§ 1. Motion made, and Question proposed, "That there shall be charged on and after the nineteenth day of April, nineteen hundred and one, the following customs import duties:—
|Sugar of a polarisation exceeding 98 degrees||the cwt.||4||2|
|Sugar of a polarisation not exceeding 76 degrees||the cwt.||2||0|
|and intermediate duties varying between 4s. 2d. and 2s. on sugar of a polarisation not exceeding 98 and exceeding 70 degrees.|
|Molasses (including all sugar and extracts from sugar which cannot be tested by the polariscope)||the cwt.||2||0|
|Saccharin (including substances of a like nature or use)||the oz.||1||3|
§ And that duty shall be charged in accordance with the provisions of the Schedule to the Customs Tariff Act, 1876, on goods containing as a part or 653 ingredient thereof any article liable to any of the above duties.
§ And that the exemption under the same Schedule from the duty on plums or plums preserved in sugar shall cease"—(Mr. Chancellor of the Exchequer.)
§ * SIR WILLIAM HARCOURT
It would be superfluous on my part to offer to the Chancellor of the Exchequer testimony to the ability and lucidity of his statement. But that statement was characterised by qualities higher than ability and lucidity. It was characterised by honesty. It was characterised by the quality which has been so very much wanting in the conduct of this war—the quality of telling this House and the country the real truth. I am not going to discuss the particular proposals of the Chancellor of the Exchequer to-night. That we shall reserve for a future occasion. I will only say, as a representative of one of the great coal exporting districts of this country, including the great exporting towns of Newport and Cardiff, that the right hon. Gentleman cannot expect our support for the proposal to reproduce, after the expiration of half a century, the principle of export duties which, ever since the time when Sir Robert Peel and Mr. Gladstone became complete converts to the principle of free trade in 1845, has never been reproduced in this country.
But I would ask leave to make some observations on the general financial condition of the country to-day. After all, this Budget is only a chapter in that disastrous history. It does not pretend to be a final account. In former times we have had months fixed at which the war was to be over. But this war corresponds to the poet's description of happiness; it "never is, but always to be"—over. We have had no repetition of these prognostications of the termination of the war to-day. We are to borrow £127,000,000 in all. That is four times as much as was borrowed for the Crimean War. The money borrowed for the Crimean War was £30,000,000. Up to the present time the cost of this war has been £148,000,000, and what it will be before it is over the right hon. Gentleman 654 does not even conjecture. These are generalisations which may give the House of Commons pause and deserve our careful consideration. There is one point only in the whole of that statement which we may regard with satisfaction, and that is the extraordinary, the unexpected, the un hoped for productiveness of the revenue. You have a revenue of £140,000,000, for I include in it, of course, that £10,000,000 which has been hidden away by that miserable process of diverting revenue from the Exchequer which is known under the name of subsidies. That sum of £140,000,000 is double what the revenue was some thirty years ago. What has been the source of that enormous increase in the revenue? It has been the soundness of the financial principles persistently acted upon in this country for more than half a century. It has been the maintenance of the principles established and discovered, it may be said, by Sir Robert Peel, enlarged by the genius of Mr. Gladstone, and, to do justice to the Government of Lord Beaconsfield, faithfully followed by Sir Stafford Northcote. They were principles which enabled you in fifty years to discharge £200,000,000 of the Debt of this country.
In eighteen months you have increased the Debt of this country by £127,000,000. I venture to say that before the liabilities which this war will carry with it are ended you will have absorbed the whole of that 200 millions, which represent the economies of the last half-century. Out of that revenue you have been able to apply immense sums to the increase of your Army and your Navy You have devoted large sums to the education of the people, and you have diverted large sums in subsidies. Contemporaneously with this, you have seen an immense increase in the comfort and well-being of all classes of people in this country. You have seen the working classes with their better wages and higher standard of comfort. You have seen the income-tax payers largely increased in wealth and numbers. You have seen the realised wealth of the country, as displayed in the death duties, enormously increased. And why is that? Because your finance has been founded on sound principles of taxation. I always hear 655 with satisfaction the principles of taxation and finance expounded by the Chancellor of the Exchequer. He always seems to me, as I listen admiringly to his exposition of those principles, to be as one crying in the wilderness in the midst of the immense majority around him. I was very glad to hear his exposition of those principles to-night. I cannot say that I always agree with the application of the principles; but with the principles themselves I am always able to concur. Never was it more necessary that those principles should be understood, vindicated, and asserted by men in authority. We are living in a day of newspaper finance, in which it is proposed to reverse all those principles which have led to the creation of the enormous revenue and prosperity of this country. We are told that we are to go back on all these ideas and principles, which experience has shown are the foundations of a revenue which is the admiration and envy of all nations.
What are the principles on which we have realised this revenue of £140,000,000? What was the revenue before you adopted those principles? What were those principles discovered by Sir Robert Peel and expanded by Mr. Gladstone? The first was simplification of taxation—the raising of large sums on few articles. The second was that you should never levy taxation upon protective principles, or so as to raise the price of the commodity beyond the amount of the benefit to the Exchequer. These are the two fundamental principles of taxation which have given you the revenue which you now enjoy. It is well that those principles should be asserted and demonstrated as they have been by the Chancellor of the Exchequer to-day; and, without distinction of party, I for one at least will always support any man, on whatever side of the House, who maintains what I believe and know to be for the financial interests of this great country. So much for the revenue. But if the revenue has increased beyond hope, the expenditure has increased beyond belief. I who immediately preceded the right hon. Gentleman, on the last occasion on which I spoke as responsible for the finances of the country, ventured to address the same warning 656 to the House as that of the right hon. Gentleman in regard to the increasing expenditure of the country. But during the last five years this Government has been in office, as the right hon. Gentleman very fairly admitted, the increase of the expenditure has been nearly 30 millions. That is a fact which it is necessary for this House to bear in mind in dealing with the Budget and finance of the country. The expenditure of the country is stated by the Chancellor of the Exchequer to-day at £183,000,000; and that is after you have depleted your expenditure by taking £4,800,000 from the Sinking Fund, which has hitherto been devoted to the reduction of debt. Therefore the expenditure has been something like £187,000,000.
The right hon. Gentleman is perfectly right in warning this House and the country that you cannot go on at the present rate without involving this country in financial ruin. If these were the last words I had to speak in this House they would be to endorse the warning which the right hon Gentleman has given. I do not envy his successor. I only hope that he will, like himself, renew some effort to prevent a course which I am certain will lead to the discredit and the injury of the nation. We have new doctrines upon this subject of taxation, and I should say that on the whole the fashionable doctrine at the present time is that all taxation should be taken off the rich and put on the poor. [Ministerial cries of "Oh, oh."] Yes, read the organs of the moneyed classes; read The Times newspaper; read the development of the doctrine which in substance is thus stated—"That it is the men possessing from £5,000 to £50,000 a year upon whom increased taxation more heavily bears in consequence of their poor relations and their subscriptions. Therefore, what you have to do is to do away with direct taxation and put the whole of that taxation on indirect sources of revenue." That is the doctrine of the organs of the moneyed classes, but I hope a Chancellor of the Exchequer will never adopt a doctrine of that description. But as I read this newspaper finance it seems to me that the fashionable doctrine of to- 657 day may be condensed into two words—conscription and protection.
§ * SIR WILLIAM HARCOURT
Does anyone believe that this expenditure and this borrowing is not going to be increased? Has anyone read the despatch of Sir Alfred Milner, which was only delivered to us this morning? This despatch, by the way, was in the hands of His Majesty's Government on 25th February, almost immediately after the meeting of the House, but which we have not been allowed to see for two months after it came into their hands. Why has it been withheld? We have had discussions to which it would have been a most valuable contribution, but it was locked up by the Government, who have likewise withheld the Report of the Secretary to the Admiralty upon the settlement of South Africa. What does Sir Alfred Milner say in this Report? He tells you that the last six months, of this, war have been retrogressive, and that the condition of things is much worse in South Africa than it was six months ago. He gives an account of the backward condition of the contest in South Africa during the last six months, and how much better it was before.
There is another thing in which I can agree with the Chancellor of the Exchequer. He says it is not only the expenditure on the war which is so formidable, it is the growth of the normal expenditure of this country, and the fact that if the war was over to-morrow the war taxes raised last year on the expectation of ending the war have been already swallowed up in the increase of your normal expenditure. That is a most dangerous condition of things. But expenditure will not cease with the war. The Chancellor of the Exchequer has told us that as soon as the war has ceased we are going to enter upon a 658 damnosa hereditas of colonies which, as Sir Alfred Milner points out, are more extensive than the whole of France and the United Kingdom put together. You have to deal with that condition of things; you have to repair that ruin, and it has to be done at the expense of the taxpayers of this country. You cannot have listened to the Chancellor of the Exchequer without being convinced that at all events for a time, which he does not profess to limit, the whole cost of the reparation of the injury which has been done to that unhappy country must come out of the pockets of the taxpayers of this country. That is a thing which is without doubt. Then you are to have a land settlement. You have sent out the Secretary to the Admiralty to report upon the subject. He has come back, and he has reported. Unfortunately he reported to the Colonial Office, and so we have not had the Report. It did not suit the purpose of the Colonial Office, and the Colonial Secretary told us that he would not give it to us now, and possibly it might never be given to us. But Sir David Barbour has reported to the Treasury, on the probable resources of the country, and the Chancellor of the Exchequer with his usual frankness has given us an account of what we may expect from them. That is the difference between the spirit in which the House is treated by the Colonial Secretary and the Chancellor of the Exchequer. We have had a scheme propounded—I do not know whether it is an inspired scheme of The Times newspaper—for this settlement in South Africa when the war is over. The object of that settlement is fairly stated. It is to establish in South Africa a British garrison and a British electorate. Those are the two objects of the land settlement which is contemplated, and as far as I have read Sir Alfred Milner's despatches, that also is his view. But you are also to have irrigation, railways for the purpose of these settlements, and education in the Transvaal for the Boers, which is to be attractive to men of University education. What is the scheme going to cost I Mark what is happening. The whole of the stock of that country is either destroyed or in the course of being destroyed. You have to restock the whole of that country; you are going 659 to offer to the people who will settle there sufficient inducements to set them up in farming in a country co-extensive with France and the United Kingdom. How many millions do you think that is going to cost? Just try and think what would be the cost of establishing such a settlement as that and how it is to be done. This country is going into a great land speculation. It is to establish men of whom we do not know anything, and to depend upon their solvency for the return of our money. What is propounded in The Times newspaper is that there should be a land bank, in which the British taxpayers are to be the shareholders. That is a prospect, I think, of borrowing many more millions.
There was a very Interesting part of the speech of the Chancellor of the Exchequer referring to his hopes of obtaining some thing out of the Transvaal and the Free State. First of all he gives up the Free State altogether; you are to have no contribution from the Orange River Colony, and that is a bad job. It was, I suppose, one of the most happy and flourishing places before this war anywhere to be found, but it is so devastated, so destroyed, when it becomes a British colony that it can afford to pay nothing towards the cost of its own administration. In the controversy of the last two years between the right hon. Gentleman and myself I have indicated that I wished, as he wishes, to get something out of the Transvaal, but the more that question is examined the more it is seen how absolutely impossible it is you can get anything out of the Transvaal. The great extent of that country is ruined and devastated like the rest; there is nothing in it beyond the mines, and there is no hope of obtaining anything out of it any more than the Free State. What will be the revenue of that country? Before the war it was £4,000,000. Yet every source of that revenue has been condemned beforehand by the parties who promoted the war. They have condemned the profits made by the Netherlands Rail-way, the dynamite monopoly, the concessions, and the Customs. There is hardly a source of profit which these men have not pledged themselves to diminish, and therefore the revenue will be much less after the war is over. But what is to be the cost of the country? You have to 660 police it. For that purpose you have the men who are to form Baden Powell's police. That, to begin with, at the rate of 10,000 men, will cost £2,500,000. But to try to police that country with 10,000 men is about as sensible as proposing to wage this war with 10,000 men. It is absurd on the face of it. Sir A. Milner, in his despatch, says you will get no assistance from any of the Dutch population—not even the loyal Dutch population. He says "the bulk of the Afrikander population will never take up arms on the side of the British in this quarrel, even for local defence"; therefore you must depend upon the men in the colony of British origin. "Oh, but," you say, "when the war is over the Boers will settle down." Do you really believe that? You are the people who told us that Kruger would never fight. You have entirely misconceived the situation, as you still misconceive the character of the problem you have to encounter. How are you going to get any revenue out of the gold mines? The right hon. Gentleman said that Mr. Robinson was going to help him, but I think the correspondence with that gentleman will have undeceived him upon that point. You will not get it out of the gold mines, because, first of all, the gold miners will not give it to you. And if they will not give it to you, remember, there is no other population on which you can rely to get any revenue at all. Therefore, if they will not pay, you will not get it. But they cannot pay, and I will tell you why. The whole question of the development of the Transvaal is the question of labour. Now, even in the flourishing times before the war there was an immense deficiency of labour in South Africa. The Member for Mansfield, in an article which appeared in the Nineteenth Century, tells us that the present labour in the Transvaal comes from Portuguese East Africa, and from nowhere else, and then he remarks that drink is the only thing the Kaffirs care for, and if you cannot offer them drink they will leave your mines. That is not a hopeful prospect, and he is reduced at last to say that you must have Chinese for gold mine labour. It comes, then, to this, that the hope of gold mining in South Africa depends upon the introduction of Chinese labour, which has been rejected by every 661 society of white men, whether in America or Australia.
Now, even the Government are beginning to be ashamed of saying that the war is over, or that it is likely soon to be over. There is a phrase that I have heard, that "all is over except the shouting"; but here it is the shouting that is over, and not the war. The Colonial Secretary is now an optimist, although as such he has not been very successful. He was much more successful in the character of a prophet when he told us some time ago what would be the consequences of this war. He then said that it would be a long and costly war, and he was quite right. He said it would be a bitter war, and it is a bitter war. And he also said that its embers would remain for generations. Those treacherous embers lie hidden, and they may burst forth upon us at any moment. What is the situation now? It is summed up in the words of Sir A. Milner—It is no use denying that the last half-year has been one of retrogression. Seven months ago this Colony was perfectly quiet, at least as far as the Orange River. The southern half of the Orange River Colony was rapidly settling down, and even a considerable portion of the Transvaal, notably the south-western districts, seemed to have definitely accepted. British authority, and to rejoice at the opportunity of a return to orderly government, and the pursuits of peace. To-day the scene is completely altered.There is the authentic account. It is not an account which was prepared for the General Election. If it had appeared at the General Election it might have had some effect. But I venture to think that the country is beginning already to ask what it is to profit by this war. It has got up to this time taxation and debt, and future liability which I think will cost you as much as the war has cost. What have you gained besides? You have gained the paralysis of all reform at home. There is the question of the housing of the poor. What has become of that? In connection with old-age pensions and education, what might have been done with that £140,000,000? It is all gone. Formerly when a war was over expenditure ceased and taxation was reduced. As soon as the French war was over that was done, though it took forty years before the 662 mischief to the nation was recovered. But here the moment this war is over the beginning of a new expenditure takes its rise. When the Crimean War, which was waged not for the integrity of the British Empire but for the integrity of the Turkish Empire, was over there was nothing left except the liabilities of certain treaty obligations and guarantees, of which the best that can be said is that you never took any notice of them at all, and twenty years afterwards Lord Beaconsfield at Berlin consolidated the Turkish Empire (to use his own phrase) by depriving it of half its territory. Therefore there was not a great deal of harm done by the consequences of the Crimean War. But when this war is over expenditure will begin to rise. You will begin to expend money in setting up a population in the two Republics.
There is this curious thing which I have always observed about Imperialists—namely, that they have a great regard for the British Empire generally, but there is one part of the British Empire which they always forget, and that is the United Kingdom of forty millions of people, and I believe that one of the consequences of this war will be that this neglected corner of the Empire will insist upon some regard being paid to their interests. Can we not ask now, in this indefinite prospect of war, this endless perspective of increased and ever-increasing expenditure, is there yet no prospect of a settlement? I would ask the particular attention of the Committee to a portion of Sir Alfred Milner's despatch, and mark you, the Government were in possession of that despatch on 25th February. Sir Alfred Milner says—The terms offered by Lord Kitchener, which are, in substance, identical with repeated declarations of policy on the part of His Majesty's Government, are generally regarded as a generous and statesmanlike offer, as one which, if firmly adhered to, will ultimately be accepted, but as an offer which we cannot afford to enlarge.We did not enlarge them, we cut them down. Sir Alfred Milner proceeds—On the other hand, there is a very general desire that no effort should be spared to make the generous character of our intentions widely known, and to encourage any disposition on the part of the enemy to parley, with the object of making them better acquainted with the terms on which we are prepared to accept their submission,663 Here, then, you have Sir Alfred Milner saying that the loyal population in South Africa accepted as a good settlement the terms offered by Lord Kitchener (I suppose by this is intended the terms offered by Lord Kitchener in his conference with the burghers early in the year), and urging that if those terms were not immediately accepted they should still be firmly adhered to, and that we should encourage the enemy to parley in order that the offer might be made generally known and a settlement thus brought about. I ask the Committee to remember this, that the Government were in possession of that statement of Sir Alfred Milner when the Colonial Secretary cut down the terms offered to General Botha by Lord Kitchener, and declared that under no circumstances would he ever enter upon any further negotiations. The Government had that despatch in their pocket at the time the House was discussing the attempted settlement between General Botha and Lord Kitchener, and I say it was a most unfair proceeding to conceal it from the House, the withholding of that despatch at that time was a most unfair concealment from the House and the country. I am sorry the Colonial Secretary is not here, because I desire to challenge him on the subject of having concealed from the House a despatch which would have cast most light on the whole question at issue.
The Chancellor of the Exchequer was quite right in saying that it was not this war only but other things that were leading to the financial ruin of the country. I ventured to offer that warning in 1895, but I did not then anticipate a policy of doles. In those days the doctrine was that we must arm against two Powers. We have done with that now. The doctrine now is that we are to arm against the world. We are told, and it is not an agreeable thing to hear, that we are hated by all the world. The Government think there is some advantage in perpetually repeating that statement. The Colonial Secretary luxuriates in it. He regards it as a complimentary detestation, He is never tired of boasting of it. He says it is a proof of our strength, for the strong are always hated, and only the weak are loved. Well, if to be hated is a proof of strength, then no one has con- 664 tributed more than the right hon. Gentleman to the strength of this country. But I differ from that opinion. I do not think it follows that if a nation is strong it therefore must be hated. At the conclusion of the great war with Napoleon Great Britain was a great deal stronger than she is to-day. We had not then to seek after a reconstruction of our military system. We had no surrenders to inquire into and no disasters to investigate. With the record of Salamanca and Vittoria and Waterloo fresh in the memory of the world, the military prowess of this country was universally respected and admired. But England was then not only strong in military capacity, she was strong in the moral approbation of the world. It was felt that in that war we had made enormous sacrifices for the liberty of Europe as well as our own; that we we had contended against the gigantic tryanny of Napoleon, and we were regarded in a sense as the saviour of Europe. Do you command the same moral approbation now? It is a much more serious thing to have earned the hatred of the peoples than the hostility of Governments. I am sorry to say there is an unfortunate scepticism about us abroad. Most of the nations do not altogether believe in your inevitable war. They are doubtful whether your only object was the cause of liberty and civilisation. They look with some surprise at the manner in which you have fulfilled the declaration of the Prime Minister that he meant to annex no territory and appropriate no gold mines. These poeple may be all wrong in their conclusions, and I believe they are, but the sending out of 320,000 men to South Africa has not increased the opinion abroad of our military power; and the manner in which the contest has been waged and the objects which they think are aimed at have not increased the moral approbation of the nations in our regard. The political and moral problem of South Africa is deep, and, indeed, so far as we can see at present, is unfathomable. There are proposals for reconstruction, which to my mind are more formidable even than the war itself. I shall be told, of course, that this is pessimism. Yes, the worst that can be said of our pessimism 665 is that it has too often turned out to be optimism. Month after month, and almost day after day, the reality of things makes the situation worse than we ever conceived it would be. But what of your optimism? By your optimism you perhaps first deluded yourself, and you certainly deceived the country. Your optimism has been belied at every stage of this lamentable contest, and it has found its natural expression to-night in the most disastrous financial statement that has ever been made by a Chancellor of the Exchequer in the House of Commons.
§ * COLONEL MILWARD (Warwickshire, Stratford-on-Avon)
I am sorry I cannot follow the right hon. Gentleman through all the arguments he has offered. As a great financial authority I should have thought he would have helped us by his counsel in the very difficult position we have now arrived at. The position of the Chancellor of the Exchequer is a very difficult one. He had to impose large additional taxation on the country, and I believe he has done it in a way which will meet with general acceptance, because the taxes he has imposed have either been discounted beforehand or, as in the case of the export duty on coal, there was a general feeling on the part of a very large section of the population that it was desirable that such taxes should be imposed.
There is one matter in the Chancellor of the Exchequer's statement which raises a very important question, namely, whether some differential treatment should not be afforded to our colonies with reference to the taxation on sugar. They are already paying on sugar a tax equivalent to the bounty given by foreign countries, and now it is proposed to increase that tax by ½d. per pound. It seems to me that it would be very good policy on the part of this country to meet the colonies with reference to this particular matter. This is a very large and important question, and worthy of more than the cursory attention which can be given to it to-night, but I hope it will be raised at a later stage in a more serious form. I believe that the taxation of sugar will not be unpopular in this country. Money has to be raised, and the country, having approved of the policy of the 666 war, will pay for the war. Sugar being at an abnormally low price, I think the Government were very wise in selecting it for the purposes of taxation. There are a few questions which I would venture to address to the Chancellor of the Exchequer. The first is with reference to the drawback in the case of sugar refined in this country. Sugar refined abroad, of course, pays on the weight at which it is imported, but sugar refined in this country loses a certain percentage in the process. I have no doubt that the Chancellor of the Exchequer is aware of this matter.
§ * SIR M. HICKS BEACH
I think that the scale which I explained to the House will give the kind of allowance to which my hon. friend refers.
§ * COLONEL MILWARD
I am very glad to hear that. Then, as to the taxation of glucose, the Chancellor of the Exchequer seemed to suggest that he was open to argument on the question. Brewers and confectioners use glucose, and if it is not taxed they may resort to its use more largely. I believe that both invert sugar and glucose must be taxed in order to deal fairly with the producers of beet and cane sugar. I hope there will be no difficulty in this matter. I think the Chancellor of the Exchequer is wrong with reference to the retail price of sugar after the duty. I only hope he may be right, but I think the increase in the retail price will be more than ½d. With reference to the expenses of the war in China, which my right hon. friend put down at £3,500,000, we were led to hope that the expenses would be repaid in a comparatively short time. As regards the income tax, I do not think the country will be dissatisfied at the increase of 2d. in the £. I would venture, however, to point out to the Chancellor of the Exchequer that on previous occasions when the income tax was 1s., or more than a 1s., it was paid by quarterly instalments. A large number of persons at present pay their income tax in one lump sum at the end of the year. I ventured to suggest last year, and I suggest it again now, that a part of the income tax might, at the option of the person paying it, be paid in July and August, interest to be allowed on the 667 amount paid in advance. A great many persons would in that way avoid the tremendous strain of having to pay one large sum, and it would also be a great relief to the Chancellor of the Exchequer, because five or six millions might be available when required. The Chancellor of the Exchequer appeared to look forward to a perpetual increase in the expenditure of this country. I believe it to be a wholesome plan for the purpose of checking expenditure that all expenditure has to go before the Treasury. I do not believe in the niggardliness of the Chancellor of the Exchequer. It is a very easy thing to spend money. Committees on county councils can spend whatever money they choose without check from their Finance Committee, but that is not the system of Government of this country, and I hope it never will be. Everybody wants money—the Army, the Navy, the Civil Service—and one of our greatest difficulties is that the State is itself the greatest employer of labour. I am very glad that the Chancellor of the Exchequer is firm in guarding the expenditure of the country, and I hope that every succeeding Chancellor of the Exchequer will be equally firm.
§ MR. KEARLEY (Devonport)
I want to ask one question, as to how the duty on sugar is to be collected? Large shipments of refined sugar arrive everyday in the ports of this country, and merchants are able to obtain possession of it without any serious impediment. A merchant wants facilities for getting delivery over the ship's side or at the quay of discharge, according to the terms of shipment, by a simple Customs endorsement on the bill of lading in exchange for the duty. At present when a bill of lading is received the merchant goes to the shipping office, and by paying the freight gets the bill of lading endorsed, and he is then enabled at once to get possession of his goods. My suggestion is that the bill of lading should be taken to the Custom House and should be endorsed in return for the Customs duty. Of course, the right hon. Gentleman clearly understands that I am only referring to refined sugar. It is most necessary, unless there is going to be a very large increase in the cost, 668 that there should be no interference with free circulation. I shall be glad to explain the matter privately to the right hon. Gentleman.
§ MR. KEARLEY
Passing from that subject, the right hon. Gentleman who spoke last urged the Chancellor of the Exchequer to stand firm against the general demand for increased expenditure in all directions. I hope the right hon. Gentleman will also stand firm against any assault which may be made on him by the hon. Member for Central Sheffield or other hon. Members, with reference to a preposterous countervailing duty for the benefit of colonial sugar, which does not really count, as it is only nine per cent. of our total importation. To satisfy the colonial producer of sugar, you will have to give him 1s. 3d. per cwt., the equivalent of the bounty given by European countries, and you will also have to give him 15s. a ton to induce shipment to this country. At present he ships the bulk of his sugar to the United States on a 5s. freight, whereas the freight to this country is 20s. I hope the Chancellor of the Exchequer will kill any such proposal when made to him. It was suggested by the hon. Member who has just spoken that the Chancellor of the Exchequer was unduly sanguine when he anticipated that a halfpenny per pound extra would cover the cost to the consumer. The Chancellor of the Exchequer has given a concession of 6d. to defray the attendant expenses that arise from the imposition of a duty, and I have no doubt he has been advised in this matter; but, without going into details, it is computed that it will cost the consumer at least a farthing per pound in addition to the duty. For example, the imposition of the duty will break through-rates. Sugar can now be shipped from any part of Europe direct to the smallest town in the kingdom, but the very moment the Customs impose any difficulty the through-rate is broken, and the goods have to be freighted at land rates from the port of entry. Then there will be the extra handling. From the moment sugar is handled it begins to lose weight. There 669 is a decrease of moisture which evaporates, so that there will be a loss in that direction also. The right hon. Gentleman says that everybody in this trade—the importer, the refiner, the merchant, and the final distributer—will exact a profit on this extra duty. It is very reasonable that they should, for money will be locked up, capital will be sunk, credit will be given, and all along the line more profit will be demanded to discharge the extra risk, and to pay interest on the capital invested.
The right hon. Gentleman very aptly mentioned that the removal of taxes upon manufactured imported goods in the past had opened up our industries, increased employment, and practically put us in the advantageous position we were now in to-day. I quite agree with him; but I am prepared to argue that the imposition of such taxes has just the converse effect—it destroys our industries and diminishes employment. I wonder whether the right hon. Gentleman has ever studied how the duties on sugar in the past affected consumption. From 1860 to 1863 the duty on refined sugar was 18s. 4d., and the consumption was thirty-five pounds per head. Every fall in the duty brought about an increase of consumption. From 1864 to 1866 the duty went down to 12s. 10d., and the consumption rose to forty pounds per head. In 1867–1869 the duty was diminished to 12s., and the consumption rose to forty-three pounds. In 1872 the duty was reduced to 6s., and the consumption rose to forty-seven pounds. In 1873 the duty was reduced to 3s., and the consumption leapt up to fifty-two pounds; and finally, five years after the duty was abolished in 1874, we find that the consumption per head had gone up to sixty-three pounds, in 1885 to seventy-three pounds, and in 1900 eighty-five pounds per head. Of course I have not forgotten the observation of the right hon. Gentleman that he did not agree with these figures in regard to domestic consumption. I will not question his decision on that point, but I think he will agree with me that the statistics are sufficient for my argument. Whether the whole of this eighty-five pounds per head is domestic consumption or not, is not 670 material to my point. It is remarkable that in spite of the continuous increase, when there was a sudden drop in the market which lasted for a year, the consumption immediately jumped up in 1874–5 six pounds per head; and in 1897 it went up eight pounds per head owing to the low market.
The point I want to make is that the imposition of this tax is bound to diminish consumption of what is not a luxury but a necessity of the people, and at the same time it will have a serious effect on those industries which have sprung up mainly from cheap sugar. The right hon. Gentleman does not seem to have much idea of the importance of these industries. He says that that importance has been exaggerated, and that he did not think they would suffer. I do not know his idea of the importance of these industries, but the capital invested in them amounts to twelve millions of money, and they employ from 100,000 to 120,000 workmen, who are paid 5½ millions in wages. I consider them very important industries indeed, and they are increasing yearly. No doubt these industries will be severely hit by the very heavy imposition proposed to be placed on them to-night. Look at what has been the effect of the additional tea duty imposed last year. The consumption of tea continued to increase without a break for twenty-five years. But last year the Chancellor of the Exchequer put on an additional duty of 2d. per pound, and if anyone cares to examine the figures of total consumption—putting aside the tea cleared in anticipation of the Budget—he will find that there has been a very considerable diminution in the consumption of tea in this country. Moreover, that diminished consumption has brought about a great amount of distress in the tea-producing countries. In anticipation of continued increased demand planters had brought a larger acreage of tea gardens under cultivation; but all of a sudden they found not only that had the consumption not increased, but that it had diminished. Therefore two of our own tea-producing possessions have been already hit by this increased duty. Besides, to impose a duty on sugar will largely affect the industries which use sugar. I am perfectly certain this tax will not be popular. It is all very well to 671 say that working men should be made to feel that honour and glory cannot be had cheap—I perfectly agree—and that it would be wrong to exempt them from all taxation duo to the war. But considering the amount of additional taxation put on last year, I maintain that the working man is already paying more than his share of the burden. I could see that the imposition of an additional 2d. of income tax was not wildly applauded on the other side of the House; it was not received with enthusiasm. But I am sorry the Chancellor of the Exchequer did not make it 4d. instead of 2d. The right hon. Gentleman has not shown any great genius in discovering new lines of taxation, or where he could put his hand on new sources of revenue. He has shown none of that skill of the right hon. Member for West Monmouthshire when he put on the death duties. I do not know where the Chancellor of the Exchequer and his party would be now if it had not been for these death duties, though they opposed them bitterly, and said that they would repeal them when they got into power. Now that they are in power these death duties have proved their salvation. The Chancellor of the Exchequer has told us that the twelve millions imposed last year had not been spent for war purposes, but on the increased demands of the whole of the Departments of the Government of the country. I say that the death duties have provided very largely for the war expenditure, and I think that the Government would have shown their appreciation of them by recanting all that they said at the time they were imposed, and by turning their attention to new sources of taxation, such as the taxation of ground values. I know that when we come into power—and that cannot be long delayed now—we shall turn our attention to that unexplored source of revenue, instead of taxing the food of the people.
§ SIR ALBERT ROLLIT (Islington, S.)
We cannot to-night discuss in any detail the complex subject presented to the House by the right hon. Gentleman the Chancellor of the Exchequer. I happen to be connected with two districts which will be specially affected by certain of the Budget proposals, and I am quite certain 672 that in those districts the taxation of sugar and the export duty on coal will be, to say the least of it, disappointing.
I wish to say a word or two on the question of expenditure. We have constant dissertations on both sides of the House as to the growth of expenditure, and I think that as a general principle there is no objection to these observations; but in considering expenditure we should look to see whether it is likely to be remunerative or reproductive. That is the whole question. When I hear protests against expenditure I cannot help recalling the opinion of the American who said: "Our school rate is the highest rate, but it is the rate which we like best, because it is the most remunerative to the State." I think that much of the protest against both municipal and State expenditure is purely academic. In regard to sugar, I will not follow the stock arguments as to its being a food and a necessity of life, for these are well known; but I should like to reinforce the arguments of the hon. Gentleman opposite as to the danger which exists as to the effect of an impost on sugar upon certain of our growing commercial undertakings. I also echo what was said, that if you once strike at the system of through bills of lading, leading to increase of handling, Customs machinery, drawbacks, and bond, you introduce disturbing elements which make the impost borne by the consumer considerably more than the ideal calculations which are often previously made before the idea is put into practice. The Chancellor of the Exchequer said that the price of sugar was higher in 1893 than it would be with the addition of the duty he proposes; but I would like to point out that these new industries have largely grown up since 1893. There are distinctly new undertakings—and I speak with some knowledge of them in London, and especially in Hull and along the east coast—which will be specially struck at by these proposals. I would like to point out that the class of small dealers will be most hampered. It is these who will require more capital and who cannot at this time afford the sacrifice. Moreover, the prospects of trade are not so certain as to tempt us to run any risks in dealing with commercial undertakings at the present time. These industries are 673 very important. They not only affect commerce in confectionery, but one of their real advantages to the people is that they provide articles of food which contain a nourishing element and which are cheap. The development of the jam industry has also influenced fruit culture amongst farmers. Owing to the greater demand for capital, these small growing industries may be supplanted and concentrated in the older districts, and that, in my opinion, is not the best condition for trade.
The proposed coal export duty at once raises the trade question. The Chancellor of the Exchequer said that when you think of revenue you must not forget the trade. The chief danger in regard to the tax upon coal is that it has become the course of trade to take out coal and bring back cargoes, which places at the disposal of our people the commodities of the world which are the bases of our chief industries. There is nothing more dangerous than to interfere lightly with the established course of trade. The Chancellor of the Exchequer said that only the ports which exported coal to the European and Mediterranean markets would have to bear any burden that may arise. But these are very important trades; they are what are called our short trades, and the East Coast ports are chiefly engaged in them, and therefore to them they are of the utmost moment. The Chancellor of the Exchequer drew a distinction between the varieties of coal which are essential to foreigners and those which are not so essential. Again I say, although I do not speak for a moment with any exactitude, some of the north-eastern ports, notably Hull, are dependent on the Yorkshire and Midlands coalfields, and although that coal may not be so essential as Welsh coal, these districts will have a double blow to bear. I am quite sure, however, that the Chancellor of the Exchequer is alive to trade considerations, and I hope he will not lose sight of the point in regard to the east coast ports. I was very much struck by the remark of the Chancellor of the Exchequer that, after all, supposing that trade is affected, what would happen in this country would be that we would get our coal cheaper, or that the coal would be husbanded. Well, I would venture 674 to reply to that, that there is something bettor than husbanding goods, and that is to make your trade fructifying in the pockets of the people, which is a sound economic maxim. I should have said that the prospects of the marine trade are not very good. It should be remembered that it was to the mercantile marine that we owed the transport of our immense army to South Africa without the loss of a single life; and the mercantile trade of the country ought to be one of our chief considerations. When foreign nations are entering into competition with our shipping trade it is not the moment to run any risk of injuring that trade. The Chancellor of the Exchequer said that he would exempt bunker coal. Why was bunker coal to be exempted? It was because it was for the ship's use and not for trade. But owners of enterprise, with a view to economy, had large stores of coal at different stations abroad, and why should not these stores be exempt also as well as bunker coal? The Chancellor of the Exchequer said that shipowners could enlarge their bunkers. Of course, they could fill their ships' holds with coal, if they wanted to, and sail about the sea till the coal was exhausted; but what about the trade? No industry can be carried on in that fashion. Our shipowners have their coal stored abroad in order that they may successfully compete with their commercial rivals.
One other point. An increase of taxation would have been welcomed by one particular class—I mean the retail tobacco dealers. Now who gained the benefit of the last reduction of the tobacco duty? It was chiefly the large wholesale manufacturers, and not the retail dealers, who in these days of keen competition are entitled to consideration, for they bear a good deal of taxation. Again, when the duty was increased the wholesale dealers fixed on them the whole of the increased duty of 4d. per pound; and owing to the circumstance that the principal sale of tobacco is in small quantities, the retail dealers could not impose that increase on the consumer. Therefore, the retail dealers to-day declare that they would welcome some more substantial increase in the duty, in order that they could equally levy it from others. I want to say, in conclusion, that I was glad to 675 hear the Chancellor of the Exchequer say that he reserved his powers in order that the taxation for war purposes might ultimately fall on the Transvaal itself. But the right hon. Gentleman significantly omitted to mention one taxable asset—namely, the mines themselves. I express the feelings of my constituents, and I believe of the country, when I say that the nation will expect that those whose property has been saved by national expenditure and national suffering and loss shall take some substantial part in the redemption of the debt and of those obligations which are the cause of their property being in existence at the present time. I deeply regret the war, but we had no alternative. It was necessary for our self-preservation; and we may hope that it will soon be brought to an end by the acceptance of terms of an honourable peace. But we may also express the hope that in the re-adjustment of taxation the British taxpayer will not be forgotten, and that those who will reap the chief portion of the benefit will bear part of the burden. I do not speak of the Budget in any hostile spirit, but I represent those who have an exceptional position and will bear exceptional burdens, and I trust my representations will bear some fruit.
§ MR. BROADHURST (Leicester)
I consider the financial statement of the Chancellor of the Exchequer to-night to be one of the most appalling within my memory. The right hon. Gentleman explained the falling off in the death duties as considerably due to the shrinkage of value in securities in the City. What that shrinkage may be to-morrow after this statement must be something serious to contemplate. The Chancellor of the Exchequer has said many good things in his time, and has made many great resolves in public speeches, but the one weak point about the right hon. Gentleman is that, while he is bold in the presence of the general community, he appears to be exceedingly weak in council and Cabinet decisions, which, after all, determine the financial policy of all Governments. It is only about two years ago that the Chancellor of the Exchequer said—We should seriously consider whether the time has not come to have regard to the ancient 676 virtue of economy. If we go on as we are going on there may he very bad times in store for the people of this country, and particularly for the working classes.Therein he was a prophet; those times have come. He went on—In this question of economy is wrapped up much of the future prosperity of the country. The country is rich and prosperous now, but there are signs that the prosperity may not endure for ever.We now know that the prosperity has not endured for ever. Already we have entered upon the down grade, the length of which no man can foresee, and the rapidity of the descent no man can foretell. In his election address at Bristol also the right hon. Gentleman was very brave and wise. He said—I can see no cause for anxiety as to the future so long as we adhere to those great and long-established fiscal principles to which we owe our abundant and easily collected revenue, and are careful not to assume new responsibilities, either at home or abroad, without due consideration of the effect which may be produced upon our industrial prosperity by a serious increase of our public burdens.But how has that policy been carried out by the Government? The Chancellor talks wisely; he lays down sound economic principles, and makes accurate prophecies, but he fails at the critical moment to muzzle his wandering colleagues in their foreign and colonial policy. All the principles laid down by the right hon. Gentleman in the two quotations I have given have been abandoned again and again, with the result that he has had to make an appalling financial statement, and one which will to some extent have a paralysing effect on certain of our industries. He is sailing dangerously near to the policy which the hon. and gallant Member for Central Sheffield advocates. The Chancellor of the Exchequer will find that in his shipping arrangements, with regard to the taxation of coal, he has landed himself in a hornets' nest. The unfortunate suggestion that ships should double their bunker space, in order to save the payment of the tax abroad for the return journey, will be laughed at at every street corner where even the elementary principles of the shipping industry are understood. A more extraordinary suggestion was never made by a Chancellor of the Exchequer. The tax on sugar will pro- 677 bably partly destroy an industry which, although young, is a great one, and one which has ministered to the wants of the labouring classes to a degree no one could have foreseen. It has carried into the homes of the labouring community sustaining, and I might also say luxurious, food, which could never have been provided but for cheap sugar. The hon. Member for Devonport has shown that the increase to the consumer will be, not a halfpenny in the pound, but, outside the large centres of population, probably a penny or even more.
The right hon. Gentleman justified the tax on sugar on the ground that all classes should make their due contribution to the cost of the war. He in effect said they all shouted for, approved of, and applauded the war, and therefore all ought to pay for it. There is a certain amount of truth in that, but the people did not know the real facts about the matter. They were led astray by the statements of the Government. But even if that were not the case, who has made so large a contribution towards the cost of the war as the working classes of the country? There is scarcely a working man's home throughout the length and breadth of the land which has not in some form or other, directly or indirectly, given the life of at least one of its members in this unholy war. That is a contribution which would have been perfectly sufficient without the further taxation of the children of the poor as well as the adults. Sugar has become almost as important an article of food with the poor as breadstuff itself, and to levy this tax is to make an unjust apportionment of the burden. An additional 4d. on the incometax would have caused less suffering and injustice than this 4s. 2d. on sugar. I know that the income tax on small incomes is very heavy, but I would have obviated that by making the scale of relief higher than it is at present. I would have taxed incomes of £5,000 a year on a different scale than incomes of £2,000 or £3,000 a year. The people with the higher incomes were not ignorant of the cause of this extraordinary expenditure; they approved of and encouraged it; thousands of them stood to make profits out of it; and they are the people who ought 678 to pay a far larger proportion of the cost of the war.
Then the right hon. Gentleman appears to have been thoroughly frightened of the brewing trade. I have a grave suspicion that the reason he hesitated at mineral waters is that the mineral water trade is largely in the hands of the brewing interest. The brewing interest during the last half-year have been awaking to the fact that they have been slaves to one political party, and that that party is now holding their support too cheaply. They have, therefore, been making it known to whom it may concern that they could not be so well relied upon in the future if the brewing interest was further taxed. Hence the exemption of that trade from the new taxes to-night.
I cannot imagine a more unfortunate attack than that upon the merchant shipping industry of the country. Is it wise at this time, when you are meeting with most severe competition from all parts of the world, when your trade is lessening, when your freightage is getting cheaper, and when cargoes are more difficult to obtain, to dabble in this ancient Tory taxation of commerce and industry? In many cases this new proposal will necessitate your ships going across the sea in ballast to fetch their cargoes, instead of carrying out a profitable cargo of coal to dispose of to the people abroad of whom they buy their goods. This is a retrograde step. We are passing on to the taxation of the necessaries of life. I sincerely hope we shall be able to mitigate, if not to destroy, both these attempts to interfere with the earning capacity of the country, because, after all, if you interfere with trade and commerce you are lessening your revenue sources, and the nation itself must suffer from the taxation of any of its industries.
I rose particularly to call the attention of the Chancellor of the Exchequer to a promise which he made last Budget night, but to which he has omitted to refer to-night. Last year we were dealing with tobacco and tea. The tax on tobacco was repealed the year previously. I took great exception to that repeal, and pointed out that the consumer would receive no benefit whatever from it. The consumer did not receive any benefit, and the Chancellor re-imposed the tax last Budget night. 679 He then increased the tax on tea. My point was that the taxation of the two articles is unequal and unjust in its effect. I desired that an effort should he made to tax the values of tea and tobacco, and not the weight. A man who buys the sweepings of a tobacco warehouse at 4s. per pound pays the same amount per pound to the revenue as the man who gets the best tobacco at 8s. or 10s. per pound. The same remark applies to tea. The poor person who gets tea at 14d. or 15d. per pound pays exactly the same amount to the revenue as the rich person who pays 3s. or 4s. per pound. The right hon. Gentleman with his usual courtesy admitted there was some ground for complaint, and promised to consider between then and the next Budget night—that is to-night—whether something could he done to meet that point. No reference has been made to the matter, and I trust the right hon. Gentleman will deal with it at a later stage of our proceedings.
The Chancellor of the Exchequer evidently fully appreciates the financial position into which the country has been landed. If the present blind and unhappy policy is pursued further, we shall have to discuss not 2d. or 4d. on the income tax, or 4s. 2d. per cwt. on sugar, but double those amounts. I only wish the right hon. Gentleman would warn his colleagues in the Government in the language and with the firmness with which he has warned the Committee and the country to-night of the difficulties into which they are drifting and the dangers into which our national finances are being driven by the mad policy we are pursuing in different parts of the world. He was hopeless as to the future of the Transvaal. Not in the next ten years will you get any revenue from the Transvaal towards the cost of the war. Is there a man who, after reading Sir A. Milner's despatch, can but admit that not within twenty years will you be able to look forward to the taxation of the Transvaal? A tax might and ought to have been put upon the diamond mines of Kimberley. Thousands of pounds were spent in the relief of that property, and hundreds of lives were lost in its rescue. Diamonds to the value of £8,000,000 or £10,000,000 are annually exported from those mines, and it is altogether unjust that they should escape direct and sub- 680 stantial taxation towards the cost of the war. I do sincerely hope the Chancellor of the Exchequer will lecture and warn his colleagues with regard to the dangers into which they are leading our beloved country by their incapable policy.
§ * SIR EDGAR VINCENT (Exeter)
It would be difficult for those who hold the views I do regarding the expenditure of the country not to be grateful to the Chancellor of the Exchequer for the complete justification he has afforded of the truth of the views we have expressed. I admire the eloquence of his statement; above all, I admire its strength. Certainly there was never an occasion when frankness could have been more difficult, because I believe that in our history there have been few years in which the financial condition of the country was more unsatisfactory than to-night. What is the position, put in a few words, and freed from all technicalities? It is practically that although last year the Chancellor of the Exchequer imposed new taxes to the extent of, I think, £14,000,000, at the present time the peace charges have increased to such a degree that the entire amount of the new taxation is absorbed to produce equilibrium. The revenue he anticipates on the basis of existing taxation amounts to £132,000,000. The expenditure amounts to £127,000,000, and if you add the £2,000,000 for interest on the already contracted War Loans to be paid for out of ordinary revenue you get your total of £129,000,000. I think the margin of £2,500,000 named by the right hon. Gentleman is not more than sufficient, if we may judge from experience, to provide for the Supplementary Estimates we shall have to deal with in the course of the session. As regards the expenditure already incurred on behalf of the war, we have heard it stated many times that it was our duty to pay a reasonable and just proportion from current revenue. But if we look into the accounts we find that out of a total expenditure of £91,000,000 only £24,000,000 has been paid out of revenue, of which nearly £5,000,000 has been produced by the suspension of the Sinking Fund. The proportion is therefore, roughly speaking, one-fifth, which is far less than the proportion paid out of current revenue 681 at the time of the Crimean War, when the country was infinitely less rich than at present, and also far less than at the time of the great Napoleonic war, when the condition of the country could not be compared with that of today.
What do the proposals of the Chancellor of the Exchequer amount to with regard to the payment of war costs from revenue? The proposed now taxation amounts in the aggregate to £11,000,000, which is precisely the figure of the increase of the ordinary expenditure of the current year. That is to say, the entire increase of taxation the House is called upon to vote this evening is already absorbed by the increased cost of the War Department, the Navy Department, and the Civil Service Department. The consequence is that with an income tax of 1s. 2d. and new taxes on coal and sugar we are practically no further advanced than we were last year. We have placed before us an estimate of £60,000,000 for the war, but under the most favourable circumstances the revenue of the country will not produce more than £15,000,000 towards that amount, so that, assuming a favourable view of the course of the war, three-fourths of the amount will be left for loans and future taxation to bear.
§ * SIR M. HICKS BEACH
I think the hon. Member is mistaken as to that. I was merely speaking with regard to the estimates of revenue and expenditure which are already in the hands of hon. Members. On those there would be a balance of more than twenty millions towards the cost of the war. [An HON. MEMBER: Altogether.] No; this year. Altogether, more than forty-five millions.
§ * SIR EDGAR VINCENT
The figures on which I spoke are these. The Chancellor of the Exchequer said that on the ordinary Budget there would be a surplus of £2,865,000, and he proposed additional taxation to the extent of £11,000,000.
§ * SIR EDGAR VINCENT
I do not consider that the Sinking Fund can fairly be included. It appears to me 682 that in any calculation of this kind it is absolutely essential that we should proceed from the basis on which we stood before the war began. I therefore maintain the correctness of my estimate regarding the proportion of war expenditure to be paid this year out of current revenue.
Turning now to the question of borrowing, I confess I am glad to find that the Chancellor has abandoned the practice of temporary borrowings. I think that in financial circles and commercial circles in this country there is only one thought with regard to the floating debt, and that is that it is excessive. I do not deny the existence of arguments which may be held to justify the course the Chancellor of the Exchequer took, but it is really nothing more than what I may call "knot in the handkerchief" finance. It is a kind of memoria technica that eventually the recovery of a portion of the debt may be obtained. I believe it is more advantageous to borrow frankly on a permanent basis, retaining all the rights of this country to recover from the Transvaal Government, but at the same time borrowing in such a way as to get the money on the cheapest terms. I cannot believe it is good finance to borrow in such a manner that this country has to pay 4 per cent. for money. Now, taking the view I do with regard to this matter, I was glad to hear this evening that it was shared by the right hon. Gentleman the Chancellor of the Exchequer, namely, with regard to the general financial outlook. I think that it is wise for the House, without regard to party politics or party considerations, to devote some attention to the question of our growing expenditure. I accept the view—and I hope it will produce a beneficial result—that we have arrived at our present position, not principally on account of the war, but rather on account of the lax system of financial administration into which the Government has fallen, and I really attribute little responsibility to the Government beyond that which I attribute to the Opposition of the House in general, because in real truth, if one looks back on the proceedings of the House, the question of close control over expenditure has been to a large extent neglected. I confess that it is with some regret 683 that I fail to observe any tendency whatever towards improvement. On the present occasion the proposals made in Supply involve an increase of about £11,000,000. That represents a very large proportion indeed. I think the figures last year amounted to £90,000,000. The Vote this year is £101,000,000, representing, therefore, an increase in one year of 12 per cent. If any private firm or individual increased expenditure at this rate we should be somewhat sceptical in regard to that firm or that individual maintaining credit, and I do think the nation should be fully as careful in regard to expenditure as any commercial firm or private individual. Until this evening I was sorry to hear no mention whatever of economy. This evening the Chancellor of the Exchequer spoke of the desirability of economy, but I must say that I missed from his speech and from the speech of the right hon. Gentleman the Member for West Monmouthshire any practical suggestion tending to the end which they admitted to be desirable. No practical proposal was put forward which would either improve the administration of the country from a financial point of view, or which would enable this House to maintain a closer control over the finances of the country.
What is the present system of control? It practically amounts to this, that the sole barrier against the increase of expenditure, as things are now ordered, is the Chancellor of the Exchequer. If, as has often happened in the course of the last 200 years, the Chancellor of the Exchequer is Prime Minister, or if he is in the Cabinet with a large number of Members who have financial experience, the result is national economy; but if the Prime Minister is either non-financial or anti-financial, or if the Chancellor of the Exchequer has not adequate financial support, then I think the interests of national economy are somewhat unduly neglected in favour of the interests of the spending departments. The figures which the House has already are in themselves alarming, but the effect they make upon my mind is enhanced by the undoubted fact that the more money the House gives to the spending departments the more those departments cry out for further funds. So far from being satisfied with the 684 enormous amount spent upon the Army, the tone of the recent debates showed that there was a feeling in some quarters that the pay of the soldier ought to be nearly doubled. I confess that it is entirely impossible for the Chancellor of the Exchequer, no matter what his ability may be, to keep the finances of this country on a safe basis if these principles prevail. There used to be another safeguard against extravagance in the Treasury, but I submit that the Treasury, although it may still exist, has practically ceased to exist as an effective means of checking expenditure. You have destroyed the old prestige of the Treasury, and it cannot now give the effective control it used to give ten, twenty, or thirty years ago in keeping down the expenditure of the country within reasonable limits. I believe economy to be a most difficult thing to practise. It is almost impossible for the Chancellor of the Exchequer to keep a sufficiently tight hand on the reins if he does not meet with energetic support from a large section of the House. In making these remarks my only object has been to draw the attention of the House to the great urgency of the question of control over public expenditure. I trust that I have not drawn too black a picture. I desire above all not to embarrass the Government. But I wish to induce hon. Members to take up and examine the question for themselves, and I am convinced that if before granting increased supplies to the various spending departments they will insist on examining into the question and make certain that the present Vote is expended so as to attain the maximum of efficiency, that it will be possible to organise the services of the Army and Navy in a fully efficient and adequate manner without endangering our reputation as prudent and economical administrators.
§ MR. ROBSON (South Shields)
The hon. Member who has just sat down has emulated the example of the Chancellor of the Exchequer in one respect. He has given us a warning about extravagance, and he has been good enough to say that the responsibility for that extravagance is to be shared, not merely by the responsible Government and those who support them, but equally 685 by the Opposition and all sections of the House. Well, we will shortly give to those hon. Gentlemen the opportunity of showing whether their policy is as courageous as their utterances are candid. In a very short time there will come up for review by this House a measure by which over £2,000,000—the very amount that is expected to be derived from the export duty on coal—is to be taken out of the pockets of the general taxpayers for the relief of the political friends and supporters of the Government in the country. There is an instance of extravagance about as gross, as inequitable, and as shameless as ever was introduced to this House. I wonder whether the hon. Member for Exeter, and the hon. Members who cheered him, will stand side by side with the Opposition when they take up their parable against that extravagant and inequitable taxation. I have not the slightest doubt that the candid Member for Exeter and the candid and exemplary Chancellor of the Exchequer will stand side by side in demanding that there should be taken out of the depleted resources of this country £2,000,000 for the relief of the friends of the Government. I attach, therefore, very little importance to the candid utterances of the hon. Member for Exeter or to those of the Chancellor of the Exchequer. What we want is not so much candour—it is an easy virtue, provided it is not followed by courage—and as there has been no Chancellor of the Exchequer so candid as the distinguished occupant of that office to-day, so there has been no Chancellor of the Exchequer less courageous in resisting the extravagant tendencies of his party and of this House than the present holder of that office. We saw an instance of that to-night. We were told by the Chancellor of the Exchequer that we have spent twice as much over this war as over the Crimean War. I expected I that statement to be the prelude of an announcement that, at all events, we were going to get a Crimean War income tax. Again, the candid utterance was the prelude to anything but a courageous policy. A Crimean War income tax is something apparently which the Chancellor of the Exchequer dare not propose. I need not stop to criticise that.
686 This Budget will be historic. It will be historic by evil pre-eminence among Budgets, but it is the first—certainly for half a century—that has been distinctly and avowedly retrogressive. It is a Budget that carries us back to an obsolete system of finance. That system has been reintroduced in the House for reasons on the part of the Chancellor of the Exchequer to which I listened, I would say respectfully, with astonishment—reasons which I never expected to hear from that Front Bench, and above all from the Chancellor of the Exchequer. An export tax on coal is purely and simply a tax on trade. It is the first of such taxes for many years. For years the whole trend of our policy has been to repeal such taxes. Now we have a Chancellor of the Exchequer who proposes to re-introduce them, and he does so with a formula that is remarkable, and more ingenious than the old debates will show. The right hon. Gentleman says he wants to "broaden the basis of taxation." I have always understood that the glory of every great Chancellor of the Exchequer was to broaden the basis of trade and narrow the basis of taxation. Now we have it stated that the basis of trade requires to be broadened. That is put before us as a new financial policy. The basis of taxation was never so broad as when we had 700 articles I subject to taxation. There is an example for the Chancellor of the Exchequer! That was broadening the basis of taxation. That was a policy we thought we had overcome. That is the policy which under this specious formula we have re-introduced to-night. Let us look at the reasons. The right hon. Gentleman, in introducing the new tax, says, first of all, that it is not an unmixed evil. Well, no tax is an unmixed evil to everybody. I might almost venture to say that no misfortune is an unmixed evil to everybody. There are persons who live by the disturbance of trade, and there are persons who live by the quarrels of their fellow creatures. I do not doubt that such persons will welcome the Chancellor of the Exchequer as a great ally in their business relations, because the tax is by no means an unmixed evil. The Chancellor of the Exchequer went on 687 to say that it would not do trade any real harm. I go one step further than this distinguished Chancellor of the Exchequer. I expected him to tell us not only that taxes are not an unmixed evil, but that trade thrives by taxes. The right hon. Gentleman says that 1s. on a ton of coal would not really injure trade, and, by way of strengthening his argument, he pointed out that the trade had flourished under the great increase in the price which had taken place recently—that the increase which we had seen in the price of coal was due to the increased demand for coal. The increase in the price followed the prosperity of trade, and the increase in the price is shared by all the competitors alike, as the cost of production is borne by all competitors alike. The right hon. Gentleman cannot put the tax upon Belgian, and French coalowners, but he puts it on the English coalowner. His tax is a handicap on the English producer. This is a reversion to protection, but the person protected is not the English, but the foreign producer. The foreign producer will be very grateful to the Chancellor of the Exchequer. A tax of 1s. per ton in times of declining trade such as we are now entering upon may make all the difference between a big profit and a little one, between profit and loss, between prosperity and bankruptcy. A tax of 1s. per ton is a heavy tax to put on one class of producers who compete with foreign producers. It is quite true that the English coal-owner is not entirely excluded from Continental markets. He managed to send 8,000,000 tons there last year.
§ MR. ROBSON
Now our candid Chancellor of the Exchequer tells us he would be very sorry to see that export trade increased under normal conditions in regard to one of our greatest articles of commerce. I say that such a statement as that indicates, not merely a change of policy, but a state of mind of which this country had better take note, and of which we had better warn the country thoroughly and in time. Let coalowners and the coal industry of this country, which numbers over 800,000 688 workers, take note of the fact that a responsible member of the Ministry would be very sorry to see their export trade increased.
§ * SIR M. HICKS BEACH
I never said that. [An HON. MEMBER: Yes.] An hon. Member suggested that with falling prices the export to France might increase by three millions in the next or in the present year over the highest figure it has ever attained. Such a rate of increase would be to my mind extremely dangerous to coal consumers at home.
§ MR. ROBSON
The right hon. Gentleman has not confuted my argument. He has given us to understand that the increase under normal conditions of trade in the export of coal would he gravely mischievous and dangerous to consumers at home. Let the Committee consider the extent to which the exports of coal have increased from most insignificant proportions to being 12 per cent. of our total exports. We have, however, seen the trade hampered in a variety of ways, and is it to be understood that it is dangerous to see it increased? The right hon. Gentleman said we were in some danger from the exhaustion of the coal measures. Are we to keep coal here for generations unborn? We have seen many substitutes for coal introduced. The serious consideration with regard to the future of coal is not so much foreign competition as the fact that the age of steam may be said to be drawing to a close. If we had an improvement in the use of electricity there would he a great diminution in the consumption of coal. Let no Chancellor of the Exchequer flatter himself that he is saving up coal for posterity. Posterity will probably say that it would very much rather, instead of saving up coal for it, that he had paid off a little more debt for it. That is the probable answer that posterity will make to the Chancellor of the Exchequer. The right hon. Gentleman made an appeal to the patriotism of the coal trade and of the shipping interest. But do not let it be imagined that this coal tax is a war tax. It is nothing of the kind. It is an exact equivalent of the Agricultural Rating Relief Act. It is a tax to enable the 689 Government to perpetuate that measure, and before the Chancellor of the Exchequer appeals to our patriotism he should get rid of that Act.
The right hon. Gentleman proceeded to reproach us with our own proposals for expenditure, of several of which he reminded us. But I should like to make a comparison between our demands for expenditure and those made by hon. Gentlemen opposite. As he says, we have demanded extra expenditure on education, but what is that compared with the demand made on his side of the House for an extra grant to the land-owning classes of this country? Let hon. Members compare, not only the amount of these rival demands, but also their character. The right hon. Gentleman referred to various demands which he described as extravagant, but I noticed that he did not mention Old Age Pensions. That was a singular omission. The party opposite have striven through all-night sittings to relieve the burdens upon property, but may I remind the right hon. Gentle-man that taxation on trade and industry falls upon the working classes, He is now proposing to raise eight millions of money by fresh taxes on trade, industry, and the working classes, and four millions upon property, leaving the tax-paying community still to pay more than two millions which is unjustly put upon their shoulders for the purpose of relieving a special class of the community. I hope this Budget will he opposed by every Member of this House in the interests of the constituencies, It cannot be defended on the ground of necessity. The war is to be paid for by loan, and all this increased expenditure arises from the Government, system of administration. It is for every Member to say whether he is prepared to go to his constituents as an avowed champion of an obsolete and retrogressive system of finance.
§ MR. BECKETT (Yorkshire, N.R., Whitby)
said the hon. and learned Member who had just spoken had drawn a comparison between the demands made by hon. Members on either side of the House for increased expenditure. He was bound to point out, however, it by no means followed that the demands on the 690 Opposition side were the more economical of the two; indeed some of them were very extravagant and calculated to be far more expensive than the Agricultural Rating Relief Act. If the educational policy advocated by hon. Members opposite were to be carried out as a whole, there was no question that it would involve an expenditure far in excess of any to which this sorely tried Ministry had so far been committed. It bad been suggested that they were reverting to an obsolete and retrogressive system of finance. Those were very fine epithets, but he did not gather that any arguments had been advanced to justify their use. It was true that certain taxes had, years ago, been abandoned, but they were abandoned because they were no longer wanted, and Mr. Gladstone, in dropping them, distinctly stated that they might be reimposed in case of urgent necessity. Hid hon. Members opposite suggest that no such necessity had now arisen? The hon. Member for South Shields had had a good deal to say about the export duty on coal, and had suggested that it was being imposed for the protection of the foreign producer. He did not agree with him in that. He could not see how the foreign producer was protected, for if there was one thing which the Chancellor of the Exchequer had made more clear than another it was that the quality of the coal produced in South Wales and in the North of England was such as could not be obtained elsewhere, and therefore the shilling export duty upon it could not be deemed to be a protective duty in favour of the foreign producer, who could not supply the same quality coal. The Chancellor of the Exchequer also made it clear that he regarded the export trade in coal as a drain upon our capital, and surely if foreigners were to be allowed to make that drain it was only fair that they should pay some small tax upon it.
But, as the right hon. Gentleman for West Monmouthshire had said, this was not the time to discuss the details of the Budget. He wished for his part to say that the country owed a great debt of gratitude to the Chancellor of the Exchequer for having put before it in plain, unmistakable terms the serious situation in which it stood at the present moment. His 691 reproaches were thoroughly well deserved. Since Lord Randolph Churchill sacrificed himself on the altar of economy, there had hardly been a great statesman on either side of the House who had stood up for the economical management of our finances. The Chancellor of the Exchequer had said that the country had ratified the expenditure. That was true, but at the same time, in matters of finance, party leaders should take the lead, and not the country. He trusted that the words of the Chancellor of the Exchequer would be printed in big characters and circulated all over the country, for he had told them what it was most essential they should know, namely, the position in which they now stood. The speech constituted a most solemn and serious warning. It was, he might even say, a most alarming statement. The right hon. Gentleman, who had shown them that Treasury control was ineffective, was, he believed, profoundly convinced in favour of economy, but, unfortunately, other forces had proved too strong for him. For years our expenditure had been mounting by leaps and bounds, and we had now reached the limits of our taxable capacity. That was a consideration which called for solemn consideration. Could we put any fresh tax on beer? No. Could we put more on spirits? No. Could we add to the taxation on wine, which showed a falling revenue? No. Could we put additional duties on tea or tobacco? No. These were staple articles of expenditure on which we could not add a single penny to the taxation. We had been accustomed to believe that these things could be taxed if necessary to any extent when this country was engaged in war, but now we had discovered that we had reached the limits of our taxable capacity. The Chancellor of the Exchequer had said truly that, in raising revenue, we must not sacrifice trade. But if we increased the income tax much more we would undoubtedly sacrifice trade, for there were signs that trade was declining all over the country, and we might depend upon it that the increase in the income tax would not yield the same return per penny as before. He believed that any further increase would be found inadvisable, and would be resisted by the country 692 at large. It was all very well to recall the fact that in 1813 the income tax reached 2s. in the £, but what were the circumstances which then obtained? We were then engaged in a conflict against practically the whole world. Our national existence was at stake, and there was consequently good reason for charging a high income tax. Now, when we were engaged in a war with some 40,000 farmers, there surely ought not to be the same necessity for a high income tax. The truth was that our system of expenditure required to be overhauled from top to bottom, especially with reference to Army administration. Everybody was agreed that not a single shilling which was necessary should be begrudged for the Navy. But the Army, he considered, stood in a different position, and it was the duty of the House to see that it got an adequate return for the enormous sums of money which were spent upon it.
Another thing stated by the Chancellor of the Exchequer was most interesting to the House. He admitted that there was no chance of getting back from the Transvaal the money we had expended upon this war; he said that we had taken over a ruined country, and that there were no realisable assets whatever. Under those circumstances we should have to put our hands into our own pockets. Personally he could not help expressing regret that Lord Kitchener's terms were not accepted. It was clear that, whatever wealth, there was in the Transvaal, and whatever increase of trade might attend the return of prosperity, it would be enjoyed mainly by the next generation, and that seemed to offer an argument why posterity should, to a considerable extent, be called upon to liquidate this war debt. He could only say in conclusion that he thought every Member of this House must sympathise with the Chancellor of the Exchequer in the task which confronted him, and must admire the courage with which he had set about it. He had rendered great service to the country by putting the situation so clearly before it, and if his statement should lead to a thorough overhauling of our methods of finance, it would not have been made in vain. There was one thing the nation must take to heart and understand thoroughly, and that was 693 that, if we expended so extravagantly as we had done in times of profound peace and prosperity, we could not afford to indulge in the luxury of war.
§ MR. JOHN REDMOND (Waterford)
I have risen to take a brief share in the discussion upon this subject to-night, because I feel that it is important that the voice of Ireland should be heard clearly and distinctly with reference to the extraordinarily disastrous and disgraceful financial statement which has been set before the country by the speech of the right hon. Gentleman the Chancellor of the Exchequer. But in the first place allow me to offer to the right hon. Gentleman the meed of the sincere admiration with which his speech has filled me. I have seldom listened to a speech which impressed me more with its honesty of purpose. The Chancellor was in great difficulty. I doubt if any Chancellor of the Exchequer of recent times ever had to face a more difficult situation, and the right hon. Gentleman addressed himself to it in an honest manner; and the honesty of his speech was only equalled by its courage, for it requires courage to make such a speech as the right hon. Gentleman made tonight.
I hope that one of the effects of the speech to-night will be to call the attention of the country to the true state of affairs in South Africa. I do not think in the memory of any Member of this House there was ever a more disastrous situation put before the country than was depicted by the Chancellor of the Exchequer, and the one thought in my mind all through it, from beginning to end, as I listened to the disastrous tale unfolded, was what a misfortune it was for my country to be tied up in partnership with Great Britain. It is one of the cheap commonplaces of debate on that question that it is, forsooth, a benefit for a poor country like Ireland to be in partnership with a rich and prosperous country like Great Britain, But it is exactly the contrary. What interest has Ireland in the great expenditure entailed by the war in South Africa; what interest has Ireland in the policy which necessitated that expenditure? Absolutely none, and it is absolute disaster for a poor country 694 like Ireland to be tied up in partnership with a rich country like England, when it is forced to pay a share, and too large a share, as I shall presently show, towards the enterprises undertaken by the rich partner. The Chancellor of the Exchequer has pointed out that the deficit with which he has to deal is not a deficit entirely due to the war, but is due also to the growth of what he called the ordinary expenditure. What is the nature of this bloated ordinary expenditure? The chief increase is with reference to the Army and Navy. If I were an English Member I would agree with the Chancellor of the Exchequer when he said that the popular feeling was that there should be a strong Navy; but I ask hon. Members to kindly address themselves to the question as to what benefit Ireland, as a separate entity, gets from the Navy? The value of the Navy is not to protect Ireland from invasion; the value of the Navy to this country is that it is a great insurance of your commerce all over the world. Ireland has no commerce on the seas, and so far as the Navy is concerned this increased expenditure, which may commend itself to the popular mind of this country, cannot commend itself to the minds of our people, who look upon it as a piece of wanton and absolute extravagance. The same is also true of the Army, and when it is pointed out that the deficit is due not only to the war but to the enormous increase of the Army Votes, that is no consolation to Ireland at all, because she is forced against her will and her interest to pay too large a share towards that expenditure. Someone said in the course of the debate that he knew no one who had been in favour of economy. I can only say the Irish Members for all the years I have been in Parliament have protested year after year against these bloated Estimates for Army, Navy, and Civil Service. We, at all events, have not been in favour of this extravagance, and are not open to that imputation. The Chancellor of the Exchequer boasted of the prosperity of Great Britain. He did not say Great Britain, he spoke of the United Kingdom, but he meant Great Britain, because he spoke of the great prosperity which marked the recent history of this country. He said 695 there had not been a step backward in the prosperity of the people, and that their power of consumption had been maintained. If that is true of Great Britain, it is not true, and the Chancellor of the Exchequer knows it is not true, of Ireland. There is one industry which is not progressive either in Great Britain or Ireland, and that is agriculture. In this country agriculture is one of a great number of industries, and is not of paramount or overwhelming importance, but in Ireland it is the only industry. While, therefore, it is true to say that, notwithstanding the decline in the prosperity of agriculture, so far as Great Britain is concerned trade is prosperous, it is not true to say that trade is prosperous in Ireland, because there agriculture is the only industry, and is admittedly languishing. Under the present financial system Ireland, notwithstanding that fact, is bound to bear her share of the enormous expenditure decided upon by this country against the protests of Ireland's representatives.
This is a new Parliament, and the point may fairly be raised that Ireland is called upon to pay far more than her just share of taxation. This is not the proper opportunity for formally raising the question of the financial relations between the two countries, but the question will have to be raised before the session is much older, and debated at length. Suffice it for me to say at present that in 1895 a Royal Commission—in the main a British Commission—containing most of the leading financial authorities of the country, unanimously, with one exception, reported that Ireland was being overtaxed, having regard to her taxable capacity, as compared with Great Britain, by at least £2,750,000 a year. That Report was made in 1895 on the basis of the figures of the receipts and expenditure for 1893–4. The taxation of Ireland in that year was £7,500,000, and between then and 1899–1900 the taxation of Ireland has been raised by more than £1,000,000. Up to March, 1901, another additional £1,000,000 was placed on the taxation of Ireland. We have not the exact figures for the last year, but we know broadly what they are. Last year the Chancellor of the Exchequer himself stated that the new taxes he was then imposing 696 would probably raise the taxation of Ireland by something close upon £1,000,000. Now, forsooth, additional taxes are to be imposed upon Ireland, amounting roughly to £600,000 a year. ["More."] I am making a moderate estimate. The income tax, which in Ireland is a small matter, and the sugar duty will mean additional taxation of about £600,000 this year. Therefore we have this extraordinary fact, that a Commission, with a majority of your own countrymen and your leading financial experts upon it, declared in 1893–4: we were taxed £2,750,000 more than we ought to be, and since then nearly £3,000,000 additional taxation has been put upon us. And while this has been going on on the one side, the prosperity of Ireland has been going down on the other. In this country the prosperity has been going up year by year, by leaps and bounds, and the capacity of the people to bear taxation has been increased. But in Ireland during those years since 1893–4, when our taxation has been increased by nearly £3,000,000 a year, the prosperity of the country has admittedly gone down. After all, the best test of the prosperity of a country is the state of the population. During those years to which I have referred the population of Ireland has diminished by 100,000. and the pauperism per thousand has increased. Judged by any test you can possibly apply, the prosperity of Ireland has gone down, while her taxation has increased. I take the point, therefore, that even if the taxation now proposed were in our opinion just in its character, and even if the object for which it is imposed were laudable and right, we Irish Members would still be bound to protest against this additional taxation on the ground that we are called upon to pay far more than our share.
But what is the character of the new taxation? The Chancellor of the Exchequer spoke about direct and indirect taxation, and he told an applauding Committee that the direct taxation of this country was about 48 per cent. of the total, and was now to be brought up to a level with the indirect taxation. That was not a candid statement; it was scarcely a fair statement. He was speaking, he said, of this country, but what is the fact in regard to Ireland? 697 While it may be true that direct taxation now is equal to indirect taxation in Great Britain, that is not true of Ireland. Indirect taxation in Ireland is 78 per cent. of the whole taxation of the country. I think it is a cruel thing for the Chancellor of the Exchequer to speak as he did of the direct taxation equalling indirect, when he knows that in the poor country of Ireland the indirect taxation is 78 per cent. of the total taxation. And then he proposes to levy five millions of additional money, and to inflict on Ireland still further taxation by a duty on sugar. I protest against this additional taxation of sugar. It is a tax which will press heavily on the poor, which will be felt in every miserable little cabin in Ireland, and which will not be felt at all in the houses and palaces of the rich in this country. It is unfair to the individual and unfair to the country. There are many ways in which this tax on sugar will be injurious to Ireland. We have very few industries. One small industry recently arose in which I am interested, for the reason that I had lately an opportunity of inspecting one of the places where it is carried on. It is an industry for the manufacture of condensed milk. I went over the establishment in Minister, and found 300 or 400 girls engaged in making condensed milk. Now, the chief ingredient of condensed milk is sugar. Apart from the general injustice of this taxation of the poor, it is a little, hard that a new industry of this kind should be specially hit by the new taxation which has been imposed. Again, take the case of the income tax. Is there in the whole history of politics a tale of greater injustice than the history of the income tax in Ireland? What are the facts? Up to the year 1853 there was no income tax in Ireland; but in that year, when Ireland was impoverished and exhausted after the famine, the taxation of Ireland was actually doubled at one fell stroke, and an income tax was imposed; but Mr. Gladstone stated that he was only imposing it for seven years, and he gave a distinct pledge to that effect. And he stated that as a compensation he would free Ireland from the Consolidated Annuity Fund. Now, the Consolidated Annuity Fund amounted at that time to £250,000 a year; but the very first year that the 698 income tax was imposed on Ireland a sum of over half a million was raised; and from that day to this, in exchange for the Consolidated Annuities, Ireland has paid in income tax considerably over thirty millions sterling. I say that the whole history of the income tax in Ireland is a history of injustice and of breach of faith. Do not let me be misunderstood on this question of the income tax. If I had my way I would pay the whole cost of the war out of the income tax. I think it would be a far honester way, for undoubtedly the whole responsibility of this war rests, not with the poor or the working classes, who have been deluded into supporting the war, but with the moneyed classes of the country. I would be glad to see, therefore, the entire cost of the war thrown on the income tax. Still, notwithstanding that the income tax is paid by the wealthier classes, I protest, as an Irishman, against any increase of any tax whatever in Ireland, in view of the fact that we are paying far more than our share, according to our taxable capacity. The Chancellor of the Exchequer boasted to-night that the yield of the income tax had risen. Certainly that was something to be, proud of, showing as it did how wealth and prosperity have increased in this country. But again the right hon. Gentleman was speaking only of Great Britain. Why, the rapidly-decreasing welfare of Ireland is proved not only by the increasing poverty of the working classes and by the emigration of the poor, but is actually proved also by the decreased welfare of the rich. The 1d. in the £ of income tax produces much more here than it did five years ago; but in Ireland it produces less. These are the figures. In the year 1896 an 8d. in the £ income tax produced in England £13,822,000, and in 1900 it produced £16,400,000, showing the increasing prosperity of the country. The same thing is true of Scotland. In 1896 an 8d. in the £ income tax produced in Scotland £1,400,000, but in 1900 it produced £1,700,000. But during the same period in Ireland an 8d. in the £ income tax produced in 1896 £700,000, and in 1900 only £960,000. That was an increase in England of £2,500,000, and in Scotland of £300,000, but a decrease in Ireland of about £10,000. By any test 699 you like to apply to Ireland—the tests of increasing poverty of the poor, the increase of depopulation of the country, or the striking fact that the wealthier classes have during these years decreased in prosperity—the country is becoming impoverished, while you increase the taxation by three millions per annum.
Now, of course, I recognise the fact that in the main this enormous deficit is to be attributed to the war. I confess I was appalled, and I think that the English Members must also have been appalled when they heard the figures as to the cost of the war as they were read out by the Chancellor of the Exchequer. I do not believe that the public outside had any idea until to-night that this war had cost up till now 153 millions of money. It is appalling, and as the Chancellor of the Exchequer read out these figures amid the ominous silence of the Ministerial Benches, it seemed to me that over the faces of hon. Members opposite was creeping the grey shadow of political death. I wonder what would be the position of the Conservative party in the House of Commons to-day if last September they had gone to the constituencies and had told the constituencies that the cost of this war up to the present was 153 millions, and that Sir Alfred Milner was of opinion that we were to-day, as far as the ending of the war was concerned, worse than we were six months ago?
With regard to this £150,000,000, I think hon. Members will admit that it is a little hard for us, coming here from a poor country like Ireland, where our people are almost begging for something to promote their prosperity, to be expected to take part in voting such a sum for this purpose. I cannot help thinking that many hon. Members must have had qualms of conscience when they heard these figures. What would that money have done for old age pensions, for schemes for the housing of the very poor, or for education? The Chancellor of the Exchequer, in speaking about economy, said that hon. Members on this side if they economised in one direction would be forced to spend in another, and he instanced a scheme of compulsory land purchase and sale in Ireland. Is that the same kind of expenditure? Any expenditure for 700 the compulsory sale and purchase of land in Ireland would, from a strict point of view, be a reproductive expenditure. By such a scheme of land purchase we are simply asking for the use of credit under circumstances which have been proved in your land purchase dealings with Ireland in the past to be perfectly safe to the Exchequer. But, apart from the financial aspect, it would be money spent for the pacification, conciliation, and peace and prosperity of the people of Ireland, whereas this money has been spent for the destruction of a country and the extermination of a brave race. This £153,000,000 which has been spent so far on this war is double what was spent on the Crimean War, and it is as much, we have been told, as was spent in two years in the great Peninsular War. And for what purpose has it been spent? Not to fight England's battles against the world or against the greatest nations of the world, but in the fighting of a battle against a handful of armed farmers. The Chancellor of the Exchequer spoke of this as a great war. Yes, it is a great war, but for this country and this Government it is a disgraceful and a shameful war. It is a great war in the sense that it will live in the history of the world for all time as an example of how a little country, made up of men who were willing to give their property and their lives in defence of an ideal, withstood for months and years the might of one of the greatest empires. It is an example of heroism which I believe will live in history alongside the history of the Greeks, who preferred to die at Thermopylae rather than surrender their liberty to a foreign nation. The only sense in which it is a great war for you is that it has cost you £153,000,000. There was no part of the Chancellor of the Exchequer's speech in which I admired his honesty more than when he said that his hopes of last year, that the Transvaal would be able to pay something for the war, were delusive. He has now told the country that nothing can be hoped for in this direction, and, so far as the Transvaal itself is concerned, nothing can be hoped for for years. He has admitted that fact, and who can tell how long it will continue? But if the war ended to-morrow there would probably be a 701 deficit in the revenues of the Transvaal itself, and this country would be put to an enormous expense to police it. Therefore we must postpone indefinitely any hope of recouping ourselves from the revenues of the Transvaal. It is well that these facts should be stated, and I thank the Chancellor of the Exchequer for having told the country plainly that this war has cost £150,000,000, and that he can hold out no hope of an early termination of the war. Sir Alfred Milner has just declared that you are worse off in South Africa than you were six months ago, and in addition to that we now hear that the taxpayers of this country will have to pay the cost. I sincerely hope that these facts will have their proper effect upon the men who went with a light heart into this war, believing. I suppose, the declaration of the Colonial Secretary when, at the time of the Raid, he said he could not go to war, and when he asked us to consider what a serious thing it would be if he had to send 10,000 men to conquer the Transvaal. I want to know where the Colonial Secretary is to-night? I sympathised sincerely with the Chancellor when he reminded the House how easy it was for the Secretary of State for War to come down here and propose a great scheme of Army reform and leave the Chancellor of the Exchequer to provide the money. The Chancellor was not thinking of the Secretary of State for War. The Chancellor was thinking of the Secretary for the Colonies, and he was thinking with some natural bitterness of soul how easy it was for his colleague to come down here in the midst of a war fever in the country and win cheap applause by advocating this disastrous war, and then leaving him to come down to-night and to devise unpopular means, as they necessarily must be, in order to meet the bill. I sympathise with the Chancellor of the Exchequer in that position. In my view it is not the Chancellor who ought to get up at that Table to justify this enormous expenditure, but the man who, notwithstanding the cheap popularity of the moment, will go down in history as responsible not merely for the expenditure of two hundred millions of treasure, but for the vastly more precious treasure of the blood of 20,000 702 of his countrymen. In the name of the Irish Members I seize this, the earliest opportunity that has occurred to us, to enter our protest against this Budget. We protest against it on three broad grounds. First, we object to the purpose for which this taxation is raised; second, we object to the character of the taxation itself; and third, because Ireland is called upon to pay an unjust and inequitable share of it.
§ * MR. JOHN WILSON (Falkirk Burghs)
I listened to the statement of the right hon. Gentleman the Chancellor of the Exchequer with feelings of disappointment and regret. Within the short time which has elapsed since the right hon. Gentleman sat down telegrams have been pouring in upon me protesting against his proposals. I hope the Committee will give me a little time to-night, as I seldom interfere in the debates except on subjects of which I think I know something more than the greater part of the House. Well, there is no doubt that the Chancellor of the Exchequer has the sympathy of all of us on this side of the House, and possibly of many on the other side, on the difficult task he has undertaken of providing for the cost of a war which has been one of the greatest surprises in history. Never has there been a war in which such extraordinary estimates as to cost and duration have been made from the beginning till now. At first ten millions was to be the cost, but to-night we are told that it has already cost 150 millions.
I regret very much the step which the Chancellor of the Exchequer has taken in raising the necessary taxation from the people of this country. I have from October, 1899, when the war broke out, during last session and till now, urged strenuously on the Chancellor of the Exchequer, in public and private, the importance of taxing the Transvaal for the whole cost of the war. I heard the hon. Member the Leader of the Irish party say that this was a war brought on by people of the moneyed class of this country and that they were entitled to pay for it. I say that the war was brought on directly by the ultimatum of President Kruger, and indirectly by the fact that these gold mines existed in the Transvaal; but what I 703 do take exception to is that the Chancellor of the Exchequer does not put the cost of the war upon those who brought it on. The right hon. Gentleman has no doubt I given to this House what he considers a good reason for not doing so. I must traverse that reason. The light hon. Gentleman says he has not received a Report from Sir David Barbour who was sent out to report on the mineral wealth of the Transvaal, and whether the Transvaal could bear any part, or the whole cost of the war. But he did not require to send Sir David Barbour out there to find that out. The mine owners of the Transvaal themselves admit the great wealth of the country. The greatest mining expert in South Africa has admitted it in his Report, which I hold in my hands, presented to the Consolidated Gold Fields meeting in 1899. Mr. Hayes Hammond said in that Report that under good rule, such as British rule—[Cries of "Oh!" from the Irish benches]—I hope hon. Members opposite would not dispute that the rule of Britain is superior to the corrupt rule of Kruger—a very conservative estimate of the saving would be £4,826,535 per annum, being a saving of 6s. per ton of ore crushed that year. One of his fellow directors is Mr. C. J. Rhodes, and the chairman is Mr. Rudd, who at a meeting in Johannesburg estimated the saving at 7s. 6d. per ton, while another authority, Mr. Eckstein, estimated it at 10s. per ton from the abolition of the dynamite monopoly, the reduction of enormous railway charges, the reform of the liquor laws, and the securing of cheap labour. This saving would thus range from 5 to 8 million pounds sterling per annum. But, say that the saving would be five millions per annum, why should the Chancellor of the Exchequer ask us to pay the cost of the war; why should he put taxation on the people of this country who are not receiving any special benefit? They have given their blood and their treasure not alone in direct taxation. Everybody knows what a vast amount has been raised in support of the widows and orphans of our soldiers killed in the war. I heard the hon. Member for Devonport say that when the increase on the income tax was announced by the Chancellor of the Exchequer it was received with 704 ominous silence on this side of the House. We all believe in the justice of this war, and we are willing to pay for it provided we cannot find a substitute better entitled to pay for it. Who should pay for it but these mine-owners of the Transvaal who were increasing enormously their already bloated fortunes? I regret deeply that the Chancellor of the Exchequer did not raise a Transvaal War Loan of a 100 millions at 3 per cent. guaranteed by this country. Although the Transvaal is not able to pay it at this moment, it will in a short time. It has been stated that the Transvaal is ruined. Undoubtedly the farming districts are ruined. There is very little agricultural wealth in the Transvaal. When Mr. Gladstone gave it up in 1881 there was nothing in the Treasury. The whole wealth of the country is in the gold mines, and these mines are just as intact to-day as when they were abandoned in 1899. I do not profess to say that I am as great an authority as Mr. Hayes Hammond, but I have been there; I have been in the mines; I have examined them; I have seen the nature of the strata; and I can tell you that they would not be injured by the delay in opening them. What has been the damage done? Only £200,000 to one mine, and that is a mere nothing compared to the enormous resources of that little district comprising the Rand, extending not more than twenty-five miles beyond Johannesburg. Why does Sir David Barbour not give his Report? Surely he could have visited all the gold mines within twenty-five miles from Johannesburg by this time?
I hark back to my main point. It was not necessary to send out Sir D. Barbour; the Government could have taken the report of the mine-owners themselves. The Chancellor of the Exchequer has, I am sorry to say, taken what I think are-retrogressive measures. I do not mean to talk on the income tax or the sugar duty, but we come to what I consider the greatest blot on the Budget—I speak from some experience—and that is the export duty of 1s. per ton on coal. The Chancellor of the Exchequer stated that it was quite evident that coal could stand an export duty of 1s. per ton when the selling price was 16s. 3d. per ton, according to the Board of Trade returns for 705 last year. He supposes that that tax will not check export; but let me tell him, so far as Scotland is concerned, that it will give a serious check to export, and that it has already done so. What is the price of coal now? I tell him that coal which was selling at 15s. per ton at the pithead last year is now selling at 8s. per ton, and I would be glad to give him a contract at that figure. It is well known that the largest part of the cost of production of coal is for labour. How is this duty going to affect the 800,000 people who are interested in the production of coal in Great Britain? In Scotland we export a third of our whole production of coal, but in Fifeshire it is two-thirds; and I am sure that county will be very seriously crippled by this duty. Let me give one illustration to show how competition rules in regard to coal in foreign markets. The Hamburg coal market is very important—four million tons being handled, of which probably two million tons are Scotch, which meet on a level with other coal. Now a penny or twopence in the ton will turn the scale of profit and loss. When the price was 16s. 3d. it was not so easy to turn that scale, but when the price is 8s. a ton that is a very different matter, and I can say that this tax of 1s. a ton will almost annihilate the Scotch coal trade in Hamburg. [An Hon. MEMBER: What about the telegrams?] Hon. Members ask me to read these telegrams. [Cries of "Read."] I will give the substance of them: "The Association of Goal Exporters consider that the trade will be ruined by the proposed duty." Contracts have been made forward, and it can be quite easily understood that these contracts cannot be fulfilled and delivery made if they have to pay a shilling per ton duty, when very often the profit may be in pence. That, however, is but a small matter. A more grave question is that the prosperity of many of the shipping ports will be seriously hampered. I do not know whether the Chancellor of the Exchequer has taken into consideration that view of the matter. Something like five or six million tons of coal are exported from the shipping ports of the Clyde, and the greater part 1 of that goes out in bulk and enables 706 shippers to bring home freights at a much easier rate. By this tax the Government are most seriously imperilling the shipping supremacy of Great Britain. I predict that they will not maintain it for more than a year or two. They will live to see the folly of it and regret it. Why have the Government not made it an ad valorem duty? It is said that foreigners cannot do without South Wales coal. There is a certain amount of truth in that. It holds a peculiar value in the market—giving great heat and little smoke. The Scottish coal is something like Yorkshire coal, burning freely; but the German and Belgian coal will drive the English and Scotch coal out of the market, if the latter is weighted with a duty of 1s. per ton. Why, the direct loss to this country will not be two millions but twenty millions, besides the loss on the shipping trade. For these reasons I object to the passing of this resolution, and though I do not suppose that my protest will be of much avail, I shall be obliged to go into the lobby against the right hon. Gentleman on this part of his proposals.
§ * SIR CHRISTOPHER FURNESS (Hartlepool)
said he appreciated very much the straightforward speech which the right hon. Gentleman the Chancellor of the Exchequer had made in regard to the growing increase of the Supplementary Estimates. He recognised, as he was sure many other hon. Gentlemen did, the difficult position which that system made for the Chancellor of the Exchequer. He himself, playing a somewhat important part in the industrial life of the country, felt how serious was the effect of this increasing expenditure upon our position, as compared with that of other countries, in the struggle for the industrial supremacy of the world. They had heard that night how our expenditure was progressing by leaps and bounds. Whatever his opinion might be in regard to the war in South Africa, he was ready and anxious to pay his share in connection with it—whether his contribution were through the income tax or in any other way. But, as one possessing a very considerable area of land in this country, he did not understand why he should be let off by the remission of rates and taxes in con- 707 nection with his land, and have the burden saddled on him in connection with his commercial concerns. He fully recognised that the Chancellor of the Exchequer had a very great objection to further taxing tea. He remembered that the right hon. Gentleman gave as his reason for not adding to the duty on tea that the existing duty represented something like 40 or 50 per cent. of the value of that article. When he came to the question of sugar, he presented to the Committee a system of a sliding scale of duties in connection with sugar used in households, manufactures, and breweries. But when it came to the question of the duty on coal he did not seem to have given that attention to this important matter which it deserved. Like sugar, they had got various qualities of coal—good coal and inferior coal, large and small—coal worth 12s. 6d. per ton and coal only worth 3s. per ton f.o.b.; yet the right hon. Gentleman proposed to impose one uniform export duty on all of 1s. per ton. A duty of 1s. per ton on coal worth 12s. 6d. per ton represented 8 per cent.; but the same duty on coal worth 3s. per ton represented 33½ per cent., f.o.b., on the value. There was another point in regard to the competition now taking place as to whether the iron ore produced in Sweden, Spain, and other countries should be exported from these countries to this country, or whether the ore should be manufactured into iron and steel by the countries producing it. Possessing as we did the preponderating carrying trade, we had been able to send by our fleets of steamers coal to various countries and bring back the iron ore and manufacture it here into iron and steel, thus giving employment to enormous multitudes of working men. The imposition of a 1s. duty would have the effect that, instead of exporting coal, we would make it into coke and send the coke abroad; and instead of receiving the iron ore from abroad, the countries producing it would themselves manufacture it into iron and steel and throw out of employment hundreds and thousands of working men now earning good wages. Every ton of coke means consuming two tons of coal.
§ * SIR CHRISTOPHER FURNESS
said he had listened very attentively to the speech of the right hon. Gentleman, but had not heard that a tax of 1s. per ton was to be placed on coke. If the right hon. Gentleman really proposed to put 1s. per ton on coke, I should like to point out to him that that would be equivalent to 6d. per ton on coal; and consequently the tax would be an inducement to ship, where possible, coke instead of coal. There were many engaged on the north-east coast of England who made contracts two or three years ahead, and it seemed to him that it would be a great hardship that these men should pay a duty of twenty-five per cent. on the free-on-board price of coal. What will be the effect of this duty upon our coal? We stand, practically, equally divided, and if I may, I will venture for a moment or two to give an illustration. For the sake of argument I will take the case of a steamer carrying 4,000 tons of coal. Its expenses from the north-east coast of England to Spain or Norway might amount to £2,000. That will mean 5s. per ton on the coal exported to that country and 5s. per ton on the iron, ore which is brought back by the steamer. In that way we arrive at a gross freight of £2,000. If we impose an export duty of 1s. per ton on the coal, that will mean that the ship will be precluded from earning one-half of her freight. The consequence will be that the cost of working the steamer will have to come out of the raw material which is brought back to this country. So that instead of the steamer earning 5s. per ton on the outward cargo the freight would be 1s. per ton less. This would have to be made up on the return cargo, and the cost of the iron imported into this country would, therefore, be increased by that amount, which would be equivalent to an increase of 2s. per ton in every ton of iron we produce from Spanish, Norwegian, and Swedish ores. In that way we shall be increasing the cost of the manufactured article, and instead of our being able to produce the manufactured article cheaper we shall be compelled to increase the price, and this will cripple our trade and place us at a disadvantage in competing with other countries. 709 It is only a question of a very small margin indeed as to whether we cannot produce the finished article cheaper in Spain than in England. I do hope that the right hon. Gentleman will seriously consider this matter after he has had the advantage of hearing the views of those who are interested in the question. I trust that he will be able to alter his views in regard to the imposition of this duty. From the right hon. Gentleman's statement I was able to gather that he is placed in this position—that after borrowing and manipulating everything he possibly could to meet this enormous expenditure, he finds himself with a deficit of something like £11,000,000. How is it proposed to meet this? It is proposed to add 2d. in the £ to the income tax, which raises £5,000,000. There is to be a halfpenny per pound on sugar, which means £4,000,000; and there is to be 1s. per ton upon exported coal, which is estimated to bring in something like £2,000,000. As showing the sincerity of my desire that the Chancellor of the Exchequer should seriously reconsider this matter of increasing the income tax, I may point out to the Committee that an increase of 1d. in the £ means several thousand pounds to my companies. Again, with regard to the relief which has been given to the landowners—I say this with great respect and not in a boasting spirit—as the possessor of land I am anxious to pay my quota to the rates, and I do not require any remission. With regard to the 1s. per ton upon coal, it may affect me directly, but it will also affect hundreds of thousands of workmen engaged not only in the coal pits, but also in the ironworks throughout the country and in our Mercantile Marine, and it will have a very serious effect upon the industrial life of the nation. I venture to make this assertion, that if the right hon. Gentleman persists in imposing this 1s. per ton on coal it will be the commencement in this country of the American system of establishing enormous trusts. Hon. Members opposite have stated that the foreigners would pay this tax. If they did pay this £2,000,000 on coal. I should have no particular objection to it; but in my opinion the people who will pay this money will be the working men of this country, and the 710 foreigner will not contribute any portion of it. I do hope that the right hon. Gentleman, after he has given more careful consideration to this proposal to impose a duty on coal, will find some other means of meeting the difficulty; otherwise I apprehend the gravest consequences to the industrial and commercial life of the country.
§ MR. JAMES REID (Greenock)
In venturing to address the House for the first time. I claim that indulgence which I know is never refused, and which is one of the oldest and most valued traditions of this House. I should like to say a few words upon this subject, because I represent what was once a very important sugar refining constituency, a trade which I regret to say has now been almost entirely driven out of this country, not by fail competition, but by the introduction of bounty-fed sugar from Continental nations. London, Liverpool, Bristol. Hull, as well as my own constituency, have suffered immensely during the last twenty years by this system. I will give hon. Members a single instance of what occurred under my own observation. I know of one large sugar refining business which was established at a cost of a quarter of a million of money some twenty years ago. It went on for a few years, and it was the property of wealthy men who knew what they were about, and the business was worked for a number of years at a loss. I may say that owing to this bounty-fed system that business was ultimately sold for a sum under £20,000. I should like to thank the Chancellor of the Exchequer for putting a differential duty on sugar, and I would ask him to go a little further and put on a countervailing duty, in order to prevent any injustice being done to my own constituency and to British sugar refiners generally. Why should we allow foreigners to bring bounty-fed sugar into this country in order to deprive our legitimate sugar refiners of their trade? A great deal has been said about confectionery, and it is said that this tax will help that trade, but no one trade has a right to prosper by a bounty which drives another trade out of existence. I hope the right hon. Gentleman will keep that in mind and give us some relief. I am 711 not a sugar refiner myself, and so I speak disinterestedly. A former excuse made for not carrying out my suggestion was that we had not the machinery for collecting a countervailing duty, but now that the Chancellor of the Exchequer is introducing a new duty that excuse falls to the ground. I believe there is a possibility of another conference upon this question being held in Brussels. I am told that Germany, Austria, France, and Belgium are willing to abolish these bounties, but that Russia blocks the way. I remember that when I was a young man the sugar refiner was a wealthy man, but to-day he is only a struggling manufacturer, and in many cases he has been ruined. I should like to put this question to the Committee—supposing such trades as the cotton industry of Lancashre, or the iron trade, to which the hon. Member opposite has referred, were confronted with bounty-fed articles opposing them in this country, would they not long ago have risen in their wrath and have compelled any Government to give them some relief? Because the sugar trade was only a small industry the sugar refiners have always got the cold shoulder, and there is a strong feeling that they should now have some relief on this point. I hope the subject will be brought up again in the House before we have finished with the Budget. I thank hon. Members for the courtesy they have shown in listening so attentively to me.
§ * MR. TAYLOR (Lancashire, Radcliffe)
As a new Member, addressing the House for the first time, I should like, if it be not impertinent, to congratulate the Chancellor of the Exchequer upon the courage, the lucidity, and the straightforwardness of his statement to-night. I noticed that at the very beginning of his remarks he told us that he was not going to be a party to deferring for future years payments which he considered ought to be met now. I at once asked myself what he meant by "party." Is the right hon. Gentleman called upon by any section of this House to be a party to deterring this payment, or can it be that the party is to be found amongst his own friends upon the Front Bench? His attitude upon this question was very emphatic and very 712 creditable to him, but I wondered when I heard his statement if there, could I possibly be any party who desired that a portion of this expenditure should not be paid at once. The right hon. Gentleman proceeded to tell us frankly that we could not expect him to place additional taxation upon spirits, wine, beer, or tobacco, and this time even tea is to be let alone. That extra 2d. in the pound upon tea is still to remain, in order to meet the requirements of the Agricultural Rating Act. I very much regret that the Chancellor of the Exchequer did not maintain his courage when speaking about the effect of the taxation of sugar used by the brewers. He told us that upon that point he was open to reconsider his proposal if arguments could be brought to bear to show that the tax upon sugar used in beer was injurious to the trade. This statement, taken in connection with the taxation of similar objects, is extremely significant, and I regret that he did not give us any indication that he would tax further any of those commodities, the use of which is not always good for the community; and he has reserved his taxation for articles which, at all events, do not injure the consumer, notwithstanding his little sneer against cheap confectionery.
We have had trotted out again the old argument that direct and indirect taxation should be maintained at about the same level, and the Chancellor of the Exchequer took credit for having reduced indirect taxation by one or two per cent. at the expense of direct taxation. Upon this question it may be considered impertinent for a new Member to think at all; but I think there would have been some excuse if, fifty or sixty years ago, a Chancellor of the Exchequer had told us that the balance between direct and indirect taxation would have to be maintained. The past fifty years has taught us that the true policy is to raise taxation with the least amount of friction and incubus upon the industries of the country. After we have had so many lessons in this respect I am not ashamed to stand up here and say that we ought to carry direct taxation still further, and go in the direction of having a free breakfast table. I observe that the Chancellor of the Exchequer is going to tax the coal that is taken in the ships, but not in the 713 bunkers, and he gave a hint to the shipowners to make their bunkers larger. What is there to prevent them doing this and making their bunkers larger, so that at other points they may unload their bunkers? What guarantee have we that none of the coal in the bunkers will be sold abroad? He told us that the rise in the price of coal and the cost of freight have had the effect of increasing the shipment of coal. By the same process of reasoning, as the price of coal has now gone down very much, the shippings of coal will be less, and to prevent them declining to nothing at all you are going to put an extra tax on coal! I have had many representations made to me from my constituents, who comprise a great many colliery workers and owners, and I anticipate that they will be very much against this tax on coal. I would much rather that the Chancellor of the Exchequer had remained true to the tradition of which I have always looked upon him as being one of the guardians, and that is the freeing of our trade from every kind of shackle; but at the same time we have a tax placed upon sugar, which is worse than the tax upon coal. The Chancellor of the Exchequer has told us that this 25 per cent. tax upon the retail price of sugar may disappear in a very short time. If you are going to tax sugar to the extent of 25 per cent., and it is going to disappear, why not tax it 100 per cent. and then there will be no price at all. This is taxing a very large and important industry, which is beneficent to the community and profitable to the nation. The manufactures of biscuits, confectionery, sweets and jam are large and not unimportant industries in this country, and the consumption of the people per head of sugar I think ought to be taken on the higher basis, namely, 90 lb. and not 56 lb. But take the consumption at 56 lb. per head. That means 2s. 4d. per head of the whole population of this country.
Why is this tax on sugar not levied as a poll tax? The reason is, I suppose, that this tax will not be so easily discerned by those who have to pay it. That is one of the reasons why I object to it, for I believe the people should be able to realise what they are paying. Taxation on sugar is open to much the 714 same objections as a tax on bread itself. What is the objection to a tax on corn? Is it not that it would place a tax on the very poorest of the people? Why did Cobden and Bright and all their followers work for Free Trade sixty years ago if it was not in order to better the condition of the poor people in the country? Therefore I object to the taxation of sugar, because it is practically as bad as a, tax on bread. The Chancellor of the Exchequer thinks that the rich consume more sugar per head than the poor. I would remind him that a very large proportion of the poor of this country who are too poor to pay for flesh meat consume jam and sweets along with their bread, and I believe that the poor per head consume more sugar than the rich. But this tax is avowedly a tax upon the poor. The taxation of such articles means restricting the consumption; but apart from this, as a matter of national welfare, is it better to restrict the consumption of commodities by the poor or to restrict the extension of the savings of the rich? The working classes are the great consuming classes, and we know how the taxation of raw materials affects them. I venture to say that the taxation of the people's food is as much a tax upon the raw material as the taxation of cotton or wool coming into this country would be. If you do not increase the price of labour, a tax like this is practically robbing the working lasses by increasing the price of food. I cannot agree with those who say that the working classes of this country need this particular lesson to teach them the real meaning of war. The great fall in our trade returns is already beginning to teach the working classes any lessons that they may be in need of.
I may be asked what should be taxed? It is not for us to say what should be taxed, but surely there are other sources of national income which might be touched before the sugar of the people. Is there not that large unearned increment of land values? Is there not that least earned of any increment we have ever considered—I mean the value of tied house property belonging to public-house owners? Are these considered to be improper objects for taxation? Are they not as proper objects for taxation as sugar and coal? I re- 715 member a speech by the Secretary of State for the Colonies in which he asked what ransom were the rich owners of land going to pay for the defence of their country, and the undisturbed possession of their property. Why is the right hon. Gentleman not repeating that phrase to-day? What ransom are the owners of incomes from monopoly businesses in the shape of tied houses prepared to pay for that monopoly while it lasts?
There remains another subject of taxation, namely, the income tax. This is a House of income-tax payers; let us not forget that, and a special duty lies on us to let it be seen that we are not specially tender to the payers of income tax. As a small payer of income tax myself, I should have preferred that the Chancellor of the Exchequer had increased the income tax to 1s. 6d., and thereby have removed the necessity for taxing sugar or exported coal. In the strongest possible manner, therefore, I object to the taxation of sugar. There are only one or two other commodities that can be put in the same category. Water could be taxed—I know the water of the people of London is taxed—salt could be taxed, and corn could be taxed. The Chancellor of the Exchequer says that the finances of our Indian Empire are in an infinitely better condition than our own; but the Indian Government tax a commodity that we have not yet reached; they tax salt. I do not believe in these principles of taxation. I believe the proper way to raise taxation is to go to those who have it, and we ought to rejoice in our ability to find sources of national income rather than tax anything that is used by the very poor. I object to these taxes because they are a restriction of trade, because they moan the impoverishment of the people, and because, whether he means it or not—and I do not think he does—the Chancellor of the Exchequer is initiating a policy of Protection, and is inserting the thin edge of the wedge of Protection that a less wise man than he may some day drive up to the hilt.
§ * MR. D. A. THOMAS
This is not the occasion to go into detail on the question of the coal duty, but I should like to correct one or two misapprehensions under which the Chancellor of the Ex- 716 chequer is evidently labouring. I wish at the very earliest moment to enter my very strong protest on behalf of a very large labouring population in South Wales against this coal tax. I have been asked by the hon. Member for Cardiff, who represents the largest coal exporting port in the world, to express his regret that owing to an affection of the throat he is not able to be here to-night to enter his protest also. Although I admire the manliness and candour of the speech of the Chancellor of the Exchequer, I do not think in regard to this coal tax he has been very well coached. He quoted several authorities, including Mr. Gladstone, in support of this tax. He quoted from something Mr. Gladstone said when he was Vice-President of the Board of Trade, I think, in the early forties. Any opinion Mr. Gladstone may have expressed on this question deserves the attention and consideration of the Committee, and I myself, as an expert on this question, would attach very great weight indeed to it, because I believe no man understood the coal question in its broad aspects so well as Mr. Gladstone. In 1860, when Mr. Gladstone was Chancellor of the Exchequer, and when the question of the commercial treaty with France came before the House, he very strongly advocated it, and that treaty provided that there should be no export duty on coal shipped from this country to France.
Then the right hon. Gentleman quoted—I make no complaint of it—from a few notes published a few years ago by myself. He dignified those notes with the title of a book, and he seemed to rather pride himself that his enemy had written a book on the matter. The right hon. Gentleman, with all his great ability and financial experience, has very little experience as a commercial or business man, and he does not appear to appreciate the difference as touching competition between an addition of 2s. to the price of coal when it was 9s. 6d. and a 1s. duty when the price of coal is 16s. or 17s., as it is to-day. The object I had in writing the few notes which the right hon. Gentleman referred to was this. The coal trade in South Wales and the North of England was at that time in a state of great depression. A large number of collieries 717 were working at a loss, and believing that the low prices were due to the competition between the coalowners themselves, I felt—and the experience of the last few years has shown that I was right—that the addition of a couple of shillings on the then price would not materially affect the demand or prejudice the position of exporters in neutral markets as regards the competition of the United States or other countries. If the right hon. Gentleman had only read those few notes a little more carefully he would see that in the scheme I propounded it was provided that when the price of coal reached 11s. or 12 s. the scheme would cease to operate altogether, because I felt that when coal had reached that figure foreign competition might be a very important factor indeed. To-day, with the best class of Welsh steam coal at 17s., a duty of a shilling in the present state of the coal trade will make all the difference in the world as regards foreign competition.
The right hon. Gentleman says that our coal exports have increased very largely in recent years, but it must be remembered that the exports from the United States have also increased from 20,000 or 30,000 tons to 600,000 tons to European markets. The right hon. Gentleman has imposed this tax for the purpose of providing a couple of millions, but he at the same time rather appeared to indicate that one of his objects was to conserve the coal of this country to ourselves. The right hon. Gentleman must see that the idea of limiting the export is inconsistent with the raising of revenue. If by the imposition of this tax he can prevent coal from being exported, he will not derive any revenue from it. I would wish to know how this duty is to be levied and collected. Large quantities of coal have been already sold, and this duty comes at a very inopportune time, as many contracts have been already entered into. The right hon. Gentleman says that the foreign consumer is going to pay this duty, but as regards the contracts which have been already entered into, either free-on-board or c.i.f., how is the foreign consumer to pay this duty? I as a coal sale agent have entered into contracts, and the foreign consumer will not pay the duty on them. I know there is 718 a difference of opinion on the subject in coal circles, and I therefore wish to know who will have to pay this duty—the buyer or the seller? With regard to the contracts which have already been entered into, the imposition of the duty will be a very serious matter to the middlemen and merchants of Cardiff and Newport, and will practically mean ruin to the small man. He is not a producer of coal himself; he makes contracts for hundreds of thousands of tons, on which he sees a probable profit of 3d. or 6d. per ton. After he has made his contract the Chancellor of the Exchequer comes along and says he must pay a duty of 1s. per ton. This is not a question which will affect coal-owners and miners only—it is really a duty upon tonnage, the right hon. Gentleman says he is not going to put the duty upon bunkers, but he is going to put it on all coal exported from this country, whether used on boats sailing under the British flag or not. A very large proportion of the coal exported from this country is used by British ships and British subjects abroad. A French boat coming into Newport to take bunkers on board and to sail to Malta will pay no duty at all upon those bunkers, but a British boat, sailing under the British flag, coaled by British people in Malta, and coming from Malta back to Newport, will have to pay 1s. a ton upon that coal. Where does the principle come in? The right hon. Gentleman says the foreign consumer will have to pay. In this case the foreigner is let off free, while the British subject has to pay. But I rose mainly to point out the misapprehension of the right hon. Gentleman with regard to myself and to ask one or two questions. I hope in his reply he will explain very clearly the incidence of this duty, and whether in the case of free-on-board sales and contracts the duty will be paid by the buyer or the seller.
§ * MR. WYLIE (Dumbartonshire)
I listened with much attention and anmiration to the able and lucid speech of the Chancellor of the Exchequer, but I regretted very much that he made no allusion to any proposal for the purpose of counteracting the injurious effects of the bounty system upon both our colonial and our home sugar industries. In connection with these bounties the British 719 Government has a two-fold duty to perform—in the first place, in regard to the working-men connected with sugar refineries, and in the second place in regard to our colonies, in seeing that they have at least fair play, and are allowed to continue their industries under absolutely free trade conditions. What has been our course during the last twenty or thirty years? We have accepted—in many cases welcomed—a gigantic system of protection practised by various continental countries, which has given an enormous advantage to the sugar producers of those countries, taken a very large amount of land in Europe for purposes to which it might have been much better devoted, rendered desolate and uninhabited vast tracts in the tropics, ruined the sugar industry in the West Indies, and taken the bread out of the mouths of tens of thousands of working-men in this country. At this juncture the Chancellor of the Exchequer had a splendid opportunity of completely redressing all these grievances, and I am very sorry he has not availed himself of it. He has had a brilliant precedent afforded him by the India Council, which two years ago imposed countervailing duties for the purpose of saving the sugar industry of the East Indies. In supporting countervailing duties I speak absolutely as a free-trader, and in the interests of free trade. Like Ruskin, I would like to see trade between the nations as frank and free as honesty and the sea-winds can make it, but if a continental country puts on a bounty, which is a very injurious form of protection, and it is taken off at the port of entry on this side, that is simply adjusting the conditions to almost absolute free trade principles, and giving respective industries the same fair play as they would have had under what are commonly known as free trade principles. I think the Chancellor of the Exchequer to a certain extent approves of this principle, because in dealing with articles of competition for foreign countries, of which sugar is a component part, he is willing to tax them to the extent of £240,000. Why has he not extended this principle to the sugar industry of the West Indies, and the sugar-refining interests of this country? I am at a loss to know. I admit that in 720 his graduated scale of duties on sugar he has given a very great advantage to the sugar refiners of this country over that which they already possess, but he has not given them all they require to meet the competition of bounty-fed sugar, while he has left our West Indian colonists entirely in the cold. If we do not give them any advantage over even the most hostile countries, we are bound, at least, to afford them fair play; and I think, it is not yet too late for the Chancellor of the Exchequer to revise his proposals of taxation and to arrange a scheme of countervailing duties which would at least give the colonists that measure of fair play. If the right hon. Gentleman considers the present time is not opportune for the imposition of such countervailing duties in the face of the Convention shortly to be held at Brussels, I think if he were to give a firm indication that if the bounty-giving countries would not come to reasonable terms he would impose countervailing duties, for which he has the machinery completely to his hand, he would greatly strengthen the hands of our Commissioners at the Convention, and make it almost an absolute certainty that the bounties would entirely disappear in the course of the present year. I very strongly commend what I have said to the attention of the Chancellor of the Exchequer.
§ * MR. HOLLAND (Yorkshire, W.R., Rotherham)
said that at the last General Election in his address he pledged himself to oppose any proposal which would be likely to hamper or hinder trade, and he expressly placed an export duty on coal in that category. Neither he nor his constituents thought the Government would go to the extreme length of proposing such a duty, but, seeing that it was now brought forward, it was the duty of the Committee to examine the proposal and see whether or not they approved of it. He opposed such a duty because it aimed a heavy blow at a very important industry, and it was the business of the Legislature to help rather than to hinder the industries of the country. If the effect of the proposal was to limit the exportation of coal it would also have the effect of reducing the earnings of 000,000 men engaged in the coal industry 721 and of diminishing the comforts of the 3,000,000 people who might be dependent upon the earnings of those men. The miners of the country certainly deserved better treatment than that at the hands of Parliament. The hardships of their lot wore bad enough without their calling being singled out for such a heavy blow as this. Not only would the earnings of the miners be diminished by the coal duty, but the burden of taxation would be increased by the sugar duty. The sugar duty, at any rate, hit everybody in some degree or other, but the proposal with regard to coal hit only a section of the community. The Chancellor of the Exchequer desired not to stop the exportation of coal, but to raise a revenue. He would, however, receive the support of hon. Members who had an entirely different object in view—Members who were anxious to have coal exports stopped because they feared the early exhaustion of the coalfields. There was, after all, no prospect of such exhaustion, as the recent high prices had induced a more economical use of coal, and, in addition to that, large new coalfields had been discovered. It had been mentioned, in the course of the debate, that the use of electricity would probably diminish the use of coal. He would like to point out that the generation of electricity required that coal should be used, so that he did not think too much importance should be attached to that particular argument. In other countries the use of liquid fuel was largely increasing, and that would diminish one of the demands which had hitherto caused the use of coal. He thought, taking all these facts into consideration, they might look forward to the future with considerable composure, but even if our coalfields were to run short we had in our colonies vast stores of coal, and by drawing upon these we should do something for the consolidation of the Empire.
At a recent meeting of the Associated Chambers of Commerce a resolution was brought forward in favour of an export duty on coal, and after discussion it was seen that it would not hold water, and the resolution was quickly dropped. The duty on sugar would fall far the most heavily on the industrial classes of the community. If they limited themselves 722 to what was called the taxable margin of a man's income, then from that point of view the sugar tax was altogether indefensible. It violated the principle of equality of sacrifice on which our great statesmen had laid stress formally years. The present Colonial Secretary fifteen years ago referred at Warrington to that very point, and said that taxation ought to involve equality of sacrifice, and that he did not see how that result was to be obtained except by some form of graduated taxation. He objected to the tax because it was the raw material of a number of other industries. He was glad the Chancellor of the Exchequer indicated his intention of granting a drawback on the export of goods made from sugar. Another great blot on the Budget was the visionary contribution from the gold mines of South Africa. It had gradually become more and more visionary during the last few months. He thought public opinion had become all the more sensitive since the announcement was made a few days ago that the Chartered Company was to be relieved of its intended contribution in connection with the Jameson raid. He trusted that as the result of the debate the Chancellor of the Exchequer would stiffen his back, and be resolutely determined that the gold mines of South Africa should not be allowed to escape a substantial contribution towards the expenses of the war.
§ * SIR M. HICKS BEACH
With regard to the remarks of the hon. Member who has just sat down, I think there has been some misunderstanding as to my views with regard to the contribution of the Transvaal, and I think that misunderstanding was shared by my hon. friend the Member for Falkirk. I did not intend to say anything to-night to the effect that the idea of a contribution from the Transvaal has now become visionary or illusory. That is not my notion at all; but what I did wish to point out to the Committee was that there was no early or immediate prospect of any such contribution. I went on to point out that there were very valuable asssets belonging to the Government of the Transvaal, particularly mineral assets, from which such contribution might come, but that it was impossible for us, or for any one in the present 723 condition of the country, until the termination of the war and the establishment of an ordinary Government and a new system of taxation, to say what that contribution should be, or what the Transvaal could afford to pay. The hon. Member may rest assured that as long as I am Chancellor of the Exchequer I shall not leave the question out of my view, and, on the contrary, that I shall do the very best, as I am quite sure my right hon. friend the Colonial Secretary will also, to obtain whatever may be possible to be obtained from that source. But I thought it right frankly to point out to the Committee the position of affairs as it is at the present time, so far as I have learnt it from Sir D. Barbour, and to explain that for the moment, and for a certain time before us, we could not expect to derive any contribution.
§ MR. JOHN MORLEY (Montrose Burghs)
The right hon. Gentleman spoke of the ordinary Government being set up, and said that when that Government was set up a contribution might be expected from them. I suppose the ordinary Government will be themselves the judges.
§ * SIR M. HICKS BEACH
We shall hear what the ordinary Government have to say, but the ultimate decision must rest with the Imperial Government. My hon. friend the Member for Falkirk said we ought to have issued a Transvaal loan for 100 millions at 3 per cent., instead of borrowing in the ordinary way on the credit of the Imperial Government. Really, to issue such a loan on the credit of a State which is at present at war, which in many respects is in a ruined state [Opposition cheers, and an HON. MEMBER: Guarantee it.] Yes, but what is the use of our guaranteeing it? You had much better raise it on our own credit.
There are one or two points raised by hon. Members in the debate to which I wish to allude. Several hon. Gentlemen have protested against the proposed export duty on coal. I expected those protests from hon. Members representing constituencies intimately connected with the coal-producing interests. But I did not expect such a protest from the hon. Member for Merthyr, and I cannot understand how, while he believes he could have raised artificially the price 724 of coal by 2s. a ton when the trade was very depressed and coal was selling at 9s. 6d. a ton, he can argue that an addition of 1s. a ton on the same coal when it is selling at 17s. will ruin the trade. That is a proposition which, I think, would not have occurred to the hon. Member if the 2s. had not been intended for his pocket and the 1s. for mine.
§ MR. D. A. THOMAS
When coal was selling at 9s. 6d. foreign competition was not to be feared. At 17s. it would be disastrous.
§ * SIR M. HICKS BEACH
The hon. Member has a perfect right to change his mind; and perhaps I was a little unfair in taking the argument which he intended for one purpose and applying it to another. I am very grateful to the right hon. Member for West Monmouth and to my hon. friend the Member for Exeter and to my hon. friend the Member for Whit by for their aid to my endeavours, however unsuccessful so far, to indoctrinate the public and this House—and, I am bound to add, my own colleagues also—with a desire for economy. If we could get the public to believe that all these great additions to expenditure, however necessary, had to be paid for—and often paid for by unpopular taxes—then there would be a greater desire to scrutinise expenditure very carefully before it is incurred, and not to incur it except where there is a real and absolute necessity for it. I have not seen that tendency for some years past in the public mind; and I think the right hon. Gentleman will agree that it is not only during the term of office of the present Government that there has been a failure in the public mind of that sense of the necessity for economy which used to be prevalent twenty or thirty years ago. The hon. Member for Merthyr asked me who would pay the duty on coal. I understand that the person who applies to the Customs for leave to put the coal on board will pay the duty. Several hon. Members have alluded to forward contracts which have already been made. That is not an easy matter, and I shall be much obliged if hon. Members will communicate with me on the subject. Probably the best way to deal with it will be to imitate, at any rate, the principle of the section inserted in the Finance Act 725 of last year with regard to tea and other goods of that kind on which the duty was increased. Perhaps the law might be framed so as to enable a person who had made a contract here to break his contract unless the person with whom he made the contract abroad were willing to pay the 1s. duty. That is the effect of the section of the Act of last year, under which practically the duty may be added to the price agreed upon, so that the person who might ship the coal would not pay out of his own pocket.
§ * SIR M. HICKS BEACH
Yes, that will apply to sugar. The hon. Member for Waterford made a very eloquent speech dealing with the poverty of Ireland, the contribution of Ireland to the Imperial revenue, and the connection of Ireland with Imperial expenditure. The hon. Member will, I hope, pardon me if I do not follow him into the questions he raised in respect of Ireland to-night. They are of great importance, and he discussed them with great ability and eloquence. No doubt we shall have an opportunity later on of going fully into the subject. But I would say two things. I know how unpleasant and unsatisfactory it is to anybody to be told that he is not so poor as he tries to appear, but I think Ireland is better off and increasing more in prosperity than hon. Members would represent her to be. I will say nothing more on that subject. I do not wish to say anything disagreeable to hon. Members. At any rate, I believe that things are better, and becoming better, in Ireland than was actually represented in the speech of the hon. Member, and, although no doubt it is a fact that the payment of Ireland to the revenue derived from taxation has increased in recent years—I have not the figures by me to verify the statistics given by the hon. Member—yet the hon. Member omitted entirely to state that the contribution of Great Britain to the Imperial revenue had increased by a far larger amount, and I believe it would be found on inquiry that at the present time, on the estimated revenue and expenditure of the year before us, Ireland would pay about 1s. 5½d. when Great Britain 726 would pay 21s. I am bound, putting altogether aside the question of the way in which the revenue is expended (which to my mind has a material bearing), to say that if I am correct in those figures the position is not so bad for Ireland as the hon. Member represented.
I hope the Committee may be willing shortly to allow these resolutions to pass. I would venture to point out that by doing so they do not express any approval of the policy of the Budget or the proposals of the Budget, but simply do what has invariably been done in the case of any Budget I can remember—namely, that the Committee gives its assent to the resolutions in order that, as is absolutely necessary, the Customs may levy the duties on the following day. If upon subsequent discussion either the sugar duty or the coal duty should be disapproved of by the House, every penny so levied would be returned to those who paid it, and nobody would be any the worse. I hope that in these circumstances we may be allowed to take these resolutions, and, if there is no objection, I would also ask that the loan resolution might be taken. ["No, no."] I would venture to say that in these matters time is of great importance, and the delay of a loan, after the announcement that it is intended to borrow is made, often has a very prejudicial effect upon the terms on which it is effected. I am in the hands of the Committee with regard to it, and, though I will not press them if they are not willing, I hope they will agree. At any rate, I hope they will give me the resolution for sugar and the resolution on coal.
§ * MR. LOUGH
The request made by the Chancellor of the Exchequer seems to me to be a reasonable one if we are to understand that discussion on all these subjects can go on to-morrow. There are many details with regard to this tax of great importance which have not been mentioned by the Chancellor of the Exchequer, and which I would much rather bring forward later on. If, however, we are not to be allowed to deal with this question of sugar to-morrow, I would ask the Committee to bear with me while I call attention to these matters.
§ * SIR M. HICKS BEACH
I understand that it would not be in order to discuss 727 these resolutions on the other resolutions to-morrow, but we are prepared to give opportunities for their discussion on Report.
§ * MR. LOUGH
The Committee has really not given these two resolutions that consideration which they deserve. There is first the question of Excise. What will be done with regard to glucose? If an announcement is made by the Chancellor of the Exchequer to-night that an Excise duty will be placed on glucose, the manufacture of that article in large quantities will commence within a week. [The Chancellor of the Exchequer here indicated that glucose manufactured in this country would he subjected to an Excise duty.] Supposing beet sugar is produced in this country, will an Excise duty be levied upon it? The sugar duty is one of the most serious proposals ever laid before this House, and it really ought not to pass this first stage without a little more consideration. We are imposing a duty of 4s. 2d. on refined sugar, ranging down to 2s. on raw sugar. The Chancellor of the Exchequer stated that the range of difference in the price of sugar was as between 8s. and 13s. Therefore, the right hon. Gentleman is putting 4s. 2d. on the 13s. which makes it 17s. 2d., and he is only putting 2s. on the 8s. article; and so he has created a difference of 7s. 2d. in the market where the difference to-day is only 5s. That is an extraordinary thing to do in this House to-night without any discussion. Why differentiate the duty in this way? The inevitable effect will be that advantage will he taken of the low duty to bring in as much common sugar as possible, and it will be refined and adulterated in this country, and sold as the high-priced sugar. The Committee will recognise that this is a matter of the greatest importance, and this differentiating of the duty is a great mistake. If there is to be any difference at all, it should only be 6d. per cwt., putting 4s. 2d. on refined sugar and 3s. 8d. on raw sugar, giving 6d. for alleged loss of weight in refining. We should then be acting in accordance with the principles of Free Trade. I am afraid that the Chancellor of the Exchequer has fallen into a mistake with regard to this. Then, there is a 728 tremendous importation of foreign preserved fruit. Will there be a duty levied on foreign fruits preserved in sugar, and on everything else preserved in sugar? I do not think the Committee has any idea as to the great interference with trade caused by this duty. By to-morrow morning everything which has been left out will create a great stir in the market, and every man will be trying to take advantage of what we have for-gotten to include. This duty is a breach of the two most serious canons on which our duties have been levied in this country for the last forty or fifty years. The first is that we should not levy a tax upon the great articles consumed by the people, and the second is that we should not levy a tax on raw material. Now sugar is both. Sugar is the third greatest article of consumption. Grain is first, meat is second, and sugar is third. Sugar is the foundation of a great many other manufactures to which the Chancellor of the Exchequer has not referred in his speech. I do not think that the right hon. Gentleman has appreciated the importance of the manufactures which are founded upon sugar. He referred in his speech to the Act of 1876, which enables corresponding duties to be levied on all the substances containing sugar. It does not appear that that principle covers the case of saccharine. [Cries of "Divide, divide."] I hope hon. Members will not interrupt me, for I have not said a word which is irrelevant. Saccharine contains about three hundred times as much sweetening property as sugar. That would require a duty of 12s. in the £ at the outside, but the Chancellor of the Exchequer has said that the duty is to be 20s. Why should the duty on saccharine be more than is necessary to make it correspond with the duty on sugar? I venture to submit these suggestions to the Committee.
§ MR. T. M. HEALY
On a question of procedure, the Chancellor of the Exchequer has asked the Committee to take these resolutions to-night, and also to take the Vote for the loan, and he says that this was done last year under the Finance Act. I think it is very important that the Committee should understand with regard to money matters 729 exactly where we are. This is a matter of far reaching constitutional importance. When the right hon. Gentleman the Member for West Monmouth introduced his Finance Bill, he earmarked the title of "Finance Act" in order to show that it was for the purpose of raising duty and not for the purpose of a loan. Now the War Loan Act of last year and the Finance Act had not only different titles but totally different preambles. If the procedure now proposed is to continue, it may be possible in one Committee of Ways and Means to raise the duties on beer and spirits and also to provide for the compulsory purchase of land in Ireland, and two subjects, one a loan and the other a levy, could be dealt with by the same Committee. This involves a further consideration. We never know what is in the Chancellor of the Exchequer's lucky or unlucky bag of resolutions until they are read out from the Chair, and I have never understood that Ways and Means ever governed anything except what came under the head of the Finance Act. Yet to-night it is proposed to give the right hon. Gentleman the power to raise this money, and forsooth we are to have, after 12 o'clock, another resolution which we have not seen, and which is to be dealt with under the same procedure. I acknowledge that the right hon. Gentleman is entitled for his fearlessness and general courtesy to some consideration, and we are told that we shall have a further allotment of time for the discussion of these very important subjects, but having regard to the fact that the rules and forms of the House, which are sometimes sneered at, are its safeguards, and should be strictly adhered to, and also having regard to the closure, we are entitled to demand that the rules of the House shall not be departed from in this matter.
§ * SIR M. HICKS BEACH
I have no reason to blame the hon. Member for having raised this point. I can assure him that the rules of the House, which in matters of this kind are of great importance, are being accurately followed. I think the hon. Member, however, is under some misconception. He pointed out quite rightly that last year the War Loan Act was one Act and the Finance Act was another Act. So they will be again this year. But last year the Committee of Ways and Means sat 730 on the 25th of March, and the first resolution passed was a War Loan Resolution—precisely the same kind of resolution that I propose to submit now,—and immediately following on that the same Committee of Ways and Means passed the Income Tax Resolution, the Contract Notes Resolution, and the Estate Duty Resolution. Subsequently, of course, these three last resolutions were embodied in the Finance Act, and the War Loan Resolution was embodied in the War Loan Act. Precisely the same course will be taken now. The loan resolution will be embodied in a separate Bill, and there will be ample opportunity for full discussion of the loan apart from the Finance Bill. I hope that will satisfy the hon. Member. With regard to the question of the hon. Member for West Islington, the duty on saccharine has been very carefully calculated. It is, of course, very high, but the best information I can obtain puts the sweetening power of saccharine, as compared with sugar, very much higher than the hon. Member has stated, and, therefore, the duty is correspondingly high. The hon. Member may rest assured that there will be ample opportunity for discussing the details of the proposals.
§ MR. T. M. HEALY
On a point of order, may I submit to you, Sir, that last year the point was not taken, and the precedent of last year is, therefore, not an established precedent. The right hon. Gentleman has not informed us if this was ever done before last year. If the House passes a thing per incuriam it does not follow as a matter of course that it is an established precedent. But I respectfully submit to you, Sir, having regard to the practice of dealing with the Finance Act and the shape into which it was put by the right hon. Member for West Monmouthshire, that the passing of resolutions at one sitting to be afterward formulated into separate Bills is in itself a breach of the practice of the House.
§ * SIR WILLIAM HARCOURT
May I ask the Chancellor of the Exchequer what is the practice with reference to the supplementary loans, which do not form part of the Budget proposals? Are they initiated in Committee of Ways and Means? With reference to the remark of the hon. Member for North 731 Louth, I remember that objection was taken to the Finance Bill of 1894 because it dealt not only with taxation, but also with the National Debt, and Mr. Goschen moved a resolution insisting upon the Bills being separated. I certainly claimed at that time that the whole financial arrangements of the year could be dealt with in the same Bill. All loans are initiated in Committee of Ways and Means. If they were initiated in separate Committees, then, of course, the objection of the hon. Member would decidedly apply. The only question is whether there ought not to be separate Committees of Ways and Means.
* THE CHAIRMAN
There is only one Committee of Ways and Means, and it is not possible to move for a separate Committee of Ways and Means in order to consider a separate resolution. The Committee of Ways and Means having been set up, it is open to the Committee to consider any resolution which deals with finance. But when these resolutions are accepted and passed by the Committee it would not be right to put into a Finance Bill dealing with the finance of the year proposals for raising a loan to be repaid after a certain number of years or a loan in perpetuity.
§ MR. RENWICK (Newcastle-on-Tyne)
May I ask whether we shall have an ample opportunity to-morrow, or on Monday or Tuesday, to discuss this important question of the tax upon coal? I speak on behalf of other Members for coal constituencies. I would point out to the Leader of the House that while this question is in abeyance it is paralysing the export of coal, and therefore it is absolutely necessary that it should be settled promptly. It will greatly depend upon the right hon. Gentleman's answer whether we shall vote for this resolution.
§ MR. KEARLEY
What has been urged by the last speaker in regard to coal is of far more importance in relation to sugar. There are imported into this country no loss than 60,000 tons per year of articles containing sugar in some form or other. I take the figures from the Board of Trade Returns for last year. The Chancellor of the Exchequer has told us to-night what is to be the duty on these articles; and I really think that before we pass these resolutions we ought to get some information 732 on the point. The Chancellor of the Exchequer told us in his speech that there was no intention of giving any preferential treatment to the sugar refiners in this country. Refined sugar polarising 98 degrees is to be charged 4s. 2d. per cwt. I would like the right hon. Gentleman to tell us on what basis he reduces the duty to 2s. per cwt. on sugar that polarises no more than 76 degrees. I do not suppose that the right hon. Gentleman intends to subsidise the British refiners to the extent of 1s. per cwt., but his scheme actually does that; and I can name a firm that will take £200,000 a year out of this subsidy. What is the explanation that can be offered? It is urged that the waste in manufacture has to be taken into consideration; but surely the manufacturer in Germany has to sacrifice waste in manufacture. I would like to know who has advised the Chancellor of the Exchequer on this matter; for I am perfectly sure he has been wrongly advised. The Chancellor of the Exchequer mentioned that he had consulted an association which was at present acting as between the refiners and merchants and shippers in this country and the German beet refiners and shippers. But all the interests should be consulted. The refiners are, of course, interested persons, and if they get a concession such as is proposed they will get wonderfully well out of the duty. I hope the Chancellor of the Exchequer will give the trade an opportunity of pointing out that the scale of polarising between 98 and 76 degrees is altogether wrong, and that it will enormously subsidise the refinersin this country, although he has told us in clear terms that that is not his intention.
§ * SIR M. HICKS BEACH
I endeavoured to explain to the Committee in the course of my speech that this scale has been arrived at under circumstances of great difficulty, and, of course, before the duty is proposed it is really impossible to consult everybody who ought to be consulted in the matter. I wish to state that it is our intention not to protect the British refiners, but to put them on a fair basis with refiners abroad. If the scale does more than that, it ought to be altered.
§ THE FIRST LORD OF THE TREASURY (Mr. A. J. BALFOUR) Manchester, E.
733 My hon. friend the Member for Newcastle has put a question with regard to the order of discussion. My friend wants an opportunity of discussing the coal duty to-morrow or on Monday or Tuesday. I understand that it will be impossible to discuss it to-morrow, when we shall continue the debate on the remaining resolutions. The next opportunity, and by no means the last, for discussing these proposals of the Government will be on the Report of these resolutions. When that is disposed of, there will, on the Second Reading of the Finance Bill, be again full opportunity to discuss all these important topics. Again, after the Second Reading there will be a Committee stage, when the proposals will be before the House in a form in which they cannot be upon these preliminary resolutions. I think, therefore, that my hon. friend will have the fullest opportunity of having these schemes thrashed out.
§ MR. A. J. BALFOUR
The Report cannot be taken on Monday, because we are pledged to give that night to discuss the Irish University question on the motion that the Speaker leave the Chair. I should hope that the Report on the resolutions may be taken on Tuesday, but if not I shall endeavour to fix an early day.
§ MR. RENWICK
I do not wish a multiplicity of days to discuss this question. What I clearly see is that until this question is settled the export of coal will be practically demoralised; and it ought to be settled as quickly as possible. So far as I can judge, it may be two or three weeks.
§ MR. A. J. BALFOUR
The immediate result of the passing of the resolutions is that the duty is levied; but if on any subsequent occasion the House sees fit to throw out or modify the Budget proposals then those who have been injured by the levying of the duty will be recouped. Meantime, the duty will be levied to-morrow morning. My hon. friend is quite right when he says that it will never do for any trade to be unsettled.
§ MR. JOHN MORLEY
I ask whether it will be possible on the Report stage 734 of these resolutions to discuss the general policy of the Budget, in the way rather initiated to-night by my right hon. friend near me; or whether the discussion will be confined to one proposal after another, each proposal being dealt with specifically?
§ SIR WILLIAM HARCOURT
I ask whether it would be possible to discuss the general policy of the Budget on the resolutions which are not to be taken to-night?
§ * MR. KEIR HARDIE (Merthyr Tydvil)
The Leader of the House said that the duties will come into operation this morning. That practically means that all subsequent discussion will only be of an academic kind.
§ MR. A. J. BALFOUR
If at any stage of these preceedings the House were to decide that the proposals of the Government were not acceptable, their past effect would be abolished.
§ * MR. KEIR HARDIE
My point is this, that if once the House to-night endorses these resolutions, the chance of their being rescinded or modified in the future is very remote indeed. Now I regret exceedingly that the party above the gangway on this side of the House is going without protest to allow the country to be dragged back to the old policy of Protection. [Cries of "No, no."] Hon. Members say "No, no," but it will be the story of the War Office over again. The first false step taken to-night, then step by step, bit by bit, we will land ourselves where we were forty or fifty years ago. Speaking in a special sense for the working classes, I entirely endorse the view of the Chancellor of the Exchequer, that the working classes should be made to pay direct their share of the extra war expenditure, extra naval expenditure, and extra military expenditure generally. If the working classes could be made to feel that all this military glory is costing them something it would make them consider how far the glory was worth the cost. But the right hon. Gentleman is not taking the necessary steps to make the working classes feel that they are paying for the war glory. The tax on sugar will fall on the working man's wife, 735 and not on the working man himself. It is going to be a very serious matter to the woman who has to maintain herself and her three, or four, or five children in decency on £1 or 25s. a week. A tax of ½d. per pound on sugar will mean an extra expenditure of 3d. per week in most houses of the poor, which will be immeasurably greater than twopence on the income tax. My point is that the bulk of the tax will fall with the greatest severity on the very poorest classes of the community. Everyone who understands the condition of life among the very poor, knows that tea and bread form their staple diet, and every sweated victim in London and in every other centre of industry will be taxed to pay for this war. I am not discussing this matter from the point of view of trade, as other hon. Members have done, but from the point of view of the principle involved. If a fresh tax had to be found, surely an article of food required by the poor should not be selected, but the surplus wealth of the country of which we have heard so much this evening should be taxed. The Chancellor of the Exchequer tells us that the income of the country liable to be assessed for income tax had risen during the past twelve years by £120,000,000 per annum. If that be so, surely some means might have been found of securing a proportion of it, rather than having to put this burdensome and iniquitous tax on sugar, and thereby inflict an injustice on the very poorest. Now I come to the tax on coal. I do not believe that the export tax on coal will reduce the quantity exported by a single ton. I will tell you what it will do for a certainty. It will reduce the colliers' wages very considerably. There will come a time when the present crisis will have passed away, when, the competition between this country and its continental rivals will be again as keen as formerly, and when it will be impossible for the colliery proprietors of this country to maintain their position in the continental markets if they have to pay the present rate of wages and this export duty. When that time is reached, what is going to happen? Employers and employees will agree that it is bettor to have wages reduced, and retain our foreign trade than give up our foreign trade and go without employment. This export duty is really a tax 736 upon one section of the working class community, and a section which I venture to say the House of Commons would not willingly punish by imposing a burthen upon it not borne by other sections of the community. I am going to vote against both these resolutions, because I believe that the sugar tax and the export duty on coal are both wrong in principle. We have gone far enough astray as it is from the policy which made this country prosperous, and I would appeal to hon. Members not to give their sanction to a further departure, which would make it necessary to begin all over again the work which the Free Traders did. I trust the House will not sanction proposals which are so dangerous to the prosperity of the country, and so unjust to certain sections of the community.
§ MR. GUTHRIE (Tower Hamlets, Bow)
said he wished to ask the Chancellor of the Exchequer what effect the tax on sugar would have on the confectionery industry. He would also like some information as to how the Customs authorities were going to arrive at the percentage of sugar in a manufactured article. His constituents were very much interested in the matter.
§ * SIR M. HICKS BEACH
said that the provision already applied to all dutiable goods in articles like cocoa and chocolate, and was very simply administered
§ MAJOR JAMESON (Clare, W.)
said that at that hour of the night it was perfectly impossible to debate the resolutions, and in discharge of his duty to his constituents he begged to move the adjournment of the debate.
§ Motion made, and Question proposed, "That the Chairman do report Progress; and ask leave to sit again "—(Major Jameson).
§ MR. A. J. BALFOUR
I hope the hon. Gentleman will not persist in his motion. It is absolutely necessary—I am sure the right hon. Gentleman opposite will agree with me—that these resolutions should be passed to-night.
§ SIR WILLIAM HARCOURT
I must support the right hon. Gentleman in what he has just said. It is necessary for the protection of the Revenue that these resolutions should be passed, and I understood from the Chancellor of the 737 Exchequer that the general debate can be reopened to-morrow.
§ MAJOR JAMESON
said matters of importance to his constituents were involved, and he could not get any information as to whether he would be pre-
§ cluded from speaking to-morrow. He would therefore persist in his motion.
§ Question put and negatived. Original Question put.
§ The Committee divided:—Ayes, 183; Noes, 123. (Division List No. 127.)739
§ Resolved, That there shall be charged on and after the nineteenth day of April nineteen hundred and one, the following customs import duties:—
|Sugar of a polarisation exceeding 98 degrees||2||4|
|Sugar of a polarisation not exceeding 76 degrees||2||0|
|and intermediate duties varying between 4s. 2d. and 2s. on sugar of a polarisation not exceeding 98 and exceeding 76 degrees.|
|Molasses (including all sugar and extracts from sugar which cannot be tested by the polariscope)||2||0|
|Saccharin (including substances of a like nature or use)||1||3|
§ And that duty shall be charged in accordance with the provisions of the Schedule from The Customs Tariff Act, 1876, on goods containing as a part or ingredient thereof any article liable to any of the above duties.
§ And that the exemption under the same Schedule from the duty on plums of plums preserved in sugar shall cease.