HC Deb 23 May 1901 vol 94 cc1051-100

[SECOND READING.]

Order read, for resuming Adjourned Debate on Main Question [20th May], "That the Bill be now read a second time."

Question again proposed; Debate resumed.

MR. LOUGH (Islington, W.)

said that this Finance Bill was the most important introduced into the House of Commons for a century, and he had endeavoured to understand its leading features. In the discussion it had been assumed that steps should be taken to reform the national system of finance, because it was not really sufficient for the needs of the nation. No fact had been brought out more strikingly than the statement about what the normal income of the country would have been without any increase of taxation this year or last. When the present Government came into office six years ago they enjoyed from their predecessors a surplus of no less than £4,500,000. If to that surplus was added the natural increase of the taxes that then existed, the amount that had been diverted to give the doles to the landlords in connection with the agricultural rates, and the amount that had been obtained by suspending the Sinking Fund, they found that the income of the country to-day would be twenty-three millions more than it was six years ago. When they found that with the income tax at 8d. instead of 1s. 2d., without the new sugar duty, which would be so oppressive, and without the coal export duty, they would have enjoyed an income of twenty-three millions more than six years ago—that was a fact which ought to sink into the mind of the nation. How had the difficulties in finance arisen? They had arisen from the extravagance of the Government. The Chancellor of the Exchequer had pleaded that the Government had been supported by the House in every extravagant proposal they had made. He doubted many of those broad statements. They had been told that not a voice had been raised in favour of economy; but that was not the case. Constant voices had been raised both inside and outside the House in favour of economy, but the Government paid no attention to them. Now, all this extravagance was really confined to one Department, although an attempt had been made to spread it over all the Departments of the State. It had been said that there had been extravagance in the Civil Service. One feature of the Civil Service which had not been noticed in the House was that a great portion of that increase was due to war expenditure, and it was a most extraordinary thing that war expenditure had thus crept into the Civil Service Estimates—such as the cost of the wars on the West Coast of Africa and in Uganda as well as the cost of the Uganda Railway. Apart from that, they could lay their finger upon one point of extravagance, namely, the great increase in warlike expenditure. The Chancellor of the Exchequer told them that he would borrow twenty millions more than was absolutely necessary for contingencies. Since that statement was made the twenty millions had been borrowed, and there was nothing more certain than that these twenty millions would be spent this year. In the statement he was going to make to the House he would therefore add that twenty millions to the admitted expenditure. In the year 1895, the year before the Government came into office, the total warlike expenditure, excluding the items in the Civil Service Estimates and the Indian expenditure, was thirty-five millions. Four years afterwards, in 189, 9, it had increased to forty-four millions. In 1900 it amounted to sixty-nine millions, in 1901 to 120 millions, and in 1902 to 141 millions. Now, these were the most extraordinary figures ever submitted to the House. Within six years the warlike expenditure on the Army and Navy had increased from 35 millions to 141 millions. He maintained that no nation could stand such extravagant expenditure without suffering very great inconvenience, or, indeed, disasters of the worst character. It was said this was a normal increase; but he did not regard it as normal. It was too late to cry over spilt milk; they had got now to find the money. They had had a most ingenious and eloquent speech from the hon. Member for Exeter, but his little plans and ingenious suggestions would he no use whatever unless the House resolved to cut down the expenditure all round. They could not get back to a proper state without cutting down expenditure in every Department. The taunt was constantly flung at them about the necessity of having a strong Navy; but the question was what did a strong Navy mean as to cost? The expenditure on the Navy six years ago was 14 millions; and it had gradually advanced to 30 millions; and why might it not go on from 30 millions to 40 millions, or from forty millions to fifty millions?

Attention called to the fact that forty Members were not present. House counted, and forty Members being found present—

MR. LOUGH (resuming)

said that the Naval Estimates had always been divided into two broad sections, one for maintenance and the other for new construction. It was the new construction which ran the country into expense. Ten millions were put down this year for new construction, and he thought that they ought to have gone more slowly and cut the item down to perhaps five millions. The present First Lord of the Admiralty had only been in office a few months, and yet he put before the House of Commons a larger sum for new construction than had ever been proposed by the most experienced First Lord of the Admiralty in the whole history of the House. There was a large field in the expenditure on the Navy, as well as on the Army, in which economy could be practised, for it would not be wise to continue this war-like expenditure on such a large scale. It had been stated that we were a rich nation, and that we could stand the expenditure, and that it was a good investment. The previous night they had been assured again how rich we were, and that the nation could easily bear this burden of taxation. That was not so. We were rich, but we could not easily bear a sudden increase of taxation. He felt convinced that at the beginning of the last century, say in 1815, the nation was in many respects more able to find a great deal of ready money for new purposes than it was to-day. At that period money was hoarded in stockings, and was readily forthcoming; and that was the secret of the success of the tremendous efforts which the country then made. But to-day things were very different. The nation was rich, but its money was invested in other spheres, and it could not be got quickly to meet an enormous war expenditure which was unprofitable. That was the reason why he was apprehensive of this enormous weight of taxation. Why had there been such a great fall in the national securities? Consols had fallen 20 per cent. more than they had ever fallen in so short a period; and credit was shaken. In these days of keen competition no business could be successfully carried on without putting a large amount of capital into it. A hundred years ago there were no municipalities, comparatively speaking. Now hundreds of new municipalities were asking for capital, and that added to the rates. A great deal of money could be raised, no doubt, but if a sudden demand were made for money to a large amount there was sure to be a collapse, which would entail a great deal of suffering. He felt assured that if the Government had approached their Estimates in a spirit of economy they would not have needed the large amount of money they now asked for. The argument of the Chancellor of the Exchequer was that we were in a mess, and that we had got to find the money to get out of it; but that was no reason why the House should adopt the proposals of the Government without criticism. It was the business of the Opposition to find fault with the proposals of the Government, but not their business to make suggestions of other financial proposals to take their place. He wished the Opposition were, in fact, a great deal more vigorous than they were in arguing the case against the Government. When industries were being destroyed, and securities were falling, it was the business of the Opposition to examine the Government proposals with care. We were only raising £10,000,000 by fresh taxation, and we required £70,000,000, so that we were raising one seventh by taxation and six sevenths by loan. He did not think one seventh was a sufficient proportion to raise by taxation.

The proposals of the Government embodied the maximum interference with the trade of this country. It had been said that there were only two fresh taxes. That was true; but what was the importance of the articles which were taxed? What was the history with regard to the coal trade for the last sixteen years? From the Return with which they had been supplied by the courtesy of the Financial Secretary to the Treasury he found that the capital employed was £110,000,000. There were five years when the interest on the capital was only 1 per cent., and the average for eleven out of the sixteen years was only 3.40 per cent., and taking the whole of the sixteen years the profit shown upon this very speculative industry was only 6.11 per cent. That was the history of the trade upon which the Government levied a new export duty—of the trade at which they had aimed this heavy blow. The Government had generalised on one fact, they had taken the profits of a single year, when the profit was £40,000,000, and imposed an export duty on this important article which all great statesmen who had previously sat on the Treasury Bench had hesitated to touch. He thought the Government were making a great mistake. It was true that the tax did not touch Ireland, and in regard to that matter the Government was teaching the country that in the selection of the article to be taxed was to be found the solution of the problem of Irish taxation. He also protested against the sugar tax. The article selected in that case was an article of food largely used in this country, and also employed in many manufactures and minor industries, and that was one reason why it was a bad article to select; but the real objection was that in the case of that tax, also, there was the maximum interference with trade combined with a large measure of protection. The House might be willing to give the Government a sugar tax if it was fairly imposed, but this one was not. In this tax the Government had imposed twenty-three taxes on sugar. Many persons seemed to have forgotten the meaning of the words "free trade." Some had an idea that it had some connection with the corn laws, but they had no such connection except indirectly. The meaning of the words "free trade" meant that there should be no shackles of any kind imposed upon trade, and that merchants should not be asked to expose their invoices or say where they did their trade and tell their trade secrets. The most serious evil in the tax upon sugar was that it hit many very small industries. Very little interference was sufficient to destroy such industries in this country and transfer them to another, and it was a great pity that any blow should be given to them. But the Budget also applied to Ireland, and it was the business of the Chancellor of the Exchequer to bring in proposals which were just with regard to Ireland. The right hon. Gentleman had, he admitted, remembered Ireland on this occasion. It was almost the first time for sixty or eighty years that an article of great consumption had been taxed in England and not in Ireland. Such a thing showed that there was a tardy awakening on the part of the British Treasury. They were beginning to see that with one exchequer a fairer selection of the articles for taxation was a solution of the Irish financial problem. By the selection of one article Ireland was not hit at all, but in the selection of another (sugar) Ireland was hit very heavily. By the selection of certain articles the Government could ruin Ireland altogether. Seven years ago Ireland was paying £7,500,000, and its population was larger than it was at present. The taxation had now increased to £9,500,000. The Census returns showed that while England and Scotland were increasing in population and in wealth Ireland was moving in another direction. While Great Britain was getting greater and richer Ireland was getting poorer and her population decreasing. The crime of the House consisted in this—that it wrung almost the same increase of taxation out of the growing poverty of Ireland as it did out of the growing wealth of Great Britain. Including the proposals of the present Budget an additional two and three-quarter millions of taxation was being imposed on Ireland since 1893–4, although the country was then declared to be overtaxed to the extent of two and three-quarter millions. Such a state of things must come to an end shortly, because if the House was constantly increasing the burdens of Ireland while her strength was constantly diminishing she would be crushed out of existence. Many of the proposals in the Budget were greatly to be deplored, and he hoped that they would be opposed at every stage.

MR. FLOWER (Bradford, W.)

said he shared to a great extent the views of the hon. Member on the question of financial relations, in fact he was the only one of the Unionist Members who last year gave the effective assistance of his vote when the question was before the House. On this occasion, however, he desired to claim the adherence of the hon. Gentleman on behalf of another part of the Empire also suffering from financial depression. A great opportunity he felt had been lost by the Chancellor of the Exchequer, with regard to the sugar tax, of dealing in a satisfactory manner with the existing distress of our West Indian colonies. The financial assistance rendered last year to the West Indies amounted in all to no less than £320,000, £82,000 of which was for the relief of the distress caused by the hurricane in 1898. He could not help thinking that it was unfortunate that the right hon. Gentleman in his Budget did not see his way to granting equality of opportunity in the markets of the mother country to the West Indies. The question was, could the Government do that by this Budget? One could not strike a mathematical balance in these matters. The open bounties could be fought by a countervailing duty, but the bounties that were given by railway companies and others in the shape of reduced freights could not be estimated. He believed that giving colonial sugar a preference tariff would go far to minimise that evil. He would probably be told that we must wait until the time of the International Conference at Brussels, when the question could be discussed. But why should we wait until then? The sugar bounties did not represent the whole aid which foreign sugar got in competition with the colonial sugar, and even if it did, the removal of the bounty would not now give equal opportunity to the colonial sugar trade, which had been beaten down by the treatment meted out to it, while the foreign trade, fed by bounties, had grown luxuriously, and had an immense advantage. The work of the bounty had been done, and that was the reason why some Governments were now willing to withdraw the bounty. The colonies ought, on the other hand, to have some compensation for the damage which had already been done. Put on counter-vailing duties by all means, but give a preference beyond that. For the purposes of revenue countervailing duties were worse than useless—they were measures of reprisal; and though they would secure the withdrawal of bounties they would bring nothing into the Exchequer. The Chancellor of the Exchequer wanted revenue, and as he could not count on the countervailing duties for the purpose, we were thrown back on preference tariffs. He had been told that it would be exceedingly difficult to give a rebate on colonial sugar, because it would be difficult to earmark it, but the system of marking the packages, he imagined, would get rid of that difficulty. The Government having already accepted the principle of inter-Imperial preferential trade, had done much, and it was impossible now to argue against a preferential tariff for colonial sugar. Australia was at the parting of the ways. She was preparing the way for a new tariff, and she desired to include the mother country in the inter-Imperial preference, but she hesitated to do so because there was no reciprocity in this country, and she would not enter into a policy of "all give and no take." He hoped the Government would see its way to come to some arrangement on the Committee stage which would not involve a serious loss of revenue, but would be of assistance to the colonies, and particularly the West Indies, in this matter, and that some scheme would be arrived at which would build up again an industry that was rapidly slipping away, and which would at the same time be an earnest of the desire of the Government of the mother country to forward the movement of the federation of the colon es.

MR. E. J. C. MORTON (Devonport)

In common, I believe, with every Member who has the honour of a seat in this House, during the past six or seven years I have listened with great pleasure and admiration to the six Budget speeches of the Chancellor of the Exchequer because of the wisdom that was contained in them. We have heard during the past six years the wisest possible advice with regard to the virtue of economy and the soundness of free trade; but the unfortunate thing is this—that the Budget speeches of the right hon. Gentleman have not corresponded with his Budgets. I have never listened to any Budget speech of the Chancellor of the Exchequer without being reminded of the saying of Mr. Sheridan when on one occasion addressing an audience from the hustings. Seated next to him on the opposite side of the wooden barrier was his opponent, and while Mr. Sheridan was addressing the audience he was hit in the mouth by an egg—and an electioneering egg at that—the man who threw it immediately shouted out, "I beg your pardon, I meant it for your opponent," and Mr. Sheridan replied, "I wish to Heaven you had meant it for me and had hit him." I take the same view with regard to the Budget speeches. I would do with a little less advice if we could have a little better Budget.

We have to meet an enormous expenditure not only in consequence of the war, but by the growth of the ordinary expenditure of the country. In order to meet this the Chancellor of the Exchequer has proposed an export duty on coal, an import duty on sugar, an increase on the income tax, and a vast increase of the Debt. To three out of those four proposals I absolutely object. I have an objection to his proposal with regard to the increase of the income tax, which does not however go down to the root of the matter; but I want to take these proposals in order, and I want to draw attention to some things that I have seen with regard to these proposals, and I want to say this, that the only sound principle of finance is that you take out of the pocket of the taxpayer the money you want—that is to say, direct taxation. The moment you commence indirect taxation you never know where you are. Now on the 18th April last the Chancellor of the Exchequer made his Budget speech; early on the morning of the 19th I went to Newport, Mon., and this is what I found. At midnight between the 18th and 19th an order had come down to Newport, a town of 62,000 inhabitants, which subsists entirely upon the export of coal, that no coal was to be exported until a duty of 1s. a ton had been paid upon it. The effect of that order was that the whole of the dock labourers were out of employment; before twelve o'clock noon the whole of the coal trucks which bring the coal from North Monmouth were crowded at the sidings, waiting at the tips unable to unload their coal; and after twelve o'clock noon you had the whole of the railway men out of employment; by six o'clock at night you had mine managers issuing notices to the men that their services would not be required next day because they had no trucks to carry away the coal which they had got up, that the whole of the dumping grounds at the pits' mouths were occupied by the coal which they had put there. So that within twenty-four hours of the making of the Budget speech you had three industries paralysed in one small district.

Now, I hoped to have had an opportunity to address the House on the Report stage, and, knowing I was going to speak, I got a telegram. This is no anonymous communication such as those of the President of the Board of Agriculture. I am going to give the name of the person who sent it— Export trade stopped from midnight 18th to morning 23rd, except duty paid, when vessels only required small quantity to finish. Our firm's accumulation about 40,000 tons, others similar experience. Collieries and railways partially stopped three days; sidings contained probably 200,000 tons when work recommenced. Signed Pyman, of Messrs. Pyman and Watson, one of the biggest export firms we have. Now I do not know whether hon. Members are aware of the terms of the order which was sent down by the Treasury to the Customs House officers. I have the actual words of the order which went down to this same place—Newport. It is headed, "Concessions to British Contractors re Still Current Contracts"—

    cc1061-99
  1. CONCESSIONS TO BRITISH CONTRACTORS RE STILL CURRENT CONTRACTS. 15,747 words, 1 division
    2. cc1099-100
  2. STEAMSHIP SUBSIDIES. 56 words