CUSTOMS—TEA.

HC Deb 23 April 1903 vol 121 cc304-49

Motion made and Question proposed, "That the Customs duty now charged on tea shall continue to be charged until the first day of August, nineteen hundred and four (that is to say): Tea … the pound, Sixpence."—(Mr. Chancellor of the Exchequer.)

MR. EMMOTT (Oldham)

At the time of the adjournment I was congratulating the Chancellor of the Exchequer upon the unexpectedly large surplus he was able to devote to the remission of taxation, and I was saying that I agreed with the hon. Member for King's Lynn that I thought the Estimates of the right hon. Gentleman were based on a rather sanguine view of the possibilities of the future. Particularly is that the case with regard to the Customs. This year the returns show a reduction of£767,000 in the revenue from Customs on the Estimates, and next year the Chancellor of the Exchequer is estimating not only that he will get that£767,000 but in addition another£1,400,000. I think an estimate of that kind is not usual on the state of things as they exist in the country at the present moment, though I hope it will be justified. Many believe that when the Transvaal loan is floated there will be a considerable reaction in trade and that we shall have greater prosperity than we had last year, but in any estimate like this, which is based, as I understand it to be, on the returns of Income Tax as showing the general prosperity of the country, it is only right to remark that the Income Tax of last year was based on the profit of the three preceding years. I do not think the profits from business since 1900 have been so large as they were in 1899–1900,audit is possible that the Income Tax will not show that increase which the right hon. Gentleman expects, although, so far, I admit the returns of foreign trade are extremely good. But there are no signs of such a general revival of trade as would lead one to adopt the sanguine view which the Chancellor of the Exchequer has put before us. There is one other matter which may justify the right hon. Gentleman in regard to these Estimates, which is that he seems to be expecting that in future years there may be a considerable reduction in the expenditure of the Army. I hope the Government, although they refused all Motions on the subject when the Estimates were before us, has taken heed of what I believe is the general feeling of the House, if it could only be expressed without party feeling, and also the general feeling of the country, that we are spending more than we ought on military affairs. I have no doubt next year the right hon. Gentleman will be able to point to reduced Army expenditure, and that even if he has over estimated the receipts from the Customs he will not have to increase taxation At Question time we had sad news with regard to Somaliland. It is quite clear in regard to that matter that instead of spending hundreds of thousands we may have to spend millions before it is concluded. The right hon. Gentleman also said there should be a Committee of Inquiry into the incidence of the Income Tax I hope that will be held, but I do not think the right hon. Gentleman will find many such cases as the one which he instanced where the estimate was put up from£3,000 to£50,000. I know some industrial centres fairly well, and I think there can be but few cases of that kind. On the other hand, if we could lessen the number of assessments left to the Commissioners, and make everybody return their own incomes, it is quite possible that we might find many incomes under estimated, and the country would benefit.

I must join every hon. Member who has made an attack on the proportion of reduction that has been made as between direct and indirect taxation. The right hon. Gentleman said without including the Coal Tax the amount received from indirect taxation was£15,127,000, and the amount received from the Income Tax was£18,118,000. He is now proposing a remission of£10.000,000 in regard to the Income Tax, whilst he only remits£2,500,000 of indirect taxation, which will leave indirect taxation at£12,500,000, whilst direct taxation is only represented by£8,000,000 If to the indirect taxation the Coal Tax is added, the indirect taxation will altogether amount to£14,500,000, so that the old proportion of taxation will be entirely destroyed in the future, and indirect taxation will have been increased by far more than its just proportion. In regard to the Income Tax, we leave small incomes untaxed, and with regard to small incomes, I think, if it could be usefully done, there is an irreducible minimum of income which should not be taxed at all. We formerly carried out the principle almost because at one time of the necessities of life only tea was taxed, but now bread and sugar are taxed, and therefore the smallest incomes pay a consider- able amount of taxation which a few years ago they did not pay. It has been said that a high Income Tax is a danger, in as much as it diminishes our possible resources when any great strain is put upon the country. That is true, and I think we ought to be very careful not to depart from the lines upon which our taxation has been based throughout, but I venture to say that we have been shown during the late war that the Income Tax is not our only resource in case of emergency. The right hon. Gentleman told us that the Sugar Tax and the Bread Tax had been collected with very little trouble, so it has been clearly proved that in the case of any great strain coming on this country there are other sources besides the Income Tax.

In conclusion, the right hon. Gentleman dwelt, as all Chancellors of the Exchequer have done during the last twenty years, on the fact that the real danger of the country at the present time is our greatly increased and growing expenditure. It is quite hopeless for us to imagine that we are going to reduce our expenditure at home, because it is perfectly evident we must spend more rather than less in connection with the affairs of these Islands. The expenditure for the Navy cannot be reduced unless the expenditure of other nations on their navies is reduced also, but I hope the Government will lose no chance of joining any effort which may be made in that direction. We are left therefore with this, that the expenditure on our Army is the one thing upon which we may diminish the calls made on the taxpayers of this country. I believe, as I said before, that relief may come in that way, and I have only one suggestion to make in regard to this Budget. I once knew a case where a Chairman of the Finance Committee of a municipality left the local authority and went on the School Board in order to see what he could do in the way of reducing the expenditure of the School Board. He was not a success because he became an ardent supporter of increased expenditure. The suggestion I make is this, that if we spend too much on the Army we should ask the Chancellor of the Exchequer to change places with the Secretary of State for War, which might demoralise the Chancellor of the Ex- chequer, but would probably make the Secretary of State for War an economist.

SIR ALBERT ROLLITT (Islington, S.)

I do not propose to discuss the proposals of the right hon. Gentleman generally, but there are two points, one of which has been referred to very little and the other which has not been mentioned at all, to which I should like to refer. I should like to add my testimony to what I think was the most practical, able and businesslike speech of my right hon. friend, and which, apart from the merits and demerits of his proposals, is one likely to commend itself to business men in this House. I re-echo, as many have done, the last words of my hon. friend opposite that this question of the combination of efficient economy with a decrease of expenditure is all important. I believe no work can be more useful to the country than the strict attention which is given to the revision of the Estimates of the country. With regard to the question of the Army I have been sorry to notice too great a disposition to magnify the importance and utility of a large Regular Army as compared with the cheap, and what I believe may be made a thoroughly efficient force in the shape of our Auxiliary forces. I do not think a feeling of fair regard to the difficulties and the condition of the Volunteer Forces has always been applied. The recent regulations are a mistake, and I think instead of seeking to economise in the direction of Army Corps and the like we should seek to economise by having a small force and developing in the people of our country a general readiness to take up arms if there is any necessity. I believe the Income Tax payers will be grateful for the remission of taxation, and I think they are entitled to—I do not say the full amount, because I might be disposed to deal somewhat differently with that point—but a considerable reduction is due to them. We ought to be very careful to retain the elasticity of this tax. It is not the only resource in times of emergency, but a very fruitful one, and it has the merit of being popular in this country. I think it is a good thing to maintain the equitable incidence of taxes, and not to tax the patience, as well as the pockets, of the taxpayers, and that, at the earliest opportunity, remission should take place. What I think will be even more acceptable is the proposal to institute an inquiry. The Income Tax is a very difficult tax to administer in some points of detail, and I certainly think, in instituting this inquiry, that regard should be had not only to the real incidence of the tax, but also to the position of the small tradesman, who has the struggle for commercial existence to undergo, upon whom this burden most heavily falls. The hon. Member for King's Lynn spoke against the suggestion that there was a distinction of principle, which I believe, between taxation of realised property and precarious income on profits made in trades and professions. My hon. friend and others have taken exception to exemptions and abatements, but I think without those this tax would be a cruel and unpopular one. In the matter of abatements, I should like to go farther and adopt some fair graduation which would adapt the tax to the men who are able to pay. I hope that is a suggestion which the Chancellor of the Exchequer will find it possible to deal with.

Apart from the Income Tax he has so generously remitted, the Chancellor of the Exchequer had considerable choice as to the reductions he might have made. He declined to remit the Coal Tax, because the exports had not been diminished, but I venture to think that this tax is disadvantageous to trade, and I do not admit the stoppage of exports to be the crucial test as to the propriety of the tax; I might remind the Chancellor of the Exchequer that one of the arguments in favour of the tax was that it would restrict exports, and so prevent the remote and scientifically preventive possibility of the extinction of our coalfields in the dim future. I believe other means of economy in that matter will be devised to prevent the serious consequences that would ensue. With regard to tea, I think it may now be regarded as a practical necessity, and though I have a personal interest with regard to the remission of the duty on coal, I feel that the pressure of indirect taxation is very considerable, and I Should have been extremely glad if some reduction had been made in the case of tea. Sugar again is distinctly a food—a necessary and most nourishing food—and an article indispensable to the great majority of the poor. I would remind my right hon. friend and the Committee that the Convention will come into operation, and whatever predictions may be made, I venture to say that it will increase somewhat the price of sugar. I should have liked that the figures had been so adjusted as to make a somewhat less decrease in the Income Tax and to remit some of the taxation upon either tea or sugar—if possible of such an amount upon sugar as would counteract the increase which will necessarily arise from the operation of the Convention. While I approve of the reduction in the Income Tax, I think there were considerations that might have pointed in other directions, and would certainly have been acceptable to myself. In regard to the remission of the duty on corn, I am glad to say that I am not in the dilemma of some of my hon. friends on this side of the House, and I have no concern with the approaching quarrels between the Government and the right hon. Gentleman the Member for Sleaford. I think they are on the horns of a dilemma. If it was a good tax, as we were told, why remit it, and if it was a bad tax why was it ever imposed? In any case I have an absence of responsibility because I opposed it on principle. I did not support it reluctantly like the hon. Member for King's Lynn, but I voted against it, because I was not led away by those specious and fallacious arguments that no one would bear the tax, that everybody would benefit, and that everything would come Out of nothing. Well, these are arguments, but they are not facts, and I am glad, that the situation has been redeemed by the present Chancellor, It was a standing temptation to proceed in a direction which I am sure would not have commanded the general approval of the House. I am glad it has been repealed.

I have only to add a word on one point to which I wish particularly to draw the right hon. Gentleman's attention, and on which he maintained significant silence. On the occasion of the discussion of the Budget, reference has generally been made to a subject in which I have taken very great interest. I mean the question of our Savings Banks. Nothing has been said about the result of the decrease of interest on Consols this year in its bearing—a very important bearing—upon the future of our Savings Banks. I should like to point out to my right hon. friend that there is a growing liability of which he will have to take note unless he passes legislation on the subject. That arises from the fact that this year the interest on Consols is reduced by a quarter per cent. The effect of that will be felt by the Chancellor of the Exchequer in making him less able to meet the deficits upon the working of the Savings Banks and Friendly Societies, and it will involve him, much as we may regret it, in an expenditure of about£38,000. That will increase the deficits which he must meet this year to something like very nearly£250,000, and it will increase it in the next four or five years to an amount approaching£500,000. I am extremely sorry that this question should have to be raised from the force of circumstances, but a deficit of nearly£250,000 is a matter of which the Chancellor of the Exchequer must take note. A Select Committee on which some of us sat was appointed on the subject some time ago, and that Committee recommended that the interest payable by the Savings Banks to depositors should be reduced by⅛per cent. Some of us suggested the enlargement of the area of investment might meet the matter, but there was an equal division of opinion in Committee on that subject. Concessions were made, and I think it was ultimately, virtually agreed, in consideration of those concessions, that a compromise was inevitable, and, upon the whole, I think it would have to be accepted. These institutions are of the greatest importance to this country as a means of encouraging thrift, and I have to convey to my right hon. friend an expression of the belief of those interested, that he has not only their welfare at heart, but that he will do all he can when the exigency arises in regard to the price of Consols—which is really the cause of the difficulty—and we hope that he may see his way to meet it by some other means than the reduction of interest. In any case I ask him to state, if there is to be a reduction, when it is likely to take place. I take it that it must be effected within the present session by legislation if at all. The date suggested by the Committee was 20th November, 1902, but that is past, and I would point out to the right hon. Gentleman that it would be most inconvenient and most injurious, and would involve endless trouble if any date were fixed which was in the middle of the Savings Banks year. I hope and trust that until the 20th November no change will be made. I hope also that the change will be made simultaneously in the case of the Post Office Banks and the Trustee Banks, but that above all he will let us know as early as possible what are his intentions in that direction, and how he means to meet the deficiency to which I have referred. I hope that in the reply he makes he will indicate his interest in, and his sense of the value of, these banks, and give us an assurance that he will make that change, if it is made at all, as little injurious to thrift and the saving habits of the people as he possibly can. With these observations I beg to express general approval of his proposals. There are some details which I could have wished had been otherwise. But I believe the Budget to be sensible and practical.

MR. CHANNING (Northamptonshire, East)

I wish to associate myself with the remarks of the hon. Member for Islington in regard to Savings Banks. It seems to me that it will be very disastrous if we are to add to the character of this Budget a further step which might possibly be taken, in view of the deficit that may arise, by reducing the interest on deposits in the Savings Banks. If you distribute your relief in the proportion of£4 to the rich man, and£1 to the poor man, and if you add to that a reduction of an eighth per cent. on the interest paid to depositors, it will be a very serious matter. I sincerely hope that either owing to the price of Consols, or to some other method, the right hon. Gentleman may see his way to meet this difficulty without reducing the interest on deposits. I can assure him from having discussed this question very fully with working men in the country, and those specially interested in it, that that would be most heartily resented, not only in this House but in the country itself. I should like to say—I do not wish to say it with any disrespect to the Members of the Select Committee—that some of those in the House may remember that I myself drew attention to the fact that the Committee was largely composed—almost entirely composed—of the banking interest representatives in the House. It was only by an effort which was made by myself and supported by one or two Members that one representative of the working classes was added to that Committee. I would strongly recommend the right hon. Gentleman to consider that fact in view of the recommendation of the Committee. With regard to the Budget, I consider it a rich man's Budget. What is more, I consider it a rich rich man's Budget, and for this reason. Two hon. Members for Islington have referred to the position of the small Income Tax payers. The right hon. Gentleman has announced, very much to the satisfaction of all interested in this question, that an inquiry will at last take place, but I will remind him and the Committee that a promise was made by his predecessor last year in reply to Amendments moved by the hon. Member for the Elland Division and by myself. In the course of the debates——

MR. RITCHIE

The proposal I make as much wider.

MR. CHANNING

I am quite aware that the proposal of the right hon. Gentleman is much wider. But the point to which I attach the greatest importance—and I hope it will be included in the inquiry—is the question of the conditions under which exemptions and abatements may be extended to the poorer classes of Income Tax payers. I myself would have ventured to suggest that instead of giving 4d. relief in the Income Tax that the reduction should only have been 2d., or perhaps only 1d., and the rest remitted to the poorer classes, and to the lower middle class, in this country, who, in my opinion, have borne far more than their share in the expenditure on this war. I cannot imagine why the right hon. Gentleman has not given 3d. off the Income Tax and applied the other penny to the extension of the system of abatements and exemptions for the poorer class of Income Tax payers. I shall move an Amendment in that sense with the view of giving relief in the way of exemptions and abatements to the struggling tradesmen, and small professional men who have really had to suffer far more than the great millionaires, to whom the reduction of 4d. on the Income Tax may be extremely pleasing, but it is not at all in any sense a necessity. I have for years past protested against the policy which underlies all these Budgets. It appears to me that, since 1895, we have had one perpetual policy of increasing expenditure which went to the benefit of the rich, and of shifting the burden of that expenditure, year by year, more from the shoulders of the rich to the shoulders of the poor. Hon. Members may regard that as a laughing matter, but I do not think it is [An HON. MEMBER: It is not a fact.] Does not an increase in indirect taxation mean the transferring of a portion of the burden which would otherwise have fallen upon the wealthy classes to the shoulders of the poorer classes?

MR. RITCHIE

What I say is that the change in the incidence of taxation in past years has been in the direction of putting taxation in the form of direct taxation and taking it off indirect.

MR. CHANNING

The increase in the last three years——

MR. RITCHIE

I am not talking of the last three years.

MR. CHANNING

I am discussing the new forms of taxation. We have heard with the greatest satisfaction that the right hon. Gentleman is taking off the Corn Tax. I share a little the surprise of the right hon. Gentleman the Member for Sleaford at the course taken by the Government in that respect, and I have some reason to do so, because I was the one Member in the House who moved in Committee that the tax should be imposed for one year only. The late Chancellor of the Exchequer replied to me last year—giving his quotation in exact words— It has never been the habit of this House to impose a new indirect tax for one year only, and that for the obvious reason that it would leave everyone uncertain as to the future; for imposing any indirect tax only for twelve months would undoubtedly interfere with trade, for a reason which would probably be inadequate, and which no Chancellor of the Exchequer would think of putting forward."† and in concluding this section of his speech the right hon. Gentleman wound up by saying— That is why I have proposed this Corn Duty as part of our permanent system of taxation."‡ Warmly as I welcome the remission of this tax, for the sufficient reason that I do not at all share the opinion of hon. Members opposite that the indirect taxation had been a light and trifling matter and the only burden had been upon the rich, I must say there is a complete hiatus between the reasoning of the Government last year which it was perhaps hard to account for. My right hon. friend the Member for Sleaford, and other Members representing the agricultural districts, remind me a little of a picture which appeared in one of the early numbers of Punch. It represented an agriculturist being drawn into swamps by a Will-o'-the-Wisp light. That was the Protection cry of those days. I have no doubt that many agriculturists in this House and out of it regarded this as a protectionist tax. But I confess, although I thought that it was of a protective nature, I always thought that the motive for the tax was largely connected with the Colonial Conference about to take place shortly afterwards. He conceived that the tax represented one of the suggestions which emanated from Birmingham, and certainly it was supported with remarkable persistency as well as ingenuity, by the present Postmaster-General. It has been said that this is a trifling tax which has not been felt by the people. I think that the right hon. Gentleman the Member for Sleaford dwelt upon certain figures that appeared in the Labour Gazette. I do not think he can have considered those figures with very great care, because undoubtedly they show that whereas in some districts, when the tax was first imposed, and where the price of bread was already high and left a margin to the traders and bakers, the price did not rise any further. But what are the fact With regard to London, which contains 5,000,000 people. They show an increase in the price of bread of 1d. all over this vast metropolitan †See (4) Debates, cix., 164. ‡See (4) Debates, cix., 167. area. [An HON. MEMBER: No!] These are the official figures given in the Labour Gazette. The price was from 3½d. to 4d. in 1902, and from 4½d. to 5d. in 1903. If the hon. Member can produce better figures than these he is welcome to answer me.

MR. CHAPLIN

What I stated was that the figures in the Labour Gazette showed that in some of the larger towns in the North of England there had been a reduction. Would the hon. Member kindly read the statement with regard to Oldham and also the whole of the statement with regard to London?

MR. CHANNING

I am aware that Oldham is one of the instances in which there has been a reduction, but in the greater number of cases to which the right hon. Gentleman refers the price has remained the same. In all cases that is the fact with the exception of Manchester and Liverpool, where the price was low in 1902 and has remained the same. I do not profess to understand the reason for the state of the price there, as I am not familiar with the conditions in those cities.

MR. CHAPLIN

They are reduced.

MR. CHANNING

No, they have not been reduced. Oldham is reduced, but not either Manchester or Liverpool. I think I have sufficiently referred to that matter. What I wish to say is that with one or two exceptions prices are either the same or have risen since last year. That is, I believe, incontrovertibly proved by the official figures. Now we are asked to consider the Budget in which there is this relief of the Corn Tax and a relief of 4d. on the rich man's Income Tax. I wonder if hon. Members have really considered what the Corn Duty and the whole of this indirect taxation has meant for the poor man. An agricultural labourer with 14s. a week, who spends one-third of his income on bread and other articles which paid the Corn Duty, has been paying, Without any increase in the price of bread, an Income Tax of 3½d. in the£.But if the price of bread went up½d. he was paying an Income Tax of 13d. in the£,and in the case of the Loudon working man, where the price of the loaf had gone up a Id., and had this imposed on him not four but eight times the ad valorem duty, there was an Income Tax of 26d. per£. There is no doubt whatever about these facts. The hon. Member for Islington, who first addressed the Committee, seemed to consider that the poor man's case, in this matter, was entirely a question of the consumption of alcoholic liquors. I am quite prepared to take the basis of a teetotal working man's budget and to show that taking the consumption of tea, sugar, bread, and tobacco, the taxation of non-alcoholic articles has meant for working men, with incomes ranging from the labourer at 12s. to 14s. to the incomes of workers at 35s. to 40s. per week, has meant that they have been paying an Income Tax from one-and-a-half to double what the rich man has paid during the last two years. I have shown that in the case of the labourer the Corn Tax alone represented something like an Income Tax of Is. in the£1 where the price of the loaf had gone up, as it did very generally, and as I found it universally the case in Devonshire and the West of England.

There is another part of the question in regard to the full incidence of taxation on the poorer classes of the community, which has not been mentioned in the debate, but which should not be left out of consideration by hon. Members who wish to do justice as between man and man. The hon. Member for King's Lynn referred to the enormous increase in local taxation. That is a matter which we cannot leave out of sight. I ask hon. Members to consider this fact besides the fact that the working classes have been paying in indirect duties a higher Income Tax during the last three years than the wealthier classes I have been in consultation with some of the most experienced financiers in the Co-operative movement during the past few days in regard to this matter. I asked them what is the proportion which the working man pays out of his wages for local rates either directly or indirectly, and the answer was that, taking the income of the working mail at 26s a week, the amount of rent he paid was 6s., and that the proportion of the rent which belonged to the rates was Is. 8d. That means that the working man pays indirectly through rates an Income Tax of 15d. per£. Now, what proportion of his income does a man who occupies a house rented at£400 or£500 pay in rates? Instead of paying an equivalent to a tax of 15d. in the£,he is paying an equivalent to a tax of something like 3d., 4d., or 5d. in the£for local rates. Taking it all round, it will be found that the working classes are paying in Income Tax, without counting alcoholic liquors at all, more than double what the wealthy classes are paying. I think, if inquiry were made into this matter, that that would be proved absolutely and incontrovertibly. I regard it as a national misfortune that power has been in the hands of hon. and right hon. Gentlemen opposite during the last seven or eight years. Instead of a reversion to expenditure on a peace footing, as was the case after the Crimean War, but we have practically a crystallisation of the war expenditure imposed for ever in a time of peace. The right hon. Gentleman the Chancellor of the Exchequer has spoken of a reduction being possible on the Army Expenditure. I do not know whether he is going to take over the control of the War Office or is going to induce his right hon. friend the Secretary of State for War to abandon his scheme of Army Corps. But unless he gets rid of the policy of the War Office his speech consisted of so many meaningless words that cannot be realised. I associate myself with the hon. Member for Kings Lynn in his allegation that this surplus which is being distributed is a fictitious surplus. During the last few years the late Chancellor of the Exchequer has adopted the policy of taking an immense margin of money above his actual necessities, and most of this money has disappeared in a mysterious way, while the position of the year following has been made to look better. I cannot see how, on the figures, the right hon. Gentleman can make ends meet next year. This fact remains, that there has been an increase in the expenditure of the country of between£40,000,000 and£50,000,000 a year, without any real prospect of reduction. Unless a bold policy of retrenchment is really entered upon, it will be well nigh impossible to make any further reduction then in taxation.

MR. J. WILSON (Falkirk Burghs)

I think there will be but one opinion—that the right hon. Gentleman the Chancellor of the Exchequer has performed his task in a thoroughly able and businesslike manner. This was what we might have expected from a man of his training. Last year when the Budget was presented a great war was raging and expenditure was going on apace. Unfortunately, owing to the demands made in South Africa and elsewhere, that expenditure has still to a very great extent to be calculated for. We expected after the visit of the Colonial Minister to South Africa, which was made in such a brilliant way, that a large amount towards that expenditure would be secured from the Transvaal. Some of us have said during the past four years that the Transvaal ought to pay a much larger amount than she wishes now to contribute. Before the war the mining magnates said that if British rule could be substituted for Boer Government the advantages it would bring would be worth over£100,000,000 sterling. I am sorry that the Colonial Minister has not been able to secure that£100,000,000, for I am still of opinion that in spite of the difficulties in regard to native labour the Transvaal is quite able to pay that amonnt. I must congratulate the Chancellor of the Exchequer on his abolition of the Corn Tax. I voted for that tax when the war was raging, but when the war was over I opposed it and urged its discontinuance, and voted against it, and I congratulate the right hon. Gentleman on his courage in having retraced the step taken in putting a duty on the bread of the people. Although it was a mistake in putting it on I am sure the remission of this taxation will secure the confidence of the people. I am also glad to congratulate the right hon. Gentleman on the Income Tax reduction. I agree that a large proportion has been taken off the Income Tax as compared with the amount taken off indirect taxation, but the precedent of the Crimean War ought not to be forgotten. When that war was ended the Income Tax was reduced from 1s. 4d. to 7d. in the£,and I think the Chancellor of the Exchequer has therefore a very good precedent, and has to a great extent met the expectations of his supporters.

I am, however, a little disappointed that we have had no statement in regard to the Coal Tax. The right hon. Gentleman might have reduced the Income Tax by 3d., and taken Id. off the Coal Tax. I urge this because I consider the Coal Tax economically unjust and oppressive to the industries of the country. I know that the right hon. Gentleman, in reply to a deputation which asked him to abolish the Coal Tax, urged that they could not expect a remission of the Coal Duty considering the amount of coal which was exported. But there are very good reasons why the volume of coal exports has not fallen off. It is perfectly well known that in America there have been enormous disturbances of labour; and during the first three months of this year no less than 976,000 tons of coal have been exported from this country to the United States, and that is really after all the total expansion that has taken place in the coal trade in this country. But the coal trade is one which has always expanded. Since 1850, when the total exports were only 3,000,000 tons, these had expanded to 43,000,000 tons; and if there had been no reason for the inflation I have mentioned there would still have been expansion in the coal exports. The price of coal has fallen, the wages of miners have fallen, and, more than all, freights of coal have fallen. Had the shippers of this country, when the Coal Tax was put on, been fully alive to their own interests, I am perfectly certain that they would have prevented the imposition of the Coal Tax. There was at that time, however, a natural feeling that the enormous profits which were made by the coal owners should be taxed. It was, however, forgotten that these were not ordinary profits but arose from an undue expansion of the trade. Owing to the low price of the article and the low freights foreigners now get coal cheaper than before the imposition of the tax. If we are to have no redress in the way of reduction of the tax, the Chancellor of the Exchequer, as a Scotsman and a good business man, ought to apply the tax on an ad valorem scale. Why should Scotch coal, which is only 7s. or 8s. per ton be taxed at the same rate as Welsh coal, which brought 13s. or 14s. per ton. The late Chancellor of the Exchequer admitted the principle so far, for he gave a remission on small coal under 6s. a ton, and what is to prevent the present Chancellor of the Exchequer from giving an additional concession. Taken as a whole I maintain that a coal export duty is economically unjust and oppressive. There is no indication of any scarcity of coal in the near future, and I believe that the Royal Commission that is at the present time making inquiry into the subject, will be able to show that there is at least ten times more coal yet to be worked than has been worked up to the present time, and that the supply will last for hundreds of years. I ask the right hon. Gentleman to take my suggestion into his most earnest consideration and if he cannot take off the whole tax he should make it an ad valorem duty. I am in the hope however, that if he has such a surplus next year as this, he will take off the whole tax.

MR. TOULMIN (Bury, Lancashire)

There is one item in the Budget which will give satisfaction to the working classes of Lancashire, and that is the remission of the Corn Tax, against which they expressed very strong opinions a year ago. One cannot help having a certain amount of sympathy with the right hon. Gentleman the Member for Sleaford in the step the Government have taken, and in seeing the last hope of a policy he has long advocated disappear. I think, however, he will find that the Government have had good reason for the action they have taken. The right hon. Gentleman quoted the late Chancellor of the Exchequer as saying that the Corn Tax was the least injurious tax he could discover. I will not argue with the right hon. Gentleman the Member for Sleaford as to injury to the consumer; but whether the consumer has been injured or not, I think it has been discovered that the corn tax has inflicted an injury in one quarter, and that quarter is the Government. Therefore, the Government have very good reason for dropping a tax which they have discovered to be rather unfortunate. The Chancellor of the Exchequer himself appears to be conscious of that injury, because he said that the tax lent itself to misrepresentation. That is rather a singular statement to make. Are all the acts of the Government which lend themselves to misrepresentation to be disavowed; and is the Government to be influenced by a misrepresentation and change its policy? because that policy has been misrepresented? I am not quite sure that one cannot turn the accusation the other way round, and ask whose were the misrepresentations? Were they those who said that the tax would not hurt anyone, and would be paid by American railway shareholders? If that were true, is not the Chancellor of the Exchequer giving£2,500,000 away to the corn growers in the United States and Russia? But, I take the Chancellor of the Exchequer's own ground. I say that the country rejected the tax because, as the right hon. Gentleman himself says, corn is more a necessity of life than any other commodity, because it is raw material, and because it is the food of the people, and of the horses and cattle which serve the people. I would wish to be allowed to congratulate the Government in retracing what I sincerely believe to have been a wrong step in fiscal policy, all the more as they have put it out of the power of any future Chancellor of the Exchequer to initiate a preferential tariff on colonial corn. The Government have, I think, more steps to retrace. The Chancellor of the Exchequer says that he has no sympathy with the cry for a free breakfast table. That has been shown by his disposal of his surplus, which gives£10,500,000 to Income Tax and only£2,500,000 to indirect taxation. The right hon. Gentleman appealed to Cobden, on the Navy. I wish the right hon. Gentleman had as much belief and trust in Cobden as a man who understood the conditions of the people and the way in which taxation ought to be laid upon them, as he had in Cobden's opinion as to the necessity for a strong Navy. In 1859 the taxes on commodities in England were£1 11s. 7d. per head. That was the time when Cobden and Bright concentrated the attention of financial reformers on a free breakfast table. In 1901 the taxes on commodities were again£1 l1s. 6d., after having been reduced by successive Governments. For forty years the free breakfast table has been the object of the Liberal Party. Every step taken in that direction by the Liberals was imitated by Tory Chancellors of the Exchequer; and even the present Chancellor of the Exchequer will admit that Sir Stafford Northcote and Lord Goschen were statesmen in abolishing the last remnant of the duty on sugar, in reducing the tea duty, and in abolishing the duty on currants.

It apppears to me that the policy of the Government with reference to the incidence of taxation indicated by this Budget shows that the Government have taken advantage of the war to reverse what has been the settled policy of this country for nearly half a century—a policy founded on equity and justice by proportioning the burden to the power to pay. The basis which existed before the war is altered It is a basis which existed after a Conservative Government had been in power for four years, and which was not discovered to be unjust. The Chancellor of the Exchequer gave the contribution from Income Tax payers to the increased revenue occasioned by the war at£39,800,000, and the contribution from indirect taxation at£31,932,000. What remission is now promised? Taking a period of three years the Income Tax will be reduced by£31,500,000, and indirect taxation will be decreased by£7,500,000. I think the true position will be best seen if we reverse the process by which the taxes were put on. The taxes were put on in layers, year after year, and let us revert to the position which obtained before the last penny was put on the Income Tax and the Corn Duty was put on. Suppose the war had been over earlier, the Chancellor of the Exchequer would not have thought of putting an additional penny on the Income Tax last year, or putting on the Corn Duty. If we take the Corn Duty off, and the last penny on the Income Tax off, we then find the Chancellor of the Exchequer has reduced the Income Tax by 3d. without giving any corresponding reduction to indirect taxation. In 1900–01 tea, beer, spirits, and tobacco were taxed additionally to the amount of£5,600,000; the Income Tax was raised to 1s., producing an additional£8,000,000. In the next year sugar and coal were taxed and produced£8,000,000; and the Income Tax with an addition of two pence also produced£8,000,000, with the surplus from the previous addition. Step by step the Income Tax and indirect taxations have been increased, but now when we come to a remission of taxation, if we take off one year's layer, the Income Tax alone receives remission. I think there is a strong claim that the reduction of taxation ought to have been carried out in the same proportion as taxation was put on. It has been claimed that men with 30s. a week should not pay in the same proportion as men with£30 or£300 a week. I agree with that; but there is also a strong claim that there should beat least a minimum which the very poorest householder should have untaxed. There should be an untaxed minimum. Many labourers do not get anything like 30s. a week, and there are many households which have no able-bodied men, and taxation bears upon them with undue severity. Nearly a fourth of the workers of this country receive such scanty wages that they cannot purchase sufficient food and clothing to make them efficient; and taxation tends to further reduce expenditure on food, and, therefore, further reduce their efficiency. Those whose incomes are so small that they cannot buy enough of the necessaries of life ought to be entirely exempt from taxation. With regard to the National Debt, I do not think that the measures which the Chancellor of the Exchequer has taken for its reduction are by any means heroic. The Sinking Fund was fixed at£23,000,000, because it was foreseen that this year there would be a reduction.

MR. RITCHIE

Certainly not. I deny that.

MR. TOULMIN

That was What was understood at the time. It appears tome that it would be more to the advan- tage of the country if we had a Sinking Fund for the debt incurred by the war, leaving the £23,000,000 alone. I should like to ask the Chancellor of the Exchequer on what basis he fixes the amount for the reduction of the debt. Is the proportionate wealth of the country taken as a basis? In that case we are better able to pay £28,000,000 now than during the years in which the nation did pay £28,000,000. Again, is the basis our responsibility? Our responsibility in the amount of territory and the millions of subject races that have come under our sway indicates that we may well think it necessary to give more attention to paying off the National Debt. The deplorable incident which was announced this afternoon shows the vanity of prophesying that the National Debt will be paid off in forty, fifty or sixty years; and the war has shown how easily the savings of thirty years may be dissipated in three unfortunate years.

MR. LEES KNOWLES (Salford, W.)

As a Lancashire man, following a Lancashire man, I congratulate my right hon. friend on the repeal of the tax on corn, and also on the large reduction in the Income Tax. I recognise that that reduction will mean in populous districts still further employment. It seems to me that the point of the speech of my right hon. friend the Member for the Sleaford Division was a question as between the producer and the consumer. My right hon. friend, no doubt, speaks for an agricultural district, where corn is produced; I speak as one of the representatives of Lancashire, where corn is consumed. When my right hon. friend referred to the speech of the ex-Chancellor of the Exchequer in proposing the Corn Tax, he forgot altogether that the proposal was made without consultation with members of his Party; and although many of us voted for the tax in order to keep the Government in power, we did not, approve of it. Two or three days later, after it was proposed but before it was agreed to, I spoke in my own constituency, and said that the country had returned the Government by a huge majority in order to prosecute the war; and that I looked on this tax as a tax in connection with exceptional expenditure to pay for the war. Now the war is over, and I came here to-day prepared, if the tax was not removed, to urge on my right hon. friend to remove it as soon as possible; because in Lancashire we hold the traditions of Cobden and Bright. I represent one of the divisions of Salford with a population of 230,000; and I cannot forget the history of my county, or the incidents of Peterloo. Therefore, I was naturally opposed to this tax; and I am only too delighted that the Chancellor of the Exchequer has seen his way to remove it. It was said when it was imposed that it would not inflict any great burden on the people, and my right hon. friend the Member for the Sleaford Division said to-night that since the tax was imposed the price of corn was less and the cost of bread had fallen. Why? Because the tax was imposed when the market was falling. The same thing was said with regard to the Coal Tax. But, although the price of corn and the price of bread may be lees now, it might be said that if the tax were not imposed, the price of corn and of bread would be still less. It is also said that the removal of the tax will, at all events, remove misrepresentation. The hon. Gentleman who has just spoken succeeded in winning Bury for the Opposition upon this tax. We know how that was done; we know what was done by the Co-operative societies; we know how the price of bread in Bury I was raised; and how the hon. Gentleman won the seat. But, as I have said, I have always opposed this tax.

AN HON. MEMBER

You voted for it.

MR. LEES KNOWLES

Oh, yes; I voted for it because I was not going to turn out a Government which had been returned to prosecute the war; but I explained my views at the time, and said I had always opposed a tax on the food of the people. This tax on corn goes even farther, because not only corn but also offal and starch products are taxed, which has a very important bearing on many industries in Lancashire. I have received a letter from a firm in my constituency referring to a deputation from the Calico Printers Association which waited on the Chancellor of the Exchequer to point out the difficulties arising in connection with the drawbacks on exports. The firm in question are both calico printers and dyers, and they assert that especially as dyers and finishers they are very hard hit. They say— We are both calico-printers and dyers, and we can safely say that calico-printers are not nearly so hard hit as dyers and finishers in this matter, a great proportion of mineral matter being used in the bulk of their finishes. Our dyeing and finishing department shows that for a similar turnover in the finished article the consumption of dutiable material is more than doubled, and in some finishes it would be much more than this, as our finishes to a great extent are soft finishes, that is, they are not heavily filled with size. It has cost our firm during the past year in direct duty alone an amount equal to twice the Income Tax, so that we are in reality paying triple Income Tax, compared with other trades… Had the tax been accompanied by taxation on the foreign manufacturer and finished work from abroad, it would probably have been to a large extent counterbalanced. This shows that the tax on corn is not merely a tax on the poor man who buys his bread, but that it is also a tax on the manufacturer and those whom he employs. Of course the right hon. Gentleman the Member for Sleaford thought a new policy was inaugurated last year and, like the hon. Member for Sheffield, approved the new form of taxation.

MR. J. FITZALAN HOPE

On the contrary, I said the Corn Tax was prejudicial to the policy I advocated.

MR. LEES KNOWLES

It was the hon. Member for the Central Division to whom I referred; I had for the moment forgotten that there was any other Member for Sheffield.

MR. BATTY LANGLEY (Sheffield, Attercliffe)

I may remind the hon. Gentleman that there are other Members for Sheffield who did not approve of the duty. I for one did not.

MR. LEES KNOWLES

I am glad to find I get some support from Sheffield. My point is this. The tax was contrary to the policy of Free Trade and it was a tax on the food of the people. I therefore congratulate the Chancellor of the Exchequer on having removed it and thus on having got rid of a source of much misrepresentation.

MR. ROBSON (South Shields)

When the Corn Tax was introduced it was announced as a small burden, and I presume we must infer that its remission is a small boon. It is clear, however, that the remission of the tax is a great relief to the conscience of hon. Gentlemen opposite. The hon. Member who has just spoken has endeavoured to explain that he has acted consistently throughout in regard to this matter. True, he admits he voted for the tax, but he says he was aware that in doing so he was doing a wrong thing, and throughout he has, he says, maintained unaltered his profound conviction that the tax was not a good one.

MR. LEES KNOWLES

I explained to the House at the time that I voted for it, merely as an exceptional war tax.

MR. ROBSON

The hon. Member has forgotten that when the tax was imposed the war was over.

Mr. LEES KNOWLES

No, but, whether the war was over or not over, you have to pay your debts when you have incurred them.

MR. ROBSON

When the tax was introduced we alleged that it was a war tax, but the then Chancellor of the Exchequer was particularly careful to refrain from calling it a war tax, and he introduced it and defended it as a permanent tax. The hon. Member's admirable consistency did not stop there. He made some no doubt sincere, but almost pathetic, references to Cobden and other Lancashire men, and then went on to defend the Coal Export Duty. I am not surprised at the hon. Member's defence of that duty. When that duty was introduced we opposed it, and pointed out that it would fall with unequal incidence on different classes-and different districts. Welsh coal held a totally different position to the coal exported from our north-eastern ports. It was coal exported from the northeastern ports to the ports in the north-east of Europe, there coming into competition with German coal, that was bound to feel the duty most heavily. What has actually happened with regard to that coal? The Chancellor of the Exchequer has claimed that the duty has not diminished exports. Of course, the right hon. Gentleman means exports generally. But exports from districts affected by foreign competition have diminished. Exports from north-eastern ports have largely diminished, and in the neutral market to which the coal from those districts is sent, German trade has increased 20 per cent. Thus we have made a deliberate transfer of the trade to the German coal owners. I wish to look at the Budget from the point of view of general policy. The remission of Income Tax will amount in due time to something like £10,000,000, and from the taxation on food and trade something like £2,000,000 will be removed. My hon. friend the Member for Northampton said the war has been used as a means of transferring burdens from the rich to the poor. That is actually true. The Chancellor of the Exchequer says that £18,000,000 has been put on in the form of direct taxation and £15,000,000 in the form of indirect taxation. The right hon. Gentleman is now remitting £10,000,000 of the former and £2,000,000 of the latter, so that £13,000,000 out of the £15,000,000 on food and trade will remain, and only £8,000,000 out of the £18,000,000 on income. In addition to this we have to take into consideration the doles given to particular classes. You must not look at one Budget by itself. You must look at the general trend of fiscal policy, and consequently you must, in considering this matter, bear in mind the relief given to supporters of voluntary schools under the Education Act. The war has been made the occasion not merely for increasing the burdens of all classes, but for relieving certain propertied classes at the expense of the general trade and industry of the country. Thus the Government have not merely increased expenditure, but have transferred burdens from the richest to the poorest.

Let me invite hon. Members to consider how taxation falls on different classes of the community. Every tax falls sooner or later in an industrial community upon all classes, but it does not fall on every class with equal weight. Speaking generally, taxes upon food and trade fall on the industrial and labouring classes—that is to say, the principal weight, as measured by sacrifice, falls upon them. With regard to Income Tax, the principal weight or sacrifice falls upon the trading and professional classes; it falls with much greater effect upon them than upon the propertied class. The man who derives his income from property has an income of which he may spend a far larger proportion than would be legitimate in a man who derived his income from his profession or trade. The man who pays upon the whole of his trading income is paying practically upon that which he ought to regard as part of his capital, because it has to be laid to reserve, but the man who pays upon property is not doing anything of the kind. This Government have levied their taxation in the form of indirect taxes upon the industrial and trading classes, and their direct taxation in a form which falls most upon the trading and professional classes. The propertied class, which ought to have borne some special share of this additional burden, so far from having been specifically burdened, has been specifically relieved, and I say that we should do wrong if we allowed this financial debate to proceed without keeping that fact well in mind. These measures for relieving property are apparently by no means ended. Before next week is over we shall be discussing another great grant, also to a particular class, and also without reference to the fact, now becoming very serious indeed in our administration, that all these grants have to be borne in large part by the necessities of the poor. I should have been very glad if the Chancellor of the Exchequer had made the remission of the Corn Tax an indication of a change of policy, but I listened with some forebodings to what he said on that point. He dealt with tea and sugar. What did he say about tea? He said it was not a necessary of life; it was not a raw material. I hope the Committee will not regard that as a sound proposition in either finance or economics. Tea is an article of food, and whatever is an article of food is a raw material of labour.

MR. RITCHIE

When I was addressing the Committee on these taxes every observation I made upon the one was relative to the other. The question was which of the taxes I should take.

MR. ROBSON

The right hon. Gentleman is perfectly accurate; that is what he was doing, and I am taking the reasons that he gave. He went on to say that people sometimes took too much tea. I could not help reflecting on what his predecessor had said in regard to bread. Bread, he said, was very often wasted. Apparently tea is a new form of excess. Conservative Chancellors of the Exchequer are very fond of posing, not as persons who burden the poor—far be such a thing from their intention or their policy—but as philanthropic persons who desire to restrain the prodigality of the poor. Too much tea is drunk; so much bread is wasted!

MR. LEES KNOWLES.

The crumbs fell from the rich man's table.

MR. ROBSON

Yes, and I suppose that soon they will be all that the poor will have to eat. Taking what the right hon. Gentleman said as indications of policy, I was much struck by his choice of comparisons. Every Budget I have heard has been fertile in comparisons of different epochs. The right hon. Gentleman has dealt much in comparisons both here and outside. He tells the working classes of the country that they must not complain, because they do not bear as great a percentage of the total taxation as in 1856 and 1858. Again he tells us to-day that we must not complain, because the amount of taxation per head at the end of a war with 50,000 farmers is not so great as at the end of a war in which England stood against organised Europe under one of the greatest military geniuses of the world, when at the end of year After year of heroic and magnificent sacrifice, England had reached almost her last sovereign. The Chancellor of the Exchequer chooses that period as one suitable for comparison with to-day! The standard of comfort for the industrial classes is apparently to be drawn from 1858, and the right hon. Gentleman's standard of the burden for the community at large is to be that which existed in England at the end of the Napoleonic war.

MR. RITCHIE

It is an entire misrepresentation.

Mr. ROBSON

The right hon. Gentleman says it is a misrepresentation. That would be a very serious word to come from his own lips had he not used it once before this evening. He said he had been guilty of misrepresentation with regard to the corn tax. The word "misrepresentation" is, I believe, a parliamentary expression, but it is an extremely disagreeable one, and might not inappropriately be termed an offensive one.

MR. RITCHIE

The hon. Member must not misrepresent what I said. I did not say that he or any other hon. Gentleman had misrepresented the Corn Tax, but I said it was a tax capable of being misrepresented.

MR. ROBSON

Now is the right hon. Gentleman fairly representing the meaning he intended to convey to the Committee? I will not use the word "misrepresentation." We do not judge of inuendoes and insinuations of that kind by what the mere words technically purport to convey; we look at their substance and sense. What on earth did the right hon. Gentleman mean when he said that this was a tax which lent itself to misrepresentation if there has been no misrepresentation about it? We know perfectly well that allegations and assertions may be made by inuendo just as well, and perhaps more conveniently, than in any other form. I would like to ask where has the misrepresentation been with regard to the Corn Tax? What did we on this side contend, only too frequently amid laughter and interruptions? We contended that the Corn Tax fell as a burden on the English consumer. Does anybody now deny it? ("Yes.") There are some who do. Then they apparently, do not follow the Prime Minister, If we may judge from the attitude of the Prime Minister to-night he desires to deny it, because he interrupted my hon. friend the Member for West Monmouthshire when he described him as having said it did not fall on the consumer. The Prime Minister did not like the reference, and said, "Where is it? Produce your Hansard." I have taken the trouble to look up Hansard, and what the right hon. Gentleman said when the tax was being debated was that "its effect on the working classes would probably be nothing." When we said it would be something we were charged with misrepresentation. I think our "misrepresentations" have proved to be correct, otherwise, why have you taken off the tax? What is meant by this extraordinary policy at a time when the Exchequer is being depleted by so many demands, when our expenditure is rising as the income used to rise—by leaps and bounds? What is meant by making this magnificent remission to the foreign producer? What have American railways done for us that we should give them £2,000,000 per annum? These are the assertions which, like curses, are coming home to roost. One is entitled to reflect upon the way in which the House and the country have been treated over this tax by those who defended it. It has not been fairly and sincerely defended. The arguments which have been used in its favour have savoured of petty and contemptible dialectic.

The right hon. Gentleman made another reference in telling us why he took off the tax which struck me as ominous. He said, "There is no elasticity about it." That is a phrase to reflect upon. It meant, of course, that he dare not increase the tax. The people make a great deal of noise about their bread; but their is plenty of elasticity about tea and sugar. We are to assume, I suppose, that the taxes on the food and trade of the people which are retained have the virtue of elasticity, and I think I can predict where the elasticity will be required. The right hon. Gentleman has taken 4d. off the Income Tax. That is equal to £10,000,000 or over, but this year the remission will mean a loss to the Exchequer of only £8,000,000. Next year the full effect of £10,000,000 will be felt. But the right hon. Gentleman has already given away, by remitting the Corn Tax, the £2,000,000 which he saves by the Income Tax remission not having its full effect this year. Where is the right hon. Gentleman going to find the extra £2,000,000 next year? Is he going to reduce expenditure? We have had that hope too long. If even the cessation of a great war does not produce a diminution of expenditure, we must not look forward to any reduction next year. He will look for the additional money required in those taxes which have the virtue of elasticity. He is not going to put the burden on property.

MR. RITCHIE

I am sorry to interrupt the hon. Gentleman, but I distinctly stated how I should meet it. I said there was a non-recurring charge on the Army Estimates, which would considerably more than meet the deficit.

MR. ROBSON

May I ask the right hon. Gentleman to mention that nonrecurring charge?

MR. RITCHIE

Certainly. A portion of it is £2,000,000 placed on the Army Estimates for the purpose of meeting the extra demands for compensation which legitimately arose this year.

Mr. ROBSON

That is a compensation in connection with the war, and is a war and not a peace expenditure. I thought the right hon. Gentleman was dealing with peace expenditure. However, if he says it is a non-recurring war expenditure, we are all very glad to hear it. But I am still rather disposed to doubt whether we shall ever see that £2,000,000 so saved. ["Why?"] Hon. Gentlemen wonder why. I remember—perhaps they have forgotten—that not long ago we discovered an expedition, of which nobody on the Front Bench knew anything, had started into the centre of Africa—an expedition which seems to have had somewhat unhappy results, one which might well have been more carefully considered, and for which more elaborate preparations might very properly have been made. Is that going to be a non-recurring expenditure, or is it, with this Ministry which never knows when a war is going to take place, to be a continually recurring expenditure t They did not know of the Jameson Raid. They did not know what Sir John Ardagh had put into his report about the intention of the Orange Free State, although that report was lying undusted on the shelves of their offices. This is the sort of expenditure which, with such Ministers, we shall have continually recurring. We may anticipate a great deal more expenditure in the same form, and whenever additional money has to be raised we know where it is to come from. It is not to come from a tax on property; it is not to come from the burden laid on incomes—which, indeed, is already sufficiently high; it is to come from taxation on the food of the people. That is the traditional and historic policy of the Party opposite. The moment the finance of the country gets into a position of difficulty, and they find themselves embarrassed, they revert to that policy as an instinctive policy.

MAJOR RASCH (Essex, Chelmsford)

I have not been able clearly to follow the argument of the hon. Member for West Salford, who congratulated the Chancellor of the Exchequer on the abolition of the registration duty on corn. He said that we who represented agricultural districts would probably not agree with him because we grew corn while they in Lancashire consumed it. I should like to ask what he supposes we consume in Essex? Does he think we eat manna? We eat bread if we are lucky enough to get it; therefore we are in the same boat as the people of Lancashire. I regret the Government has seen fit to abolish the registration duty. I am not a protectionist, nor are my constituents, and this is not a protectionist tax. A protectionist tax is one which protects, one which encourages home industries and discourages imports, and this registration duty has done neither. As a matter of fact, it has done us rather more harm than good in the agricultural districts in the matter of offals. But I am not disposed to make mountains out of molehills, or to say that this is a momentous or important matter. I regret the abolition because I think the imposition of the duty showed that the Government had a pious opinion with reference to the distress in the agricultural districts, but although I regret it I shall go down to my constituents on the Corn Exchange at Chelmsford to-morrow, and meet them without the slightest diffidence, because I know they are sensible men who recognises the difference between shadow and substance, who have an acute recollection of the condition of agriculture when the right hon. Gentleman opposite was in office ten years ago, and who are not likely to kill King Charles in order to make James king.

MR. KEARLEY (Devonport)

Many hon. Members to-night have pointed to the urgency for a reduction of expenditure, but they have seemed to hold the opinion that the only hope for reduction was in the Army Estimates. I hold the view that there is much to be done in the way of reducing expenditure in connection with our administrative Departments. To all our great administrative Departments there is what I may call a commercial side; they have frequently large amounts of commodities to buy, and in the administration of those Departments there is much money that might be saved. Let us take an illustration which has come under the notice of the Committee during the present session, showing how the heads of Departments conduct the commercial side of their offices. About a month ago we had under discussion a supplementary Estimate, containing a large additional sum to be spent on the maintenance of two steam launches. It is a small illustration, but it wilt suffice. The President of the Board of Trade could give the House no explanation; he knew nothing whatever about this extraordinary additional expenditure, and asked to be allowed to make an explanation on Report. That is a weak feature in the administration of Ministers; they generally know nothing about the items of expenditure which are brought under discussion, and take refuge in the Report stage. What was the explanation on this occasion? Here was a steam launch which was bought second-hand in 1874 for £590, and since that time had had spent on it by the Board of Trade no less than £2,900. Take another case. If hon. Members wish to know where the money goes I advise them to study the Navy Appropriation Accounts of this year. What do we find there? We find that there are thousands and tens of thousands of pounds expended upon repairing vessels that ultimately have been decided to be useless, and the money spent upon them has been literally pitched into the sea. Any hon. Member who wishes to study this matter should peruse the Navy Appropriation Accounts, and then he will see for himself the great waste that is going on. Let me give another case. I felt it my duty to study the waste in the victualling of the Navy. If this Department were efficiently managed, the head of the Department ought to have discovered that the Government were carrying on the manufacture of Navy biscuits at a cost which was 41 per cent. greater than they could buy them in the open market. These are items which ought to be considered carefully by those hon. Gentlemen who are the responsible heads of this particular Department. I am perfectly certain that we shall never get a real diminution until every item of expenditure is watched as carefully as possible, and in that way alone shall we be able to reduce our expenditure.

We have been reminded quite recently by two right hon. Gentlemen, one who is still a Member of the Government, and one who recently was in the Government, that to hold a position in the Tory Administration of this country, one must have certain social distinctions. This was pointed out by the right hon. Gentleman the Member for Preston and the Member for Bordesley, who said that to possess the aptitude of business was considered to be rather a vulgar accomplishment than otherwise by the Government. Until the Government get rid of this idea we shall never get the finances of this country upon a proper footing. I called attention to this matter last year, and I make no apology for alluding to it this year, because I believe that the more it is ventilated and discussed, the more it will be recognised by the House as a line upon which we might pursue our policy of efficiency and a reduction of expenditure. I do not propose to go into any further details to-night on the Budget because we shall have plenty of opportunities later on, but I raise these points because I think they require forcing upon the attention of the House. It is because most of the speakers have indicated that it is solely in the direction of the Army that economy can be effected that I have felt it my duty to point out another direction in which I think much can be done in the way of economical and efficient management.

MR. RITCHIE

The hon. Member who has just sat down has truly said that there would be many opportunities for discussing the various points which have been raised to-night and the criticisms which have been passed upon the Budget; and, therefore, I hope the Committee will consent to bring this discussion to a close and let the Government have the Resolutions, which will, of course, have to be embodied in the Finance Bill. Then there will be ample opportunity for discussing the whole question as regards principle and details.

MR. LOUGH (Islington, W.)

Do you want more than one Resolution?

MR. RITCHIE

Yes. The hon. Member will observe that there is no Resolution of a contentious character; they will all be included in the Finance Bill. It is not as if we proposed to impose any fresh taxation. We are not doing that. We are continuing existing taxation and remitting taxation, but we are not imposing taxation; and under the circumstances it is necessary to have all the Resolutions. I do not, of course, say that it is absolutely essential, but it is important for the carrying on of business. I want to point out that we shall have other opportunities of discussing all these matters of principle and detail, and I do not think that any hon. Member wants to have a general discussion on these various Resolutions, and I hope that the Committee will be content to have the discussion in the ordinary way both on the Second Reading of the Bill and in the Committee stage.

MR. JOSEPH WALTON (Yorkshire, W.R., Barnsley)

Is this not the only opportunity we shall have for a general discussion?

MR. RITCHIE

No. On the Second Reading the discussion can be full and complete, just as if we were discussing the whole of these Resolutions. I desire, however, Mr. Lowther, to say a few words with regard to the criticisms which have come from both sides of the House with regard to our Budget proposals. If there is one thing that I regret more than another in connection with the proposals which I have made, it is that, so far as the proposal as to the Corn Duty is concerned, it is unacceptable to my right hon. friend the Member for the Sleaford Division, whom I greatly regret to find in opposition to us on this point. I know how keenly he feels on this subject, and my regret, therefore, is all the greater. But, Sir, I am sure that his disappointment must have been somewhat mitigated by the reception which the proposal met with on the other side of the House. Our proposal for the remission of the Corn Duty, which, I confess, I anticipated would be acceptable to hon. Gentlemen opposite, has been received, not, perhaps, with a storm of disapproval, but, I will say, with a storm of adverse criticism. [Opposition cries of "No, no!" and "Misrepresentation."] I do not go merely by cheers. Anyone who has heard the discussion to-night cannot fail to have been struck by the extremely cold way in which the proposal was received on the other side. It is not the cheers I am talking I about, but the verbal criticisms; and I think those criticisms and that attitude may go some way towards mitigating the distress which my right hon. friend feels. My right hon. friend desired that the duty should remain on, and, from a protective policy point of view, I can understand that he strongly objects to it being taken off. The duty was advocated as a broadening of the basis of taxation. In a sense, of course, the Corn Tax was a broadening of taxation, but not in the ordinary sense of the term; for, as I understand the term, it means a tax capable of increase or decrease; and in that sense it is not a broadening of taxation, because I do not myself believe it would be possible to increase the tax, except on an occasion of very great emergency, and it goes without saying that it is not possible to decrease it. From that point of view, therefore, it is not of very much value as broadening the basis of taxation. If that is so the whole thing amounts to this—we derive £2,500,000 from this particular tax, and if we retain it we must take that amount off something else—for my right hon. friend agrees that this amount of taxation should be taken off something; and he suggests tea. Even from his point of view, unless he regards it as a measure of protection, it is just as well to take it off the Corn Tax as off tea. If he knew of the variety of small matters that have to be considered in connection with the tax I am sure he would agree it is more desirable to take off this tax than to take 2d. off tea. It is on an article largely used for cattle feeding purposes, and it is a matter of complaint with farmers that the cost of feeding stuffs has increased with the imposition of the tax. My right hon. friend says it has not increased the price of bread; but that is an impossible thing to say. It is impossible for the reason that the price of corn and the price of flour, and therefore of bread, depends on a great many circumstances other than this particular tax. Therefore it is quite impossible, if there has been no actual rise, to say that the tax has had no effect on the price. Certainly I am quite sure my right hon. friend will agree with me that undoubtedly the price of flour has increased to the amount of the tax, and a good deal more; and, as a good many people make their own bread, the cost of the latter must have been increased.

A good deal has been said about direct and indirect taxation; and most of the speakers from the other side have contended that we have taken a far larger amount of money off direct taxation than we ought to have done, and that remissions should have been more equally distributed between direct and indirect taxation. Now, as my hon. friend behind me has said, when the Crimean War came to an end 75 per cent. of the whole amount remitted was taken off direct taxation and 25 per cent. only was taken off indirect taxation; so that we are strictly in accordance with precedent. When the right hon. Gentleman the Member for West Monmouth talks of the enormous increase of the burdens we have placed on the shoulders of indirect taxpayers, I venture to tell him that the proportion of direct to indirect taxation is more in favour of the indirect taxpayer than it was when he was Chancellor of the Exchequer, even after we have taken off this taxation.

MR. BALFOUR

Hear, hear!

MR. RITCHIE

He will find, if he examines the subject, that the proportion of indirect to direct taxation was then larger.

SIR WILLIAM HARCOURT

I would remind the right hon. Gentleman of the Death Duties.

MR. RITCHIE

It makes not the slightest difference; the result is the same. I contend that when the right hon. Gentleman says we are imposing a greater burden on the indirect taxpayers now than was imposed before, he is stating what is not correct. When he had charge of the nation's finances there was a larger proportion on the indirect taxpayer than we leave now.

SIR WILLIAM HARCOURT

I proposed an arrangement which increased direct as compared with indirect taxation.

MR. RITCHIE

That does not alter the facts of the case when the right hon. Gentleman left office. ["Oh, oh."] But I do not want to pin myself to his operations. Let him take any year previous to that and show me that the indirect taxpayer was more favourably considered than he is under our proposals. He cannot show any single year during the whole time Mr. Gladstone was in office that will compare to anything like the same extent in favour of the indirect taxpayer as that which we are now proposing. Let me also point out that when we are talking about taxation, we must remember that the local taxation account is also included; so that it is not only for Imperial purposes that this taxation is now levied, but very largely for local purposes. Therefore it may beargued that the indirect taxpayer ought fairly to be called upon to pay even a larger proportion than he is now asked to pay. Of course, we shall have plenty of opportunities of discussing that matter in Committee. Let me also point out to the Committee, what I think has been pointed out by one or more speakers already, that, when we come to talk about indirect taxation, a large proportion of this indirect taxation is purely voluntary. It is true that a certain proportion of this indirect taxation is on the necessaries of life; but a very large proportion is taxation which people may pay or not as they choose; and I am glad to think that a large proportion of the working classes do not pay this indirect taxation at all, because they refrain to a large extent from the intoxicating beverages to which hon. Gentlemen have alluded. With regard to the Sinking Fund, it has been stated by the hon. Gentleman the Member for Monmouth Boroughs that the proposals I am making to the Committee to-day are a departure from the expressed intentions of my right hon. predecessor. He said— You are taking a certain portion of the reduction of interest and giving it to the taxpayer. The right hon. gentleman who preceded me," the hon. Gentleman said, "stated distinctly in this House that he intended that this reduction of interest when it came about should not go to the taxpayer but should go to the Sinking Fund. I happen to have a paper which was presented by my right hon. friend to the House on April 30th, 1899, in which these words occur— To the saving to be effected by the reduction of interest on Consols in 1903 the taxpayers of the day will no doubt have an unanswerable claim, but if on that account the fixed debt charge were reduced by, say, £1,500,000, the new Sinking Fund would still stand in 1905–6 at about £7,750,000. Consequently my right hon. friend reduced the fixed charge by £2,000,000, thereby reducing the Sinking Fund to £5,750,000, and having done that he says the taxpayer will, when this reduction of interest comes into play, have a full and good claim for remission of taxation. I do not press that, though I thought it right to allude to the fact in view of what the hon. Gentleman has said. But I base my position on the facts of the case as they stand. What are the facts of the case? In the present year immediately the Transvaal loan is floated, which I hope will be within a very short time now, we are going to repay out of that loan £4,000,000 which we advanced to the Transvaal and which will be repaid as a first charge upon this loan. Therefore within the next month we shall receive £4,000,000, which will be employed in redeeming debt, and the money hitherto required to pay interest on that amount of debt, namely, about £20,000 will of course go to the Sinking Fund. In January next we are to receive £10,000,000 more money, not out of the guaranteed loan but out of the loan which has been underwritten by the Transvaal mine-owners; so that within twelve months we shall receive £14,000,000, and the interest upon that £14,000,000 will be £420,000, which will be added to the Sinking Fund part of the fixed debt charge, and by that time the amount of the fixed debt charge which is available for the extinction of the debt will be increased by nearly £500,000. In another year we shall get another £10,000,000, and the year after that we shall get a further £10,000,000; so that we are really going to put into the Sinking Fund a sum of about £1,000,000, since the debt which bears this amount of interest will be extinguished in three years. The £1,000,000 which will no longer be required for interest will remain part of the Fixed Debt Charge—that is, will be added to the Sinking Fund, so that by the time this £30,000,000 is paid we shall have a Sinking Fund of close on £9,000,000 sterling. I ask the Committee whether, under these circumstances, I should have been justified in asking the taxpayers to pay another £1,000,000 more now. The taxpayers are already heavily burdened; and I am satisfied that the Committee would have considered that I was placing a much greater burden on the existing taxpayers than I was in the least justified in doing, having regard to the circumstances I have now stated. Therefore I maintain not only that we have not actually diminished the Sinking Fund, but that we have made provision for largely increasing the Sinking Fund and bringing it up to an amount greater than it has ever been known to reach before. The right hon. Gentleman opposite gave us his usual exposition of what he considered to be the folly of our expenditure upon armaments. This is not the time to discuss that question. The right hon. Gentleman and others have asked me to-night to explain whether we propose in any way to reduce the cost of these armaments next year. What a preposterous idea it is to propose that at this stage of the Budget I should enter into the details of the Navy and Army expenditure with a view to showing how much they are to be reduced next year.

SIR H. CAMPBELL-BANNERMAN

When will you?

MR. RITCHIE

When? Why, when the Estimates come on next year. That is the time to discuss the details of Estimates. The Budget is not the time to discuss the details of the Estimates. It is my duty of find the money for the Estimates which have been laid before the House and agreed to. I am very far from saying that it is not wise to criticise minutely this expenditure, and I am sure I should be as delighted as right hon. and hon. Gentlemen opposite to see it much less than it is. But it is absurd to ask me to enter into details of Army and Navy expenditure upon an occasion like this. My hon. friend the Member for Islington asked me about the Savings Banks. Well, I hope to introduce a Bill dealing with that subject; but I think it would be impossible now that it should come into operation until the beginning of the financial year of the Savings Banks. My hon. friend thinks that would entail considerable loss to the Exchequer, but I do not think this need necessarily be the case, for it may be possible to provide that whatever the loss may be should fall on the proposed Reserve Fund. But, if hon. Gentlemen think that because Consols are now so low we can afford to disregard the recommendations of the Savings Bank Committee, they are entirely mistaken. It matters not to us, so far as the Savings Banks are concerned, what the price of Consols is, except so far as new investments are concerned. I A sum of £100,000,000 of Savings Banks money is invested in Consols, and we cannot sell this out. We have to be content, therefore, with the rate of interest—2½ per cent.—at present obtainable; and we cannot afford to pay the present interest to Savings Banks depositors without great loss to the general taxpayer. I Ho not think that the general taxpayer ought to be called upon to bear that loss; and therefore I hope that it will be possible to carry the Bill which I shall introduce. I hope, too, that we shall receive the assistance of my hon. friend in carrying it. He was a valuable Member of the Committee which inquired into the subject; and, when it is stated that the Committee mainly consisted of bankers, the Committee will believe that my hon. friend would be able to stand up against any number of bankers if he thought that the interests of the public were being prejudiced by them. I do not know that I have anything further to say. I am greatly obliged to the Committee for the kind way in which they have spoken of myself in connection with the Budget and for the consideration they have given to me, and I hope they will now agree to the necessary Resolutions.

MR. LOUGH

I think it is not unreasonable that the matter should be brought to an issue now, and I desire to submit an Amendment to the Motion which will enable that to be done. I beg to move to reduce the Tea Duty from 6d. to 4d. Our case is, that there should have been a reduction in the Income Tax of 3d. and of 3d., only. That would have taken £6,500,000 and left £4,000,000 for the relief of indirect taxation, and this should have been applied to a reduction of the Tea Duty by 2d. and the abolition of the Corn Duty. Not one of the advocates for a reduction in the Income Tax asked for a greater reduction than 3d., and the statement of the Chancellor of the Exchequer that he proposed to reduce the Income Tax by 4d. came as a complete surprise. The right hon. Gentleman has thrown a most valuable light on the principle which guided him in this matter. He told us that he took the precedent of the Crimean War, at the end of which 75 per cent. was taken off direct taxation, and 25 per cent. only was taken off indirect taxation. The answer I make to that is, that many things have happened since the Crimean War. We have had the Reform Act of 1867 and the Act of 1885, and the class of the population on whom these indirect taxes fall are now represented in Parliament, whereas in the years referred to they were unable to make their voices heard. In a speech a week ago the Chancellor of the Exchequer adumbrated this new policy of sticking to the indirect taxes that were imposed during the war, of maintaining them as a continual burden on the people and giving all the relief to the direct taxpayers.

MR. RITCHIE

What I said was that this deputation came to me and asked me to so regulate the finances of the country as to give a free breakfast table. That was the proposal made tome and to which my observations were addressed.

MR. LOUGH

Many of us would like to see a free breakfast table. We are not ashamed of the demand, or of the policy which embodies it; and, as the Chancellor of the Exchequer argued before this deputation, and before this Committee to-day, in favour of almost confining his relief to direct taxation, so we wish to argue in favour of the claims of the indirect taxpayer who we think is being cheated in this year's Budget. These taxes were imposed equally on direct and indirect taxpayers. The Chancellor of the Exchequer had tried to make out that the Coal Tax was not an indirect tax. That is not fair. Surely it cannot be denied that it is an indirect tax.

MR. RITCHIE

Not on the consumer.

MR. LOUGH

I am not on that point. It is only fair that I should be allowed to take one point at a time. We are speaking of direct and indirect taxation, as generally understood, and we say that it is merely playing with words to suggest that the Coal Tax is not an indirect tax. The Chancellor of the Exchequer, however, has left it out of the indirect taxes in order to make out his case that more money has been raised by direct taxation than by indirect taxation. We know the figures, and we say that there is scarcely any difference in the way the taxes were imposed. What we demand is that, inasmuch as you made both classes pay equally, so, when the remission comes, You should give it to both classes equally. We contend that the proposal of the Chancellor of the Exchequer is a most unfair one on this broad ground, and also on one other ground that I will venture to mention. There was a plain road open before the right hon. Gentleman, but with many ingenious arguments he has taken the wrong road. I desire to submit one final argument in support of this proposal; it is with regard to the Tea Tax. Growers of tea put their case before the Chancellor of the Exchequer with great moderation. They stated that they had patiently borne the burden placed upon them and that, in the first year this additional tax was levied they paid half the tax out of their own pocket, and suffered a great loss inconsequence. The area of tea-growing being diminished, the consequence now is that there is a certain shortage of tea, and the increased price which has followed has had to be borne by the consumer. The Chancellor of the Exchequer said that the tea duty was a small duty,

but it is a duty of at least 75 per cent. On the price of the raw material. The Chancellor of the Exchequer also said that tea was not a necessity; again I disagree with him. We think it would have been far better for the Government, and far more to the credit of this House, if the remission had been made in the same way as the taxes were imposed I beg to move to reduce the Tea Duty from 6d. to 4d.

Amendment proposed— To leave out the word 'six,' and insert the word 'Four'—(Mr. Lough.)

Question put, "That the word 'Six' stand part of the Question."

The Committee divided:—Ayes, 184; Noes, 76. (Division List, No. 68.)

AYES.
Agg-Gardner, James Tynte	Craig, Charles Curtis (Antrim, S	Gretton, John
Agnew, Sir Andrew Noel	Cranborne, Lord	Groves, James Grimble
Allhusen, Aug. Henry Eden	Cross, H. Shepherd (Bolton)	Guest, Hon. Ivor Churchill
Anson Sir William Reynell	Crossley, Sir Savile	Hall, Edward Marshall
Arkwright, John Stanhope	Davenport, William Bromley	Hamilton, Rt Hn Lord G. (Mid'x
Atkinson Rt. Hon. John	Denny, Colonel	Hare, Thomas Leigh
Bain, Colonel James Robert	Dickson, Charles Scott	Harris, Frederick Leverton
Balfour, Rt. Hon. A. J. (Manch'r	Digby, John K. D. Wingfield-	Hay, Hon. Claude George
Balfour, Rt. Hon. G. W.(Leeds	Dimsdale, Rt. Hon. Sir Jos. C.	Heath, James (Staffs., N. W.)
Balfour, Kenneth R.(Christch.	Dorington. Rt. Hon. Sir John E.	Hermon-Hodge, Sir Robert T.
Banbury, Sir Frederick George	Doxford, Sir William Theodore	Hickman, Sir Alfred
Bignold, Arthur	Duke, Henry Edward	Hoare, Sir Samuel
Bigwood, James	Durning-Lawrence, Sir Edwin	Hogg, Lindsay
Bill, Charless	Elliot, Hon. A. Ralph Douglas	Hutton, John (Yorks, N. R.)
Blundell, Colonel Henry	Faber, Edmund B. (Hants, W.)	Jameson, Major J. Eustace
Bond Edward	Faber, George Denison (York)	Jebb, Sir Richard Claverhouse
Boscawen, Arthur Griffith	Fellowes, Hon. Ailwyn Edward	Keswick, William
Brodrick, Rt. Hon. St. John	Fergusson, Rt. Hn Sir J. (Manc'r	Knowles, Lees
Butcher, John George	Fielden, Edward Brocklehurst	Lambton, Hon. Fredk. Wm.
Carlile, William Walter	Finch, Rt. Hon. George H.	Law, Andrew Bonar (Glasgow
Carson, Rt. Hon. Sir Edward H.	Finlay, Sir Robert Bannatyne	Lawrence, Wm. F. (Liverpool
Cautley, Henry Strother	Firbank, Sir Joseph Thomas	Lawson, J. Grant (Yorks. N. B.)
Cavendish, R. F. (N. Lancs.	Fitzroy, Hon. Edward Algernon	Lee, A. H. (Hants, Farenam)
Cavendish, V C W (Derbysh.)	Forster, Henry William	Lees, Sir Elliott (Birkenhead)
Cecil, Evelyn (Aston Manor)	Foster, Philip S. Warwick. S. W.	Legge, Col. Hon. Hensage
Chamberlain, Rt. Hon. J (Birm	Fyler, John Arthur	Leveson-Gower, Frederick' N. S.
Chamberlain, Rt Hn. J. A (Wore	Gardner, Ernest	Lockie, John
Charrington, Spencer	Garfit, William	Lockwood, Lieut.-Col. A. R.
Churchill, Winston Spencer	Godson, Sir Augustus Fredk.	Long Col, Charles W.(Evesham
Clive, Captain Percy A.	Gore, Hn G. R. C Ormsby-(Salop	Long, Rt. Hn. Walter(Bristol, S.
Cochrane, Hon. T. H. A. E.	Gore, Hon. S. F. Ormsby-(Linc.)	Londsdale, John Brownlee
Coghill, Douglas Harry	Gorst, Rt. Hon. Sir John Eldon	Lucas, (Col. Francis (Lowestoft
Collings, Rt. Hon. Jesse	Greene, Sir E. W.(Bury St. Ed.	Lucas, Reginald J. (Portsmouth
Compton, Lord Alwyne	Greene, Henry D. (Shrewsbury)	Macdona, John Cumming
Corbett, A. Cameron (Glasg.)	Greene, W. Raymond (Cambs.)	Maconochie, A. W.
M'Arthur, Charles (Liverpool)	Platt-Higgins, Frederick	Stanley, Edward Jas. (Somerset
M'Calmont, Colonel James	Powell, Sir Francis Sharp	Stirling-Maxwell, Sir John M.
M'Iver, Sir Lewis (Edinburgh W	Pretyman, Ernest George	Strutt, Hon. Charles Hedley
Majendie, James A. H.	Purvis, Robert	Talbot, Lord E. (Chichester)
Malcolm, Ian	Quilter, Sir Cuthbert	Talbot, Rt Hn. J. G. (Ox'fd Univ.
Manners, Lord Cecil	Randles, John S.	Thornton, Percy M.
Maxwell, Rt Hn Sir H. E (Wigt'n	Rankin, Sir James	Tollemache, Henry James
Maxwell, W. J. H. (Dumfriessh.	Rasch, Major Frederic Carne	Tomlinson, Sir Wm. Edw. M.
Mildmay, Francis Bingham	Reid, James (Greenock)	Tritton, Charles Ernest
Montagu, G. (Huntingdon)	Remnant, James Farquharson	Valentia, Viscount
Montagu, Hon. J. Scott (Hants.)	Renshaw, Sir Charles Bine	Walrond, Rt. Hn. Sir William H
More, Robt. Jaspe (Shropshire)	Renwick, George	Warde, Colonel C. E.
Morgan, David J (Walthamstow	Ridley, Hn. M. W. (Stalybridge)	Webb, Col. William George
Morrison, James Archibald	Ritchie, Rt Hon. Chas. Thomson	Williams, Colonel R. (Dorset)
Morton, Arthur H. Aylmer	Robertson, Herbert (Hackney)	Willox, Sir John Archibald
Mount, William Arthur	Rollit, Sir Albert Kaye	Wilson, A. Stanley (York, E. R.)
Mowbray, Sir Robt. Gray C.	Ropner, Colonel Sir Robert	Wilson, J. W. (Worcestersh., N)
Murray, Rt Hn A. Graham (Bute	Rothschild, Hon. Lionel Walter	Wodehouse, Rt. Hn. E. R. (Bath
Newdegate, Francis A. N.	Royds, Clement Molyneux	Worsley-Taylor, Hry. Wilson
Nicholson, William Graham	Scott, Sir S. (Marylebone, W.)	Wortley, Rt. Hon. C. B. Stuart
O'Neill, Hon. Robert Torrens	Seely, Charles Hilton (Lincoln)	Wrightson, Sir Thomas
Orr-Ewing, Charles Lindsay	Seely, Maj. J. E. B.(Isle of Wight	Wylie, Alexander
Palmer, Walter (Salisbury)	Sharpe, William Edward T.	Wyndham, Rt. Hon. George
Parkes, Ebenezer	Skewes-Cox, Thomas
Pease, H. Pike (Darlington)	Smith, H. C (North'mb. Tyneside	TELLERS FOR THE AYES—Sir Alexander Acland-Hood and Mr. Anstruther.
Pemberton, John S. G.	Smith, James Parker (Lanarks
Percy, Earl	Spear, John Ward
Pierpoint, Robert	Stanley, Hon. A. (Ormshirk)
NOES.
Allen, Charles P. (Glouc,. Stroud	Hayne, Rt. Hon. Charles Seale	Samuel, Herbert L. (Cleveland)
Ashton, Thomas Gair	Helme, Norval Watson	Samuel, S. M. (Whitechapel)
Barran, Rowland Hirst	Hobhouse, C. E. H. (Bristl, E	Schwann, Charles E.
Bayley, Thomas (Derbyshire)	Holland, Sir William Henry	Shackleton, David James
Beaumont, Wentworth C. B.	Hutchinson, Dr. Charles Fredk,	Shaw, Charles Edw. (Stafford)
Bell, Richard	Jones, William (Carnarvonsh.)	Shaw, Thomas (Hawick, B.)
Black, Alexander William	Joyce, Michael	Shipman, Dr. John G.
Bolton, Thomas Dolling	Kearley, Hudson E.	Sinclair, John (Forfarshire)
Brigg, John	Langley, Batty	Spencer, Rt Hn C. R., (Northants
Brown, George M. (Edinburgh)	Lawson Sir Wilfrid (Cornwall)	Taylor, Theo. C. (Radcliffe)
Caldwell, James	Leese, Sir Joseph F. (Accrington	Thomas, David Alfred (Merthyr
Campbell-Bannerman, Sir H.	Leng, Sir John	Thomas, J. A. (Glam. Gower)
Cawley, Frederick	Lough, Thomas	Thomson, F. W. (York, W. R.)
Channing, Francis Allston	Lundon, W.	Tomkinson, James
Craig, Robert Hunter (Lanark)	M'Kenna, Reginald	Toulmin, George
Davies, Alfred (Carmarthen)	Mitchell, Edw. (Fermanagh, N.	Ure, Alexander
Dilke, Rt. Hon. Sir Charles	Norman, Henry	Walton, Joseph (Barnsley)
Duncan, J Hastings	Partington, Oswald	Weir, James Galloway
Edwards, Frank	Price, Robert John	White, George (Norfolk)
Emmott, Alfred	Priestley, Arthur	White, Luke (York, E. R.)
Evans, Sir F. H. (Maidstone.)	Rickett, J. Compton	Whitley, J. H. (Halifax)
Griffith, Ellis J.	Rigg, Richard	Wilson, F.W. (Norfolk, Mid)
Gurdon, Sir W. Brampton	Roberts, John Bryn (Eifion)
Haldane, Rt. Hon. Richard B.	Robson, William Snowdon	TELLERS FOR THE NOES—Mr. Herbert Gladstone and Mr. Causton.
Harcourt, Rt. Hon. Sir Wm.	Rose, Charles Day
Hardie, J. Keir (Merthyr Tyd	Runciman, Walter
Harmsworth, R. Leicester	Russell, T. W.

Original Question put, and agreed to.