HC Deb 09 June 1903 vol 123 cc330-98


Order for Second Reading read.

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

*MR. CHAPLIN (Lincolnshire, Sleaford)

rose to move: "That this House considers that the financial policy of His Majesty's Government, in the remission of indirect taxation imposed only last year for purposes of a permanent character, involves a needless and injurious disturbance of trade, and a serious loss to the revenue, without substantial relief to the consumer; and that, if any remission of indirect taxation is considered necessary by His Majesty's Government, such remission ought to be made by a reduction of the duties proposed to be levied on tea or other articles of general consumption." He said, I shall endeavour most carefully, Sir, to observe your ruling with regard to allusions to the fiscal proposals which have recently been made, but I confess it will be very difficult to avoid them in the arguments I wish to address to the House. I hope I shall not be transgressing your ruling when I say that the situation in which the House approached the discussion of the financial proposals of the Government is of a very unusual, and, indeed, a remarkable and almost an unprecedented character. It reminds me very much of a sentence in a letter which a great English Statesman wrote to me on one occasion to this effect: Remember that the vicissitudes of political life are endless. Certainly nobody could desire a more perfect vindication of that statement than the position in which we find ourselves to-day. Three months ago nobody, no one at least in his senses, would have dreamt that the present Government would have come forward during this session with a proposal to repeal the duty on grain, which only last session they imposed themselves, and avowedly for purposes of a permanent character, and with the object of broadening the basis of taxation. So much so that when the announcement was made it was received with amazement and universal surprise by friends and foes of the Government alike; with ridicule and contempt by the Government's enemies, and with dismay and disgust by innumerable friends. Who could have imagined only a few weeks ago, when Parliament was occupied in what I suppose we should call its normal proceedings, when the youth and flower of the Party who sit around me here were engaged in nothing more sensational than nightly sallies upon the Secretary of State for War and what they delight to call his phantom Army Corps; when some of the keenest intellects in the House of Commons were more or less be fogged by the intricacies and morasses of legislation upon Irish land; or more recently were staggered by the transformation scenes which followed in such quick succession on the London Education Bill; that a greater, more important, and far more serious transformation scene than any one of them was even then awaiting us, and that we were to be confronted all at once, if not with a complete reversal of our fiscal system yet with changes going down so deeply to its very roots that they might well give cause for the most serious, the gravest, and most anxious reflection to politicans of all classes and all creeds both in Parliament and in the country. Yet so it is; and in my judgment we owe the present situation most clearly, as it seems to me and as I hope to demonstrate to the House, in the first place, to the ineptitude, shall I say the blundering ineptitude, of a single Minister, who, I presume, insisted as part of his financial scheme upon the repeal of the duty upon grain, and, secondly, to the supine and nerveless inaction of a Cabinet, whose members apparently, with one exception, were indifferent and willing to agree to it. That was indeed a masterpiece of statecraft, reserved for the new Chancellor of the Exchequer—an effort of financial genius, destined, no doubt, to place him as a heaven-born financier on a pinnacle of enduring fame. But it will be found ere very long that the pinnacle of fame is only a monument of folly, and that the heaven-born financier has made an irretrievable mistake. Why do I say this? Because the Chancellor of the Exchequer by his unfortunate and most unwise proposal has apparently precipitated a movement which, although I personally approve of it, is from its nature essentially a matter for great deliberation, for which neither his Party nor the country were prepared, and which in some respects I think is permature. Again because, reading between the lines, and even without the necessity of doing so, for it is obvious now from the speech at Birmingham alone, that the repeal of the duty must have been entirely opposed to the views of the Secretary for the Colonies and destructive of his aims, and, above all, to his cherished and well known views upon colonial policy, if he had quietly accepted it. For the moment, however, the policy of the Chancellor of the Exchequer appears to have prevailed over that of the Secretary of State; but it was only for the moment. For a few days afterwards the world was startled and aroused by the reply delivered at Birmingham in a speech which was undoubtedly a great speech, announcing an Imperial policy and proclaiming a great principle which for forty or fifty years the Colonial Secretary has been the first of leading English Statesmen in Great Britain with the courage to uphold. What is that principle, and what is the position that it was designed to meet? They have been described by both the Secretary for the Colonies and the Prime Minister on two different occasions. The objects of my right hon. friends are, so far as I can gather, mainly two. One of them is to cement the union between the colonies and ourselves, and to bind them, if possible, closer together; and, for this purposes, to keep, to promote, and to increase our trade with the colonies, even if by doing so we might lose something of our trade with foreign countries.


The right hon. Gentleman is getting a little beyond the limits of my ruling.


Of course, Sir, I must bow to your ruling, but it will be very difficult for me to convey my argument to the House with regard to the effects of the repeal of the corn duty if I cannot make any further allusion to the two great objects of my right hon. friends.


The right hon. Gentleman began by saying, "What is the object of the policy of the Colonial Secretary?" That seemed to promise a full discussion of the whole of his views.


No, Sir, I do not want to lead to that; I merely wished to put the broad aspect of the question; but if you tell me I shall be transgressing your ruling in so doing I will pass at once to those considerations which relate most closely and distinctly to the repeal of the corn duty, alone.


I do consider that the right hon. Gentleman would be transgressing. I do not complain of what he has said so far as he has gone, but if I had allowed him to proceed it would have become the general subject of debate.


Under those circumstances I must content myself with saying broadly that the principal objects of my right hon. friends were two—one to increase the trade between the mother country and the colonies, and the other to acquire the power of retaliation if this country or the colonies were assailed by foreign hostile tariffs. That was the great principle to which I rejoiced to hear that my right hon. friends had both of them subscribed, and that is a principle which I have not the smallest doubt the verdict of the country will finally endorse. That being, as I understand, the policy which the Government have now held before us—

SIR M. HICKS BEACH (Bristol, W.)



The Prime Minister and the Colonial Secretary most undoubtedly have done so, as I should be able to convince my right hon. friend if I were in order in making the statements I desired to make. He has not had the advantage, as I have had, of hearing two speeches from the Prime Minister on the subject; and I say that that being their policy, there was one point in connection with it which to me is more incomprehensible than ever, and which becomes more and more so every hour, when I see them deliberately throwing away the only weapon in their armoury which would have enabled them to give real effect to this great principle to which, whatever my right hon. friend may say, the Prime Minister and the Colonial Secretary have beyond all doubt committed themselves. That is a proceeding as to which I have never from the first been able to understand the reason, or reasons, by which the Government were prompted in the repeal of the corn duty, and as this is the first occasion we have had of doing so in debate, I desire to examine them as carefully as I can—and with the permission of the House—I will proceed to do so. Now Sir, the House will recollect that in remitting indirect taxation the Chancellor of the Exchequer told us that his choice lay between tea and corn. Tea, he said, possessed many advantages; it was the easiest and the least contentious subject of taxation, and, if my right hon. friend had only acted up to that opinion how very different would have been his own position, the position of his Party, and that of an immense number of his supporters in the House to-day! Unfortunately he elected to take corn. And why? Because, as he said, it is the food of our people; it is the food of our horses and our cattle; it is a raw material, and it has the disadvantage of being somewhat inelastic. But is it not the case that each one of those arguments had precisely the same force at the time the duty was imposed? Of course they had, and the right hon. Gentleman knows it as well as I do, and that if they are arguments in favour of the repeal of the duty to-day, they were equally arguments against it at the time when he supported its imposition. But since the duty was put on my right hon. friend has discovered something else—and here I am bound to say that the Prime Minister, when I had the honour of waiting upon him with a recent deputation, went even further than the Chancellor of the Exchequer, for on that occasion he tried to persuade the farming portion of his audience that this duty operated as a great burden on the raw material which they used; and that consequently the class which had the most reason to object to the duty was the farming class.


Hear, hear!


The Chancellor of the Exchequer says "Hear, hear," but I may observe that those two propositions were received with every mark of dissent, and loud cries of "No, no" from the gentlemen present who were chiefly concerned, and in reply to the right hon. Gentleman's cheer I can only put the opinion of the farmers themselves, who ought to know what they are about, because, unlike my right hon. friend, who speaks only from theory, they speak from actual experience. The Chancellor of the Exchequer will find out, if he takes the trouble to inquire, that while it is perfectly true that a limited section of the farming class, whose operations are devoted to what is called "feeding," are not greatly enamoured of the duty on grain, yet the whole body of the farming class throughout the country are absolutely unanimous with regard to the duty on flour. They are so for the best reasons in the world — reasons which I gave in detail on the occasion of the deputation to which I have referred, and which I need not repeat except to say this—that it was found that the result of the duty on flour was incidentally to reduce the cost of feeding stuffs all round; and everybody who knows anything about the subject must be aware that that is a very important matter indeed to the farmer.

But, worst of all, the right hon. Gentleman has made another discovery, viz., that this duty is open to misrepresentation. I wonder when he made it. Most of us made it—and there was little difficulty in doing it—during the prolonged debates on this question last session, and if ever it was to be acted upon then was the time. But the misrepresentation which was patent to everyone in the House, with, I suppose, the exception of the right hon. Gentleman, did not prevent the Govern- ment from imposing it. And if misrepresentation is a reason for repealing a Government measure, what has the right hon. Gentleman to say about the Education Act of last year, or the Agricultural Rates Act of some years ago, or half a dozen other measures, which were quite as much open to misrepresentation? As a matter of fact, I have always been of opinion that it is the Education Act which has done us, as a Party, more harm in the country than any other measure passed by the present Government—though, of course, the Prime Minister will never admit it—and this poor little innocent duty on corn is to be made the scapegoat in consequence. But did anyone ever dream of repealing the Education Act because it was alleged, and I think truly, to be grossly misrepresented in the country? Of course not, and why on earth are we to do so in this case? But then he considers that it could never have remained as an integral portion of the fiscal system of the country. Why not? He gave no reasons in support of that view. It can be only a matter of opinion, and all experience and probability is against him. As a matter of fact, it did remain an integral part of our fiscal system for at least twenty-five years during the time of Gladstone, Bright, and Cobden, all of whom were among the leading free traders of their day. I was very sorry to hear the Prime Minister give his countenance to that view. He thinks it has been conclusively proved that even the 1s. duty in what he called "the struggle for a fiscal existence" could never have held its own as an independent tax. But where, and when, and by whom has this been proved? With great respect, I entirely dispute the statement. The only thing that has been proved on this point is that a Government with a great majority, but with incredible weakness, yielded in this matter to purely party clamour, and, what is worse, after that clamour had practically ceased, as soon as the result of the duty was known by experience to have been absolutely harmless. And this from a Government who were careful to tell us through the mouth of their Prime Minister that they had every confidence in the common sense of their countrymen, and again, through the mouth of the late Chancellor of the Exchequer, that they were not a cowardly Government, and were perfectly prepared to fight, if need be, the battle of the big loaf and the little loaf once more! I do not know that there is any great heroism or superhuman courage needed for that. Ever since the passing of the Reform Bill, in every contest I have had to fight in my constituency, I have had to fight that battle on every single occasion. I do not know that it ever did me much harm, and, what is more, I do not think it ever will. The Prime Minister added that in any case this tax could never have been permanent, and he seemed to found his statement upon the belief that whatever we did, the other side, when they came in—as come in at some time, of course, they must—[OPPOSITION cries of "No, no,"] — would be certain and bound to repeal it. Well, Sir, I should have left it to them. It was their business, not ours. More than that, it would have been absolutely consistent from their point of view, but it was absolutely inconsistent with everything that we have said and done on this side of the House. But I doubt his statement very greatly, and I doubt it for a reason with which I think the House will agree is a good reason.

I have been trying to ascertain to the best of my ability what are the prospects of the wheat harvest of the world for the coming year, and the result of my inquiries is that it promises to be a good, and quite possibly a great one. If that is so, it is as certain as I am addressing the House that there will be a fall in the price of wheat of several shillings per quarter, and if it should exceed 4s. then the price of bread will go down in proportion. Under these circumstances I ask is it conceivable that any Government in the world—even this Government with bread sensibly lower, in spite of the duty, should deliberately elect to throw away a revenue of £2,500,000 a year for absolutely no reason in the world whatever. I do not believe it for a moment. What I do believe is that if my right hon. friend had not made this intolerable mistake, the whole thing would have been forgotten by this time. The superstition against the shilling duty on corn, and it is only a superstition, would have died out altogether, and I think it is quite conceivable that the Colonial Secretary in the course of time might have been able to make the further trifling addition to the duty he mentioned, with the general agreement of the country and of all parties concerned; for it has been established by incontestable evidence that you can put a small duty upon wheat without affecting in any way the position of the consumer. Now, Sir, I have endeavoured to examine to the best of my ability the various reasons which have been adduced in support of the remission of this duty, and I have searched in vain to find one, with a single exception, that was not evident and ought not to have been thought of before the tax was imposed. But that exception is, indeed, a strange one. I do not think anybody who had not heard it would have believed it. It so happens that it has turned out that the shilling duty did confer a little gain upon two classes in the country, namely, the millers and the farmers, but when the Government found this out they were horrified at having taken to themselves that unclean and cursed thing, Protection. And so this little gain my right hon. friend told the deputation was now to be withdrawn from two of the most deserving, and, at the same time, the most depressed industries in the country, although on the right hon. Gentleman's own admission, which he has stated over and over again, it had never done the slightest harm to any human being in the world. Why! the dog-in-the-manger is not in it with His Majesty's Government in this case. And why on earth this Government, above all others, should elect to play this very unenviable rôle towards those who have been for generations the best and most loyal supporters the Government has ever had in the world, passes my comprehension.

If it is hard to find reasons in support of this repeal, it is easy to find many against it. Perhaps the strongest reason of all is the fact that last year you deliberately declared that this tax was to be permanent. On the faith of that statement put forward by the Ministry capital was invested, mills were re-opened, industries were started, and farmers bought more stock because feeding stuffs in consequence had become cheaper. Now all this is to be thrown away because instead of being permanent the tax on corn is to be at once repealed. Those who have been misled, those who relied on the statement of the Government and have lost their capital in consequence have the deepest possible ground for complaint. In face of these explicit statements which were made by his predecessor last session upon this point in particular, I am at a loss to understand how the present Chancellor of the Exchequer can justify his action. Just one year ago to-day, Mr. Speaker—for it was on the 9th of June, 1902—my right hon. friend the late Chancellor of the Exchequer, whom we all rejoice to see back again in the House—and I say that entirely apart from all considerations as to whether he is likely to support me or not on this occasion—made this statement. He said— It had never been the habit of the 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 for only twelve months would undoubtedly interfere with trade for a reason which would probably be entirely inadequate, and which no Chancellor of the Exchequer would ever think of putting forward. [MINISTERIAL cries of "Hear, hear!"] But that is exactly what the present Chancellor has done, and I shall await with increased interest the right hon. Gentleman's defence of his action to-day. It is no use for the Government to say that they have lost from amongst their ranks their late Chancellor of the Exchequer, because they heard his statement. They sat by his side and they acquiesced in all he said, and everyone of them was as fully responsible as my right hon. friend himself. Therefore, I shall a wait with great interest what the right hon. Gentleman has to say.

To go to another subject which is an infinitely smaller matter, although in itself it is by no means unimportant, I say that you are deliberately throwing away a revenue of £2,500,000 a year which it injured nobody to raise and which it will benefit no one to remit. Sir, what I believe everyone expected, and what most people wanted to see, was the duty remitted on tea instead of on corn, for the relative advantage to the con- sumer between the repeal of the duty on corn on the one hand, and the remission of the duty on tea on the other hand, cannot bear comparison for a single moment. Moreover, the last addition to the tea duty was made expressly for the purposes of the war, and tea growers, especially in India and Ceylon, in my opinion, most undoubtedly had a very strong and serious claim. Let me take the case of tea first. I believe the Chancellor of the Exchequer could have reduced the duty on tea by one-half. If this had been done the duty would have been 3d. per lb. I understand that the ordinary consumption of tea in a cottage family comes to something like 1 lb. per week. If that is so that would have been a gain of 3d. in the lb. to the good in every week throughout the year to every little cottage home in the country. What are they going to get by the repeal of the duty on corn? The duty on flour is 5d. a cwt., and in every sack of flour there are two and a half cwts., consequently the duty on a sack of flour is 1s. 0½d. But a sack of flour makes from ninety-five to 100 loaves, and if you divide 1s. 0½d. into 100 loaves you will find that the 1s. duty comes to something just under half a farthing for each loaf. I believe there is no coin in general circulation small enough to enable anyone to pay this fractional addition to the price of bread, and that is why the price of bread all through the country has never altered in consequence of this tax, [OPPOSITION Cries of "Oh, oh!"] unless where it was done for political purposes immediately after its imposition, and that was only for the moment. I think that when the official records are consulted it will be found that I am absolutely correct in my contention that the repeal of the duty on corn will be of no benefit whatever to the consumer.

There is one other argument against repeal which I do think the right hon. Gentleman might have taken into consideration. Whatever value he may place upon his own consistency, I think he really might have had some consideration for the views and the position of a great number of his supporters—men who through evil and through good report have so loyally supported the present Government. Why, Sir, there is hardly one among them who for weeks and months has not spent his time and energies and his eloquence in defending, and successfully defending, the very policy which is now to be abandoned, and in respect of which my right hon. friend is calling upon those Gentlemen to recant every word on the subject they have ever said, and to go forward and confess that in all they have said and done they have been absolutely wrong, although they still believe and know it to be absolutely right. I can tell him that the feeling of resentment against a Minister who attempts to drag his followers through such muddy paths as this is as deep and bitter as, in my opinion, it is thoroughly well founded, nor do I think that it will be very easily allayed. Now, I have said enough on a subject, which to me, I say quite honestly, is the most painful and the most distasteful I ever recollect throughout my long connection with the Tory Party.

It only remains to consider what is the course that is right, and which I ought to take to-night. The followers of the Government at the present time are undoubtedly placed in a most extraordinary position. I find little but confusion in their counsels and indecision in their action. It is useless to seek guidance or leadership from them, and we must rely upon ourselves. The views which I entertain upon this special duty are views which I have urged and which I have held for many years. They are strengthened and confirmed by the tests and the results of actual experience to-day, and even those who are most opposed to me will, I think, admit that I have supported them by arguments which hitherto have not been met and which are not very easily replied to. I am also in favour of that policy—I hope I shall not transgress again—which is held out to us for the future with regard to our colonies, but this Budget is diametrically opposed to it. This Budget, and its author in particular, the other night were welcomed effusively and with open arms, by the enemies of the Government—the very men who so bitterly opposed us in the policy on which last year we were all of us united, and in which a great number of us still most thoroughly believe. I warned my right hon. friend, the Prime Minister, when he recently received a great deputation that if the present course should be persisted in I was convinced it might lead to lasting injury, if not possibly to disaster, to his Party. My words were little heeded at that time, but who is there to say to-day in the light of all that is going on, and what we see and know around us, that they were idle or altogether unneeded? I still believe, as I believed at that time, that the wise course, the right course, and the only course, which even points to safer and calmer waters, is to retrace our steps in this respect and go back to the surer and safer ground which was left to us by the predecessor of the Chancellor of the Exchequer. Some loss of credit and reputation to the Government undoubtedly there would be, but that is better than a great disaster to the Party. I appeal, then, to the Government once again, even at the eleventh hour, to hold out to us the hope that at later stages of the Bill they will take this course; otherwise it must be, and it will be, my duty to go to a division on this occasion. It may be, for all I know, in that case, that we shall have the big battalions on both sides of the House ranged against us. I neither know, nor do I care, for it will not deter me by a single hair's breadth from the course which I know is the only clear, the only plain, and the only straightforward course which is open to those who, like myself, remain by their opinions on that point. And that being so, I have neither doubt nor hesitation for a moment in following the path which is marked out for me to-night by conviction and consistency alike, and that is to vote for the Amendment, which I submit with confidence that is fearless and complete—yes, Mr. Speaker, and to a tribunal higher than Parliament, higher even than this House, for it is to the country and to the people that I appeal.

*MR. DAVID MACIVER (Liverpool, Kirkdale)

I beg to second the Amendment. I have the greatest pleasure in doing so. I am sure there is no one in this House or out of it, who would for one moment doubt my loyalty to the Party to which I belong. It is thirty years since I first had the honour of sitting in this House, and during all these years there has been no more loyal supporter of the Conservative Party than myself, and yet the words that occur to me in regard to the Chancellor of the Exchequer's attitude at present are words which I would not be allowed to use in this House. To my mind nothing could be more ill-judged than the proposal for the repeal of the grain duty. All the arguments used last year by the then Chancellor of the Exchequer, my right hon. friend the Member for Bristol, and by my right hon. friend the then Secretary to the Treasury, now Post-Master-General, and by others who spoke in the same sense, related to matters which were more or less matters of opinion as to the effect of these duties; but these arguments come home to-day, not as matters of opinion, but as matters of actual knowledge and experience. What the late Chancellor of the Exchequer and the then Secretary to the Treasury said as to this tax being largely borne by the producer, and not falling on the consumer at all, has absolutely been borne out by the facts, and nobody who looks into them candidly can possibly say that one brass farthing of these grain duties has fallen on the consumer. There is no doubt that in certain constituencies—the constituency of Bury and many others—there were certain Radical bakers who took the hint and endeavoured to raise the price of bread.

MR. TOULMIN (Lancashire, Bury)

I ask the hon. Member if he will excuse me contradicting that.


I have not any doubt whatever that in Bury and in certain other constituencies electioneering organisations did give the bakers the hint to endeavour to raise the price of bread. Anyone who has paid more in price for bread has not done so by reason of the grain duties, but by reason of electioneering tactics on the part of opponents of the Government. I say that without hesitation or qualification. I know it from my business to be true. I have had as much to do with the buying and selling of grain as any Member of this House, and I have had as much to do with the carrying of grain as any Member of this House, and I know what the facts are, and what they have been all through. I know that at this time last year the average price of wheat was 31s. 3d. per quarter before the duty was put on, and that the average price per quarter is now about 27s. 6d. Therefore it is a fact, and I put it forward without the slightest doubt or hesitation, that the price of wheat, notwithstanding the duty, has been actually less than it was before the duty was put on. I say, therefore, there was no legitimate ground whatever for increasing the price of bread, and if it had been increased, it was for the reasons I have stated. What does the existing duty on wheat, and the corresponding duty on flour, amount to? The ordinary freight fluctuations in one day, the differences between one ship and another are sometimes far more than the amount of the duty. If the Government are so unwise as to repeal those grain duties, they will have thrown away £2,500,000, and they will have done it without any benefit whatever to anybody in this country, but perhaps with a certain amount of benefit to our foreign competitors. At the great deputation which waited upon the Prime Minister and the Chancellor of the Exchequer, the Prime Minister said that in fixing the duty on flour at 5d. as the equivalent to the 3d. on corn they gave the turn of the screw in the direction of benefiting the British miller. I wish to put it emphatically to the House that this turn of the screw represented by the ½d. difference between 4½d. and 5d. a cwt., simple though it was, has been enough in Liverpool to give new life to the milling industry. Simple and trifling as that turn of the screw was, it was in favour of the British miller, and it has helped us in Liverpool, at all events, to do a better business than we had done before.

The Chancellor of the Exchequer told us that his choice was as between tea and grain, and that, although tea had some attractions, on the whole he preferred the remission of the duty on grain. May I be allowed to point out to the House how the remission of the tea duty would affect the working men as compared with the grain duty? If the grain duties are withdrawn nobody in this country will be in any way the gainer, but if an equivalent in money be taken off the duty on tea, it will be a real advantage to every cottager in this country of a very large percentage of the sum he pays on tea. If we reduce the duty on tea by 3d. a pound, which is about the equivalent to the grain duties, it will be 3d. in the pockets of the working men, and will be a real benefit to their families. A friend of mine in Liverpool who employs a great many men, has been at the pains to take out the particulars of the expenditure of sixteen working men's families; and the result shows that, for every shilling spent on bread, something like 6d. is spent on tea. I hope I have temperately, but very sincerely, very earnestly, endeavoured to impress my view on the House that the withdrawal of the grain and flour duties is a mistake. They benefit least of all the Government. The Chancellor of the Exchequer has a certain amount of influence. His position appears to me to be very much like that held by Charles II. Nobody wished to kill Charles II. in order to make his probable successor king. Nobody on this side of the House, whatever we may think of the present Chancellor of the Exchequer, wishes him to cease to exist in office for the purpose of putting our friends opposite in power. However much we may disapprove of the action of the Chancellor of the Exchequer, after all, one is obliged to look at his possible successor. Some of my other friends on the Treasury Bench may be exceedingly unbusiness-like. Probably they are, but, at all events, there are some business men amongst them; but if you look opposite and see the kind of people which would replace them there is no business there. If you have a business-like Government of any sort, our friend, the present Chancellor of the Exchequer, could remain in office in another sphere. He might even be appointed Governor of the Isle of Man or of some colony. To come back to serious considerations, I think that if this Government can only retain office by the unwilling votes of their friends or by the support of hon. Members opposite it must be that the end is not very far off. Loyal as I am to the Government I do not wish to see them remain in office under conditions which do not appear to me to be plain and straight- forward. If they are going to go out of office it is much better that they should do so voluntarily. Nobody disputes my loyalty to the Party, and I regret extremely that I am obliged to speak in the terms I do; but I do wish to recall a wise saying of an old friend, "The next best thing to not making a mistake is to get well out of it." The Chancellor of the Exchequer has made a dreadful mistake, a great blunder in withdrawing these duties. If the Government are personally loyal to him it says much for their personal kindness to him. I wish the Chancellor of the Exchequer better occupation elsewhere. I think if the Government really desire to retain the confidence of their friends in the House and out of it, of the larger tribunal of the country, they will have to do their best to retrace their steps in this most unfortunate affair. I beg to second the Amendment.

Amendment proposed— To leave out from the word 'that,' to the end of the Question, in order to add the words 'this House considers that the financial policy of His Majesty's Government, in the remission of indirect taxation imposed only last year for purposes of a permanent character, involves a needless and injurious disturbance of trade and a serious loss to the Revenue, without substantial relief to the consumer; and that, if any remission of indirect taxation is considered necessary by His Majesty's Government, such remission ought to be made by a reduction of the Duties proposed to be levied on tea or other articles of general consumption.'"—(Mr. Chaplin.)

Question proposed, "That the words proposed to be left out stand part of the Question."


Mr. Speaker, if, as the author of the tax the repeal of which is the principal feature of the Budget of the year, I ask leave to intervene thus early in the discusson of the Amendment, it is because my right hon. friend the Member for Sleaford has, as it were, appealed to me against the present Chancellor of the Exchequer, to whom I am only anxious to give such humble support as may be in my power consistently with my own opinions, and because I think my right hon. friend and the seconder of this Amendment take a view of the whole present fiscal and political situation with which I am unable to agree. Sir, what is the history of this small duty on grain and on flour? When I proposed it, as Chancellor of the Exchequer, to my colleagues in the Cabinet of last year, the South African war was still at a stage of which no one could foresee the end. I proposed it, as it was necessary, in my opinion, to raise more money for the purposes of that war by indirect taxation, and because I believed that in this revival of this duty I had a source of revenue which would yield largely to the Exchequer while doing the minimum of injury possible to the trade, commerce and industry of this country. When I brought it before my colleagues in the Cabinet it was my duty to state to them that I foresaw the objections with which it would be assailed. I knew that it would be challenged as a violation in theory, though I believe not in practice, of the principles of free trade. I was well aware of the use that would be made of it in reviving the cry of the big loaf and the little loaf in Parliamentary elections. But, after careful consideration of the objections to this proposal, my colleagues in the Cabinet cordially accepted what I suggested. And when the war ended in South Africa, as we had to reconsider the finance of the year, of course, as was my duty, I placed the matter before them, not merely as a tax necessary for the war, but as a permanent addition to our sources of revenue. They unanimously accepted the proposal which I made to them to persist in the tax. I proposed it, and my colleagues accepted it, as a purely fiscal measure, which, in the enormous annual growth of the ordinary expenditure of the country, I believed and they believed to be a necessary addition to our sources of indirect taxation. Very well. What has been the result? Has the tax failed as a fiscal measure or has it succeeded? No, Sir, it has not failed. It has produced to the revenue more than I ever anticipated. It has not checked that great import of corn and flour from abroad upon which this country depends for its existence. There never was, I believe, a larger import of wheat and wheat flour taken together in any one year than there was in the year which has just closed. Has it protected the British corn growing farmer? In the discussions on the tax, I and my right hon. friend the First Lord of the Treasury had to rebut suggestions that it would do so. It has not done so in the least degree—for the simple reason which last year I stated to the House, that foreign wheat and British wheat are, unfortunately for us, two different things in their value and in their price; and this was singularly exemplified by the bad harvest of last year, the result of which has been that foreign wheat has necessarily commanded a somewhat larger price than before, quite irrespective of the duty, while British wheat has fetched a very low price indeed. Has the tax increased the price of bread? If it had increased the price of bread one thing is certain, that a rise in the price of bread would have been, I might say, universal, or at any rate very general. All that has happened is that in some places the bakers took advantage of the tax to do what they had been long meditating for other reasons—namely, to increase the price of the loaf for a temporary period—while in other places there was no rise at all. And, finally, I venture to say that when this tax is repealed, as, of course, after the proposals of the Government, repealed it will be, whether the producers of corn or flour abroad may profit, or whether the steamship companies and the railway companies who bring us that corn or flour may profit, or whether our dealers, millers, or bakers may profit, there is one person who will not profit at all by the repeal of the tax, and that is the consumer of bread. Therefore, Sir, when I first heard of the proposal of my right hon. friend the Chancellor of the Exchequer to repeal this duty, I confess I heard it with surprise and regret.

So far I am in agreement with my right hon. friend the Member for Sleaford. But now I am afraid I must part company with him, for there is another side to the question which I think he has somewhat failed to see. Why did I propose to the House last year that this tax ought to be a permanent addition to our sources of indirect taxation? For this reason—because of the enormous annual growth of our expenditure. I had protested as Chancellor of the Exchequer for years against that growth. I had protested to my colleagues, I had protested to this House; and I had endeavoured to show to the country what I thought were the great dangers to our finances of that growth, because it must never be forgotten that that growth has been far in excess of the automatic growth of our revenue. Well, Sir, my protests and my sermons were received with indifference. Had they met with more sympathy I might not now be addressing the House from this place. But I am thankful to think that there has been a turn in the tide. My right hon. friend the Chancellor of the Exchequer has been able to make a reduction in the taxation of the country this year, on which I sincerely congratulate him. But what is left? Surely it must have come almost with surprise to many persons in this country to find that, nine months after the conclusion of the costly war in South Africa, all my right hon. friend could do in the reduction of taxation has been done in the Budget now before the House, and that in peace time we have still to retain the additional taxes on spirits, on beer, on tea, and on tobacco, and the new taxes on sugar and on coal, all of which were imposed as taxation for the purposes of the war. Surely, Sir, it is even a graver thing that in peace time the Income Tax should stand at the unprecedented figure of 11d. in the pound. I think that these things have deeply impressed the country and have not been without their power of impression on this House.

I have been glad to see that there has been in this House, in the course of this session while I was absent, a very strong evidence of a desire not only on the other side of the House, but on this side also, to reduce that part of the expenditure in which, to my mind, our money is worst spent—namely, our Army expenditure; and I was still more glad to find in the Budget speech of my right hon. friend the Chancellor of the Exchequer a promise of considerable reduction in the Army expenditure in the course of the next year or two. But I hope the attention of my right hon. friend will be directed to checking the increase of expenditure in other directions also. I will venture to add that I hope that this may be a subject of consideration not to my right hon. friend alone. It is impossible for any Chancellor of the Exchequer, whatever his ability, whatever his desire for economy, really to check the expenditure of this country unless he has the active, the firm, and the continuous support of the Prime Minister of the day. Now I appeal to my right hon. friend the Prime Minister. The Estimates for this year have shown an increase which is not justified by anything within my knowledge. But my right hon. friend, as we all know, was occupied with a most laborious legislative task in the latter part of last year. I appeal to my right hon. friend to look into this matter of the increase of the annual normal expenditure of the country for himself this autumn. I trust that, even before this debate has closed, my right hon. friend may be able to tell us that he has already done so, and that he is able to say that in his opinion the great growth in the annual expenditure which has taken place within the last few years can be stopped, and that he is determined to stop it. If he is able to make any reassuring statement of that kind, my great reason for insisting last year that this tax ought to be a permanent tax will to a large extent have disappeared.

But there is another consideration, and quite as important a consideration, which influences me in dealing with this matter. My right hon. friend the Chancellor of the Exchequer gave as, I think, his principal reason for proposing the repeal of this tax that it lent itself very readily to misrepresentation. I think that that expression has in some measure been misinterpreted. I do not believe, I cannot believe, that my right hon. friend and his colleagues have proposed to repeal this tax on account of the reports of their wirepullers as to its temporary unpopularity in certain by elections. Why, Sir, is it not clear that no Government could gain popularity by such a course as that. What people like in a Government is consistency. We knew perfectly well last year that this tax might cause a temporary unpopularity in the constituencies. Yet, in the interest of sound finance—necessary for the maintenance of the equilibrium of revenue and expenditure—we determined to run the risk of that unpopularity. Sir, I will venture to say that no Government which is afraid to face temporary unpopularity in the interests of sound finance deserves to sit upon that bench. But why should this unpopularity have been more than temporary? Why, as my right hon. friend the Member for Sleaford has already said, in which I entirely agree with him, unpopularity may have come from a temporary rise in the price of bread from whatever cause. But as the months and years went by it is perfectly certain that when the people found that there was not that difference between the big loaf and the little loaf which they had been taught to expect, this tax would have been in the end no more unpopular in constituencies than the sugar tax or the coal duty, and therefore I cannot for a moment believe that this was the controlling reason in the mind of the Chancellor of the Exchequer and his colleagues when they made up their minds to repeal this duty. I think the word "misrepresentation," used by the Chancellor of the Exchequer, was a mistake. I think what he really meant was "misapprehension." That is to my mind a much more serious and a very different affair. Sir, I cannot impress upon the House too strongly that I proposed this tax last year on behalf of the Government as a fiscal measure, and not as a protective measure. I defended it over and over again as a measure of that kind, and of that kind only. Well, but what has happened since the introduction of the Budget? My right hon. friend the Member for Sleaford introduced a very important deputation to the Prime Minister. What were the arguments that were used by that deputation? I am afraid it was perfectly clear to anybody considering opinions that sometimes were expressed rather by cheers than by reasoned arguments, that protection was in the mind not of course of my right hon. friend, but of a good many of his supporters. Now, what about the millers? The millers said in so many words that the duty on flour had encouraged them to increase their milling plant, and that, therefore, it was a great hardship to them that the duty should be repealed. Well, I know what the millers said to me. They said that if I put the duty on flour at 4½d. instead of 5d. I should be giving a direct advantage to the foreign miller as against them. I was convinced by their argument and I proposed and carried through the House a duty of 5d. on flour as compared with 3d. on corn, in order to put the British and Irish miller on the same footing as the foreign miller and not to give him protection at all. I am afraid that I made a little mistake, if the millers' argument on the deputation the other day was correct, and that if my right hon. friend had not decided to repeal the corn duty, in order to keep things even he ought to have reduced the duty on flour to 4½d. There is a more important matter than that. What about the farmers? The farmers to my mind have had no protection as against the foreign grower of corn at all. [Hear, hear.] I am glad to find that statement confirmed, but I am afraid the farmers did not look upon this duty solely as a source of revenue to the country, and that judging from the enthusiasm with which the Chambers of Agriculture supported my right hon. friend, they look upon it not as protective, but as containing within itself that most dangerous thing in politics, a germ; and that they thought it heralded a return to protection for themselves against foreign corn. And there is even a more important misapprehension. In some quarters it seems to be supposed that this corn duty might be and ought to be used for the purpose of colonial preference. [OPPOSITION cheers.] Now Sir, if the decision of His Majesty's Government to repeal this duty on grain and flour was arrived at with the desire to put an end altogether to misapprehensions of this kind, then Sir, all I can say is that little as I like the repeal of the duty from a purely fiscal point of view, I should say that they have grave reasons in support of their proposal.

But a good deal has happened since the decision of His Majesty's Government to repeal this duty and the introduction of the Budget. I agree with my right hon. friend the Colonial Secretary in the view which he took that too much importance ought not to be attached to a certain speech which he made at Birmingham. He spoke as Colonial Minister on a subject affecting the Department over which he has so ably presided, and he expressed views, to which as he has very fairly said, his mind has been long tending, and which were expressed as his personal opinions. And he did not speak as Prime Minister. He spoke as a Departmental Minister, and I entirely agree with the limitation which my right hon. friend the Prime Minister imposed upon the collective responsibility of the Cabinet, namely, that no Cabinet can be responsible for all the speeches of its individual members. If that were so the life of a Minister would be even more intolerable than it is at the present moment. I have exercised that liberty often enough myself without the slightest injury, I hope, to my colleagues. We must all blow off steam sometimes, and if we can do it before an appreciative and a sympathetic audience the process is extremely agreeable. Therefore, Sir, if it had been a question of the Birmingham speech alone I confess I should have thought that it was not deserving of any special attention. But something more has happened since then. My right hon. friend the Colonial Secretary has felt it necessary to enforce his view in various ways and on several occasions, and a speech has been made (which is much more important) by the Prime Minister himself upon the same subject in the House of Commons. Now, Sir, of course there is no plan before the House, nor before the country as to any change in our future fiscal policy, but two most important principles have been laid down by the Colonial Secretary, namely, that of the use of our tariff for purposes of retaliation, and that of colonial preference. Now, what has my right hon. friend the Prime Minister said in this House? He appeared inclined to view somewhat favourably those proposals, but he said, and I confess I was very glad to see it, that he preserved an open mind upon the subject, that the great question required careful and long study, and that it was not to be decided on this or next year's Budget. Sir, we are precluded by your ruling from entering upon this question with any real argument to-day, but I hope I am not transgressing that ruling if I venture to say that, in my humble opinion, the position suggested by the Prime Minister with regard to this subject is an absolutely impossible position. It is not fair to his own Government. It is not fair to the members of this great Party. The more humble the position of an individual Member of this House, the less experienced he may be in political affairs, the more difficult is his position rendered if this subject is long left as suggested by the Prime Minister. His constituents expect from him, and they are entitled to expect from him, light and leading on this great question—one of the greatest questions that could possibly come before the House, and he himself is entitled to expect light and leading from a united Government. Well, Sir, we have had the opinion of the Colonial Secretary expressed with all that plainness and frankness of which the right hon. Gentleman is so great a master, and expressed, I know, with perfect sincerity. I yield, Sir to no one in appreciation of the splendid work which my right hon. friend has done in the position he adorns. No Colonial Secretary who ever existed has done so much to unite our great self-governing colonies to the mother country as has my right hon. friend. No Colonial Secretary who ever existed has done so much as he to make the self governing colonies feel their position and duties as part of a great Empire, and, therefore, if in this matter I am obliged to criticise the views of my right hon. friend he may be quite sure I do it with no unfriendly feeling towards himself. Sir, what is the situation? We have had a declaration, as I have said, of the opinion of my right hon. friend; we have had a statement to the effect I have quoted, by my right hon. friend the Prime Minister. Are we to take the opinion of the Colonial Secretary as the opinion of a united Cabinet or not?


I am extremely sorry to interrupt the right hon. Gentleman, but I think he will see that he is now introducing and inviting a general discussion on the merits of the proposals put forward.


It was very far from my intention, Sir, to trespass on your ruling, and I will endeavour to keep myself strictly within it. All I would say is that the repeal of the corn duty in this Budget appears to me to be, so far as it goes, a direct bar to the adoption of the principles to which I have alluded, and therefore I conclude that the opinion of the Government as a whole with regard to those principles is the same as it was when I was a Member of it. Why, Sir, year after year, as Chancellor of the Exchequer in this House, acting with the full authority of my colleagues, and without a whisper of disagreement from any of them, I opposed colonial preference. I opposed it firstly with regard to wines, though it was pressed upon us by the Australian colonies; secondly with regard to tea, thirdly with regard to sugar, and only last year with regard to corn and flour. Only a few months ago, in January last, the Government ratified the Sugar Convention, binding it not to give preference on sugar to our sugar-growing colonies, though if any preference was to be given anywhere they ought to have had it, and in this Budget now before us, and in this proposal for the repeal of the corn duty, we have, as I have already stated, a distinct bar to the adoption of such a policy. I hope, Sir, I am not transgressing your ruling if I venture to say that I am convinced that though we cannot discuss this matter now it cannot long be left undiscussed, and I would make an earnest appeal to my right hon. friends the Prime Minister and the Colonial Secretary. I do not enter into the merits of this policy. Let it, if you like, be accepted, though I do not think so myself, as a wise and right policy. Whatever opinion we entertain of it we must all feel that it is a vital change in the fiscal policy which has been accepted by this country for fifty years, and which has been accepted by our Party since 1852. That being so it is a change that ought only to be made with the assent of the general opinion of the United Kingdom. I do not say universal assent, but with the very general assent, for it certainly could only be maintained by that general assent, because the trial of it would come in times of depression rather than in times of prosperity. Now, Sir, do my right hon. friends really think that they have any chance whatever of obtaining such a general assent to this policy? Why, its promulgation has done one thing already almost amounting to a miracle. It has united the Party opposite—divided for the last eight years—into a happy family. It is dividing our Party on this side of the House, and, Sir, I venture to express my deep and conscientious conviction that if persisted in it will destroy the Unionist Party as an instrument for good. Now, Sir, if it be that there is no chance of obtaining that general assent to this policy which is necessary to carry it into effect and to maintain it, might not my right hon. friend the Colonial Secretary — might not the Prime Minister, reconsider the position? Might not they refrain—


I rise to order, sir. I wish to call your attention to the fact that I should have endeavoured, and I think should have succeeded, to place a very different complexion on what the right hon. Gentleman is now saying, had I not been bound by your ruling and refrained from endeavouring to proceed in that direction.


I did call the right hon. Gentleman's attention to the fact a few minutes ago, and I think now he is transgressing my ruling again, as he is discussing a matter which I understand is not relevant to this Bill. He is discussing the method of policy indicated in the scheme of the Colonial Secretary, and whether that is or is not a policy which ought to be adopted. That is the very thing I say ought not to be touched on.


I was trying to keep myself clear of a discussion of the merits of the question, and merely to appeal to my right hon. friends whether in the circumstances they might not consider that after all the business of statesmen—and they are experienced statesmen—is not to consider what is desirable in their own minds, but what is possible, and whether their own obligations to a great Party, towards which they stand in so prominent a position, may not lead them to consider whether it would not be more consistent with their own honour, and their own greatness, to say they will not proceed in a course which will split up their Party, and which, in my opinion, is wrong. But, Sir, I leave that, and I will only say that I do not believe, for the reasons that I have already given, that this policy commands the united assent of the present Cabinet, and that as the Colonial Secretary has indulged in that liberty which is granted to Ministers of expressing personal opinion, I, for one, shall gladly hear, if there be Ministers who disagree with him, those Ministers speak their minds. For myself, Sir, I can only say in conclusion that, though I sympathise to some extent with the objections of my right hon. friend the Member for Sleaford, to the repeal of the corn duty, yet, for the reasons I have stated, I believe that the policy which has been suggested to us practically as an alternative, is the much greater evil. I am opposed to the principles of the policy of my right hon. friend the Colonial Secretary. I believe they will be deeply injurious to this country, and will do more to disunite than to unite the Empire.


I think the right hon. Gentleman is hardly treating the Chair quite fairly. He is now proceeding to discuss the merits of this policy, and inviting other Members to follow him into a discussion which would not be in order.


Well, Sir, I have only to say in conclusion that, having to choose between two evils, I choose that which in my opinion is by far the less, and my support will be given to the Budget of my right hon. friend as against the Amendment of my right hon. friend the Member for Sleaford.

MAJOR RASCH (Essex, Chelmsford)

Perhaps the House will permit an agricultural Member to say a word on this matter. I have the greatest possible sympathy with the right hon. Gentleman the Member for Sleaford. I know perfectly well he is an expert, a past master in anything connected with the land, and has a due conception of what the agricultural interests want, and what they desire. I listened with the greatest interest to his speech when he introduced the deputation to the Prime Minister a month ago, and I also listened with attention to the speech which, to some extent, he has repeated this afternoon. I think he is piling the agony rather too high. Of course some of us think we have had rather bad luck in this matter. The registration duty hurt nobody. It was not protective because it protected nobody, and it brought in a large sum to the Treasury. Last year we proved to demonstration that black was white, but now it turns out to be, if anything, rather grey. I have always endeavoured not to put too rosy a colour on agricultural matters in Essex. I have always told the House that we were divided into two parties—those who are ruined and those who are going to be. There is such a thing as "piling the agony" too high, but those of us who go on the markets have been told by the farmers that the registration duty put no money into their pockets, that if anything it raised the price of feeding stuffs—although I hardly agree with that—and that practically it did not do them much good. But they regret its repeal, because they regarded the imposition of the duty as a benevolent view taken of their position by the Government, and they had hopes of better things to come. That, however, is no reason why I, at any rate, should vote against the Party I was sent here to support, particularly when I reflect that the present Administration, during the eight years they have been in office, have done more than the Liberal Party did during fifty years before. The only thing the Party opposite have done during the last thirty years has been to reintroduce foot-and-mouth disease. I, therefore, much as I regret the flexibility and adaptability displayed by the Chancellor of the Exchequer, have not the slightest intention of voting with the right hon. Gentleman the Member for Sleaford and against the Government on the present occasion.


We all remember that when the late Chancellor of the Exchequer imposed this corn tax he said it was to be a permanent tax. We have now heard the reasons why he is going to support the repeal of the tax. But I noticed that most of his arguments were really in favour of the Amendment of my right hon. friend the Member for Sleaford, for he has reminded us that it was a tax which injured nobody, was not felt by the community, and was to all intents and purposes a piece of sound finance. He then, however, played on the feelings of misapprehension or misrepresentation, and wound up by saying he would support the Government in repealing the tax. After that, I confess that as a loyal supporter of the right hon. Gentleman when he was in office I do not know where I am at present. I was entirely in favour of the imposition of the duty as a permanent tax. More than once I went down to my constituents and justified its imposition, and I find it very difficult now to turn round, swallow everything I then said, and support the Government in its repeal. I may say in passing that I am also in strongly in favour of the policy of preferential tariffs indicated by the Colonial Secretary, and I am prepared to go to my constituents to-morrow and justify my opposition to the repeal of the corn tax. The question of who pays the tax has been alluded to. In a letter from the Colonial Secretary, published yesterday, there are these words— It is, I think, established that the 1s. duty recently imposed was met by a reduction of prices and of freights in the United States of America, and that the lax did not, therefore, fall in any way on the consumer here. I do not wish to go behind that authority. It was a contribution of £2,500,000 to the Imperial Exchequer by the grain importers of the United States, Russia and the Argentine for the privilege of having the freedom of our markets. That is a policy of which I entirely approve. But when I remember all these things, I come back to the state of mind to which supporters of the Government are reduced, viz., a state of absolute bewilderment. We cannot reconcile these various statements. We cannot reconcile what was said by the Colonial Secretary yesterday with what was said by the late Chancellor of the Exchequer to-day, or what was said by the late Chancellor of the Exchequer to-day with what he said a year ago, and I find it difficult to reconcile the repeal of the tax with the policy of preferential tariffs foreshadowed by the Colonial Secretary. The late Chancellor of the Exchequer said the Colonial Secretary was "blowing off steam." I do not think it is fair, when a Minister, holding the high position of Colonial Secretary, makes such an important speech, he should be said to be merely "blowing off steam." I attach reater importance than that to the speech, and I believe that in carrying out the policy therein suggested the right hon. Gentleman will have the support of the men who sent him here. Then the late Chancellor of the Exchequer said the repeal of the corn tax was a direct bar to the policy of the Colonial Secretary.

There is only one direction in which we seem to have any light in regard to the position of the Government on this question. If I thought this tax was repealed in order to clear the ground in order that it might be reimposed at some future date as part of a large scheme of preferential tariffs, I might be able to understand to some extent what the Government meant. One great reason why I supported the imposition of the tax was that I thought it tended to ensure a safer food supply to these islands. The Government have recently appointed a Royal Commission to inquire into that question, but everybody knows that we are bound, whatever may happen in the future with regard to the improvement of the agricultural interest, to import a large proportion of our bread-stuffs from abroad. At present we get them almost entirely from foreign countries. If this tax had been used to give a preference to, say, Canadian corn, we should at once have made a start towards remedying the present dangerous state of affairs. Canada, with a population of 5,000,000, has a wheat area of 4,000,000 acres, from which 125,000,000 bushels of cereals were produced last year. That is, Canada has about one-eighth of the population and double the wheat area of this country. But this country has reached the maximum of its corn-producing capacity, whereas Canada has not approached its maximum. There are at least 150,000,000 acres of virgin soil, from which we could get all the bread-stuffs we should ever need. I do not think the tax made the slightest difference to the bread of the working men, but it might have tended in the direction of getting bread-stuffs from one of our own colonies by one of the safest and shortest routes. Here was a magnificent opportunity to start in a small but effective manner the great policy foreshadowed by the Colonial Secretary, but our hopes apparently are being dashed to the ground by the repeal of the tax. That is the light in which the late Chancellor of the Exchequer asks us to look at it, but I regard the matter in an entirely different way. I wish to be sanguine in my loyalty to the Government, and I hope we shall hear something from the Prime Minister or the Colonial Secretary to the effect that the repeal of the tax does not mean that it will not some day be reimposed in a preferential way with regard to the colonies. If, on constitutional grounds, they have thought it light to repeal the tax in order that it may be subsequently reimposed in the manner I have suggested, I shall feel more light hearted than I do at present with respect to the policy of the Government. I am quite prepared to go to my constituents at any time and support the continuance or the reimpostion of this tax. I do not think the misapprehension, to which reference has been made, prevails. The working men know perfectly well the value of the "big loaf and the small loaf" cry. The right hon. Gentleman the Member for the Sleaford Division has spoken from the point of view of an agricultural constituency; I speak as the representative of an industrial constituency, and I believe the working men can accurately judge the value of these electioneering cries. I want to make the foreign importer pay a very much larger contribution, for they have the run of our market without paying for it, and I should like to see them pay a little more. I believe the working man is perfectly well able to look after himself and to understand the value of any mere electioneering cry. With regard to the preferential tariffs policy I am afraid I should be out of order in discussing it, but some of us do look upon this matter as one of national importance and we consider ourselves entitled to a little more information. We want to be able to reconcile the statements made by right hon. Gentlemen, and I hope that my suggestion that this tax is being repealed to clear the ground for some fresh system of financial reform is a sound one.


Sir, on whatever points the House may differ, I am sure there will be complete agreement on the point that one effect of the Motion of my right hon. friend the Member for Sleaford has been to elicit from my right hon. friend the late Chancellor of the Exchequer a most interesting and instructive speech on the question which the House is now considering. It is natural, and not by any means unexpected, that my right hon. friend, who was responsible mainly for the imposition of the tax now under discussion, should regret that his successor should have proposed to remit a tax, which was not an easy tax to impose and which, when he put it on, he defended with, I think, sound and conclusive arguments. My right hon. friend has told the House that he proposed this tax mainly with two objects. First, to meet the growth of expenditure which, he rightly stated, was considerably greater than the normal growth of revenue; and, secondly, for the purposes of the war. Well, Sir, he has dealt, as we might have expected, not at any great length but very considerable growth in expenditure, both in regard to the Army and the other national services; and I can assure my right hon. friend that he has got no warmer sympathiser in his desire for economy than his successor in the very onerous and difficult post which he so long held with such credit to himself and with such advantage to the country. I can assure him that he need be under no apprehension upon this point, and my colleagues and I are devoting our attention to the great expenditure on the Army, the Navy, and the other services, and that we are determined, so far as the interests of the country will allow us, to see whether or not that expenditure might not with advantage be reduced. But my right hon. friend will be the first to acknowledge that, after a great war, expenditure cannot suddenly be reduced to a normal peace level. It would, indeed, I think, be a great mistake to attempt to deal with it in such a way. But it is our duty to see that, as quickly as we can, we should endeavour to reduce the expenditure which remains in connection with the war to something like what the House would be prepared to consider the proper normal expenditure upon our Army and Navy. There is much of our increased expenditure that we cannot control. It is automatic. But, so far as the expenditure which we can control is concerned, I can assure my right hon. friend that we shall be very glad if it is in our power to reduce it. My right hon. friend has also stated that one of the reasons—of course it was obvious to everybody—why he asked the House to impose this tax upon corn was for the purposes of the war. He felt it his duty to put an additional penny on the Income Tax, and I think he rightly balanced that proposal by the imposition of an additional burden upon indirect taxation. But I am sure my right hon. friend will remember that, after he had stated to the House what his proposals were in connection with the war, a condition of peace happily arrived, and that it was a matter of grave consideration by himself whether or not the taxation which he proposed in his Budget should, when peace came, be removed and not persisted in. He and his colleagues, on his suggestion, considered carefully this proposal; and he arrived, and I think rightly arrived, at the conclusion that, having regard to the obligations to which we were committed, it would be unwise to remit any portion of the additional taxation which he had proposed. And so the taxation which he then put on, both direct and indirect, was continued. I am aware that my right hon. friend did emphatically say that he hoped this tax might remain a permanent one, and that it might be the means of broadening the area of taxation.

My right hon. friend the Member for Sleaford, when he was alluding to what my right hon. friend the late Chancellor of the Exchequer said, enlarged upon the great difficulties which undoubtedly would follow the imposition of an indirect tax for a year only. My right hon. friend was surprised when I cheered that statement. But it is perfectly obvious that, when the Chancellor of the Exchequer was challenged to say whether this tax was to continue only for a year, it was his duty absolutely to come under no undertaking of that kind. It would have dislocated trade, it would have failed to bring in the revenue which he anticipated; and so he rightly altogether refused, as any Chancellor of the Exchequer would have refused, to assent to the proposition that the tax should be put on only for twelve months. I do not know what my right hon. friend might have done if he had been in my place when the Budget was introduced; but I cannot help thinking that the considerations which were present in my mind and in the minds of my colleagues at that time, would in all probability have led him to the same conclusion that we arrived at, and that, not with standing his hope that the tax would be a permanent one, he would have acted very much as I felt it my duty to act. My right hon. friend the late Chancellor of the Exchequer devoted a certain portion of his speech to the question which has been in the mind of the public now for some little time—I mean the question of preferential treatment of the colonies. It would be contrary to the ruling of Mr. Speaker if I were to enter into any detailed argument with regard to this large and important question. It must come up for argument and discussion before the country. [OPPOSITION cries of "When?"] At any rate, we are told it ought not to come up now. It has been ruled out of order to discuss it now. But my right hon. friend has devoted a certain portion of his speech to that matter, and has put certain questions to the Government, and I think, perhaps, although I may not be allowed to enter into the details of the matter, I might be permitted, in one or two sentences, to express my own opinion and the opinion of my colleagues upon this important subject. In this case, and at present, those members of the Government who have spoken have stated clearly that they have spoken only for themselves and not for the Government.


For whom did the Prime Minister speak?


My right hon. friend the Colonial Secretary, upon whose speech, I imagine, the mind of the public is most directly fixed, in, I think, the first of his speeches, expressly stated that he spoke only for himself. Of course, it is impossible for the Government not to express their view of the situation also. So far as members of the Government who have spoken on this matter are concerned, all that has been said has been that the question of the preferential treatment of the colonies should be discussed and inquired into. For my own part, I feel bound to say that I should be surprised if inquiry should show any practical means of carrying out that policy. I avow myself a convinced free trader, and I do not share the views of those who think that any practical means can be devised for overcoming the difficulties which present themselves to me in connexion with their proposals; and, as at present advised, I cannot be a party to a policy which, in my opinion, would be detrimental both to the country and to the colonies.

SIR HOWARD VINCENT (Sheffield, Central)

rose, but was unable to make himself heard amid loud OPPOSITION cries of "Order, order!"

*MR. DEPUTY-SPEAKER (Mr. J.W. LOWTHER,) Cumberland, Penrith

who for a short time relieved the Speaker in the occupation of the Chair: No question of order has arisen.


I want to ask a question of my right hon. friend.


Does the hon. Member rise to a point of order?


No, sir.


If the hon. and gallant Member rises to a point of order he is entitled to interrupt the Chancellor of the Exchequer; but if he does not rise to a point of order he is not so entitled and he should wait until the conclusion of the right hon. Gentleman's speech.


Does he speak for the Government?


I believe that an inquiry will favour the views which I hold. I do not shrink from an investigation of the subject, which, indeed, in common with all my colleagues, I think is eminently desirable from every point of view.


Does my right hon. friend speak for himself or for the Government?


If my hon. friend had listened carefully to the remarks which I made, he would have found that in some portions of them I was speaking for the Government, and in other portions I was speaking for myself. Perhaps I may now be allowed to come to the Amendment of my right hon. friend. My right hon. friend discussed the matter with an eloquence with which I cannot for a moment attempt to vie. He was not very complimentary to myself or to the Government, but I did not expect that he would be. I was aware that the proposal which we made was one which would not be acceptable to my right hon. friend, and he himself, not, I think, to any extent to day, but on another occasion on which he has spoken on the matter, gave what he thinks are very good reasons why the policy that we have adopted is a policy which is injurious to the country, and that the policy which he advocates, of the retention of the tax, is in accordance with the highest interests of the country. I differ from my right hon. friend, and I shall proceed to show, perhaps in a somewhat dull and humdrum manner, that most of the assertions which he has made with regard to the advantage to the farmer of the corn tax, and the evils which are likely to follow from its remission, exist only in his own imagination. My right hon. friend, speaking as the mouthpiece of a deputation—no, I think it was subsequently—spoke of the shilling registration duty on corn as being one means that was going to bring thousands back to the land.




I beg my right hon. friend's pardon. I think I shall show him that he expressly said the duty was to have the effect of bringing thousands back to the land.


May I ask my right hon. friend to quote my words and to state where I used them? All I can say is that I explicitly deny it.


If my right hon. friend says he did not use those words, I withdraw the assertion. I must have been reading somebody else's speech. Certainly my right hon. friend has advocated the retention of this tax in the interests of the farmers. Well, now, how is the farmer to benefit?


I think my right hon. friend very much misapprehends me. I have always spoken of the tax upon corn as a very trifling matter indeed. What is an advantage, and no doubt has been an advantage, to the farmer is the result from the imposition of the duty on flour.


The right hon. Gentleman's argument is that the tax has brought less flour into this country and more grain. My right hon. friend will not deny that one of his arguments is that there has been an increased importation of grain and a decreased importation of flour. At the deputation he laid great stress upon the fact that larger quantities of grain had come in in consequence of the duty on flour, and that less flour had come in; that the milling industry had in consequence greatly profited; and that, in consequence of the milling industry being prosperous, the feeding stuffs used by the farmers were very much cheapened, and so the tax was beneficial to the farmers. One thing, at any rate, is certain—that the farmer has not gained anything in the price which he has obtained for his wheat. It has been asserted that it is the foreigner who has paid this tax, and not the British consumer. How does my hon. friend reconcile that contention with the fact that American wheat, which was 30s. 3d. a quarter before the imposition of the tax, is now 33s. a quarter? That is to say, the British farmer has got no more for his grain, which is just now at about the same price as it was before the tax was imposed, but the American farmer has got nearly 3s. a quarter more for his grain since the tax than he got before. How, therefore, anyone can contend that it is the foreigner who pays the tax I really cannot imagine. It would almost seem that the people who have gained by this tax are not the British farmers, but the foreign farmers, because the price which they have got for their grain has risen by more than the amount of the tax which they have to pay. Now, with regard to flour, it is no doubt true that, taking the calendar year 1902, there has been a falling off in the importation of flour of 3,190,000 cwt. But that is entirely misleading, and must be analysed to see what it really means. In the first place, the calendar year embraces three and a half months in which there was no tax at all; and, secondly, and what is much more important, the calendar year is not the year to judge by at all. It is the harvest year, and the harvest year begins in most of the countries from which we obtain flour at the same time—namely, in September.

If we take the eight months, from September to April, of the harvest year 1902–3and compare it with the same eight months of 1901–2 we find that there has been no falling off in the import of flour at all; and, if that be so, it cannot be contended that in consequence of the duty wheat has displaced flour. Why should flour be displaced? The foreign exporter of flour has obtained more for his flour, exclusive of duty, than he did before the imposition of the duty—that is to say, exclusive of duty the foreign exporter obtained for his flour on an average in 1901 9.16s., in 1902 9.21s., and in 1903 9.24s. per cwt. So the foreign exporter of flour has really been obtaining a higher price since the imposition of the duty than he did before. Why on earth should it fall off? There is no doubt about the fact that the wheat imports have increased. They have increased 2,205,000 quarters in the eight months of the harvest year, September to April, 1902–3, as compared with the same period in the preceding year. It would, indeed, be a strange thing if the result of a duty was to increase the import of an article on which the duty was put. Notwithstanding the duty, the import increased, and increased considerably, although not more considerably than in some previous years. But why did it increase? As everybody knows, the home harvest, although a very large one, was of bad quality. Owing to the wet a great deal of it was spoilt and had to be used for feeding purposes, and that of itself made a demand for foreign corn. The millers were bound to have their foreign corn, especially for blending purposes. This encouraged the importation; and so practically the millers have had a very good time of it, because they have had more corn to grind. [SIR H. VINCENT: Why not?] Why not! I welcome the fact that it is so, but my ground of difference with my hon. friend is that all this grew from natural causes, and certainly not because the duty was imposed.

Now, my right hon. friend the Member for Sleaford says that the millers of this country have largely added to their plant in consequence of the pitting on of this duty. Well, I think they were very rash persons if, because of an imposition of the small duty on corn and flour, which certainly could not be considered as a permanent impost, they largely increased their plant. The truth of the matter is that the millers of this country have for some years past been seeing the great disadvantages under which they suffered as compared with their American competitors because of the old-fashioned system under which they worked; and for some years past there has been a large expenditure of money by millers in order to bring their mills up to the very best position to compete with their American rivals. I am told, from sources on which I can entirely rely, that the great bulk of the mills in this country now are very well equipped, and that they can successfully compete with any of their foreign rivals. But it is not because of any impetus which the duty has given that this expenditure has been made but because the millers have become alive to the fact that their real interest lies in obtaining the best possible machinery. My right hon. friend says that because of the increased import of grain, which I contend is due entirely to natural causes, millers have had more to grind, and therefore there has been more and cheaper offals for the farmer to buy. Let us examine for a moment the proposition that feeding stuffs have been cheapened. It is true that the home supply of offals last year is estimated to have increased by 5,000,000 cwt.; but let us see what proportion that bears to the total of feeding stuffs, both home produced and imported. The home supply of feeding stuffs amounted last year to 238,000,000 cwt. (putting roots and pay in terms of equivalent feeding value), and the imported to 83,900,000 cwt., or together 322,600,000 cwt.; and yet an increase of 5,000,000 cwt. of offals is supposed to have greatly reduced the price of 322,600,000 cwt. of feeding stuffs! The proposition has only to be stated to show how little foundation there is for any such contention. The price has fallen from entirely natural causes; and that is where my right hon. friend and those who support him have got somewhat mixed. And not only has the price of feeding stuffs fallen from natural causes, but there is no winter, I am told—I speak with great deference in presence of my agricultural friends—in recent times in which farmers have been less dependent upon the purchase of feeding stuffs. All corn crops have been exceptionally large, both in grain and straw, and hay and roots were never more plentiful. It is true there has been a fall also in oil cakes; but there, again, the fall has been because of a large speculative trade, causing great quantities to be thrown on the market. May I say also that, as far as feeding stuffs are concerned, it seems to be forgotten that there is nearly £600,000 a year levied upon imported feeding stuffs. Surely if this tax is taken off, that is an advantage to the farmer. He will get foreign feeding stuffs free of duty, and so save £600,000 a year, which he is now compelled to pay. In addition to that, there is no less than 2,000,000 cwt. of offals exported by our millers, largely to our competitors in Denmark and Sweden. And why? Because there is a drawback of 2s. 6d. a ton upon it, which is really almost like a bounty to Danish and Swedish farmers, and places them at an advantage as compared with our own farmers. I am not therefore surprised, under all these circumstances, to receive the following Resolution from the Bolton Dairy Farmers' Association— This meeting, representing the dairy farmers of Bolton, cordially approve the action of the Government in withdrawing the tax imposed on corn last year, as they regard it as a most unjust and inequitable tax on the dairy farmers of this country, compelling them to contribute a most unwarrantable proportion of the increased taxation required by the nation.


That is only one out of many hundreds.


That may be true, but it shows what an intelligent body of farmers there are in the Bolton district.

There is one statement I desire to make, which I think will be satisfactory to those who are interested in feeding stuffs and dairy farming. The House is perhaps aware that a duty is levied upon molasses imported into this country. I am told that in no other country is there a duty levied upon molasses used for feeding stuffs. The duty we derive from the importation of low-grade molasses is not very large, and I propose to take off the duty upon molasse containing not more than 50 per cent. of sweetening matter. Although the import of it now is very small, yielding about £30,000 to the Exchequer, that does not by any means represent the quantities that are likely to come if there is no tax on it at all; and therefore I think it will be a real gain to dairy farmers, and also be satisfactory to the West Indies, if we can encourage the importation of molasses for feeding stuffs in the way I propose.

One word about the consumer. It has been said that this tax has not been felt by the consumer, that, in fact, he does not pay it. Why, then, should we take off a tax which does no harm to anybody? It is a very extraordinary thing that £2,500,000 should be collected for the Revenue without any one feeling it. That is a piece of political economy which I do not understand. But there is one thing I do know—that not only foreign wheat, but still more noticeably, flour has risen, and that to a large extent. Who has borne this tax? Is it the baker? I think in one of his speeches my right hon. friend suggested that it was the baker. Well, the baker is a long-suffering person, and he may be inclined to bear a little burden of this kind for a short time, but I do not think he is likely to bear it long, and that, either in meal or in malt, either in price or quality, he will very soon transfer his burden. My right hon. friend has said that he questions whether the baker raises his price unless there is a variation of 2s. or 3s. in the price of wheat. [An HON. MEMBER: 4s. or 5s.] That may be true for short periods in regard to the natural rise and fall of the market, and putting the one thing against the other, but if there is to be anything like a permanent rise it is essential that he should make an alteration in price; and I maintain, therefore, that a permanent addition of 1s., which is a totally different thing from the natural rise and fall of the market, is a matter which he would have to consider. The price of bread in certain quarters has undoubtedly risen, and in some quarters has risen by far more than the amount of the tax. In other quarters it has not risen in price, but I very much question whether it has not deteriorated in quality. Moreover, I am thankful to say that home baking is not an extinct art in this country. I am told that in many parts of Lancashire and Yorkshire and in other districts home baking exists to a very large extent, both among the agricultural labourers and the mining population, and certainly it cannot be alleged that the price of flour having undoubtedly risen they pay nothing more on account of the duty. So in regard to the great industrial co-operative associations which exist throughout the country, and the number of whose members are to be counted not by thousands, or hundreds of thousands, but by millions. No doubt they must have borne the tax which has been imposed on flour, and not only on flour, but on oatmeal, rice, and all other commodities of that kind. But what appeals to me more than anything else is this fact: that if there is any increase in the price of bread at all it is on the poorest of the community that the tax falls most heavily, because they consume in proportion to their means a larger amount of bread than any other portion of the community. The tax has been borne uncomplainingly, because I believe that the working classes were in favour of the war, and were prepared to assist in carrying it through and in finding the money for it. In my opinion, it was a tax properly imposed at a time of great national emergency, and as properly removed, now that brighter prospects are in view. If this tax was not to remain a permanent tax on the tariff, I contend that the sooner it was taken off the better; and although I acknowledge that we are quite open to the reflection made against us of placing on the tax one year and taking it off the next, yet I maintain there was no inconsistency. It was imposed mainly for the war. [HON. MEMBERS: "No, no."] Do hon. Members maintain that the tax was not put on for the war? I can assure them that it would not have been put on had it not been for the war, and it was properly put on mainly for the war.

MR. VICARY GIBBS (Hertfordshire, St. Albans)

After peace had been proclaimed.


Yes, because there was a large amount of expenditure to be met, and when we took off a large amount of direct taxation we were bound to take off indirect taxation as well. [Mr. CHAPLIN: Tea.] What are the facts about tea? My right hon. friend says that this remission of taxation will not reach the consumer. When the right hon. Gentleman came with the deputation which waited upon the Prime Minister, he drew a moving picture of the poor old woman paying 2d. duty on her tea, urging that she would be benefited if it were taken off. But the wholesale price of tea is now only a halfpenny a pound more than it was before the tax was put on; and we have received numerous representations from the tea-growers saying that they were the persons who were bearing the additional tax and not the consumers. In making this proposal to remit the corn tax I believe it is one which will be generally accepted throughout the country, and I greatly regret that, in taking this step, we have offended the susceptibilities of many of our friends who usually work with us. But I am satisfied that in the long run, and after reflection, they will come to the conclusion to which the Government have come, that, if they were able to remit any indirect taxation at all, and had only a limited amount to remit, they could have taken no course more acceptable to the people than the repeal of this corn tax.

*SIR HENRY FOWLER (Wolverhampton, E.)

I do not think that the oldest member of this House has ever listened to a more interesting or more remarkable debate than that which engages our attention this afternoon. We have had the Cabinet veil uplifted, and uplifted without even the previous etiquette of members of the Cabinet informing the House that they had His Majesty's permission to make these revelations. But they have made them frankly and honestly, and we must make the best of those revelations and not ask for more revelations just now. Let us look at the in formation we have obtained. We have ascertained from two Chancellors of the Exchequer very much how the finances of the country under the present Administration are managed. I say the present Administration because I allege that such a state of things as has been revealed this afternoon would have been as absolutely impossible under the rule of Mr. Gladstone as to contend that two and two make ten. We are told that this tax was put on unanimously last year, and the Minister who put it on informs us that his colleagues unanimously agreed to put it on for definite, distinct, and specific reasons—partly for the purposes of the war, no doubt, but mainly to broaden the existing system of taxation. It was to form a part of the permanent revenue of the country to meet the growing expenditure. Then we were told that when the war came to an end and it was necessary to reconstruct the Budget, the Cabinet again unanimously approved its continuance on the express ground that it was to form part of the permanent revenue of the country. We do not know what happened after that. There is a long hiatus between the time when the late Chancellor of the Exchequer retired from office and the accession to office of the present Chancellor of the Exchequer. On that I will say a word or two directly. We have also had a little information given to us with reference to the financial proceedings of the Cabinet as far as expenditure is concerned. The late Chancellor of the Exchequer has told us that for years before the war, during the war, and after peace was declared, he protested against the growth of expenditure to his colleagues, and that these protests were received with indifference; and he specially called attention to the absence of what he calls "the active, firm, and continuous support of the Prime Minister." A more serious charge has seldom been made in the House of Commons against a Prime Minister. I am sorry that the right hon. Gentleman is not here at the moment, but I submit to him that it was his duty, not only to his colleagues but to the country, to have tendered his resignation. The right hon. Gentleman was the responsible guardian of the national finances. He was the responsible trustee alike for revenue and expenditure; and if he was of opinion that too much money was being spent in various large Departments of public expenditure, and especially in two Departments, I suggest to him that, as it seems to me, it was his duty to have placed his resignation in the hands of the Prime Minister. The right hon. Gentleman did eventually tender his resignation; but it was never stated in the House that he had retired from office owing to dissatisfaction with and disapproval of the policy of the Government.

I think that the lesson we have to draw, if the Prime Minister will allow me to impress it upon him, is that this Government—I am not alluding to the tenure of office of the present Prime Minister—has, to an extent of which no preceding Government offers an example, weakened the undivided responsibility of the Cabinet. Individual Ministers have had a power which belonged to the Cabinet as a whole, and in dealing with the various stages which this long controversy will go through we cannot recognise the doctrine that Ministers are at liberty to speak for themselves and not for their colleagues. The responsibility of the Cabinet for the policy of the Government is one and indivisible. That is the constitutional position which we cannot afford to see weakened or tampered with. A Cabinet Minister is not at liberty on great questions of public policy to pronounce his own individual opinions. The country believes them to be the opinions of his colleagues, and although the late Chancellor of the Exchequer said that the Cabinet was not understood to be responsible for all the speeches of all its members, the Cabinet is responsible for all the actions of its members. A disapproving Minister has one remedy in his hands, and that is the remedy which the country expects him to use when his views are irreconcilably different from the views of his colleagues. At the time when the right hon. Gentleman left office there was no doubt that the policy of the Government was to continue the corn tax. They had then no idea whatever of repealing that tax in their next Budget. But after the imposition of the corn tax of this year there were twelve by-elections, and in every one of those elections this tax formed a very prominent subject of discussion. We were challenged last year, when we objected to the imposition of this tax, that the country did not share our opinion. We thought that time would show that it did; but I am bound to say I did not think that the truth would be so clearly shown within twelve months. What was the result of these twelve by-elections? I am no great believer in by-elections; but when you have twelve elections, coming altogether, expressing practically the same view on one question, it is impossible not to be struck by the circumstance. In 1885 there was in those twelve constituencies a Conservative majority of 461. In 1900 that majority had risen to upwards of 20,000 votes in favour of the present Government. What has been the result of elections in those constituencies since the corn duty was imposed? The Conservative majority of 20,000 has been turned into a Liberal majority of 3,496.

I am not going to endeavour to weaken the explanation the late Chancellor of the Exchequer gave us as to the difference between misrepresentation and misapprehension, or to suggest that the Chancellor of the Exchequer ought to have used one word when he used the other. I will read to the House an independent opinion, favourable to the Government, and which cannot in the slightest degree be tainted with any connection with this side of the House. What does The Times say, which has been the friend of the Government throughout? Last month The Times said— It is perfectly understood by everybody that this sudden abandonment of a policy to which the whole Party stands committed is nothing but an electioneering measure resorted to in a moment of alarm at failures, easily accounted for in other ways, of the Party election managers. In the opinion of The Times that accounts for the change in the policy of His Majesty's Government in reference to this tax. We are now brought face to face with the Amendment of the right hon. Member for Sleaford on its merits. Stripped of phraseology, it amounts to a distinct censure upon the Government for proposing to repeal the tax upon corn, and to an expression of preference for a remission of the tax upon tea. And on that Amendment we must decide. I am in favour of the repeal of the corn tax. I should be in favour of it if none of these extraordinary events had happened. We opposed the imposition of the tax twelve months ago on the very same grounds that the Chancellor of the Exchequer has to-day defended its repeal. We urged last year that it was a tax upon a prime necessity of life; and quoted Mr. Gladstone's phrase about it being a tax on the prime necessity of life. I said that it was a tax upon the poorest of the poor, and the meanest tax ever imposed by the House of Commons. The Chancellor of the Exchequer to day has endorsed the opinion that it is a tax upon the poorest of the poor; and he has blown to the winds the theory that you can get £2,500,000 from nowhere—paid by some angel's visit to the Treasury. He has shown that every shilling of it has been paid by the consumer.




I know, of course, it would be impossible for me to convince my hon. and gallant friend on a subject of this kind. I object to this tax not only on the grounds we urged so strongly last year, arguments which the Chancellor of the Exchequer has endorsed this afternoon, but also on the ground that it is a violation of the principles of free trade; and in this conflict do not let us labour under the impression that there are two kinds of free trade and two kinds of protection, any more than there are two kinds of peace or two kinds of war. Do not let us think that there is "a sort of free trade." We have been challenged to define what free trade is, and we have been told that Mr. Cobden defined it as— The free interchange of commodities at their natural price. If that was one of Mr. Cobden's definitions it was rather incomplete; but a shilling duty imposed upon one class of commodities and not upon another would be an interference with the natural price. But Mr. Cobden did not leave us with those uncertain words. He said— By free trade we mean the abolition of all protective duties. I have another definition of a great authority which covers the whole question— Free trade is that system of commercial policy which draws no distinction between domestic and foreign commodities, and therefore neither imposes additional burdens on the latter nor grants any special favours to the former. The whole system of free trade is based upon that. When this Bill is carried we shall go back to the state of things where there is no protective duty in the tariff of Great Britain. As long as any corn duty existed you had a protective duty. If you had put an equivalent Excise duty on the British farmer—an absolutely impracticable thing—then you would have had no protection; but as long as you put a duty on wheat coming into the country and none upon the wheat produced within the country you have protection; and if you ring the changes on that all round, you at once reach the definition of Mr. Cobden—that free trade is the abolition of all protective duties. On that ground, Mr. Speaker, I object to this tax. But who pays this tax? The Chancellor of the Exchequer told us that it was paid by the consumer. We had all these various statements as to the different prices going up here and going down there, all of which, with one exception, the right hon. Gentleman accounted for; but he was quite right with regard to one consequence of the corn duty, that deterioration of quality is the way in which the question has been settled with the bread of the poorest people. But suppose you could prove that bread was no dearer in consequence of the duty. Then you must have deprived the consumer of the advantage of the fall in price which has been sufficient to cover the amount of the tax. The Colonial Secretary has said that the corn duty was met by a reduction of freights in the United States, and that not one shilling of the duty was paid by the consumers. Will he give us the figures? At present they are not in existence. I maintain that the duty has been paid by the consumer and can be paid by no one else.

We now come to the position of the Government. We cannot shut our eyes to what has passed. Events have occurred in this country affecting the position not only of all Parties but the position of our whole legislation; and it is under the shadow of that situation that we approach the discussion of this question. Of the position of the Government to-day we may say what Lord Macaulay said of that of a previous Conservative Government which fifty years ago was playing with the question of free trade and protection and upholding in certain quarters one view and in other quarters another view. Macaulay described that Government's position in one sentence— They have contradicted each other and they have contradicted themselves. As to the fiscal policy of this country, on which almost the commercial existence of this country depends, we do not at this moment know what is the policy of His Majesty's Government. I doubt very much whether they know it themselves. But we are entitled to ask: Is this simply a temporary reduction? Is this tax taken off only to be put on again? When another series of contested elections come round, is there to be another change of policy? The fiscal policy of this country ought to be far above any Party controversy. It involves far deeper and greater interests than those of mere party; and in the interests of all, whether they be importers or exporters, agriculturists or merchants, poor people or rich people, we have a right to know, and to know at once, whether there is a scheme or whether there is not a scheme in the brains of His Majesty's Ministers for revolutionising the whole of our fiscal policy, undoing the work of half a century, wiping out Sir Robert Peel and Mr. Gladstone as great statesmen and wise financiers. We have been told that there is to be an inquiry. By whom? Is this question to be settled by a Royal Commission? The right hon. Gentleman the Member for West Monmouth—whose absence we all deplore in a debate of this character—when someone made a similar proposition—I think it was in the controversy on the Reform Bill in 1885—said, "What! send the British Constitution to a Select Committee upstairs!" And are we to send our financial policy, which has had the stamp and seal of fifty years prosperity—which has given progress and prosperity to the nation as a whole; which has raised wages and lowered the price of food, and has given to all classes incalculable benefits—are we to throw all these into the melting pot of some imaginary inquiry? No, Sir, the Committee to inquire into the fiscal policy of this country is His Majesty's Ministers, and we have a right to assume they have made up their minds on the subject. This great question of free trade and protection is not a shuttlecock for a game of political battledore. We have a right to expect, on the lines which the late Chancellor of the Exchequer pointed out, that in a great crisis like this, and in grave questions of national policy, popularity or unpopularity is nowhere. A strong Ministry, with a majority of 130 behind them, are certainly strong enough to have a policy, strong enough to declare it, and strong enough to appeal to the country upon it. I welcome such an appeal, for I believe that the people of this country will uphold the material, the moral, and the social results which they have witnessed and with which they are familiar, and I have no fear or doubt of what their verdict will be when the issue is put to them. In the meantime it is trifling with their interests, it is trifling with our colonies, and it is trifling with the great commercial nations of the world, to leave this question unsettled. Retaliation and preferential tariffs will involve this country in difficulties far greater than any of us can foreshadow; difficulties not only with our own colonies, but more serious difficulties elsewhere. If this policy is to be embarked upon we have a right to know, and to know at once, where the Government are and what they intend to do.

MR. MIDDLEMORE (Birmingham, N.)

There are certainly one or two points in the speech of the right hon. Gentleman with which I cannot concur. He said, for example, that there was only one kind of protection that he knew of. I know of many. I know of a protection that is prohibitive and of one that is not prohibitive, and which is even unfelt. As for the speech of the Chancellor of the Exchequer, it seems to me that the chief point on which he enlightened the House was that there was a very deep division in the ranks of the Government itself, and that there is an almost irreconcilable hostility amongst them. It is quite clear that the Amendment of the hon. Member for Sleaford has brought very great confusion into the ranks of the Unionist Party. There has been a lack of cohesion before in regard to the Education Bill. It has affected some Liberal Unionists and some Liberal Conservatives, but the proposal to abolish the corn tax has carried absolute dismay amongst the older and more monumental members of that Party. But to whatever school we may belong, the majority of us feel thoroughly aggrieved at the proposal of the Government. I do not think the reason is far to seek. In plain Anglo-Saxon we have all been made fools of, and it is therefore natural that we should feel aggrieved. I do not think any one of us can feel flattered. The Government has shown its appreciation of its stalwart followers, especially the Chancellor of the Exchequer, by offering to us a suit of motley with cap and bells. They have tried to force the hon. Member for Sleaford into that garb. This is our predicament, and men like myself and many others are asked to abandon the financial position we took up not twelve months ago. This will exhibit us in a very absurd and frivolous light, to say the least of it. We have to repudiate the speeches we made to our constituents. I went about preaching the doctrine of the equality of the loaf, and now where am I? The long and short of it is that I cannot eat my own words. They are very indigestible. Finally, we have to capitulate very nearly in our hour of triumph, when the reasonableness of the tax has been proved, and when bread is cheaper. As soon as the tax has really justified itself we are asked to abandon it. I do not want to be rude, but I do think that the Government are not confining this suit of motley to their followers. We were told that the tax was to broaden the basis of taxation, that it had nothing to do with the emergency of the war, but that it was to promote the general growth of taxation. We were told also that everybody deplored the growth of taxation, yet nobody could stop it. The tax was accordingly heartily supported by us. We were further told that the tax was not protectionist, that the foreigner would pay; that we should get an enormous income from it, and that no one would feel the burden of it. That has been proved; we have received an enormous revenue from it, and nobody has felt it. It was, in fact, a model tax; it has been paid by the foreigner, and has been unfelt by the consumer, yet, owing to the enormous consumption, it has brought in a revenue of two and a half millions. What better could we wish for?

There were two very important speeches made by the hon. Member for Glasgow. I remember they were so important that I saw members of the Government exchange significant glances and nod to each other as much as to say, "Here is a rare bird for us. We ought to find a perch for him on the Treasury Bench." He spoke almost as a financial genius. I should like to read a sentence or two from those speeches. This tax (on corn) can only add to the selling price of grain in this country if it makes the supply less than it would be if the tax were not imposed. This is his first proposition, i.e. that the price will depend on the supply. Then he adds— Can any one contend that three pence a cwt. will cause land in America or elsewhere to go out of cultivation, or any part of the grain which would ordinarily come to this country to go to other markets which are taxed much more heavily than ours? This is his second proposition, i.e., that the supply on which the grain depends will not be affected by this duty, so that the price of grain will not be affected by it. That is clear. He also says— Suppose (which he has shown to be impossible) the supply were affected. Suppose that the whole tax fell on the consumer it will only amount to a quarter of a farthing on a 2 lb. loaf. The hon. Member for South Shields says the baker will charge a halfpenny. But this means an additional profit on what they are already making of fully 20 per cent. If that were possible we should all turn bakers. This is his third proposition, i.e., that if the supply were affected (which it cannot be) to the extent of a quarter of a farthing on a 2 lb. loaf, still it would not be felt by the consumer. What more do we want? Well, I think that is lucid and convincing, and I think that it is destructive. It seems to me that we are practically proposing to remit this tax, and are giving the working classes nothing in exchange. Who is to benefit by this? The working man will not benefit, because the loaf is dearer than ever. The working men are getting accustomed not to the tax, but to the idea of the tax. They know it was approved by such great financiers as Cobden, Bright, and Gladstone, and they have perceived that the loaf is no smaller in consequence of it. The working classes already have cheap bread, and it is not possible, I think, to cheapen it more. If we want to do the working classes a good turn we ought to cheapen something which is susceptible of being cheapened—such as tea. The Unionist Party has had all the discredit of imposing this tax. False criticism had done its worst, and we shall have no credit for taking the tax off. And upon my honour I do not think we deserve it. No doubt it will be said we have taken it off from Party motives. For myself I want to see the people back again on the land. We have heard from the highest possible sources that the physique of our race is degenerating. This question to my mind is of far greater importance than the maintenance of any of our institutions—the aristocracy, or squirearchy, or industrialism, or even Royalty itself. It is a question of the maintenance of our race. If we read the Report of the Inspector-General of Recruiting we must come to the conclusion that the national life of England, of which Parliament is the custodian, is at stake. I do not believe that the imposition of this tax would drive a single acre of land in America out of cultivation, or that its remission would drive a single acre in England out of cultivation, but the debate may have the helpful and satisfactory result of calling attention to the fact that the people are being driven from the land, and it is only by getting them on the land again that the national life can be restored.

*SIR JOSEPH LEESE (Lancashire, Accrington)

I should like to say a word in regard to the Amendment of the right hon. Gentleman the Member for Sleaford, and the reasons he has given for its adoption. He condemns the Government on two grounds for having remitted the corn tax: one is the alleged serious loss of revenue, and the other is that the remission gives no substantial relief to the consumer. In regard to the alleged serious loss of revenue I would call attention to a statement made by the Chancellor of the Exchequer in his Budget speech, viz.— I have still £2,000,000 to give away, and this I propose to devote to the remission of indirect taxation. According to the final balance sheet of the right hon. Gentleman, the corn tax produced last year—which was not a completed year—£2,000,000, and he calculated that a completed year would represent £2,400,000. The remission of the tax, therefore, means a loss to the revenue of £2,400,000. The right hon. Gentleman the Member for the Sleaford Division invites us to substitute a remission of 2d. on tea. In the two years 1901–2 the tax of 6d. per pound on tea produced an average of £6,000,000, or £1,000,000 for every penny. Therefore, a remission of 2d. on tea would mean a loss of £2,000,000 to the revenue, so that the repeal of the corn tax means an additional loss of £400,000. In making that remission the Chancellor of the Exchequer said— Tea has many attractions; it is the safest and the lease contentious subject of taxation; it cannot be said to be dear; I do not think a duty of 6d. is very excessive; tea is not strictly a necessary of life. and he said later— Corn is a necessary of life in a greater degree than any other article. Under these circumstances, I submit that a loss of £400,000 is a very small matter, and one which every one would be willing to incur in order to get rid of a tax on corn which is a necessary of life in a greater degree than any other article. The other point I desire to refer to is the assertion of the right hon. Gentleman that this remission of taxation gives no substantial relief to the consumer. We have had a good many statements as to whether the price of bread has increased since the tax was imposed. During the last year, and whilst this tax has been in force, the price of bread has increased.




I must protest against these somewhat discourteous interruptions.


I simply asked where? The price of bread has not increased in Manchester.


There is a very interesting official paper published by the Board of Trade called the Labour Gazette, and ever since the corn tax was imposed there has appeared in it monthly a list of about twenty-four of the largest towns in England, opposite to which has been placed the price of bread both before and after the tax. In a great many of those towns there has been no variation whatever in the price of bread, but in London, with a population of 6,500,000 people, the price of bread has risen from 4d. and 4½d. in May, 1902, to 4½d. and 5d. in May, 1903. If you assume that the consumption of bread in London is at least one quartern loaf per head of the population, which is the lowest possible estimate, then we find that the rise of ½d. per quartern loaf means no less than £13,000 a week, or £720,000 a year. I want to know how it can be said that the consumer has not paid this tax. If it is put upon the basis that two quartern loaves per head are consumed by the population of London per week, you will get £1,500,000 a year, and if we are going to have Old Age Pensions you would want 2s. on corn at least. Under these circumstances I have no hesitation in giving my vote against this Amendment.

*MR. BECKETT (Yorkshire, N.R., Whitby)

In this debate somewhat difficult issues of vast importance have been raised, but those issues, when once raised, must be faced, and they must be faced very soon. I was astonished when the Leader of the Opposition withdrew his Amendment. I think his Amendment would have given an opportunity to the House to thoroughly discuss this question, and it would have elicited information from the Government of which the House stands sorely in need at the present moment. I do not propose to say very much on this question. The corn tax, we are told, is liable to misrepresentation, but it is equally true that all such duties are liable to miscalculation, as they almost invariably work in a way different to that which is expected. I do not complain that under this duty the millers have found it possible to make a profit, but on the authority of the Prime Minister and the late Chancellor of the Exchequer we have it that they never anticipated that the millers would be able to derive a profit from this tax. This shows the extreme danger of tampering with the fiscal system of this country under which our prosperity has been realised. A member of the deputation headed by the right hon. Member for Sleaford said that this tax had put £400 into his pocket. His next-door neighbour would probably say, "Why should I not call for a duty which will put £400 into my pocket?" And thus they might go on, piling duty after duty upon the shoulders of the unfortunate consumer. The Government are accused of inconsistency, but I cannot see that they have been inconsistent in this matter at all except as regards certain Members. I understood that this duty on corn was imposed as a war tax only. [OPPOSITION cries of "No, no!"] I supported it as a war tax, and as a war tax a duty on corn, even though it falls upon the poorest of the poor, is eminently desirable, because it seems to me that the burden of a war tax, even though it cuts very deeply, is a wholesome and salutary check upon the passions of the people. I supported this tax as a war tax and not upon any other grounds. Hon. Members on this side of the House have asked why abandon £2,500,000 of taxes? I rejoice that this £2,500,000 is going to be abandoned, because as long as the Government have this money it will encourage them to continue in their career of reckless extravagance which all sides of the House are desirous of checking. The late Chancellor of the Exchequer has told us that in season and out of season he has endeavoured to check this expenditure. It seems that another Tory Chancellor of the Exchequer has been sacrificed on the altar of economy.


I really must ask my hon. friend to quote the words I used. I never blamed my colleagues, but I blamed the absence of public opinion in support of economy.


Of course, I entirely accept what my right hon. friend states, but I certainly understood him to say that had his respresentations on the subject of economy been attended to, he might not have been speaking from the place he occupies to-night. Anyhow, we know perfectly well, in regard to the late Chancellor of the Exchequer, that he did by every means in his power promote economy in the Government. I am not at all surprised that he did not meet with the support he was entitled to receive, when one of his late colleagues said not evry long ago in reply to those who wished to see economy introduced, that they had betrayed the cloven hoof of economy. I hope the cloven hoof of economy will be betrayed to some purpose. I am glad to think that we can claim the late and present Chancellors of the Exchequer on our side. The increase in the normal expenditure of this country has been very remarkable. The total increase of the normal expenditure of the country has almost exactly corresponded to the increase of taxation levied to meet the special expenditure of the war. That is a very remarkable and an unsatisfactory state of affairs. I hope that by the repeal of this corn tax a stimulus will be given to those economical tendencies which I was glad to hear the Chancellor of the Exchequer express. In regard to this tax, I think we are entitled to ask, in view of what has been said since the Budget was introduced—Is this tax to be made a permanent part of the fiscal system of the country, or is it not? If it is to be made a permanent part of the fiscal system, why take it off now? You have the machinery for collecting the tax. It is always an expensive thing to establish machinery for collecting a new tax. If you are going to impose the tax next year, why take it off now? It seems to me that is not a very wise or sensible thing to do. I hope we have seen the last of the tax upon food. My right hon. friend behind me said he wished to see the corn tax imposed and maintained because it was the single and only weapon against other countries as a means of retaliation. Well, that is a fallacy which I should have thought was exploded by now, but it appears that it is still held by many people. In the first place, it seems to me that it is a mean and mistaken motive to suppose that one country should profit by the loss of another. That is why these retaliatory tariffs are such a fruitful source of national animosity. One country cannot profit by the loss of another. If you sell you must buy, and if they buy from you they must sell to you. Lord Beaconsfield said that the best means of fighting hostile tariffs was by free imports. [Cries of "No."] I think Lord Beaconsfield said that. [Cries of "No."] Anyhow, Sir, as regards retaliation Sir Robert Peel, in 1842, said— It is for the interest of this country to buy cheap whether other countries will buy of us or not. We have a right to exhaust all means to induce other countries to do us justice, but if they persevere in refusing, the penalty is on us if we do not buy in the cheapest market. Therefore, evidently, Sir Robert Peel was against all retaliatory duties, and the experience we have seen in foreign countries shows that he was entirely right. Russia and Germany have been engaged in a war of tariffs for three years, and so far from coming to a business arrangement, the wall of tariffs only appears to have been built higher than ever. I do not wish to discuss this question any further. I wish to point out, and I think it is the feeling of a great many on this side of the House, that we have drifted into an impossible position. The members of the Government have been speaking with different minds and different voices, until we are in a state of absolute bewilderment. It seems to me that when any member of the Government speaks or writes now, he will have to preface his remarks by saying, "Without prejudice." The Colonial Secretray has announced a great policy, which is hailed and acclaimed by a great many people as the greatest act of statesmanship to be found in the annals of this country, and on the other hand, the Chancellor of the Exchequer tells us that that policy is detrimental to the interests of the country. Was the Chancellor of the Exchequer speaking for himself or for the Government?

SIR HOWARD VINCENT (Sheffield, Central)

Hear, hear! that is the point.


What is the Party I to do? We look to this Bench for light and guidance (pointing to the Treasury Bench), and the only person who can clear up the present situation is the Prime Minister himself. We are entitled to demand from the Prime Minister a clear and accurate expression of his views in such a crisis as this. It will not do for him to remain secluded and wrapped in philosophic doubt. What are the questions we are asked to consider? Are we asked to consider a principle, and if so, what principle? Is it the principle of free trade as against protection? That has been argued out fifty years ago, and we do not require time to consider it. If we are asked to consider a plan, then I say produce your plan; let us have something to consider. This question cannot be hung up for two years. You cannot throw a bomb-shell into the middle of the industries of this country, and expect people to go on with heir business as usual, waiting to see when and where it will burst. Whether this proposed change is calculated to accomplish eventually good or evil, at all events there will be a most immense dislocation of the trade and commerce of the country, and in view of that change there will be disturbance and uncertainty everywhere. That uncertainty ought not to be prolonged; and the Party have a right to demand from the Prime Minister that at the earliest opportunity he will give a clear expression of his views on the subject.

*MR. THEODORE TAYLOR (Lancashire, Radcliffe)

The greater part of the reasons that may be urged against the corn tax has not been before us to-day—the effect, namely, of the tax on other taxes and on national policy. No one has ever pretended, so far as I know, that this corn tax, so far as it has been imposed, has been very severely felt. The reason why we objected to it was because it was the thin edge of a thick wedge which was to be driven by the sledge-hammer, not wielded by the late Chancellor of the Exchequer, but by other hands, into our national prosperity and national unity. Some of us believed, two years ago, when the sugar tax was imposed that that was the beginning of a fiscal policy of retrogression, and that feeling was strengthened last year when this small tax was put upon the food of the people. The late Chancellor of the Exchequer then—and we knew that he was genuine, we believed in his intention though not in his action—denied that the tax would have a protective effect. I think he must now admit that some of us were right when we then said, as we do now, that this tax would be used by other people for another and a more sinister purpose. We have heard to-day that this tax was very very small, that it was a mere little thing, and the right hon. Gentleman the Member for Sleaford has, in tones of indignation, told us that he has been wasting his eloquence inside and outside Parliament in strongly defending the tax. It is a very sad spectacle to see such a right hon. Gentleman as the Member for Sleaford and his friends wasting their eloquence, but I am sorry that they have not a better object on which to expend it. But the right hon. Gentleman has no right to complain. The late Chancellor of the Exchequer last year warned him over and over again that though the natural sequence of the tax might appear to be protection, it was not intended in that sense at all. The late Chancellor of the Exchequer has never denied what the present Chancellor of the Exchequer has admitted to-day, that the burden of the tax, whether large or small, falls on the consumer. It was intended as a step in the "broadening of the basis of taxation." This was a broadening which we opposed because it put an additional burden upon certain backs in the country. I was glad to hear the Chancellor of the Exchequer say to-day that his greatest reason of all for abolishing it was because it was a burden that fell on the weakest backs of all. That is the reason why some of us have, in and out of season, always protested with all our strength against this tax on the poorest of the people. It is a tax which falls with peculiar severity on those with small incomes—men like agricultural labourers whose total incomes may be only £40 to £45 a year; and those inhabitants of large cities like the dockers in London, whose work is very insecure, and who, when they have paid their heavy rents, have nothing left over the margin of subsistence. This is an argument which must weigh with all sympathetic men. But the Colonial Secretary knows better than that. He says that this tax has not fallen on anybody in this country. He alleges that this "shilling duty was met by a reduction of price and freights in the United States, and did not in any way fall on the consumer here." Why then, repeal it? Why not double and treble it instead? Why not go on increasing the taxes ad libitum? Why should we not go on levying duties on a sufficient number of articles to make foreigners pay all our national expenses? If so, I do not see why the Old-Age Pension scheme should stop at a niggardly 5s. a week to begin at sixty-five years of age. Why not start with a pension of £10 a week beginning at twenty-one years of age? No, Sir; in spite of the Colonial Secretary, no one really believes the theory that we can levy tribute on other nations by imposing duties on ourselves. Such a mistake is only possible where the tax, as in this case, is a small tax on an article of large consumption. The moment you increase the scale you slow the fallacy of the argument. Because a small tax on a large consumption has not done much direct mischief, it does not follow that the principle is sound. If a little blood is lost by a pin-prick and no harm is done, it does not follow that continual blood-letting is innocuous. The only clear line to draw is no duty or some duty. Every little helps. Once you start a tax, which by being made larger becomes obviously protective, you open the door to the man who demands protection under the name of free trade.

I do not know of any cause which has so much to complain of from its professed friends as free trade. I have rarely heard of a man who was avowedly Protectionist. A man always advocates a tax which will lead to protection because it is such good free trade that he wants to get it as a weapon to force other people to act contrary to what they believe to be their interest. I do not believe that a corn tax or any other tax will compel other nations to act contrary to what they believe is their own interest. Surely the late Chancellor of the Exchequer must have found by this time that once yon give way on a matter of principle you have no principle at the back of you when you desire to resist further encroachments in the direction of protection. The right hon. Gentleman the Member for Sleaford referred to "two most deserving and depressed industries." If this principle was to be extended how many other industries should we hear of as deserving and depressed? I am a Free Trader and I believe that a corn tax is the very last tax which it was thought could be imposed in the interests of protection. I am a woollen manufacturer, and if public money is to be spent in the interests of various trades, I should speak for a share of it for my own trade. The right hon. Gentleman the Member for Sleaford says that capital will be lost as a result of the repeal of the corn tax. The right hon. Gentleman says that industries were started as a result of the tax which will now disappear. We know of other countries where large industries have been built up in absolute dependence upon duties originally levied for revenue only, and which to this day are carried on solely by protective duties at the expense of the consumers there. Protection grows by what it feeds upon, and the ultimate effect of keeping on a tax like this is the very best reason for opposing it. I frankly admit that its effect on the cost of living hitherto has not been very great. I do not think anything is to be gained by exaggerating that. But although it is not great in amount, the principle is admitted and laid down that we could interfere with articles of prime necessity for the sake of revenue. What has actually been the effect of the corn tax itself on the farming industry? We have heard from the Chancellor of the Exchequer that our agricultural rivals in Denmark, Holland, and Germany, have profited by the importation of cheap offals sent from this country in order to get the drawback. Not only have they had that advantage but a large amount of offals formerly sent to this country from America and elsewhere has been diverted to Denmark, Holland, and Germany; and that helps in the production of butter, cheese and eggs, and in that way enters into competition with our own agricultural producers. I know that the right hon. Gentleman the Member for Sleaford would say that if farmers in this country are losing by continental competition, a duty should be put upon the produce of the competing countries. That is the real secret of the whole business. Once you begin you cannot stop. There is no dividing line of principle between high duty and low duty. The only dividing line is between a duty and no duty.

The great argument for the abolition of the corn duty, next to what I may call the humanitarian argument, is the argument that the corn duty and all such duties tend more or less to increase the cost of living, and, therefore, the cost of the production of every commodity. If there is any country that cannot bear the great burden of Protection it is this country, because we have to import a larger part of our food than any other country in the world. Belgium is the only other country that does not produce nearly all the cereals it requires. We cannot produce in this country all the food we require. We must buy it with our own manufactures, and if we increase the cost of living we increase the cost of every kind of labour, and unless the working man is to be impoverished—which I believe no hon. Member desires — we must give him extra wages to pay for the extra cost of living. But if the prices of the manufacturer are raised his trade is lessened, and by and by wages will be lower in consequence of the very artifice which was intended to raise them. This principle of free trade is not a worn-out shibboleth. Our opposition to the corn tax does not represent a worn-out shibboleth. We do not advocate free trade to-day because it was good for us in 1846, but because it is a national necessity of 1903. It is no worn-out shibboleth that corn is the raw material for many trades; that corn is a food of animals; that bread is the staff of life. It is no worn-out shibboleth that in raising the cost of living you must impoverish the worker. That is as true to-day as it was in 1881, when the present Colonial Secretary summed up the matter by saying that— A tax on food would mean a decline in wages, because the same amount of money would have a smaller purchasing power. It would bring about the loss of that gigantic export trade which the industry and energy of the country, working under conditions of absolute freedom, had been able to create. We have had a speech from a Lancashire Member representing an industrial constituency advocating a corn tax. I also represent a Lancashire industrial constituency, and that constituency returns me for the purpose of opposing as strongly as I am able a policy which I believe is bound not only to injure agriculture and the manufacturing interests of this country, but which I believe will be the apple of discord between the colonies and the mother country. We must never forget that the product of one industry is the raw material of another, and that labour is a raw material of all industries. So whatever we tax I trust in future that tax will not be in the nature of a tax upon raw material, but a direct tax on the possessors of incomes.

MR. HARDY (Kent, Ashford)

, who was indistinctly heard, was understood to say: The conduct of the Government in this matter has put us in a more embarrassing position than we were a little while ago, when the Budget was introduced. We have looked to the members of the Government for light and leading on large questions of policy which we have to set before our constituents, and those of us who are not eloquent are perhaps accustomed to take too much of our speeches from the arguments of right hon. Gentlemen on the Front Bench, and I can assure them that the arguments have been in many cases a perfect banquet to our constituents, to whom they have been most agreeable. When listening to the arguments addressed to the House this evening by the right hon. Gentleman the Chancellor of the Exchequer, I thought they should be divided into two classes, one of which would have been more appropriate last year when the tax was instituted, than now when the tax has been in existence for more than a year, If the right hon. Gentleman could have imagined that the tax was going to be a burden on the poorest of the poor of this country, this tax ought never to have been imposed. While in regard to new arguments applicable to the new policy, I confess I think the right hon. Gentleman's speech is rather bare of any facts that we can take back to our constituents as arguments in favour of a reversal of policy. One of the arguments we could scarcely use again, and that was that the Chancellor of the Exchequer had to call the tax a permanent tax, otherwise the people of the country would not carry on their business in the usual way and he would not get his income. I am quite sure the right hon. Gentleman who sits below me would not abuse his position by an argument of that character. When he said he regarded this tax as a permanent tax we were justified in going down to the country with the arguments we did. We have to remember the arguments that were addressed to us last year, such as that put forward by the right hon. Gentleman the Postmaster-General, who said he would be very much surprised if in that dim and distant future, when hon. Gentlemen opposite sat on the Government Benches, any of them would favour the repeal of this corn tax. The real fact is that this tax has nothing to do with the matter at all. It is a question of competition. If we wanted an argument, the last which fell from the Chancellor of the Exchequer would be the best we could have for the continuation of this tax, because he told us that the tea tax put on two years ago had not injured the consumers in the slightest. Therefore we come to this curious condition of things: that where we have an article produced mostly by this country we should keep on the duty because the producer pays it, and if we have an article produced mostly by a foreign country we remit the tax because it is paid by the consumer. I confess I cannot see how you are going to make a distinction. If it is so clearly proved that in the tea duty the producer and not the consumer had to bear the burden, as was evidenced by the facts put forward, we may apply the same arguments to the case of corn. I think that we humble followers of the Government are put in a very unfortunate position by our leaders, but I do not wish to dwell upon that. We have not heard the weighty arguments which should have been addressed to us, especially in view of the larger question that is looming before us so immensely at the present moment. It was impossible for me to allow the debate to pass without entering my protest against the conduct of His Majesty's Government. I hope the right hon. Gentleman the Member for Sleaford will not proceed to a division on his Amendment at this particular moment, because it is directed against the Finance Bill itself. In many points I support that Bill. I helped to vote the money for carrying on the affairs of the Empire for which the Budget Bill is essential. I do not think it would be wise to vote for the rejection of the Bill. Fortunately the Bill itself brings the issue clearly before us, as in the first clause we have an opportunity of giving our opinion whether we wish it to stand, and on that point I am perfectly prepared to give my vote against the repeal of this tax.

MR. VICARY GIBBS (Hertfordshire, St. Albans)

It is quite distressing to hear one speaker after another get up in this House, and attack the great and distinguished men on the Front Bench, just as if they were a row of dolls put there to be thrown at. There is hardly a person in this House, wherever he sits, who has not had something to say against the Government in criticism of their conduct. I shall not venture to do anything of that kind. I am a most servile follower, and if I could only find out what they are after, I would follow it, but the more I listen the more confused I become. Whether it was in consequence of the Chancellor of the Exchequer's oratory not being of that pellucid character that he generally displays, or whether it was that he was so confused as not to be able to distinguish between himself and the Cabinet to which he belongs, that he succeeded in confusing one of his humble followers, I cannot say. But I have been able to make out that he gives a very different reason now for removing this tax than he did before. Then it was that these duties were liable to misapprehension. Now it is that this tax has injured the farmer, it has hurt the miller, it has ground down the poor, and it has been paid by the wretched and unhappy consumer of this country, and not by the foreigner. But when did he find out that his proposals were so mischievous and were ruining the country? Not content with introducing this mischievous measure as a temporary reason for raising money, he went on to say, "it is so good that we will make it permanent." The Chancellor of the Exchequer first said it was a most splendid thing, but he now finds out that it is perfectly mischievous, and is going to hurt the consumer. Has he not read the Colonial Secretary's letter? I wish these great men would make up their minds before they come down to the House. If we are to hang let us all hang together. What am I to do? I go down to my constituents and tell them exactly what I am told, but when I tell them one thing one day, and then tell them another thing another day, I am afraid that melancholy results may follow, and that there is a chance of the House being deprived of the inestimable privilege of seeing me one of its Members. I cannot help saying one thing about the paper which the right hon. Gentleman read while you were for a moment absent from us. It was very important, but I think it would have been much more satisfactory if he could have distinguished between the part which was his own, and that which was the Cabinet's. Valuable as his views are, it would be still more valuable if we could find out those of the Cabinet. What we want is a disclosure as to the future—to know what they are going to do; whether they are going to support the views which the Colonial Secretary has put forward, or whether they are not. I am going to support those views when the Colonial Secretary does put them forward, although I cannot give the House my reasons now. I should like to know whether the Cabinet are going to support the right hon. Gentleman, because it would be interesting to get some definite statement from them of their views.

And, it being half-past Seven of the Clock, the debate stood adjourned till this Evening's Sitting.