§ Then it is suggested to me that, as the income-tax payer received the major portion of the relief accorded last year, he should bear the whole burden of the new taxation required in the present year. But that is to ignore altogether the course of taxation during the war. During the war the income-tax payer did not only bear his fair proportion of the war charges, but he was called upon, as he always will be called upon in time of war, to contribute to the expenses of the war out of proportion to his ordinary contribution to peace expenditure. The income-tax is, in fact, the second of our great financial reserves for time of war. In a famous passage of his Budget speech of 1853 Mr. Gladstone illustrated its potency by showing how we need have had no National Debt at all if there had been resolution enough to impose an income-tax in an effective form at an earlier period of the great Napoleonic war, and he pointed to what the tax might do for us again in a similar great emergency, provided that its efficacy were not destroyed by pretended reforms, chief among which was differentiation. But, Sir, we can destroy the efficacy of the income-tax as a reserve for war just as completely by keeping it at too high a rate in peace, as by attempting to make a fundamental change in the basis on which it is levied. I have to make an appeal to the patriotism of the income-tax payer. I have to ask the Committee to support me in increasing the figure, the already high figure, at which it now stands. In the opinion of His Majesty's Government l1d. is too high a rate to be permanent in time of peace. It leaves too small a margin of reserve in case of war, and although I am obliged to ask the Committee to add an additional penny this year and to raise the rate to 1s., I say for myself that, in my opinion, it is the income-tax, payer who will have the first claim to relief, and I hope the sacrifice I am now asking of him will not endure for long. There are some disadvantages attendant on the income-tax—some cases of hardship, real 561 or apparent—which are inseparable from the nature of the tax itself; but they are all of them increased and aggravated when the tax is at so high a figure. In my opinion the remedy and the only remedy for them is to be sought in reducing the tax again to a more moderate level and not in fundamental alterations of the nature of the tax itself. There are other objections to the tax less inherent in the nature of the tax, and less inseparable from it. There is the question to which my right hon. friend the Member for Croydon called attention in a very striking passage last year, th3 question of evasion, by means of which some gentlemen escape from their due share of burden and throw a heavier burden upon all their fellow-citizens. There is the question of the proper way to charge income derived from patent rights, copyrights, and such sources. There is the very difficult question of the allowances which it may be proper to make in respect of wasting assets charged to capital; and, lastly, there are the complaints with which every Chancellor of the Exchequer and, I imagine, most Members are familiar from people of small income as to the difficulty of recovering payment of income-tax which has been overpaid. I propose to refer these questions to a Departmental Committee, and I had hoped to be in a position to state exactly of whom the Committee would be composed. I cannot yet give all the names, but I may say I have been fortunate in obtaining the assistance of my right hon. friend the Member for Croydon, who will be Chairman of the Committee, and of the hon. Member for Poplar, who has always taken great interest in our financial discussions. They will have the assistance of the Chairman of the Board of Inland Revenue, and of one or two other gentlemen, amongst whom will beat least one representative Income-tax Commissioner. I hope they will be able very shortly to get to work, and that, as a result of their efforts, we may see our way to meet some of these cases of hardship, which I think are the most serious danger which the income-tax incurs, and the removal of which would do much to mitigate the hostility which is felt to it in any form. The additional penny which I ask the Committee to 562 impose would yield, in a full year, £2,500,000. In the present year it should give me £2,000,000. For the balance of my requirements I must turn to indirect taxation. After the account I have given to the Committee of the wine duties and of the beer and spirit duties, they will see that it is useless to have recourse to them in the present year. If I were to raise the duty I should probably lose more revenue than I should gain; and, however desirable that might be in the opinion of some hon. Gentlemen because of its social effects on the country, it is, certainly, not a change that can commend itself to me when I am seeking revenue.