§ As amended further considered.
§ MR. EDMUND ROBERTSON (Dundee)said he rose to move the following new clause standing in his name on the Paper—
The amount of the permanent annual charge for the National Debt during the current and every subsequent financial year shall be the sum of twenty-six million eight hundred thousand pounds, and twenty-six. millions eight hundred thousand ' shall be substituted for twenty-seven' in section 6 (1) of the Finance Act, 1903.This was, he explained, the clause which was moved by the hon. Member for East Perthshire during the later stages of the proceedings in Committee. It would be remembered that it came under discussion late on Wednesday afternoon, after the settlement had been arrived at which put an end to the long proceedings of that sitting; it was the desire of everybody not to prolong the sitting, and consequently only a short debate took place. He was therefore sure that the Chancellor of the Exchequer would not complain of their seizing that opportunity to again raise this very important question. In 1875 what was called the new Sinking Fund 1067 was established, having for its object the setting aside every year of a certain sum for the annual charge of the National Debt, making that sum larger than the interest, and thus providing a gradually growing balance for paying off the principal of the Debt. In 1876, the first year the new Sinking Fund came into operation, the National Debt was £770,000,000, and provision was made for £28,000,000 per annum for the service of the Debt. Twelve years later the Debt had fallen to a little over £700,000.000, and the annual provision was lowered to £26,000,000. In 1900 the Debt had fallen to £638,000,000. In that year the Chancellor of the Exchequer the right hon. Gentleman the Member for West Bristol reduced the annual provision to £23,000,000. The generation which might be said to have ended in 1900 had reduced the National Debt to the extent of £132,000,000, and he thought that generation deserved to live in their grateful memories, be-because they had done more for the country than if they had added millions of square miles and millions of unwilling subjects to the Empire. He had never ceased to regret that the Chancellor of the Exchequer of that day had taken advantage of the savings of that generation to reduce the provision for the National Debt charges to so low a sum as £23,000,000. Those who were Members of the House at that time would remember the reasons given by the right hon. Gentleman. He told them that his reason for reducing the provision for the National Debt was that the price of Consols was too high for the investment of the savings of the country. A Nemesis had overtaken the proposal of the right hon. Gentleman. They were cheap enough now. What had happened since the right hon. Gentleman thus reduced the Sinking Fund? In 1900 Consols were 114, now they were 892 and the savings of £132,000,000 in the National Debt made by the previous generation had been swept away. In 1 four years they had added £156,000,000 to our principal National Debt, and it now came to this—that, with the National Debt standing at a figure little short of £800,000,000, nearly £33,000,000 higher than when the Sinking Fund was established, they were proposing now, as last ear, to provide for the annual charge 1068 for the Debt, not £28,000,000 but only £27,000,000. That was the system which he was challenging by this clause. On the whole the Fund when steadily applied had been successful in its object. The right hon. Gentleman the Chancellor of the Exchequer had taken credit to I himself for not having suspended it this year. He did not think the right hon. Gentleman was entitled to that credit, because it was quite clear that if he had not formally abolished it he had done the equivalent.His reason for attacking the Sinking Fund system was that it had not produced the capital results they had a right to expect from it had it been fairly, honestly and steadily administered. From the last Return of the National Debt it appeared that the regular debt, under the operation of the Sinking Fund system, had been reduced by more than £8,00, 000. That, on the ace of of it, was satisfactory. But, on the other hand, what he called the irregular debt had increased by £4,300,000, leaving a net reduction of £3,700,000. And even that was not the net reduction. While they had reduced the whole debt by less than £4,000,000, he contended that they had reduced the national assets by no less than £5,500,000. He estimated, indeed, that by this process, instead of the capital position of the country being £8,000,000, or even £4,000,000 better, the net result of last year's operations was that they were at least £3,000,000 to the bad. The national cash assets to which he referred were first the unclaimed dividends, which to the extent of £1,000,000 sterling had been appropriated by this Bill in order to pay off part of last year's realised deficiency. Another cash asset was the sum realised by the power given to certain corporations to commute the stamp duty payments in respect of the transfer of their stocks. That was a premium payment derived in anticipation of annual revenue, and to that extent the national asset of the future was reduced. And in the third place there was the money derived by anticipation through the redemption of the land tax. This tax was not a tax at all. It was a burden carried by the land. It had long ceased to be a real tax. It was more like a mortgage. What took place was this. 1069 A person owning land subject to a mortgage paid off that mortgage and thus redeemed the land tax by a payment in cash, thereby avoiding future annual payments. Hence again the national cash assets of the future were reduced. There were other significant items. There were the Suez Canal shares, the value of which as a cash asset was being depleted year by year, as they were drawn off the proceeds of these being also used by statutory authority for the payment of the National Debt. Thus it was clear that instead of being £8,000,000 to the good they were £3,000,000 to the bad on the year's finance.
He would ask the Chancellor of the Exchequer to give some attention to the land tax. In the financial accounts the land tax appeared in the revenue of the year 1897-8 for £940,000, but only £750,000 was expected to be got last year. That showed that the value of the land tax had been reduced by £190,000 a year. As a matter of fact it yielded only £725,000 last year, yet the right hon. Gentleman had this year budgeted it at £750,000. Why he should, in face of its steady depletion, have anticipated an increase rather than a decrease passed his financial comprehension. The real cause of the unsatisfactory financial condition was the growth of the irregular debt, which was the result of a most admirable financial ideal set up by Sir Stafford Northcote in 1875. He complained of the terminology used in the financial accounts as being very embarrassing to an outsider and to a layman. There were the landed and unfunded debt, and after them came the terminable annuities and other capital liabilities. The growth of the irregular debt was worth a moment's consideration. It was constituted under fifteen Acts of Parliament, and it had grown by £4,000,000 during the last financial year. More serious than that was its growth during the last six or seven years. In 1898 the whole amount of the obligations was under £4,000,000, In 1899 it rose to £7,000,000, next year to £10,000,000, the following year to £14,000,000, then to £20,000,000, in 1903 to £27,000,000, and this year to £32,000,000. Side by side with the National Debt which the Chancellor of the Exchequer was pretending to pay off he was allowing to grow up an irregular 1070 and illegitimate National Debt which was steadily rising. He expected that in the course of the next twelve months, owing to the carrying out of naval works, there would be an increase of between £7,000,000 and £8,000,000.
§ THE CHANCELLOR OF THE EX-CHEQUER (Mr. AUSTEN CHAMBERLAIN,) Worcestershire, E.I stated it in my speech. I said it was not possible to give the actual figures for the naval and military works, but they would not exceed £10,000,000.
§ MR. EDMUND ROBERTSONsaid he had not intended to use so high a figure, but it was clear that the irregular debt would go up to £40,000,000. It might be suggested that he was somewhat inconsistent when the position he took up in 1895 was considered. But in that year their financial position was such that the necessary works which the Admiralty proposed and the Government approved could not possibly have been provided for out of the revenue of the year, Personally, he was not responsible for the finance of that day. He had only an Admiralty responsibility. And it should be remembered that in that year, too, the right hon. Gentleman the Member for West Monmouth added very largely to the resources of the country. But the principles on which they acted when they initiated this method of providing for naval works had not been acted upon by the present Governments which in many cases had applied it to purposes which, in the opinion of the Opposition at any rate, were never intended to be covered by these loans.
Another growing debt was that represented by the guaranteed loans. In 1898 these contingent liabilities amounted to £68,000,000, and now they amounted to £153,000,000. Here again these so-called contingent liabilities were real liabilities. The indirect or contingent liabilities had increased in the last twelve months from £115,000,000 to £153,000,000 or an increase of nearly £40,000,000. That was not a satisfactory state of things. To carry on this system of borrowing pari passu with a pretended system of reduction of debt was a delusion, a fraud, and a snare. The system ought not to be continued on the present basis if it was to yield 1071 the results anticipated. Possibly the Chancellor of the Exchequer, as he said on a former occasion, would allege that municipal indebtedness was growing also; but he thought that was an argument on his side, because the same people who bore the municipal indebtedness also bore the national indebtedness. The growth of municipal debt was in no degree a set-off or excuse for the growth of national indebtedness. Even if we were piling up this local debt, that was all the more reason why we should keep a vigilant eye on the growth of the national debt, The main point on which he based his Resolution was that the existing system, part of which was embodied in the provision he was now attacking, was not an honest, plain, straightforward system. He suggested one of two alternatives. Either the Sinking Fund should be abolished, and at the same time these irregular borrowings be put on the Estimates year by year. That would be a plain, true, and accurate system. Or another way would be to add to the amount of the Sinking Fund the entire provision for the service of the Debt so as to increase the amount available for the reduction of the Debt. He begged to move the Motion standing in his name.
A clause [Amount of permanent annual charge for National Debt]—
The amount for the permanent annual charge for the National Debt during the current and every subsequent financial year shall be the sum of twenty-six million eight hundred thousand pounds, and 'twenty-six million eight hundred thousand' shall be substituted for 'twenty-seven' in Section 6 of the Finance Act, 1903."—(Mr. Edmund Robertson.)
§ Brought up, and read the first time.
§ Motion made, and Question proposed, "That the clause be read a second time."
* MR. GIBSON BOWLES (Lynn Regis)said that he entirely agreed with all the remarks which the hon. and learned Member had directed against himself, on his own record, in regard to the irregular debt. He had more than once divided the House on this point, because the irregular debt had in the main, been contracted for naval and military works, and had earnestly advised the House, as he now did again, to refuse 1072 its assent to any more Naval or Military Works Acts. So far as he understood the hon. and learned Gentleman, he said that the amount of debt was one thing and the terminable annuities were another, and he added the two together. But really and truly these terminable annuities were the machinery by which the Debt was to be extinguished. They were no more part of the Debt than the extinguisher was part of the candle. They represented permanent engagements. The terminable annuities combined within themselves both sinking fund and interest; they were set up to extinguish a portion of the Debt and therefore they were an alleviation of and not an addition to the Debt. As to the Sinking Funds proper, the hon. Gentleman wished to make out a capital account, and put all the assets on one side and the liabilities of the British Empire on the other. That would be altogether illusory. They could not put the assets in the form of cash. Who could say what was the value of the appanages of the Crown or of the British Empire? But unless you could say that no account of assets and liabilities could be complete, and if not complete it must be illusory and deceptive. That was impossible. In dealing with the depreciation of assets, the hon. and learned Gentleman said that the Exchequer balances were reduced. He agreed; they were dangerously reduced. But it did not follow that because they were reduced the liabilities of the State were necessarily increased. He could not follow the hon. and learned Gentleman in his list of all the depreciation of assets which he had drawn up—if he could, he thought he could easily show serious errors in it. With regard to unclaimed dividends be entirely agreed with the hon. and learned Gentleman. The only legitimate purpose to which these unclaimed dividends ought to be applied was to extinguish debt. A man who did not claim his dividends permanently to that extent did extinguish the Debt; and to apply them to the purposes of revenue was to rob the Debt.
Now, as to the general proposition which was raised by the new clause moved by the hon. and learned Gentlemen. There were two Sinking Funds. One 1073 was the old Sinking Fund which consisted of the balances of realised income over realised expenditure. He regretted to say that that old Sinking Fund had been assassinated. It no longer existed, and could never be revived, unless the whole financial methods of Chancellors of the Exchequer were radically changed. So long as the present financial system existed the Chancellor of the Exchequer, whenever he saw a likelihood of any balances of income that would go to the old Sinking Fund, would not fail to seize these balances for Supplementary Estimates—which they were now told were to be brought in as a matter of course. Originally Supplementary Estimates were rightly considered to be an abuse, and were rarely to be proposed—never, except in cases of unforeseen and unavoidable expenditure arising after the Budget arrangements had been accepted; but now they were brought in as a matter of course, and no Chancellor of the Exchequer would be able to resist the temptation to seize and apply the realised balances to his own necessities. Therefore, the old Sinking Fund was lost, vanished, gone for ever. The new Sinking Fund was therefore of all the more importance. The new Sunking Fund was composed of the balance of the fixed charge of £28,000,000 which was settled at a time when the gross liabilities of the State were far less than now, and since not increased with increased liabilities, but improperly reduced to £27,000,000. Out of that fixed charge had to be paid the interest on the funded debt, the interest on the unfunded debt; the terminable annuities which represent partly the interest and partly the extinction of debt; and finally, the cost of the management of the Debt; and whatever remained over, that was the new Sinking Fund. All that would remain over this year from the fixed charge after all these payments had been made, to go to the extinction of the Debt, was £1,900,000, and last year it was less. Leaving aside, then, the debt extinguishing portion of the terminable annuities, which was previously permanently allocated, the only part of the fixed charge that would be applied, this year, to the purchase and extinction of the public debt was £1,900,000. The First Lord of the Treasury in 1899 delivered a speech on the Sinking Fund which 1074 showed that his right hon. friend was under a strange misapprehension regarding it. He assumed that his right hon. friend's knowledge of finance was equal, if not superior, to that of some Chancellors of the Exchequer, who, after all, were only the Second Lords of the Treasury. His right hon. friend intimated that £5,800,000 was going to be spent in the purchase of debt—he lumping together the £4,000,000 or £4,500,000 of terminable annuities and the residue of £1,300,000 the balance or new Sinking Fund employed to purchase and cancel debt, and by some strange process concluded that the country would thereby lose £800,000 because Consols were 10 per cent. above par The whole calculation and statement were illusory. He wished the House to consider how ridiculously small, bow extremely inadequate, the provision for the extinction of the Debt was the £1,900,000 which would be used and would alone be used for the purchase and extinction of the Debt in the present financial year. What proportion was it? It was 5s. per £100 or one four-hundredth part of the Debt. The Chancellor of the Exchequer appeared rather proud of himself for having achieved that result. It was true he included the terminable annuities, over which he had no control, and which were settled long ago. But the new Sinking Fund was the only real sinking fund provided for in the year, and that amounted to only £1,900,000. The dead weight of the funded debt, without taking in the £32,000,000, of what the hon. and learned Gentleman opposite rightly called the irregular debt, was £762,000,000; and they only proposed to pay off six-tenths of a 1d. in the £ per annum. Was there ever a debtor in the County Court appealing to a sympathetic Judge who made such a proposal? It was ludicrous. The provision was altogether inadequate for the payment of the Debt. The fixed charge was now only £27,000,000, or £1,000,000 less than it was when the total liabilities of the country were far less than they were at present. The fixed charge should at once be raised to at least £28,000,000 and, in his opinion, it should be £28,500,000.
He would not enlarge on the great advantages of the Sinking Fund. They had been dwelt upon by able financiers 1075 on both sides—by the right hon. Gentle-man the Member for West Monmouth, and by the right hon. Gentleman the Member for West Bristol. They had been truly told that the Sinking Fund was the great reserve of the country; that it was the only real financial reserve; and yet it had been brought down to its present inadequate proportions. The old Sinking Fund was gone; it was a corpse; it would never be revived unless there was a great financial revolution, which he should be glad to see. The new Sinking Fund was practically the only sinking fund they now had. As to additions to what was called the capital account—a most ridiculous term —the debt for this, was of a special character, carried its own sinking fund, and was not perpetual, whereas the questions hinging on public debt was perpetual. It was none the less irregular and improper, and he repeated his hope that the House would sanction no more of it. He was filled with apprehension when he thought as, of our present financial position. After all, he was but an earnest student of finance; he did not think any one could be anything more than a student; but he could assure the House he was full of apprehension when he looked at the financial position of the country. They were approaching financial confusion; their expenditure was dictated by extravagance, without producing efficiency; taxation was oppressive; the national accounts were systematically falsified; £20,000,000, representing interceptions and approaches in aid, were left out on both sides for the manifest purpose of misleading the English people into the belief that their expenditure was less than it was; the control of Parliament of the right hon. Gentleman the Member was disappearing; appropriations-in-aid and interceptions all escaped the control of Parliament; votes on account, which were formerly for £3,000,000 or £4,000,000, to cover two months, were now for £21,000,000, and to carry the Government on for six months; taxation which was annual was becoming permanent; and, in fact, in every respect there was a prospect before them which demanded the most serious attention of this House. It certainly demanded the presence of a showed that the Transvaal and Orange Chancellor of the Exchequer who would 1076 be prepared to abandon some of the abuses which had crept in from time to time, who would be prepared to strike again, as Mr. Gladstone did in 1866, the true note of finance, and who would see that the national accounts were true, that the national expenditure was kept in hand, and that taxation was levied in such a manner as to produce the least possible burden. He knew nothing of more moment to the Empire than this, and nothing more worthy the attention of the House of Commons.
§ MR. BUCHANAN (Perthshire, E.)said that every hon. Member would agree with the speech of the hon. Gentleman who had just spoken. The subject of the National Debt, and the various questions hinging on it, were rapidly becoming more grave and more pressing. He was not quite so hopeless about the old Sinking Fund as the hon. Gentleman appeared to be. He believed that in another House of Commons, and under other auspices, it might be restored to its previous vitality. After all, it had been of some use in substantially reducing the Debt; and it was not beyond his anticipation that it might be so used again. He also thought the hon. Gentleman was rather too rigid in trying to exclude altogether the operation of the terminable annuities. That was not financially a fair method of gauging the condition of the country. He should like to urge on the Government the necessity for reconsidering the question of the National Debt on two or three general grounds. One reason why the Chancellor of the Exchequer ought to reconsider the whole question was the fact that the basis on which the scheme of the right hon. Gentleman the Member for Croydon was founded was that this country would obtain £30,000,000 from the Transvaal within three years, and that that amount would be applied to the reduction of the National Debt. There was, however, no chance of that money being now forthcoming. The Chancellor of the Exchequer referred to the matter in general language a few days ago; but since then they had had a statement from the Colonial Secretary with reference to finances of the Transvaal, which showed that the Transvaal and Orange River Colony were only just paying their 1077 way. They received £7,500,000 and spent £7,400,000. How could it be anticipated that those Colonies would impose on themselves an additional burden of £30,000,000, involving an annual charge of £1,250.000? It was absurd to imagine that this country would get any such sum from the Transvaal and Orange River Colony. Surely, therefore, the time had arrived for a reconsideration of the whole question.
He thought it was only right to call attention to the lax method in which the Chancellor of the Exchequer dealt with borrowed money. The right hon. Gentleman had helped himself to a million of money which was really capital and which should have been used for the extinction of debt, and had used it for revenue; and with regard to the deficit in relation to the year just concluded, the right hon. Gentleman had done the same thing: he had made use of £2,000,000 of loan money for the purposes of revenue. That was an extremely lax method of dealing with public finance. With regard to the irregular debt and the additional capital liability, he drew attention to the fact that it was growing at a very much more rapid rate than the funded debt, our deadweight debt, was being extinguished. It was growing in geometrical ratio. It was growing each year, and the increase every year was a large percentage over the previous year. In 1900 it was £10,000,000, in 1901 £14,500,000, in 1902 £20,500,000, in 1903 £27,500,000, in 1904 £32,000,000, and, as they knew from the Chancellor of the Exchequer, next year it would be £42,000,000. It was not only an increase, but an increase going on at a continuously increasing rate. The right hon. Gentleman had said, and justly said, it was a special debt and there were special reasons for its being extinguished in a limited number of years, but it was an increase of our capital liability and of our debt just as much as any other debt that existed. Not only was there an increase from year to year, but the system as a system was extending and was constantly being used for improper purposes. It had been said that this system was encouraged by the Naval Works Bill of 1895, but that Bill contained a small number of specified items of large magnitude which entailed 1078 a great expenditure over a number of years.
There had been a constant and growing laxity in these matters. There was a growing practice also of employing loan moneys on public buildings, and there had been an increasing laxity in the items charged to loan accounts for years. Under the Military Works Act at the present time there was a large item for Volunteer and other rifle ranges, and there were amounts put down under that heading coming down to as low as £4 and £2. So that this rich country was spreading over a term of thirty years the repayment of small sums not amounting to more than £4. It was ridiculous that they should place upon posterity such a loan as that. There was a brick factory which made bricks for the War Office, and the working capital of that factory was actually supplied by means of loan money. That was surely a very lax method of financial administration. As he had previously reminded the right hon. Gentleman, the Public Accounts Committee had reported very strongly against this practice. They said that for specific large works of a permanent character it was legitimate to borrow money, but for small works such as were now incorporated in these Bills it was highly expedient that we should return to the practice of putting the annual amount of expenditure on the Estimates. Fifty years ago the debt charge was half the annual expenditure of the conntry; but at the present time only one-fifth of the annual expenditure was represented in that way. That was a wholly inadequate sum to set aside for this purpose. He might dwell at some length upon this because it strengthened his contention, because even if £150,000,000 had not been added to the Debt by the war, the money allocated to the payment of the Debt was most inadequate. This matter was urgent, and the right hon. Gentleman the Chancellor of the Exchequer, the financial authority of the country, should reconsider at the earliest possible moment not merely the questions connected with this loan expenditure but also the adequacy or inadequacy of the charge they were setting aside for the diminution of the Debt. It was most important that they should get rid of this 1079 laxity and restore the finances of country to a solid basis
§ MR. AUSTEN CHAMBERLAINsaid the question raised by the hon. and learned Member was whether or having regard to the amount of the Debt and the circumstances of the year, the provision made for the redemption of debt was adequate. Hon. Members seemed to have had some difficulty in finding their way through the maze of figures embodied in the Return from which the hon. and learned Member quoted, and the House had probably experienced some difficulty in following the speeches which had been made. One great cause of complaint had been that outside the funded or ordinary debt there was a debt which the hon. and learned Member described as irregular, incurred on account of capital liabilities by various Departments which had been authorised by Parliament to borrow the money. That was put forward as being in itself a prima facie reason for considering that the provision for the sinking fund was inadequate. The House should keep in mind that for all debt of that character there was established a separate sinking fund, altogether outside what was ordinarily spoken of as the Sinking Fund, and that upon the annual Votes of the Departments concerned there was charged an annuity sufficient not only to pay the interest on the money borrowed, but within a period of thirty years to pay off the whole debt. That method of meeting the financial liabilities of the nation was objected to by hon. Members opposite. The hon. and learned Member for Dundee thought it was sound as long as it was pursued by himself, but that it had since become unsound. The hon. Member for East Perthshire was more consistent and more drastic in his judgment, holding the method to be unsound at any time, though he (the right hon. Gentleman) did not remember his protesting against it when it was first introduced by the hon. and learned Member for Dundee. Expenditure of that kind ought certainly to be watched, and he did not wish to see it a part of our annual financial system. But when great capital expenditure had to be incurred upon works of a permanent character, which woul dbe valuable long 1080 after the money had been spent, it was from time to time necessary to have recourse to borrowing for a short period to enable the works to be carried out. When the hon. and learned Member introduced the first of these Bills he repudiated with some warmth the idea that he was making final provision for all that had to be done. He (the right hon. Gentleman), following in the hon. and learned Member's footsteps, had had to explain why the Estimates had been doubled in some cases and increased in others, and why new works had had to be undertaken. But he had no wish to make the matter one of Party controversy. The hon. and learned Member when serving at the Admiralty, had believed the works to be essential for the defence of the country, and that it was reasonable that the cost should be spread over a term of years instead of being placed upon the Estimates of the one year.
The system of charging upon the Estimates each year whatever sum was considered necessary often resulted in uneconomical administration. When a great work of this kind was begun the quicker it was brought to completion the more economical it was as there were likely to be fewer alterations, the cost would be smaller, and the country would remain out of the enjoyment of the result of the expenditure for a shorter period. When the capital expenditure necessary for large works was charged upon the annual Votes it not infrequently happened that the sum provided was not the amount that could be economically and wisely spent in the year but the maximum amount which the necessities of the Chancellor of the Exchequer allowed him to allot for the purpose. Up to a certain point the growth of such debt would naturally be in an increasing ratio year by year, because as the works progressed more money could be spent upon them, until they neared completion when the expenditure again slackened off. Expenditure of this kind was not confined to naval and military purposes. For instance, only the other day the House passed amid loud cheers a Bill authorising the Postmaster-General to expend, and the Treasury to borrow for the purpose of providing him with the money, 1081 £3,000,000 in connection with the telephone service. That was essentially capital expenditure not necessarily to be repaid out of the revenue of a single year.
§ SIR GEORGE BARTLEY (Islington, N.)asked for how many years the telephone loan was to run.
§ MR. AUSTEN CHAMBERLAINthought it was for less than thirty years, but he did not like to speak from memory. The period was calculated having regard to the life of the different kinds of plant in which the money was to be invested. When the first Naval Works Bill was introduced the hon. and learned Member gave as a justification for it that they were engaged in paying off the borrowings under the Naval Defence Act. But the last two years of the annuities under that Act were paid off by encroaching upon the Sinking Fund a course which he had refrained for pursuing, but for which hon. Members opposite were unwilling to give him any credit.
Another class of liabilities the growth of which hon. Members regarded as dangerous were the contingent liabilities of the State for stocks raised for purposes other than those of the nation. The growth last year was mainly due to the raising of the Transvaal Guaranteed Loan under circumstances with which the House was familiar and for purposes of which the House approved. The rest of the growth was due to borrowing on account of local loans. The borrowing for Irish land purchase, which did not come into last year, would add to the amount, but that also was in pursuance of a policy which had received the approval of the House. As hon. Members were aware he had watched not without anxiety the great growth of local loans and the necessity, when he was doing everything he could to avoid recourse to the money market for the purposes of the Government, to have such recourse on account of local authorities. He thought that while matters were in their present condition the Treasury ought not to be driven to raise local loans stock to the amount which in recent years had been customary. But the main point of the discussion was whether or not reasonable provision for the redemption of debt was being made. 1082 He agreed with the hon. Member for East Perthshire that terminable annuities themselves represented redemption of debt. In many cases Consols had been cancelled and these annuities were set up to pay the interest which would have been earned and to replace to the credit of the fund the amount of the Consols which had been cancelled.
* MR. GIBSON BOWLESsaid he quite recognised that terminable annuities were partly representative of a sinking fund. What he had contended was that the only amount to be applied in any year, unless there was an old Sinking Fund balance, for the cancelling of debt by buying Consols was the balance of the fixed charge representing the new Sinking Fund, which in the present year would be £1,900,000.
§ MR. AUSTEN CHAMBERLAINpointed out that terminable annuities were largely employed for that purpose. The hon. Member who moved this clause was of opinion that the permanent annual charge for the National Debt should be as great at it was before the war. Besides the total net charge he had to consider the efficacy of the sum and not merely its amount. The reduction in the rate of interest increased the efficacy of any given sum of money for the reduction of the Debt. The right hon. Gentleman the Member for Croydon fixed the amount at 1 per cent. of the whole Debt, and it might have been argued at that time that it would have been wiser to have reduced taxation less and set aside a larger sum for debt, but his right hon. friend and the House decided otherwise. He did not, however, think that those who were inclined to take that view would seriously urge that he should now depart from the arrangement which his predecessor made. There were many right hon. Gentlemen and hon. Gentlemen opposite who prided themselves upon always having escaped the glamour of the £30,000,000 war contribution and who never expected to see that money paid by the Transvaal. That was not his view, but there were obvious reasons why at the present moment they could not raise that war contribution. He should be very sorry to believe that the Transvaal would not, 1083 in due course, when times were more favourable, make the contribution which his predecessor in office anticipated. In the meantime a sinking fund, amounting to nearly 1 per cent., continued year by year, and this, in his opinion, having regard to all the circumstances, was as much as they could expect. He gathered that hon. Gentlemen were rather anxious that the growth of small borrowings should be closely watched and that they should not be made a permanent annual part of our financial system. In that hope and wish he was very much in accord with the Members opposite, but he was bound to point out that the works already sanctioned by Parliament, and which had been begun, were coming to an end. They had overtaken the arrears out of which they arose, and it would not be necessary to ask Parliament to make provision for them again.
§ MR. SYDNEY BUXTON (Tower Hamlets, Poplar)thought this proposal had been quite justified by the concluding words of the right hon. Gentleman. After what had fallen from the Chancellor of the Exchequer he would not trouble the House with more than a few words. The right hon. Gentleman appeared to misapprehend the view of his hon. friend who moved this Amendment, because he did not desire in any sense that all this expenditure should be placed upon the annual Estimates of the year. What he did desire was that there should be some discrimination in regard to this matter. After what had fallen from the Chancellor of the Exchequer they had reason to hope that there would be some diminution in these annual borrowings. He was not very sanguine in this matter. The right hon. Gentleman had stated that some of these works programmes were coming to an end, but past experience showed that one programme led to another still more expensive proposal. In this connection he might mention the new Army scheme which had been introduced by the Secretary for War which would involve the provision of more barrack accommodation. He was very much afraid that the Chancellor of the Exchequer in these matters of expenditure would 1084 find his hands forced by the spending Departments unless he took up a very strong attitude. So long as these borrowings went on, practically the Sinking Fund was a farce, because they created debt with one hand and paid it off with the other.
His hon. friend drew attention to the whole financial position in regard to the National Debt. Last year in a year of peace and a fairly properous revenue the whole reduction of the National Debt of £800,000,000 was only £1,850,000 and that was not satisfactory. The right hon. Gentleman said they were making every reasonable provision for the reduction of the Debt, and that during the coming year the sum of £7,120,000, would be devoted to this purpose. He entirely agreed with the view which the right hon. Gentleman took in regard to terminable annuities as applied to reduction of debt. What they had to look to was the balance after deducting cost of administration and cost of annual interest. With regard to that point his hon. friend had put the matter affecting the annual reduction quite fairly. In considering the annual amount that ought to be applied to the reduction of debt they had to look to the grounds on which the permanent charge was reduced five years ago. The right hon. Gentleman the Member for West Bristol reduced the amount on the grounds that Consols were so high and that the permanent charge ought to bear a proper proportion to the outstanding Debt. At the present moment in 1904–5 the total Sinking Fund under the old arrangement would have risen to £6,500,000 upon a Debt which would have been reduced to £580,000,000. The right hon. Gentleman proposed this year a Sinking Fund of £7,000,000 upon a net debt of £770,000,000. His point was that the right hon. Gentleman the Member for West Bristol fixed the amount of the permanent debt and the Sinking Fund on the proportion of the then existing Debt, so that each year the Sinking Fund would reduce the Debt by so much. The right hon. Gentleman in taking this year the proposals of his predecessors had fixed the Sinking Fund at £7,000,000 on a net debt of £770,000,000. If it had been 1085 raised, as it ought to have been, to the proper amount, it would have been 1.25 per cent. instead of .92 per cent. On that basis the right hon. Gentleman agreed that there was a great deficiency in the Sinking Fund. Last year the proposals were unquestionably fixed on the basis that the Transvaal loan would be paid, and that the Chinese indemnity would be brought in. The Sinking Fund last year was fixed on the basis that we would get £14,000,000 from the Transvaal, and £6,000,000 from China—in all £20,000,000, and of that only £4,000,000 had been received. The right hon. Gentleman had expressed the hope that at some future time we might receive this Transvaal contribution. But in reply to a Question across the Table he said that as regarded the Transvaal nothing had been provided in the Estimates for the coming year to meet this charge. It was quite clear that for the next twelve months we should not receive this contribution from the Transvaal. That altogether upset the basis on which the right hon. Gentleman the Member for Croydon fixed the amount of the Sinking Fund. The interest on this amount had to be met out of the Sinking Fund, and that being so the Sinking Fund was not nearly so effective as if those sums had been received. It might be said that it was difficult to press the right hon. Gentleman, in a year when these sums had not been received, and when he had a realised deficit of £5,500,000, to increase the Sinking Fund. He was not sure but that these two facts were good reasons for increasing the fund. Looking to the great expenditure which was going on year by year, and looking also to the fact that the right hon. Gentleman this year would not obtain the revenue he expected, and that probably there would be a deficit at the close of the financial wear he thought that, under those conditions, his hon. friend was right in moving this Amendment as a protest against the inadequate way in which the National Debt was being diminished at the present moment.
§ * SIR EDGAR VINCENT (Exeter)said right hon. Gentlemen had had careful comparison made between the Sinking Fund established by the Chancellor of the Exchequer and the Sinking Fund established by his predecessor. He did not 1086 think that these comparisons were really of much avail, because the Sinking Fund was non-existent. There was no amount at all. In one portion of the Budget there was an approximate £7,000,000 of apparent Sinking Fund, and in another portion there was a fresh capital liability of £10,000,000 created. Therefore the net result of these two operations was an increase of debt of approximately £3,000,000. The Chancellor of the Exchequer said that these two sums were not fairly comparable, and he gave as a reason that as against this new creation of debt of £10,000,000 certain annuities were charged against various departmental budgets of future years. That did not appear to him to alter in the least the fact—the disagreeable fact that new debt was being incurred on behalf of the State. Because the Debt was charged upon small fractions it was none the less a State liability. The fact that, in the future budgets of the naval or war Departments, a certain sum was taken for work already performed meant that they had so much less to spend on the necessities of the current year. In 1905 or 1906 they might have an apparent Army expenditure of £28,000,000 of which only £27,000,000 or £26,000,000 would be really effective because £1,000,000 or £2,000,000 was required to meet expenditure already incurred. That appeared to him to be a totally wrong system because the account differed from the reality. Anyone who studied the national accounts ought to be able to get a fair and correct view of the national position without entering into five or six annexes or appendices. The Chancellor of the Exchequer had put forward a plea which had some justification, namely, that at the present time it was extremely difficult to increase the burden of taxation on the people. He submitted that they would never arrive at the proper administration of the finances until they went back to the old system of having one account which contained the entire expenditure and receipts of the year. The present system of Loan Bills was nothing more nor less than an extraordinary Budget. The effect of these extraordinary Budgets was undoubtedly to alleviate the financial necessities of the moment. They made the 1087 financial position of the country appear for the moment better than it really was. But a day of reckoning must come, and the present system of finance would be condemned because during these years of peace a vigorous Sinking Fund should have been in operation so that Year by year there should be a diminution rather than an increase of our liabilities. He hoped that the right hon. Gentleman next year when he came to make his financial statement would put the whole matter clearly and fairly before the country, and that he would amalgamate all the different accounts into one, and that he would ask the country to show sufficient financial resolution to create a vigorous Sinking Fund in order to make a considerable annual reduction in the Debt after paying for the entire expenditure of the year and not only for a portion of it.
§ MR. McKENNA (Monmouthshire, N.)said the Chancellor of the Exchequer had founded his case upon the argument that this House had last year agreed to £27,000,000 being the permanent fixed debt charge at a time when the then Chancellor of the Exchequer was able to take off taxation, and that the House ought not now to ask him to go back on that arrangement when he had to impose new taxes. Many hon. Members argued last year that a debt charge of £27,000,000 was quite an insufficient sum, and they pointed out that in fixing it at that amount the then Chancellor of the Exchequer was actually reducing by £500,000 the actual amount which was being set aside for the payment of the Debt. The fixed debt charge then was £23,000,000, and it was increased to £27,000,000, but the actual amount of the debt which was included under the fixed debt charge was increased by close upon £150,000,000, the interest of which amounted to £4,500,000, so that although there was a nominal increase from £23,000,000 to £27,000,000 the actual amount devoted to the payment of the debt was £500,000 less. When they argued on that point last year they were met by the right hon. Gentleman the Member for Croydon with various answers. They were told in the first instance as his hon. friend the Member 1088 for Poplar had pointed out, that there would he a considerable payment into the Treasury on account of the repayment of the Transvaal loan, and they were told then, while actually discussing the amount of the fixed debt charge, that it would affect the increase to the extent of £300,000 a year, by the interest which they should save on the first instalment from the Transvaal, and that in the ensuing year—that was the present year—they should have a further £10,000,000, the interest of which, added to the interest of the first £10,000,000, would more than cover the £500,000 by which they proposed to increase the charge. They had not got either of these instalments, and consequently that argument brought forward by the right hon. Gentleman the Member for Croydon had failed. They therefore stood in this position now, that if they left the fixed debt charge at its present amount of £27,000,000 they would be paying on a reduced basis compared with what they were paying before last year. He submitted to the Chancellor of the Exchequer that the amount set aside under these circumstances was not adequate. But then there was another argument.
As a matter of fact they had not in this Budget any real provision for the reduction of the debt at all. They were reducing the amount of the Debt on the one hand and increasing it on the other. But that was not all. Not only were they increasing the amount of the Debt by these new loans for permanent works, but, owing to the excess of expenditure last year over income, apart from the new debts for permanent works they had not reduced the total amount of liabilities by a single penny. The Chancellor of the Exchequer last year was able to make out on his Budget estimate a very fair case for putting his fixed debt charge of £27,000,000, because on his then Budget estimate he was showing a surplus on the year. It was pointed out that that would increase the amount for the reduction of the Debt, but this surplus was not realised. Instead of a surplus the Chancellor of the Exchequer had a deficit of upwards of £5,000,000, and that had gone to swell the Debt. He would put this case to the Chancellor of the Exchequer. The very fact that they were obliged this year to impose fresh taxation in order to meet 1089 current expenditure was not a reason for leaving the fixed debt charge where it was. On the contrary it was a reason for increasing the fixed debt charge. He reminded the right hon. Gentleman that when the annual income was very little more than half what it was at the present time this House was content to make annual provision for debt greater than we made at this time. Having regard to the smallness of our revenue and our charges, upon which we could not afford to make a large provision for debt, he thought the House was justified in asking the Chancellor of the Exchequer to make far greater exertions to pay off the permanent debt than he had made under the present Budget. There was every sign that in the future our expenditure would not diminish. We had a permanent liability imposed upon us in respect of our Army and Navy which, notwithstanding any economies that we might practice, we should not be able seriously to reduce. It behoved us, therefore, to make strenuous exertions to diminish the National Debt. By putting the fixed charge at £27,000,000 we had not done as much as we ought to have done. At the very least we should have gone hack to the time of Sir Stafford Northcote when it stood at £28,000,000 a year. If that were done he did not think that the House would be calling upon the taxpayers to make anything more than a reasonable provision for the vast amount of debt that had to be met.
§ SIR GEORGE BARTLEYsaid he had always held the idea that we ought to make the same effort as was made by our forefathers to pay off the permanent debt. He was afraid that the present tendency was to increase expenditure. The special point to which he desired to refer was the fact that in the present days we paid off our debts in a much longer period than should be allowed. The Chancellor of the Exchequer had fixed thirty years as the period within which to pay off the loan of £3,000,000 for telephones. Surely any sane man looking on the developments made by science would say that thirty years was too lengthy a period over which to extend the repayment of that loan. Before that time was over a great deal of what was now deemed to be necessary would be obsolete and out of date. He ventured to think that ten instead of thirty years would have been ample for the purpose. 1090 No doubt if they made the period of repayment shorter it would make it harder to face at the present time, but he was confident that the safest and best way to reduce expenditure was to arrange to pay our debts in a short period. The fact that we were increasing our expenditure by leaps and bounds should make us more and more careful in granting that expenditure. If we could afford to increase our expenditure, we ought to afford to set aside a very much larger proportion in repayment of our debts. Seeing that our increasing expenditure was one of the most serious questions of the day and that the amount was increasing in enormous proportions, the safest plan was to increase our Sinking Fund. This was not a Party, but a great national question, and he was sure that the only sound method of finance to adopt in the face of rapidly increasing expenditure was to make a far greater effort to increase the Sinking Fund and to pay off in that manlier a much larger portion of our debt.
§ MR.LLOYD-GEORGE (Carnarvon Boroughs)agreed that this was a very grave and urgent matter, and he was glad that such authorities on finance as the hon. Members for Exeter and North Islington bad expressed their views upon it. He was perfectly certain that nothing would be done in the way of cutting down the growth of expenditure until Members of authority in matters of finance criticised and opposed extravagance in the Estimates The Chancellor of the Exchequer had treated this as a year of exceptional pressure, but the Government had no wars or extra expenditure to meet. They had had years of bounding revenue during which the Chancellor of the Exchequer had resorted to the Sinking Fund for Budget purposes. A late Chancellor of the Exchequer, the hon. Member for West Bristol, cut it down from £25,000,000 to £23,000,000, and the same system prevailed at the present moment. The war was over, but this was not seized as an opportunity for restarting the Sinking Fund, but for reducing it by another £500,000. We were resorting to the German method of an extraordinary non-recurring expenditure. Germany divided their expenditure into three classes. They had the ordinary recurring expenditure, and the ordinary non-recurring expenditure, 1091 and finding those were not sufficient, they also had the extraordinary non-recurring expenditure. That was what the Government was doing; they had not classified their expenditure in those three stages, but that was practically what they had done. These Loan Bills were not capital expenditure. They ought to be part of the Annual Budget, and be treated as such. The result was that the Sinking Fund was nullified and neutralised by means of these loans. Before these loans were resorted to, these items were treated as the annual expenditure of the year. These were sums of money spent to meet what, after all, was the ordinary expenses of the country, and nothing could prevent them from being annual expenses. These were the expedients always resorted to by every firm when their expenses got out of hand. They always began to treat these expenses as capital expenses. It was a well-known trick—he did not use the word in any offensive way to the right hon. Gentleman—it was what everybody financially pressed resorted to, treating things as capital expenditure which really ought to be treated as current expenditure; and unless somebody had the moral courage to face the matter, and include this expenditure in current expenditure as it ought to be, the firm would have to face bankruptcy sooner or later. This was what we were doing. He was not surprised Consols were falling. Financial experts were sufficiently sensitive to what was going on. They could not be deceived. The taxpayer might be deceived for some time; he might say this was capital expenditure, but it was not so with financial experts. They knew full well. They knew we were increasing our expenditure and neutralising oar Sinking Fund; and the result was that our credit was going down in the market, and, if we wanted to restore our credit, we must treat these things as what they really were — the ordinary expenses of running an Empire.
This financial system, initiated he did not care by whom, was getting worse year after year; and the result was that the shares of this Imperial company were not quoted in the market at what they were. We had got to restore the financial sound- 1092 ness of the country. Nothing would be done until men on both sides of the House who knew what finance meant and knew the danger of running this course, took the matter in hand; and he was sure the House would respond to a call from a Chancellor of the Exchequer. He could appreciate the difficulties of the present Chancellor of the Exchequer; they were largely political, and probably he could not face the whole situation as he would like to, though he was sure he understood the position and that he could not be satisfied, and if he were there another year — let them trust the best would happen for the country, whatever it was—he hoped he would have the courage to thoroughly search out the financial situation and tell the House of Commons what it was. This was what they wanted of a Chancellor of the Exchequer. They did not want him to tell the House of Commons, as the Member for West Bristol told them, that they were in a bad way but he was going to allow them to become worse, and then they went on to the next year, and he told them: "You are really going from bad to worse." He really had not the courage to amputate the rotten limb and then to say: This is the medicine you must take." He said: "It is unpleasant, and perhaps I must put it off to another year until you get worse, and then you will be so bad that you will take anything." Was it not time to treat the finances of the Empire as they indicated that municipalities should treat theirs. How did they treat them? They said, "You want to borrow. The first thing you have to consider is; is this a reproductive thing, and, if so, how long will it last? Thirty years. Very well, you must have a sinking fund to cover thirty years, and no more." On the other hand, if they had a scheme, say, for building houses, lasting fifty years, what a trouble they had to induce the Government to extend the sinking fund! Why did not they apply this vigorous financial virtue they insisted upon municipalities exercising to their own finance to begin with. Let them practice the precepts they taught municipalities. The right hon. Gentleman in his Budget speech was strong upon the municipalities. He flung a sort of sneer at the municipalities, saying we were talking about the 1093 great National Debt, but we were overlooking the municipal debts. Everybody knew perfectly well what he meant in the light of recent controversies. Whether he intended it or not, he was perfectly certain it was accepted as a kind of sneer at the municipalities.
§ MR. AUSTEN CHAMBERLAINsaid this would be the last thing he should think of.
§ MR. LLOYD-GEORGE, proceeding, said let them first of all emulate the municipalities. They did not ask them to improve upon it. Let them take the municipalities and see what they were doing. One per cent was all they asked them to make the Sinking Fund. They were not doing this. No municipalities would be allowed to walk off with a 1 per. cent sinking fund. It was not really a Sinking Fund as it was. Whilst they were taking this position with regard to municipalities it was about time the same thing should be done with the Empire. He agreed with the hon. Member for Monmouth that they could not possibly curtail the annual expenditure. The only question was what they would spend their money upon. There would be some who wanted to spend it on warlike preparations, others on education, and others, again, on housing the poor. What they wanted to see was not only that the expenditure should be productive, but that their debt did not increase whilst nominally they were making provision for reducing it. It was not playing fairly with the people of this country. There was a great appearance of making provision for reducing the Debt every year; for some time the thing was done, and then they flung off the last remnant of reduction, and they were now going on shamelessly increasing their debt, whilst going through the farce every year of reducing it by means of a nominal Sinking Fund. It was not being candid with the people of the country; and people who really understood finance saw the fact, and they had reduced Consols accordingly by something like 15 per cent. It was no use talking of getting £30,000,000 from the Transvaal; it was hopeless to expect it. The only thing they could do was to go on spending, developing the country, 1094 and keeping it going. It was idle, with a colony which at present had a deficiency, to talk about imposing an additional burden. He did not believe that the Chancellor of the Exchequer really in his heart thought that the thing was feasible for years to come. Why, therefore, should they not wipe out the debt, and then, if it came, it would come as a boon to the ratepayers, and they would know how to make very good use of it. In the meantime, let them wipe it out; it was a real debt and burden, and pay it straightforwardly instead of going on year after year imitating the very worst financial expedients and tricks of their Continental neighbours who were marching towards bankruptcy. After all, the great strength of the country was its great financial reserve; it was so in the great Napoleonic wars. We fought and won not with lead, but with gold. We ought to carefully guard the same reserve, and see that we were in a good financial position so that, if an hour of trial came, Britain might give the same good account of herself as in the past. We were squandering her reserve, and the Chancellor of the Exchequer who declined to face the situation courageously was not one taking a patriotic view of his duty to the country.
§ * MR. PERKS (Lincolnshire, Louth)said the heavy obligations which the municipalities of the country were under to many financial institutions in London and in the provinces was a matter of the utmost gravity, and it should unquestionably be in the minds of any financial advisers of the Government a matter of very serious moment for their consideration. He agreed with his hon. friend that the greatest object of all expenditure, both Imperial and municipal, should be as far as possible to make such expenditure wherever practicable remunerative, and to take great care that money lent out upon depreciating securities, such as electric cables and so forth, should not be, either in the form of terminable annuities or any other form of security, extended over a period far beyond what the trading character of such investments would reasonably justify. He had had a great deal of experience of Continental countries and their finances, and also some of the Republics on the other side 1095 of the Atlantic against whom it was sometimes customary to direct, he supposed in a spirit of British self-congratulation, a little criticism; but he was not sure that some Continental countries would be complimented by his hon. friend's references to them. Certainly, if they compared the fluctuations of the public securities of some of the Continental nations with those of our own, during the last three or four years, the comparison would not be at all creditable to the British Government. In Italy, Hungary, Austria, France, and even Russia—he left out Germany for the moment—he knew he was correct in saying that the depreciation of the securities had not touched anything like the figure which our own had reached. Then another point. It was not usual for several of these Continental countries to charge against capital account certain classes of expenditure as were represented by expenditure in this country on public works. He agreed with the Chancellor of the Exchequer that there was much of that expenditure on public works which was of a permanent nature, and which might fairly be charged to capital account. Take the subject of dredging. They knew perfectly well that many hundreds of thousands of pounds were spent on dredging, which was of a permanent nature. But when reference was made to some of these foreign communities who were supposed to be such children in matters of finance compared with ourselves, he would remind the critics of foreign finance that a great deal of their expenditure on public works was charged to annual revenue account. He had himself had much to do with a great public work of a foreign Republic in which they had spent £10,000,000 in the last few years on one of their great ports, and of that £8,000,000 had been charged to current account and only £2,000,000 to capital account. The securities of that country had been advancing by leaps and bounds, while our national securities had been depreciating.
He did not agree with the rather pessimistic views as to the commercial and financial condition of the country expressed by the hon. Member for King's 1096 Lynn. While there was the utmost possible necessity for cutting down public expenditure to the lowest point consistent with economy and public safety, he did not think there was the slightest need for us, as a commercial and industrial community, to get into a state of panic and to imagine that we were not perfectly capable of meeting any claims that might come against us either on capital or revenue account. When they remembered that our annual national expenditure only represented what was taken to be one year's savings of the people of the country and that we might pay the whole amount of our annual expenditure if we knocked off the drink bill, they could hardly think there was legitimate ground for fear or panic. When he said that, he did not suggest that we ought not to rigidly cut down our un-remunerative outlay on various branches of the public service. Dealing with the Sinking Fund he thought we ought to make very much larger provision for the extinction of the annual debt than we did. The country was in a perfectly good condition to bear such expenditure and a period of peace was the time to deal with such a subject. He was not going into the reasons for the most embarrassing and alarming fall in our national securities, but one of the reasons for that fall most unquestionably was the very small and inadequate application of the money from the Sinking Fund to the purchase and extinction of Consols. That was, in his opinion, one of the reasons why that security had fallen to its present abnormal standard. He thought it sometimes did pay a Government in times of great depression to purchase at a discount, extinguish its debt, and so try to restore Consols to a higher position in the market. He never believed that it was a wise policy to convert Consols and attempt to save by a small annual economy the amount that we did some years ago. The effect had been to drive the investor in this class of security into hazardous ventures. But, be that as it might, seeing that the effect of a largely increased addition to the Sinking Fund would be to materially raise the price of our national securities in the market, bring all other forms of security to a different level 1097 and prevent Consols being looked upon, as they were now, as a somewhat speculative security which trustees should rather avoid, he thought the hon. and learned Member for Dundee who had moved this new clause was perfectly correct in suggesting to the Government that we should apply larger sums than at present in putting ourselves into a stronger financial position in public markets and in the general estimation of the country.
§ MR. COURTENAY WARNER (Staffordshire, Lichfield)said he agreed with the last speaker in thinking that the price of national Consols in the eye of the public would be increased by the passing of this clause now under discussion, and he thought his hon. and learned friend the Member for Dundee had done a very great service to the country by raising this debate. It was quite clear from the course of the discussion that everyone who understood the matter was of opinion that our finances were in an unsatisfactory state—not necessarily that we should not be able to meet our obligations, but because our financial system was so complicated that we could not realise what our obligations really were. One thing had been made quite clear, that our public debt had been increased by £10,000,000 under the Public Works Bills; while the operation of the Sinking Fund would only sweep away something under £2,000,000 of the debt under the Public Works Bill of last year, and for this year about £1,000,000, so that next year there would be a considerable increase in the amount of the debt. That in a time of profound peace was what no Chancellor of the Exchequer or the House ought to tolerate. The whole strength of our Empire, the whole idea of Imperialism, and of our world power, simply and solely rested upon our financial position. If that was gone, our armaments could not compete for a moment with any two Continental Powers. It was the Public Works which were the real factor which complicated our financial system. This question had been investigated by the Public Accounts Committee, which this year had unanimously reported that they had very serious doubts as to the financial methods by which the naval and military works were provided for. The procedure 1098 which had been adopted in regard to these works, the Committee said, should be the exception and not the rule; but of recent years it had become a regular part of naval and military works finance. The Committee went on to say that they deprecated the continuance of this practice, and that they believed it would be more in accordance with sound finance if the bulk of these services were included in the annual Estimates. Could anything be a stronger condemnation of the present system? These were not the opinions of men personally interested in this matter, but of a Committee appointed by this House to investigate this very question. He thought this was a most urgent case, and that the Chancellor of the Exchequer ought to take the reform of this system of accounts seriously in hand.
There was another confusing item in the accounts, referred to by the hon. Member for King's Lynn. That hon. Gentleman said the reducing of the Exchequer balances did not necessarily mean increasing the Debt. That was quite true; but, as he understood, the Exchequer balances had been reduced because Chancellors of the Exchequer had used, in times gone by, the unclaimed dividends on Consols to keep up balances, by reducing the floating debt. Now, that was not the case. The Chancellor of the Exchequer had used them to meet the deficit on his last year's finances. The right hon. Gentleman had reduced the Exchequer balances without paying off debt in the proper sense of the term. He deprecated these various systems of hiding from the public the very serious increase in the public debt. There was another point which he wished to urge. The floating Debt was kept up to £73,000,000, on which the country paid 3 per cent., whereas on Consols they only paid 2½ to 2¾ per cent. That point ought to be very seriously taken into consideration, because it was a very disastrous thing for our national finances It was time that the Chancellor of the Exchequer adopted some means to simplify the national finances. He hoped there would not be a further increase in the Debt next year, and that the whole of the Debt would be made clear to the public, in order that people might not be led to believe that they were paying off 1099 debt when they were not. It was a bad system that the Debt should continue to increase in peace time.
§ MR. WHITLEY (Halifax)said, although he was very much interested in the question of the Sinking Fund, he had not intended to take part in the debate. A reply which the Colonial Secretary had given him that day was, however, of the greatest importance in relation to this matter. When the present figure was fixed for the Sinking Fund, the right hon. Gentleman the Member for West Bristol referred again and again to the war contribution which was expected from the Transvaal, and which was to be added to the Sinking Fund. As a matter of fact, it was stated that £30,000,000 would be received in three years, and that it would be devoted to writing off the Debt, and that consequently it was not necessary that the figure then proposed for the Sinking Fund should be larger. He asked the Colonial Secretary that day whether any provision had been made in the Estimates of the Transvaal for the ensuing twelve months for the payment of the first instalment of the war
§ contribution, due last January, according to the arrangement made by the right hon. Gentleman the Member for West Birmingham, and the right hon. Gentleman's reply was in the negative. He did not know whether the matter was brought to the attention of the Chancellor of the Exchequer, but he thought, before the matter finally passed from the purview of the House, that the right hon. Gentleman ought to state whether he was going to take any steps to recover the first instalment of £10,000,000, or whether he was prepared to allow the whole of the next twelve months to pass without any payment being made. If the Chancellor of the Exchequer allowed the matter to pass without a protest, then this country would probably never see a single shilling of that £30,000,000. If the right hon. Gentleman would give an undertaking in the matter the House might be satisfied to allow the figure to remain as it was.
§ Question put.
§ The House divided:—Ayes, 136; Noes, 223. (Division List No. 271.)
1103| AYES. | ||
| Abraham, Wm. (Cork, N.E.) | Devlin, Joseph (Kilkenny, N.) | Jones, David Brynmor(Swansea |
| Ainsworth, John Stirling | Dilke, Rt. Hon. Sir Charles | Joyce, Michael |
| Ashton, Thomas Gair | Donelan, Captain A. | Kearley, Hudson E. |
| Asquith, Rt. Hn. Herbert Henry | Doogan, P. C. | Kennedy, Vincent P.(Cavan, W |
| Atherley-Jones, L. | Duncan, J. Hastings | Labouchere, Henry |
| Barlow, John Emmott | Dunn, Sir William | Lambert, George |
| Barran, Rowland Hirst | Edwards, Frank | Langley, Batty |
| Beaumont, Wentworth C. B. | Ellice, Capt.E.C.(S.Andr's Bghs. | Lawson, Sir Wilfrid (Cornwall) |
| Bell, Richard | Emmott, Alfred | Leamy, Edmund |
| Benn, John Williams | Evans, SirFrancis H.(Maidstone | Levy, Maurice |
| Blake, Edward | Farquharson, Dr. Robert | Lloyd-George, David |
| Boland, John | Farrell, James Patrick | Lough, Thomas |
| Broadhurst, Henry | Fenwick, Charles | Lundon, W. |
| Brunner, Sir John Tomlinson | Flynn, James Christopher | Lyell, Charles Henry |
| Bryce, Rt. Hon. James | Foster, Sir Walter (Derby Co.) | Macnamara, Dr. Thomas J. |
| Buchanan, Thomas Ryburn | Freeman-Thomas, Captain F. | MacNeill, John Gordon Swift |
| Burns, John | Fuller, J. M. F. | MacVeagh, Jeremiah |
| Burt, Thomas | Grant, Corrie | M'Hugh, Patrick A. |
| Buxton, Sydney Charles | Grey, Rt. Hon. Sir E.(Berwick) | M'Kenna, Reginald |
| Caldwell, James | Hammond, John. | Mappin, Sir Fredick Thorpe |
| Cameron, Robert | Harcourt, LewisV.(Rossendale | Mooney, John J. |
| Campbell-Bannerman, Sir H. | Harcourt,Rt Hn Sir W(Mon'th) | Moulton, John Fletcher |
| Causton, Richard Knight | Hardie,J. Keir(Merthyr Tydvil) | Murphy, John |
| Channing, Francis Allston | Harwood, George | Nannetti, Joseph P. |
| Clancy, John Joseph | Hayden, John Patrick | Newnes, Sir George |
| Condon, Thomas Joseph | Hayter, Rt. Hon Sir Arthur D. | O'Brien, James F. X. (Cork) |
| Craig, Robert Hunter (Lanark) | Hemphill, Rt. Hon. Charles H. | O'Brien, Patrick (Kilkenny) |
| Crombie, John William | Hobhouse, C. E. H. Bristol, E.) | O'Connor, James(Wicklow,W.) |
| Cullinan, J. | Holland, Sir William Henry | O'Dowd, John |
| Davies, Alfred (Carmarthen) | Horniman, Frederick John | O'Shaughnessy, P. J. |
| Davies, M. Vaughan (Cardigan | Hutton, Alfred E. (Morley) | Partington, Oswald |
| Delany, William | Jacoby, James Alfred | Pease, J. A. (Saffron Walden) |
| Devlin,CharlesRamsay(Galway | Joicey, Sir James | Perks, Robert William |
| Pirie, Duncan V. | Sheehan, Daniel Daniel | Walton, John Lawson(Leeds S. |
| Power, Patrick Joseph | Sheehy, David | Walton, Joseph (Barnsley) |
| Priestley, Arthur | Smith, Samuel (Flint) | Warner, Thomas Courtenay T. |
| Rea, Russell | Soames, Arthur Wellesley | Wason, Eugene (Clackmannan) |
| Robertson, Edmund (Dundee) | Stanhope, Hon. Philip James | Weir, James Galloway |
| Robson, William Snowdon | Strachey, Sir Edward | White, Luke (York, E.R.) |
| Rose, Charles Day | Sullivan, Donald | Whiteley, George (York,W.R.) |
| Samuel, Herbert L. (Cleveland) | Taylor, Theodore C. (Radcliffe) | Whitley, J. H. (Halifax) |
| Samuel, S. M. (Whitechapel) | Tennant, Harold John | Whittaker, Thomas Palmer |
| Schwann, Charles E. | Tomkinson, James | |
| Seely, Maj.J.E.B.(Isle of Wight | Trevelyan, Charles Philips | TELLERS FOR THE AYES—Mr. |
| Shackleton, David James | Tully, Jasper | Herbert Gladstone and Mr. |
| Shaw, Charles Edw. (Stafford) | Ure, Alexander | William M'Arthur. |
| Shaw, Thomas (Hawick B.) | Wallace, Robert | |
| NOES. | ||
| Agg-Gardner, James Tynte | Dalrymple, Sir Charles | Kennaway, RtHon.SirJohn H. |
| Agnew, Sir Andrew Noel | Davenport, William Bromley | Kenyon, Hon.Geo.T.(Denbigh) |
| Allhusen, Augustus H. Eden | Davies,Sir Hortaio D.(Chatham | Kerr, John |
| Anson, Sir William Reynell | Denny, Colonel | Kimber, Sir Henry |
| Arkwright, John Stanhope | Dickinson, Robert Edmond | King, Sir Henry Seymour |
| Arnold-Forster, Rt.Hn.HughO | Dickson, Charles Scott | Knowles, Sir Lees |
| Atkinson, Rt. Hon. John | Dickson-Poynder, Sir John P. | Lambton, Hon. Frederick Wm. |
| Aubrey,Fletcher,RtHon.Sir H. | Dimsdale,Rt.Hon.SirJosephC. | Laurie, Lieut.-General |
| Bagot, Capt. Josecline FitzRoy | Dixon-Hartland,SirFredDixon | Law, Andrew, Bonar (Glasgow) |
| Bain, Col. James Robert | Dorington,Rt.Hon. Sir John E. | Lawrence, William (Liverpool) |
| Baird, John George Alexander | Douglas, Rt. Hon. A. Akers. | Lawson, JohnGrant(Yorks.NR |
| Balcarres, Lord | Duke, Henry Edward | Lee,ArthurH.(Hants., Fareham |
| Baldwin, Alfred | Durning-Lawrence, Sir Edwin | Lees, Sir Elliott (Birkenhead) |
| Balfour,Rt. Hn. A. J.(Manch'r) | Faber, Edmund B. (Hants, W.) | Legge, Col. Hon. Heneage |
| Balfour, Rt. Hon. G. W. (Leeds | Ferguson,Rt. Hn. Sir J.(Manc'r | Leveson-Gower,Frederick N.S. |
| Balfour, Kenneth R. (Christch. | Finch, Rt. Hon. Geogre H. | Llewellyn,Evan Henry |
| Banbury, Sir Frederick George | Finlay, Sir Robert Bannatyne | Lockwood, Lieut.-Col. A.R. |
| Bartley, Sir George C. T. | Firbank, Sir Joseph Thomas | Long, Col. Charles W.(Evesham |
| Bathurst,Hon. Allen Benjamin | Fisher, William Hayes | Long, Rt.Hn.Walter(Bristol, S) |
| Beckett, Ernest William | FitzGerald, SirRobert Penrose | Lonsdale, John Brownlee |
| Bhownaggree, Sir M. M. | Fitzroy, Hon. Edward Algernon | Lowe, Francis William |
| Bignold, Sir Arthur | Flannery, Sir Fortescue | Lowther, C. (Cumb., Eskdale) |
| Bigwood, James | Flower, Sir Ernest | Loyd, Archie Kirkman |
| Bingham, Lord | Forster, Henry William | Lucas, Col. Francis (Lowestoft) |
| Blundell, Colonel Henry | Gardner, Ernest | Lucas,Reginald J.(Portsmouth |
| Bond, Edward | Gibbs, Hon. A. G. H. | Macdona, John Cumming |
| Bousfield, William Robert | Gordon, Hn. J.E. Elgin&Nairn) | M'Iver, Sir Lewis (EdinburghW |
| Bowles, Lt.-Col. H.F.(Middlesex | Gorst, Rt. Hon. Sir John Eldon | Massey-Mainwaring, Hn W.F. |
| Brodrick, Rt. Hon. St. John | Goulding, Edward Alfred | Meysey-Thompson, Sir H.M. |
| Brown, Sir Alex. H. (Shropsh.) | Greene, Sir E.W.(B'rySEdm'nds | Mildmay, Francis Bingham |
| Butcher, John George | Greene, W. Raymond (Cambs.) | Mitchell, Edw.(Fermanagh,N.) |
| Campbell, Rt Hn. J.A.(Glasgow | Gretton, John | Montagu, G. (Huntingdon) |
| Campbell, J.H.M.(Dublin Univ. | Greville, Hon. Ronald | Montagu, Hon. J. Scott (Hants. |
| Carson, Rt. Hon. Sir Edw. H. | Halsey, Rt. Hon. Thomas F. | Moore, William |
| Cautley, Henry Strother | Hardy, Laurence (Kent, Ashford | Morpeth, Viscount |
| Cavendish, V.C.W. (Derbyshire | Harris,F. Leverton (Tynem'th) | Morton, Arthur H. Aylmer |
| Cecil, Lord Hugh (Greenwich) | Harris, Dr. Fredk. R. (Dulwich) | Mount, William Arthur |
| Chamberlain, Rt. Hon.J.(Birm. | Hatch, Ernest Frederick Geo. | Mowbray, Sir Robert Gray C. |
| Chamberlain,RtHnJ.A.(Worc. | Hay, Hon. Claude George | Murray, RtHn.A.Graham(Bute |
| Chaplin, Rt. Hon. Henry | Heath, James (Staffords, N.W. | Murray,CharlesJ.(Coventry) |
| Charrington, Spencer | Heaton, John Henniker | Murray, Col. Wyndham (Bath) |
| Clive, Captain Percy, A. | Helder, Augustus | Newdegate, Francis A. N. |
| Coates, Edward Feetham | Henderson,SirA. (Stafford, W.) | Nicholson, William Graham |
| Cochrane, Hon. Thos. H.A.E. | Hermon-Hodge, Sir Robert T. | O'Neill, Hon. Robert Torrens |
| Cohen, Benjamin Louis | Hickman, Sir Alfred | Palmer, Sir Walter (Salisbury) |
| Colston, Chas. Edw. H. Athole | Hope, J.F.(Sheffield, Brightside | Pease, HerbertPike (Darlington |
| Cook, Sir Frederick Lucas | Horner, Frederick William | Pemberton, John S. G. |
| Corbett, A. Cameron (Glasgow) | Hoult, Joseph | Percy, Earl |
| Corbett, T. L. (Down, North) | Howard, John(Kent, Faversham | Pierpoint, Robert |
| Cox, Irwin Edward Bainbridge | Howard, J. (Mid., Tottenham) | Platt-Higgins, Frederick |
| Craig, CharlesCurtis (Antrim, S | Hozier, Hon. James HenryCecil | Pretyman, Ernest George |
| Cripps, Charles Alfred | Hudson, George Bickersteth | Pryce-Jones, Lt.-Col.Edward |
| Cross, Alexander (Glasgow) | Hunt, Rowland | Purvis, Robert |
| Cross, Herb. Shepherd (Bolton) | Jameson, Major J. Eustace | Pym, C. Guy |
| Crossley, Rt. Hon. Sir Savile | Jeffreys, Rt. Hon. Arthur Fred. | Rankin, Sir James |
| Dalkeith, Earl of | Jessel, Captain Herbert Merton | Rasch, Sir Frederick Carne |
| Reid, James (Greenock) | Sloan, Thomas Henry | Warde, Colonel C. E. |
| Remnant, James Farquharson | Smith, Abel H. (Hertford, East) | Webb, Colonel William George |
| Renshaw, Sir Charles Bine | Smith, Rt Hn J. Parker(Lanarks) | Welby,Lt.-Col. A.C.E.(Taunton |
| Ridley, Hon. M.W.(Stalybridge | Smith, Hon. F. W. D. (Strand) | Wharton, Rt. Hon. John Lloyd |
| Roberts, Samuel (Sheffield) | Stanley, EdwardsJas.(Somerset) | Whiteley, H.(Ashton und.Lyne |
| Robertson, Herbert (Hackney) | Stanley, Rt Hon. Lord (Lancs.) | Williams, Colonel R. (Dorset) |
| Ropner, Colonel Sir Robert | Stirling-Maxwell, Sir John M. | Wills, Sir Frederick |
| Round, Rt. Hon. James | Stone, Sir Benjamin | Wilson, A. Stanley (York, E. R.) |
| Royds, Clement Molyneux | Talbot, Lord E. (Chichester) | Wilson, John (Glasgow) |
| Rutherford, John (Lancashire) | Taylor, Austin (East Toxteth) | Worsley-Taylor, Henry Wilson |
| Sackville, Col. S. G. Stopford | Thompson, Dr. E. C.(Monaghan) | Wortley, Rt Hon. C. B.Stuart |
| Sadler, Col. Samuel Alexander | Thornton, Percy M. | Wrightson, Sir Thomas |
| Samuel, Sir HarryS. (Limehouse | Tomlinson, Sir Wm. Edw. M. | Wyndham, Rt.Hon.George |
| Sandys, Lieut.-Col. Thos.Myles | Tritton, Charles Ernest | Wyndham-Quin, Col. W.H. |
| Saunderson, RtHn.Col. Edw.J. | Tuff, Charles | Yerburgh, Robert Armstrong |
| Seely,Charles Hilton (Lincoln) | Tufnell, Lieut.-Col. Edward | |
| Seton-Karr, Sir Henry | Valentia, Viscount | TELLERS FOR THE NOES—Sir |
| Sharpe, William Edward T. | Vincent,ColSir.CEH(Sheffield | Alexander Acland-Hood and |
| Shaw-Stewart,SirH. (Renfrew) | Vincent, Sir Edgar (Exeter) | Mr. Ailwyn Fellowes. |
| Simeon, Sir Barrington | Wanklyn, James Leslie |
Question put, and agreed to.
§ SIR SEYMOUR KING (Hull, Central)said the new clause he submitted for the acceptance of the House provided for relief from income-tax on insurances with colonial companies. He desired to point out that the relief granted in respect of life insurances or contracts for deferred annuities did not apply to insurances effected in Indian and colonial offices simply because at the time this relief was first granted no such offices were in existence. The object of granting this relief was to encourage thrift, and not to benefit insurance offices, and the change he recommended was needed to redress a glaring anomaly. At present a Civil servant going out to India and insuring his life in an Indian office received an abatement for income-tax in respect of the premium he paid, but when he returned home he found that privilege withdrawn. In India, and also in Australia and New Zealand, on the other hand, no difference was made between British and colonial insurance offices. Considerable dissatisfaction had arisen in consequence of differentiation by the English Exchequer, and he felt sure he had only to put it before the House of Commons to secure general support for his proposal. He begged to move.
A clause [Relief from Income-Tax on Insurances with Colonial Companies]—
Section fifty-four of the Income-Tax Act, 1853 (under which relief is granted in respect of premiums on life insurances or contracts for deferred annuities), shall apply in relation to life insurances or contracts for deferred annuities effected in or with any insurance company legally established in any British possession as it applies in relation to life 1104 insurances or contracts in or with the insurance companies mentioned in that section."—(Sir Seymour King.)Brought up, and read the first time.
§ Motion made, and Question proposed, "That the clause be read a second time."
§ MR. AUSTEN CHAMBERLAINsaid his attention had been called to this matter some time ago. He thought the Amendment would remedy a real grievance, and holding that view he would be glad to accept it. A case had been brought under his notice of an Indian Civil servant who had insured his life in India, and on returning home at the end of his service found himself in a different position to that in which he would have been had he insured his life in one of our home insurance offices. The clause was not in the interest of the companies but of the individual, and he would recommend it to the House.
§ MR. SYDNEY BUXTONintimated that he had looked into the matter carefully, and as he agreed that this clause would remedy a real grievance, he would support it.
§ MR. LOUGH (Islington, W.)said the words of the clause were extremely wide. They knew how rapidly the Empire was developing, and it was necessary to guard against the more or less suspicious enterprises that came into existence with that development. The clause, to his mind, called for further consideration.
§ Clause added to the Bill
1105§ MR. CHARLES HOBHOUSE (Bristol, E.)said the new clause he had to submit was discussed on the Finance Bill of two years before, but on that occasion the principle accepted by the then Chancellor of the Exchequer differed considerably from the present proposal. When the former proposal came before the House it was treated entirely from a non-partisan and a quasi-scientific point of view. He hoped to be able to claim the support of those hon. Members who had favoured the former proposal, and in view of the general consensus of opinion in its favour, he hoped the Chancellor of the Exchequer would not lightly put aside the proposal embodied in this new clause. In the first place it was quite clear that the exemption of alcohol when used for motive power or for lighting, heating, or manufacturing purposes, opened a field for British industries that were at present quite undeveloped. There were at the present moment great possibilities, but the development of new industries, and the discoveries of science, were such as to open up a far wider field in the future. It had often been said that British manufacturers were behindhand in their methods, but this was a case in which they found enterprise hampered by the financial department of the Government. The Treasury had expressed two opinions on this question. The Chancellor of the Exchequer had a few days before admitted that he was prepared to appoint a Committee to consider this matter, whereas some four days earlier it was intimated that it was I not the intention of the Exchequer to give any special facilities for the use of alcohol for industrial purposes. There were many industries dependent on the free use of absolute alcohol, in all of which English manufacturers were handicapped by the German manufacturers having the free use of denatured alcohol. He believed it would be possible in Ireland, if it were not for the Treasury restrictions on the manufacture of this denatured alcohol, to manufacture from damaged grain and diseased potatoes a spirit costing not more than from sixpence to eight-pence per gallon. As petrol cost 1s. 4d. per gallon, and the powers of petrol and free alcohol might be represented by 100 and 110 units respectively, it would be seen that an enormous impetus might be given to an industry in Ireland, with- 1106 out there being any loss of power by the substitution of alcohol for petrol. Moreover, as the supply of petrol was in the hands of about three companies, the output might very easily be limited and the price raised, unless there were some commodity such as alcohol which might be substituted. It was a curious fact that no loss to the Exchequer would be involved in the acceptance of this proposal, because the present taxes were so prohibitive that they had prevented the establishment of any of these possible industries, and thus no revenue accrued to the Exchequer therefrom. By agreeing to the new clause the Chancellor of the Exchequer would acquire great Kudos to himself without the least expense to the Treasury, and also help in the development of very valuable industries. He begged to move.
A clause [Exemption from duty of alcohol used for motive power]—
On and after the first day of August, nineteen hundred and four, where it shall be proved to the satisfaction of the Commissioners of Inland Revenue that alcohol which has been suitably denatured and rendered unpotable is required for motive power, lighting, heating, and manufacturing purposes, it shall be lawful to sell such spirit without payment of any duty or tax thereon, and further, subject to such regulations as the Commissioners may require for the security of the revenue, absolute alcohol shall also be exempt from duty when employed in manufacturing operations where it can be proved to the Commissioners that denaturing agents would prevent its use."—(Mr. Charles Hobhouse.)Brought up, and read a first time.
§ Motion made, and Question proposed, "That this clause be read a second time."
§ MR. AUSTEN CHAMBERLAINsaid the proposal of the hon. Gentleman, which was practically identical with one moved in Committee, raised a question of much importance. Two years ago the right hon. Gentleman the Member for Haddingtonshire was the author of an Amendment to the Finance Bill, by which it was sought to render possible the use of duty-free spirit in certain cases where it had not hitherto been possible because it could not be denatured, and only denatured spirit was allowed to pass duty free. The question was one of 1107 considerable complexity and difficulty, in which he could not move without making sure of his ground. The possible uses of alcohol for motive power and other purposes had enormously increased during the last few years, and would probably be considerably developed in the future, and he was certainly anxious that the Treasury regulations should be so reconsidered in the light of these facts as to remove, if possible, obstacles from the path of manufacturers or enterprise in this country. But it was necessary at the same time to have regard to the protection of the revenue. Under these circumstances, as he stated in Committee, he thought the fairest and wisest course was to appoint a small Committee to go into the question. Although it would be a Departmental Committee, he did not suggest that it should be composed exclusively of officials serving under Government; he would hope to get other advice and assistance on the Committee, and he thought that from such a body they might get a Report indicating what was necessary and desirable if industries were to be promoted and necessary obstacles removed, and at the same time what reconstructions were essential in the interests of the revenue. By that means, with very little delay, a solution satisfactory to all parties might be arrived at. The proposal when made in Committee was accepted by those interested, and he hoped the hon. Gentleman would not think him unreasonable it he refrained from going further on the present occasion. He thought he ought to have the support of the information which such a Committee would afford before he proceeded to deal with a matter of such complexity and importance. He would, as soon as possible, proceed to the appointment of the Committee, and he would take action on their Report. He hoped the hon. Gentleman would be satisfied with this assurance, and would not think it necessary to press the clause to a division.
§ * MR. HALDANE (Haddingtonshire)sympathised with the Chancellor of the Exchequer in his reference to the complexity and difficulty which attended this question. For some years he (Mr. Haldane) had given considerable attention to the subject, and the more he had tudied it the more difficult it seemed 1108 to become. But there were two or-three particular features which had emerged clearly in his mind. This was a question not merely of industries which at present existed, and which might ultimately become important, but also of industries upon which we had scarcely entered. Anybody who studied the exhibits of Germany in the Paris Exhibition of 1900 must have realised to what an enormous extent the industries of that country had grown, not merely by research but by the free use of reagents. Germany's chemical industries had grown with a rapidity which was really alarming. A great deal of that was to be put down to the want of freedom enjoyed by the people of this country. We had splendid scientific ability; he believed that the larger proportion of the very first minds were to be reckoned to this country—he was speaking of quality rather than quantity—but, owing to the restriction which was put upon the application of science to industry, we had not given room for the development which otherwise might have taken place in this country. Alcohol afforded a peculiarly significant illustration. Two years ago the Committee was successful in securing the insertion of a clause in the Finance Bill with regard to the free use of alcohol for certain purposes; but on Report the then Chancellor of the Exchequer introduced an Amendment which rendered the clause almost useless to manufacturers. It was stated on the part of the revenue authorities that the production of alcohol could not be allowed for use in manufactures duty free without some supervision, and that to balance the cost of that supervision a surtax should be put upon the foreigner in order that the English manufacturer should not be put at a disadvantage. The result was that the Inland Revenue authorities fixed the surtax at fivepence, and as the price of pure alcohol from Germany was about tenpence halfpenny per gallon, the duty represented 50 per cent. of the cost. During a visit to a distillery he had been told that the fivepence hardly represented the cost of the supervision, but that there was a little bit of protection in it.
§ MR. AUSTEN CHAMBERLAINIntroduced by the right hon. Gentleman the Member for West Bristol?
§ * MR. HALDANEbelieved the Inland Revenue authorities did it in perfect innocence, but there were so many innocent things done nowadays that one could never be quite sure of one's position. But he believed that the right hon. Gentleman the Member for West Bristol and the present Chancellor of the Exchequer were entitled to say that they were perfectly innocent in this matter. The surtax was fixed by experts, but who were the experts? The surtax of fivepence was more than the cost of the supervision, and this addition of 50 per cent. to the cost meant that the German competitor was able to get his alcohol 50 per cent. cheaper than the British manufacturer, That was a very serious business. He was informed by the manager of one of the great celluloid industries in this country that they were seriously hampered in their competition with foreigners, and that this fivepenny surtax made all the difference in their enterprise. He did not know whether the House realised the enormous growth which had taken place in recent years in the celluloid industry, and how much it formed the foundation of a vast amount of goods in which the foreigner competed with English manufacturers. He was very anxious on this account that the Chancellor of the Exchequer should frame his reference on as wide a basis as possible. Of course he would have to inquire into the amount of the surtax and that would be the most difficult part. If arrangements could be made for relieving the distillers of the heavy charge placed upon them for supervision it was extremely desirable, because unless that could be done they would not be doing any real good to the manufacturer. The task of the right hon. Gentleman was not an easy one. He realised the complications in it for he had seen the evil results in practice, but he felt that in this matter the Chancellor of the Exchequer would have to take the opinions of people who were really experts from more sides than one. Therefore, it was necessary that they should bring in the element of the manufacturers very largely. Manufacturers came too little into contact with the Inland Revenue authorities, and in our Government Departments there was none of that constant contact which existed in some parts of the Continent. The Chancellor 1110 of the Exchequer had now an opportunity of making a new departure, and its success would depend largely upon the terms of reference.
§ MR. AUSTEN CHAMBERLAINsaid he had not yet drawn the terms of the reference, but he meant them to be as wide as possible because he thought it was important that they should have a thorough inquiry into the whole question. He should be glad to receive suggestions from anyone who had had such a large experience in these matters as the right hon. and learned Gentleman opposite.
§ * COLONEL SADLER (Middlesbrough)said he regretted he was not present to move his Motion, but having regard to the fact that the day for which it was set down the House sat for thirty-five hours, he did not suppose anybody regretted his absence. He was quite content to accept the Chancellor's promise to appoint a Committee, and he should like that Committee to be composed not only of men of his own Department, but of men like Mr. Tyler, the ex-President of the Society of Chemical Industry. That gentleman had given an enormous amount of time to the subject, and had delivered several classical papers full of statistics and information upon it. He was quite sure that Mr. Tyler would be of enormous advantage and use to the Chancellor in drawing up his terms of reference to the Committee. There were some points in connection with the question which he desired to allude to because he considered them to be of very great importance. First of all he thought it was a great reproach to British enterprise that we should allow industries of very great national importance to he captured from us without apparently a struggle to keep them. When he told the House that there were over 100 products of various kinds in which alcohol played a prominent part it would be seen what an important thing it was to this country that some change should be made in the present system of the utilisation of alcohol. Dimethylaniline, the base of many colours in this country, cost 2s. 4d. per lb., but in Germany it cost only 3¾d., as industrial alcohol is not taxed there. It was an important product in this country some years ago, but it was not 1111 manufactured at all here at the present moment. He did not see how these industries, with duties ranging from 5d. to 11s. 6d. per gallon, could be recaptured for us. Enormous industries had developed abroad owing to the cheapness of alcohol. In Germany last year there were produced over 100,000,000 gallons of alcohol, and 55,000,000 tons of potatoes were used in its manufacture and kindred products. In France from 2,000,000 to 3,000,000 tons of beet were grown and used for the manufacture of alcohol. In Germany almost every farmer had his distillery. There were in the East of Germany alone some 6,000 such distilleries, and when one remembered the vast tracts of land which were used for agricultural products required in the manufacture of alcohol it would be seen how important the matter was. There were scores of thousands of people in Germany and France engaged in industries connected with the manufacture of alcohol. Those industries had grown very rapidly and were still growing, and that was why he was anxious to make the few points he was now making. It was recognised that next to benzol alcohol was one of the most prolific source of products known in the chemical world.
Allusion had been made to the diverse uses to which alcohol could be put. It was not only good for motive power and lighting and heating but also for the manufactures to which he had referred. The attention of learned societies and Chambers of Commerce had been called to the subject and there was a great deal of talk in the country about the production of alcohol and its relation to various trades. He saw the President of the United Chambers of Commerce in his place and he hoped that that hon. Member would tell them what he thought about this question. There was a great opportunity dawning upon the country for the production of alcohol and the advancement of various trades dependent upon it, and the most urgent and promising was connected with motive power. As a substitute for petrol, alcohol had a very great opening. Petrol of late years had deteriorated very seriously in quality, and it was becoming scarcer and dearer owing to the extraordinary demand springing up for it, while alcohol, on the other hand, was a much cheaper 1112 article and could be manufactured at as low as sixpence per gallon. It had a very obvious advantage over petrol because it was sweeter and safer to use. As to its efficiency there was a good deal of dispute but it had a potential efficiency of at least 50 per cent. in excess of petrol. There were other uses such as lighting to which it could be applied. He saw a great future development in regard to alcohol lamps, and it was the most charming and effective light he had ever seen. A thirty candlepower lamp cost one halfpenny per hour. It was an extremely diffusive light. There had been as many as 50,000 of these lamps sold by one Berlin firm between October, and January last. Alcohol promised to be unrivalled for cooking purposes. The manufacturers he had alluded to were seriously crippled in their industries for the want of cheap alcohol. The difficulties about obtaining cheap alcohol were now so great that it actually paid the manufacturers better to pay the duty than to trouble about it in any other way. As the trade does not now exist there would be no loss to the revenue, nor risk in other respects. This aspect of the question had been greatly exaggerated. An ounce of experience was worth a ton of theory. In 1903 n Germany only 84 persons were fined for fraudulent use and only £2,500 was paid in fines, although something like 100,000,000 gallons of alcohol were manufactured. In Switzerland, where there were no duties on alcohole there was less drunkenness than in any other country in the world. A very large number of improvements had recently been made in the denaturing of alcohol. It was on these grounds that he contended that there was pressing urgency for its manufacture and use in this country, for many new industries would arise from it. He hoped the Chancellor of the Exchequer would be able to devise some scheme which would enable the manufacturers of this country to have duty-free alcohol. The possibilities of this industry were so great that they could not be overrated. In the first place there would he an enormous area of land which was now uncultivated which would be brought under cultivation in order to produce these various agricultural products which were usual in the manufacture of alcohol. 1113 Perhaps he had said enough to convince the right hon. Gentleman that the subject was one of very great importance, and he trusted that a Committee would be appointed to inquire into the matter without delay.
§ * MR. LYELL (Dorsetshire, E.)expressed the hope that the reference to the Committee would include the question of the amount that might be sold at any given time. It seemed to him that at the present moment there was a very great chance put into the hands of the Chancellor of the Exchequer not only for founding new industries in the production of alcohol and in all the various processes connected with its use, and also in recovering many of those industries which might be carried on in this country bat which had gone abroad. When he heard the list of trades which his right hon. friend the Member for Haddingtonshire had referred to as having been lost to this country, he began to wonder whether free alcohol was not to be the solution for all our industrial depression. He wished to call the attention of the Chancellor of the Exchequer to another point which had already been raised, namely the enormously important question of the possibilities of this new industry in Ireland. They had been assured that alcohol for motive purposes could be produced in that country for an absurdly small sum per gallon compared with the price paid for petrol. This could be done in normal times, but when they considered what might be done in time of famine and failure of the crops which were fit for nothing else the advantage would be very great. This new motor agent could be stored for an indefinite time. He called for the sympathy of all tariff reformers in this matter. Like them he was anxious to see new industries founded, and those already decayed galvanised into life. Like them he viewed in this matter the methods of every other country but our own with admiration. He had seen how in Germany the freest possible hand was given to manufacturers for the production of alcohol and the products of alcohol. He ventured to hope that the Chancellor of the Exchequer would give to the finding of the Committee, if favourable, the very fullest effect.
§ * SIR WILLIAM HOLLAND (Yorkshire, W.R., Rotherham)observed that he would not have intervened in the debate were it not that he had had exceptional opportunities during the last few years of hearing what the opinions of the chambers of commerce of the country were on this important matter, and he could assure the Chancellor of the Exchequer that repeatedly at their meetings, indeed on every suitable occasion, there had been resolutions brought forward dealing with this question, which, after being argued very fully, had received the unanimous assent of the chambers of commerce to which they had been submitted. The reason was, that manufacturers had expressed their views and made it very clear that valuable industries had been repeatedly lost to this country. He had himself come across an instance where a considerable sum of money was expended in the erection of suitable buildings with special machinery, and with several hundred workmen employed there, and, because of the necessity of alcohol to that business and the inability to obtain it at a cheap rate, the buildings had had to be taken down and the machinery transferred. The consequence was that that particular industry, which might by this time have employed several thousand workpeople, had been transferred to the French labour market. Was it not very tantalising to British traders to see a great variety of goods imported into this country which could be very well manufactured here but for the unaccountable hostility of the Government? They had found, particularly during the last twelve months, that public opinion was becoming very sensitive in regard to the taxation of raw materials. Now alcohol was a raw material to the interests concerned, and it had been taxed to the point of prohibition. The Chancellor of the Exchequer need not be in the least alarmed on the score of probable loss of revenue, because if the industries were not at present in existence in this country, as they had already been taxed out of existence, then it was clear there would be no loss of revenue. If the clause were accepted by the Chancellor of the Exchequer, his action would be likely to 1115 galvanise into new life many old industries, besides stimulating the establishment in this country of many new ones. He was glad to observe the sympathetic attitude of the Chancellor of the Exchequer, he hoped that both in the composition of the new Committee and in the reference to that Committee, those who had the greatest practical knowledge would at any rate be entitled to have a say and a seat on the Committee.
§ MR. HARWOOD (Bolton)asked if it was not possible for the Chancellor of the Exchequer to do something more than he had offered that day. When did he expect to do something with the Committee? He took it it would be twelve months before it got together and reported. Twelve months was a long time in the history of an industry, and he happened to know that this industry was going ahead very fast both in France and Germany. Was it not possible for the Chancellor to adopt a little bolder policy. They were told on all hands that the present tax was too high—could not some concession be made meanwhile, and then the Committee which had been promised might consider how it might prevent any abuses of that concession? He quite recognised the spirit in which the Chancellor of the Exchequer met that Motion, but he did not think he realised the gravity of the matter and the urgency of something being done. To put them off with a Committee which would take a year to report on a commercial difficulty which was getting worse day after day, was not dealing with them fairly.
§ MR. LOUGHsaid he would advise those who were deeply interested in this question to ask, before parting with the clause and this opportunity, whether something should not be done now. It was about eight years since he brought this matter before the right hon. Gentleman the Member for West Bristol, his attention having been called to it by a large manufacturer in Yorkshire, who pointed out to him some of the facts which had been stated to the House that day. He got a most sympathetic answer at that time, but nothing practical was done during all the time the right hon. Gentleman was in office. Two years ago the ranks of the 1116 reformers were recruited by the right hon. Gentleman the Member for Haddington-shire, who made a most interesting speech on that occasion, when, in fact, the Amendment was at first accepted on the Committee stage. It was afterwards modified and finally, owing to the caution of the Customs authorities, the whole thing had been nullified. Was this a business Assembly or was it not? Were the Gentlemen who spoke in this simple business matter with knowledge and moderation year after year to have their aims constantly frustrated because nothing definite was done? There could not be a more cautious proposal than was put forward in this clause. There were two absolute safeguards in the clause. First, nothing was to be done unless it should be proved to the satisfaction of the Commissioners of Inland Revenue that the alcohol had been suitably denatured and rendered unpotable; secondly, it was to be subject to the regulations of the Commissioners; and thirdly, it must be proved to have been properly denatured before it was allowed in duty free. Why should not the clause be accepted, seeing that it bristled with precautions? The Chancellor of the Exchequer had the old difficulty to face. The Com missioners of Customs and Inland Revenue, excellent as they were, raised bogeys which had no real existence. He suggested that the clause should be amended by the insertion of the date, the 1st January, 1905, in place of the 1st August, so as to give the Commissioners time to make their regulations; and on the first day of 1905 give that great facility to the trade of the country which had been so long required. There might be 2d. lost in revenue by this concession, but the profit to the commerce of the country might be millions. Let them take the Irish case. Potatoes were just as cheap in Ireland as in any other country, and if Ireland could be connected with civilisation by means of transit, which was absolutely hopeless under the present condition of things, and a price could be made for them, it would open a market for them to the benefit of the people in that country. He submitted that the right hon. Gentleman the Chancellor of the Exchequer ought to give some definite promise to deal with this matter. The clause seemed to be a 1117 very strict clause, but if the restrictions it contained were not sufficient, let the clause be strengthened. Something should be done in this matter to free the trade of the country from the shackles which were quite unnecessarily placed upon it.
§ MR. SYDNEY BUXTONsaid the point he desired to put to the right hon. Gentleman was this. Was it necessary for the right hon. Gentleman, in order to carry out a good deal of what was required, to wait for legislation next year. He had himself looked at Clause 8 of the Finance Act of two years ago, and he thought if the right hon. Gentleman appointed his Departmental Committee, or even without that, if he saw his way to accepting the spirit of the Amendment under Clause 8 of the Act, he might, on his own initiative, be able to do a great deal to carry out the desire of the House. It was not possible to say how far those powers would extend the clause of his hon. friend as moved, but under Clause 8 there was no doubt a good deal could be done. He asked the Chancellor of the Exchequer whether he would, on receiving the Report of the Committee, on his own initiative accept, so far as he could, their proposals in the direction the House desired, and carry them out without waiting for legislation next year. A delay of a year would be a very serious matter because particular industries were making great strides in the country, and although there was no desire that those industries should be protected, on the other hand there was every desire to see that they were not hampered.
§ MR. AUSTEN CHAMBERLAINsaid that if he found that by a more liberal interpretation of Clause 8 he could go some way towards meeting the very evident desire of both sides of the House on what was a real need of the trade of the country, of course, he should be most happy to do so. Ever since his attention had been first called to this matter he had been trying to ascertain what it was exactly they wished done, and he gathered that Clause 8 was by no means sufficient for the purpose. It was for that reason he had proposed the Committee in order that they might arrive at 1118 a solution which might come to this House with some weight and authority behind it, and he hoped the House would be ready to accept it in the same spirit in which the matter had been discussed that day. The hon. Member for Islington wished him to accept this clause, but in matters such as this he could not move without some certainty as to what would be the result of his action. He did not propose that the object of this Committee should be delay, but to insure that what was done should, be both a safeguard to the revenue and satisfactory to the trade of the country. He hoped the House would accept the proposal for a Committee, and he appealed to thesis not to indulge in a prolonged discussion, seeing that they had attained their object.
§ MR. LLOYD-GEORGEsaid he did not object to a Committee being appointed in a case of this kind; but Committees were as a rule, a means simply to expedite either the putting off of Bills or the passing of Bills for the Government. He did not say the former was the intention of the right hon. Gentleman in regard to this matter. They had many Committees sitting on all sorts of subjects at the present moment, not one of which, so far as he could see, was likely to bring forth fruits in legislation either in the present session or for many sessions to come. The right hon. Gentleman had talked about the perplexity of this matter, and said he could not accept the clause on the spur of the moment. He talked as if this was a thing which had been sprung upon the attention of the Treasury during the last few hours, whereas an Amendment had been down in the name of an hon. and gallant Member on the other-side of the House for weeks. The Chancellor of the Exchequer must have considered the character of that Amendment, and must have made up his mind whether he was prepared to meet the suggestion. He must have made up his mind whether to accept it or reject it or whether he had a Committee proposal to advance. Apparently he was simply going to refer the matter to a Committee. Supposing that Committee reported in the course of the next few days no legislation could be obtained this session; possibly nothing could be 1119 done until August of next year when they might have had a totally different Budget and the Government might have broken up on that Budget. Or they might then have another Chancellor of the Exchequer.
On this subject there was no greater authority than the hon. and learned Gentleman the Member for Haddingtonshire, who had made it perfectly clear that the manufacturers of this country were suffering. They all knew how this country was suffering in the matter of electric plant, and once they lost place in a new industry of this kind it would be exceedingly difficult for them to creep up again. Of course the free trade of this country did afford some help in meeting deficiencies of this kind. Here was a chance for the Government to assist a trade without interfering with the fiscal arrangements of the country at all. It might mean a few hundreds a year, but it might make all the difference in the world to a trade which at the present moment was subject to the severest trade competition. All they asked was that special and artificial difficulties should not be placed in the way of an industry of this kind. If this industry got a fair chance there was no place in the world where it would prosper more than in this country. Instead of having a Committee as suggested, let the Chancellor of the Exchequer take this suggestion. The debate would stand adjourned in the next quarter of an hour over the dinner interval. The hon. Member could withdraw his clause if the Chancellor of the Exchequer would say that during the dinner interval he would consider a new clause. It was not a case of two or three hours to deal with a great fiscal question. If the right hon. Gentleman was not willing to take that suggestion he hoped his hon. friend would press the matter to a division.
§ * MR. THEODORE TAYLOR (Lancashire, Radcliffe)gave an instance in connection with the colour dye industry. A gentleman who he believed was on the Tariff Reform Commission came to him to ask him to use his influence to free this trade alcohol. This gentleman, who was entering into a contract with his (Mr. Taylor's)firm, was in competition with 1120 a German firm, and his chief difficulty was the cost of trade alcohol. The hon. Member said he suggested that this gentleman should hammer away at the Government, but the reply he received was that it was verydifficult to pierce the official shell. This gentleman had assured him that, the price at which he ultimately took the contract represented a loss to him although it was no better price than his (Mr. Taylor's) firm could have got elsewhere, but the contract was given to this gentleman because the firm were determined to give the preference to Englishmen. He had always carried this out in his own business. When he was engaging a chemist he was told that he would have to go to Germany, and he said he would get an Englishman and train him, and he did so. There was a spirit among British manufacturers always to favour their own countrymen; and, as a practical business man, he did beg the Chancellor of the Exchequer in the interests of common sense and in the interests of business—and he was sure it would be appreciated by every section of the business community—to accede to the suggestion of the Member for Bolton and do something in this matter at once. It had really been postponed and postponed until business men affected had got it into their heads that Governments would not do anything at all. If former Governments had not done anything effective, he thought it was not too late for the Chancellor of the Exchequer, who had had more or less, he supposed, a business training—he was at all events the son of a very distinguished business man—to look at the thing from a business point of view. He did beg him to believe that they did not put this forward in any Party spirit, but simply in the interests of the trade of the country, so that these industries should at once have removed from them a burden which he felt sure nobody wished to impose upon them, and which, if they were once rid of, would enable them to compete with foreign countries.
§ MR. PIRIE (Aberdeen, N.)said the Chancellor of the Exchequer would have an hour and a half for reflection, and he really hoped he would take the matter into his consideration. It was monstrous that the trade of the country should be 1121 hampered by the Government being asleep to the vital interests at stake in a matter of this concern. They asked for a most reasonable concession, and the Chancellor of the Exchequer merely dealt with the matter by shelving it for a year. He hoped his hon. friend would be backed up—
MT. CHANCELLOROf the EXCHEQUER rose in his place, and claimed to move, "That the Question be now put."
§ Question put, "That the Question be now put."
§ The House divided: Ayes, 225; Noes,134. (Division List No. 272.)
1123| AYES. | ||
| Agg-Gardner, James Tynte | Davenport, William Bromley | Laurie, Lieut.-General |
| Agnew, Sir Andrew Noel | Davies,Sir HoratioD.(Chatham | Law, Andrew Bonar (Glasgow) |
| Allhusen,Augustus Henry Eden | Denny, Colonel | Lawrence, Wm. F. (Liverpool) |
| Anson, Sir William Reynell | Dickson, Charles Scott | Lawson, JohnGrant (YorksN.R |
| Arkwright, John Stanhope | Dimsdale, Rt. Hn.SirJoseph C. | Lee, ArthurH(Hants.,Fareham |
| Arnold-Forster,Rt.HnHugh O. | Dixon-Hartland,SirFred Dixon | Lees, Sir Elliott (Birkenhead) |
| Atkinson, Rt. Hon. John | Dorington, Rt.Hon.SirJohn E. | Legge, Col. Hon. Heneage |
| Aubrey-Fletcher, Rt. HonSir H. | Douglas, Rt. Hon. A. Akers | Leveson-Gower, Fredk. N. S. |
| Bagot, Capt. Josceline FitzRoy | Duke, Henry Edward | Llewellyn, Evan Henry |
| Bailey, James (Walworth) | Durning-Lawrence, Sir Edwin | Lockwood, Lieut.-Col. A. R. |
| Bain, Colonel James Robert | Dyke, Rt. Hon. SirWilliam Hart | Long, Col. Charles W(Evesham) |
| Baird, John George Alexander | Fergusson,Rt Hn.Sir J.(Manc'r | Long, Rt Hn. Walter(Bristol,S.) |
| Balcarres, Lord | Finch, Rt. Hon. George H. | Lonsdale, John Brownlee |
| Baldwin, Alfred | Finlay, Sir Robert Bannatyne | Lowe, Francis William |
| Balfour, Rt. Hon. A. J.(Manch'r | Fisher, William Hayes | Loyd, Archie Kirkman |
| Balfour, Rt. Hn GeraldW (Leeds | Fison, Frederick William | Lucas, ReginaldJ.(Portsmouth |
| Balfour, Kenneth R. (Christch. | FitzGerald, Sir Robert Penrose | Lyttelton, Rt. Hon. Alfred |
| Banbury, Sir Frederick George | Fitzroy, Hon. Edward Algernon | Macdona, John Cumming |
| Bartley, Sir George C. T. | Flower, Sir Ernest | M'Iver, SirLewis(EdinburghW |
| Bathurst, Hon. Allen Benjamin | Forster, Henry William | Massey-Mainwaring, Hn. W. F. |
| Beckett, Ernest William | Foster, PhilipS(Warwick,S.W. | Melville, Beresford Valentine |
| Bhownaggree, Sir M. M. | Galloway, William Johnson | Meysey-Thompson, Sir H. M |
| Bignold, Sir Arthur | Gardner, Ernest | Mildmay, Francis Bingham |
| Bigwood, James | Gibbs, Hon. A. G. H. | Molesworth, Sir Lewis |
| Bingham, Lord | Gordon, Hn. J.E(Elgin&Nairn) | Montagu, G. (Huntingdon) |
| Blundell, Colonel Henry | Gorst, Rt. Hon. Sir JohnEldon | Montagu, Hn. J.Scott(Hants.) |
| Bond, Edward | Goulding, Edward Alfred | Moore, William |
| Bousfield, William Robert | Greene, Sir E W(B'rySEdm'nds | Morpeth, Viscount |
| Bowles, Lt-Col. H.F.(Middlesex | Greene, W. Raymond (Cambs.) | Morrell, George Herbert |
| Bowles,T. Gibson (King'sLynn | Greville, Hon. Ronald | Morton, Arthur H. Aylmer |
| Brodrick, Rt. Hon. St. John | Hain, Edward | Mount, William Arthur |
| Bull, William James | Halsey, Rt. Hon. Thomas F. | Muntz, Sir Philip A. |
| Butcher, John George | Hardy, Laurence(Kent, Ashford | Murray, RtHnA. Graham(Bute |
| Campbell, Rt. Hn. J.A.(Glasgow | Harris, Dr. Fredk. R. (Dulwich) | Murray, Charles J.(Coventry) |
| Campbell, J.H.M (Dublin Univ. | Hatch, Ernest Frederick Geo. | Murray, Col. Wyndham (Bath) |
| Carson, Rt. Hon. Sir Edw. H. | Hay, Hon. Claude George | Nicholson, William Graham |
| Cautley, Henry Strother | Heath, James (Staffords. N.W. | O'Neill, Hon. Robert Torrens |
| Cavendish, V.C.W.(Derby-shire | Heaton, John Henniker | Palmer, Sir Walter (Salisbury) |
| Cecil, Lord Hugh (Greenwich) | Helder, Augustus | Parker, Sir Gilbert |
| Chamberlain, Rt. Hon. J.(Birm. | Henderson, Sir A.(Stafford,W.) | Parkes, Ebenezer |
| Chamberlain, Rt Hn. J.A.(Wore | Hermon-Hodge, Sir Robert T. | Pease, Herb. Pike (Darlington) |
| Charrington, Spencer | Hickman, Sir Alfred | Pemberton, John S. G. |
| Clare, Octavius Leigh | Hope, J.F (Sheffield,Brightside | Percy, Earl |
| Clive, Captain Percy A. | Horner, Frederick William | Platt-Higgins, Frederick |
| Coates, Edward Feetham | Hoult, Joseph | Pretyman, Ernest George |
| Cochrane, Hon. Thos. H. A. E. | Howard, J. (Kent, Faversham | Pryce-Jones, Lt.-Col. Edward |
| Cohen, Benjamin Louis | Howard, J.(Midd., Tottenham) | Purvis, Robert |
| Colston, Chas. Edw. H. Athole | Hozier, Hon. James Henry Cecil | Pym, C. Guy |
| Compton, Lord Alwyne | Hudson, George Bickersteth | Rankin, Sir James |
| Cook, Sir Frederick Lucas | Hunt, Rowland | Ratcliff, R. F. |
| Corbett, A. Cameron (Glasgow) | Jameson, Major J. Eustace | Reid, James (Greenock) |
| Corbett, T. L. (Down, North) | Jeffreys, Rt. Hn. Arthur Fred. | Remnant, James Farquharson |
| Craig, Charles Curtis(Antrim,S. | Jessel, Captain Herbert Merton | Renshaw, Sir Charles Bine |
| Cripps, Charles Alfred | Johnstone, Heywood (Sussex) | Renwick, George |
| Cross, Alexander (Glasgow) | Kennaway, Rt. Hn. Sir John H. | Ridley, Hn. M.W.(Stalybrige) |
| Cross, Herb. Shepherd (Bolton) | Kerr, John | Ridley, S. Forde (BethnalGreen |
| Crossley, Rt. Hon. Sir Savile | Keswick, William | Roberts, Samuel (Sheffield) |
| Cust, Henry John C. | Kimber, Sir Henry | Robertson, Herbert (Hackney) |
| Dalkeith, Earl of | King, Sir Henry Seymour | Ropner, Colonel Sir Robert |
| Dalrymple, Sir Charles | Lambton, Hon. Frederick Wm. | Round, Rt. Hon. James |
| Royds, Clement Molyneux | Stirling-Maxwell, Sir John M. | Whiteley, H.(Ashton und.Lyne |
| Rutherford, John (Lancashire) | Stone, Sir Benjamin | Williams, Colonel R. (Dorset) |
| Sackville, Col. S. G. Stopford | Talbot, Lord E. (Chichester) | Willoughby de Eresby, Lord |
| Sadler, Col. Samuel Alexander | Taylor, Austin (East Toxteth) | Wills, Sir Frederick |
| Samuel, Sir Harry S(Limehouse | Thompson, DrEC(Monagh'n,N | Wilson, John (Glasgow) |
| Seely, Charles Hilton (Lincoln) | Thornton, Percy M. | Worsley-Taylor, Henry Wilson |
| Seton-Karr, Sir Henry | Tomlinson, Sir Wm. Edw. M. | Wortley, Rt. Hon. C.B. Stuart |
| Sharpe, William Edward T. | Tritton, Charles Ernest | Wrightson, Sir Thomas |
| Simeon, Sir Barrington | Tuff, Charles | Wyndham, Rt. Hon. George |
| Skewes-Cox, Thomas | Tufnell, Lieut.-Col. Edward | Wyndham-Quin, Col. W. H. |
| Sloan, Thomas Henry | Valentia, Vicsount | Yerburgh, Robert Armstrong |
| Smith, Abel H.(Hertford,East) | Vincent, ColSirC.E.H.(Sheffield) | |
| Smith,Rt Hn J Parker(Lanarks | Walker, Col. William Hall | TELLERS FOR THE AYES—Sir |
| Smith, Samuel (Flint) | Wanklyn, James Leslie | Alexander Acland-Hood and |
| Smith, Hon. W. F. D. (Strand) | Warde, Colonel C. E. | Mr. Ailwyn Fellowes. |
| Stanley, Edw. Jas. (Somerset) | Webb, Colonel William George | |
| Stanley, Rt.Hn. Lord (Lancs.) | Wharton, Rt. Hon. JohnLloyd | |
| NOES. | ||
| Abraham, William (Cork, N.E.) | Goddard, Daniel Ford | O'Brien, P. J. (Tipperary, N.) |
| Ainsworth, John Stirling | Grant, Corrie | O'Connor, James (Wicklow,W |
| Ashton, Thomas Gair | Haldane, Rt. Hon. Richard B. | O'Dowd, John |
| Asquith, Rt. Hn. HerbertHenry | Hammond, John | O'Shaughnessy, P. J. |
| Barlow, John Emmott | Harcourt, Lewis V. (Rossendale | Partington, Oswald |
| Barran, Rowland Hirst | Harwood, George | Pease, J. A. (Saffron Walden) |
| Beaumont, Wentworth C. B. | Hayden, John Patrick | Perks, Robert William |
| Benn, John Williams | Hayter, Rt. Hn. Sir Arthur D. | Power, Patrick Joseph |
| Boland, John | Hemphill, Rt. Hon. Charles H. | Rea, Russell |
| Bolton, Thomas Dolling | Holland, Sir William Henry | Roberts, John Bryn (Eifion) |
| Brunner, Sir John Tomlinson | Horniman, Frederick John | Roberts, John H. (Denbighs.) |
| Bryce, Rt. Hon. James | Hutton, Alfred E. (Morley) | Rose, Charles Day |
| Burke, E. Haviland | Jacoby, James Alfred | Samuel, Herbert L. (Cleveland |
| Burns, John | Joicey, Sir James | Samuel, S. M. (Whitechapel) |
| Burt, Thomas | Jones, David Brynmor(Swansea | Schwann, Charles E. |
| Buxton, Sydney Charles | Joyce, Michael | Shackleton, David James |
| Caldwell, James | Kearley, Hudson E. | Shaw, Charles Edw. (Stafford) |
| Cameron, Robert | Kennedy, Vincent P.(CavanW) | Shaw, Thomas (Hawick B.) |
| Causton, Richard Knight | Kilbride, Denis | Sheehan, Daniel Daniel |
| Channing, Francis Allston | Labouchere, Henry | Sheehy, David |
| Condon, Thomas Joseph | Lambert, George | Slack, John Bamford |
| Craig, Robert Hunter (Lanark) | Langley, Batty | Soames, Arthur Wellesley |
| Crombie, John William | Law, Hugh Alex. (Donegal,W.) | Stanhope, Hon. Philip James |
| Cullinan, J. | Lawson, Sir Wilfrid (Cornwall) | Strachey, Sir Edward |
| Davies, Alfred (Carmarthen) | Leamy, Edmund | Sullivan, Donal |
| Davies, M. Vaughan (Cardigan | Levy, Maurice | Taylor, Theodore C. (Radcliffe) |
| Delany, William | Lewis, John Herbert | Tennant, Harold John |
| Devlin, CharlesRamsay(Galway | Lloyd-George, David | Thomas, David Alfred (Merthyr |
| Devlin, Joseph (Kilkenny, N.) | Lough, Thomas | Tomkinson, James |
| Dilke, Rt. Hon. Sir Charles | Lundon, W. | Trevelyan, Charles Philips |
| Donelan, Captain A. | Lyell, Charles Henry | Tully, Jasper |
| Doogan, P. C. | Macnamara, Dr. Thomas J. | Ure, Alexander |
| Duncan, J. Hastings | MacNeill, John Gordon Swift | Walton, JohnLawson(Leeds,S. |
| Dunn, Sir William | MacVeagh, Jeremiah | Walton, Joseph (Barnsley) |
| Edwards, Frank | M'Arthur, William (Cornwall) | Wason, Eugene (Clackmannan) |
| Elibank, Master of | M'Hugh, Patrick A. | Wason, John Cathcart (Orkney |
| Ellice,Capt E C(SAndrw'sBghs | M'Kean, John | Weir, James Galloway |
| Emmott, Alfred | M'Kenna, Reginald | White, Luke (York, E. R.) |
| Eve, Harry Trelawney | Mansfield, Horace Rendall | Whiteley, George (York, W. R |
| Farrell, James Patrick | Mitchell, Edw.(Fermanagh, N. | Whitley, J. H. (Halifax) |
| Fenwick, Charles | Murphy, John | Whittaker, Thomas Palmer |
| Flavin, Michael Joseph | Nannetti, Joseph P. | Wilson, Henry J. (York, W.R. |
| Flynn, James Christopher | Newnes, Sir George | |
| Foster, Sir Walter (Derby Co.) | Nussey, Thomas Willans | TELLERS FOR THE NOES—Mr. |
| Freeman-Thomas, Captain F. | O'Brien, James F. X. (Cork) | Charles Hobhouse and Mr. |
| Gladstone, Rt.Hn.HerbertJohn | O'Brien, Patrick (Kilkenny | Pirie. |
§ Question put accordingly, "That the clause be read a second time."
1124§ The House divided:—Ayes, 128; Noes, 219. (Division List No. 273.)
1127| AYES. | ||
| Abraham, William (Cork, N.E.) | Ashton, Thomas Gair | Barran, Rowland Hirst |
| Ainsworth, John Stirling | Barlow, John Emmott | Beaumont, Wentworth C. B. |
| Benn, John Williams | Hemphill, Rt. Hn. Charles H. | Power, Partick Joseph |
| Boland, John | Holland, Sir William Henry | Rea, Russell |
| Bolton, Thomas Dolling | Horniman, Frederick John | Roberts, John Bryn (Eifion) |
| Brunner, Sir John Tomlinson | Hutton, Alfred E. (Morley) | Roberts, John H. (Denbighs.) |
| Bryce, Rt. Hon. James | Jacoby, James Alfred | Rose, Charles Day |
| Burke, E. Haviland | Joicey, Sir James | Samuel, Herbert L. (Cleveland) |
| Burns, John | Jones,David Brynmor(Swansea | Samuel, S. M. (Whitechapel) |
| Burt, Thomas | Joyce, Michael | Schwann, Charles E. |
| Caldwell, James | Kearley, Hudson E. | Seely,Maj. J.E.B. (IsleofWight |
| Cameron, Robert | Kennedy,Vincent P.(Cavan,W. | Shackleton, David James |
| Channing, Francis Allston | Kilbride, Denis | Shaw, Charles Edw. (Stafford) |
| Condon, Thomas Joseph | Lambert, George | Shaw, Thomas (Hawick B.) |
| Craig, Robert Hunter (Lanark) | Langley, Batty | Sheehan, Daniel Daniel |
| Crombie, John William | Law, Hugh Alex. (Donegal,W.) | Sheehy, David |
| Cullinan, J. | Lawson, Sir Wilfrid (Cornwall) | Slack, John Bamford |
| Davies, Alfred (Carmarthen) | Leamy, Edmund | Smith, Samuel (Flint) |
| Davies, M. Vaughan (Cardigan | Levy, Maurice | Soames, Arthur Wellesley |
| Delany, William | Lewis, John Herbert | Stanhope, Hon. Philip James |
| Devlin, C. Ramsay (Galway) | Lloyd-George, David | Strachey, Sir Edward |
| Devlin, J. Kilkenny, N.) | Lough, Thomas | Sullivan, Donal |
| Dilke, Rt. Hn. Sir Charles | London, W. | Taylor, Theodore C. (Radcliffe) |
| Donelan, Captain A. | Macnamara, Dr. Thomas J. | Tennant, Harold John |
| Doogan, P. C. | MacNeill, John Gordon Swift | Thomas, David Alfred (Merth'r |
| Duncan, J. Hastings | MacVeagh, Jeremiah | Thompson, Dr. EC(Monagh'n, N |
| Dunn, Sir William | M'Hugh, Patrick A. | Tomkinson, James |
| Edwards, Frank | M'Kean, John | Trevelyan, Charles Philips |
| Elibank, Master of | M'Kenna, Reginald | Tully, Jasper |
| Ellice,Capt.E.C.(S.Andr'sB'ghs | Mansfield, Horace Rendall | Ure, Alexander |
| Emmott, Alfred | Murphy, John | Walton,John Lawson(Leeds, S |
| Eve, Harry Trelawney | Nannetti, Joseph P. | Walton, Joseph (Barnsley) |
| Farrell, James Patrick | Newnes, Sir George | Wason, Eugene (Clackmannan) |
| Fenwick, Charles | Nussey, Thomas Willans | Wason, John Cathcart (Orkney |
| Flavin, Michael Joseph | O'Brien, James F. X. (Cork) | Weir, James Galloway |
| Flynn, James Christopher | O'Brien, Patrick (Kilkenny) | White, Luke (York, E. R.) |
| Freeman-Thomas, Captain F. | O'Brien, P. J. (Tipperary, N.) | Whiteley, George (York, W.R.) |
| Goddard, Daniel Ford | O'Connor, James (Wicklow, W. | Whitley, J. H. (Halifax) |
| Grant, Corrie | O'Dowd, John | Whittaker, Thomas Palmer |
| Hammond, John | O'Shaughnessy, P. J. | Wilson, Henry J. (York, W.R) |
| Harcourt, L. V. (Rossendale) | Partington, Oswald | |
| Harwood, George | Pease, J. A. (Saffron Walden) | TELLERS FOR THE AYES—Mr. |
| Hayden, John Patrick | Perks, Robert William | Charles Hobhouse and Mr. |
| Hayter, Rt. Hn. Sir Arthur D. | Pirie, Duncan V. | Lyell. |
| NOES. | ||
| Agg-Gardner, James Tynte | Bowles, Lt.-Cl. H. F.(Middlesex | Cust, Henry John C. |
| Agnew, Sir Andrew Noel | Brodrick, Rt. Hon. St. John | Dalkeith, Earl of |
| Allhusen,Augustus HenryEden | Bull, William James | Dalrymple, Sir Charles |
| Anson, Sir William Reynell | Butcher, John George | Davenport, William Bromley |
| Arkwright, John Stanhope | Campbell, Rt.Hn.J.A.(Glasgow | Davies,Sir Horatio D.(Chatham |
| Arnold-Forster, Rt. Hn.HughO | Campbell,J.H.M. (Dublin Univ | Denny, Colonel |
| Atkinson, Rt. Hon. John | Carson, Rt. Hn. Sir Edw. H | Dickson, Charles Scott |
| Aubrey-Fletcher, Rt. Hon.SirH | Cautley, Henry Strother | Dimsdale, Rt. Hn. Sir JosephC. |
| Bagot, Capt.Josceline FitzRoy | Cavendish, V. C. W.(Derbyshire | Dixon-Hartland,SirFred Dixon |
| Bailey, James (Walworth) | Cecil, Lord Hugh (Greenwich | Douglas, Rt. Hon. A. Akers |
| Bain, Colonel James Robert | Chamberlain, Rt. Hn.J.(Birm. | Duke, Henry Edward |
| Baird, John George Alexander | Chamberlain, Rt.Hn.J.A.(Worc | Durning-Lawrence, Sir Edwin |
| Balcarres, Lord | Charrington, Spencer | Dyke, Rt.Hn.Sir William Hart |
| Baldwin, Alfred | Clare, Octavius Leigh | Fergusson, R t.Hn.SirJ.(Manc'r |
| Balfour,Rt.Hn.A.J.(Manchestr | Clive, Captain Percy A. | Finch, Rt. Hon. George H. |
| Balfour, Rt.Hn.GeraldW(Leeds | Coates, Edward Feetham | Finlay, Sir Robert Bannatyne |
| Balfour, Kenneth R. (Christch. | Cochrane, Hon. Thos. H. A. E. | Fisher, William Hayes |
| Banbury, Sir Frederick George | Cohen, Benjamin Louis | Fison, Frederick William |
| Bartley, Sir George C. T. | Colston, Chas. Edw. H. Athole | FitzGerald, Sir Robert Penrose |
| Bathurst, Hon. Allen Benjamin | Compton, Lord Alwyne | Fitzroy, Hon. EdwardAlgernon |
| Beckett, Ernest William | Cook, Sir Frederick Lucas | Flower, Sir Ernest |
| Bhownaggree, Sir M. M. | Corbett, A. Cameron (Glasgow | Forster, Henry William |
| Bignold, Sir Arthur | Corbett, T. L. (Down, North) | Foster, Philip S. (Warwick,SW |
| Bigwood, James | Craig, Charles Curtis (AntrimS. | Galloway, William Johnson |
| Bingham, Lord | Cripps, Charles Alfred | Gardner, Ernest |
| Blundell, Colonel Henry | Cross, Herb. Shepherd (Bolton) | Gibbs, Hon. A.G.H. |
| Bousfield, William Robert | Crossley, Rt. Hon. Sir Savile | Gordon, Hn. J.E.(Elgin &Nairn) |
| Gorst, Rt. Hn. Sir John Eldon | Loyd, Archie Kirkman | Rutherford, John (Lancashire) |
| Goulding, Edward Alfred | Lucas, Reginald J.(Portsmouth | Sackville, Col. S. G. Stopford |
| Greene,SirE.W.(B'rySEdm'nds | Lyttelton, Rt. Hon. Alfred | Sadler, Col. Samuel Alexander |
| Greene, W. Raymond (Cambs.) | Macdona, John Cumming | Samuel, Sir H. S. (Limehouse) |
| Greville, Hon. Ronald | M'Iver,Sir Lewis (EdinburghW | Sandys, Lt.-Col. Thos. Myles) |
| Hain, Edward | Massey-Mainwaring, Hn.W. F. | Seely, Charles Hilton (Lincoln). |
| Halsey, Rt. Hon. Thomas F. | Melville, Beresford Valentine | Seton-Karr, Sir Henry |
| Harris, Dr.Fredk R.(Dulwich) | Meysey-Thompson, Sir H. M. | Sharpe, William Edward T. |
| Hatch, Ernest Frederick Geo. | Mildmay, Francis Bingham | Simeon, Sir Barrington |
| Hay, Hon. Claude George | Mitchell, Ed. (Fermanagh, N.) | Skewes-Cox, Thomas |
| Heath, James (Staffords.N.W. | Molesworth, Sir Lewis | Sloan, Thomas Henry |
| Heaton, John Henniker | Montagu, G. (Huntingdon) | Smith, Abel H. (Hertford,East |
| Helder, Augustus | Moore, William | Smith,RtHn.J.Parker(Lanarks |
| Henderson, Sir A.(Stafford,W. | Morpeth, Viscount | Smith, Hon. W. F. D. (Strand |
| Hermon-Hodge, Sir Robert T. | Morrell, George Herbert | Stanley, Ed. Jas. (Somerset) |
| Hickman, Sir Alfred | Morton, Arthur H. Aylmer | Stanley, Rt. Hn. Lord (Lanes |
| Hope, J.F.(Sheffield, Brightside | Mount, William Arthur | Stirling-Maxwell, Sir John M. |
| Horner, Frederick William | Muntz, Sir Philip A. | Stone, Sir Benjamin |
| Hoult, Joseph | Murray,RtHnAGraham(Bute | Talbot, Lord E. (Chichester) |
| Howard, J. (Kent, Faversham) | Murray, Charles J. (Coventry) | Taylor, Austin (East Toxteth) |
| Howard, J. (Midd., Tottenham | Murray, Col. Wyndham (Bath) | Thornton, Percy W. |
| Hozier, Hon. James Henry C. | Nicholson, William Graham | Tomlinson, Sir Wm. Edw. M. |
| Hudson, George Bickersteth | O'Neill, Hon. Robert Torrens | Tritton, Charles Ernest |
| Hunt, Rowland | Palmer, Sir Walter (Salisbury) | Tuff, Charles |
| Jameson, Major J. Eustace | Parker, Sir Gilbert | Valentia, Viscount |
| Jeffreys, Rt. Hon. Arthur Fred | Parkes, Ebenezer | Vincent,Col.SirC.E.H(Sheffield |
| Jessel, Captain Herbert Merton | Pease,Herbert Pike(Darlington | Walker, Col. William Hall |
| Johnstone, Heywood (Sussex) | Peel, HnWm.Robert Wellesley | Wanklyn, James Leslie |
| Kennaway,Rt. Hn. Sir JohnH. | Pemberton, John S. G. | Warde, Colonel C. E. |
| Kerr, John | Percy, Earl | Webb, Col. William George |
| Keswick, William | Platt-Higgins, Frederick | Wharton, Rt Hon. John Lloyd |
| Kimber, Sir Henry | Pretyman, Ernest George | Whiteley, H.(Ashton-und-Lyne |
| King, Sir Henry Seymour | Pryce-Jones, Lt.-Col. Edward | Williams, Colonel R. (Dorset) |
| Lambton, Hn. Frederick Wm. | Purvis, Robert | Willoughby de Eresby, Lord |
| Laurie, Lieut.-General | Pym, C. Guy | Wills, Sir Frederick |
| Law, Andrew Bonar (Glasgow) | Rankin, Sir James | Wilson, John (Glasgow) |
| Lawrence, Wm. F. (Liverpool) | Ratcliff, R. F. | Worsley-Taylor, Henry Wilson. |
| Lawson John Grant(Yorks,NR | Reid, James (Greenock) | Wortley,Rt.Hon.C.B.Stuart |
| Lee,Arthur H (HantsFareham) | Remnant, James Farquharson | Wrightson, Sir Thomas |
| Lees, Sir Elliott (Birkenhead) | Renshaw, Sir Charles Bine | Wyndham, Rt. Hon. George |
| Legge, Col. Hon. Heneage | Renwick, George | Wyndham-Quin, Col. W. H. |
| Leveson-Gower,Frederick N.S. | Ridley, Hon. M.W.(Stalybridge | Yerburgh, Robert Armstrong |
| Llewellyn, Evan Henry | Ridley, S. Forde(BethnalGreen | |
| Lockwood, Lieut.-Col. A. R. | Roberts, Samuel (Sheffield) | TELLERS FOR THE NOES—Sir |
| Long,Col. Charles W.(Evesham | Robertson, Herbert (Hackney) | Alexander Acland-Hood |
| Long,Rt.Hn.Walter (Bristol,S. | Ropner, Colonel Sir Robert | and Mr. Ailwyn Fellowes |
| Lonsdale, John Brownlee | Round, Rt. Hon. James | |
| Lowe, Francis William | Royds, Clement Molyneux |
§ And, it being after half-past seven of the clock, further proceeding on consideration, as amended, stood adjourned till this Evening's Sitting.