FINANCE BILL.

HC Deb 05 June 1905 vol 147 cc729-79

[THIRD READING.]

Order for Third Reading read.

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

MR. FLYNN (Cork, N.)

said he desired to once again raise the question of the over-taxation of Ireland. They had recently been told that at certain places in England taxation had now reached a point almost beyond endurance, and if that were true with regard to a wealthy country like Great Britain, how much more applicable was it to Ireland? He desired that day to draw attention to the enormous increase in the revenue derived from Ireland as revealed by the Returns furnished by the Treasury—and he desired especially to draw attention to the increase since the Royal Commission on Financial Relations presented their first Report. When ten years ago that Commission reported, the revenue raised in Ireland amounted to £7,568,000—a sum admitted to be in excess of the country's taxable capacity to the extent of £2,750,000 according to the evidence of the Treasury experts. But by 1902–3 the revenue had gone up to £10,205,000, and although a year later it fell to £9,925,000 in consequence of certain remissions of taxation by the right hon. Gentleman the Member for Croydon, yet the fact remained that in the decade another £2,500,000 had been wrung out of Ireland under the present system of taxation. The figures revealed indeed a very dangerous condition of things. They had a diminishing population, a large part of the country was going out of cultivation, and the people were being driven from home by lack of work, yet the only remedy applied by England was to increase Ireland's burdens year after year, not by hundreds or thousands but by millions of pounds. The increase in ten years represented five times the amount of the agricultural grant voted in 1898, and sixteen times the amount of the development grant of last year. It was thirty times the revenue of the Congested Districts Board and yet they were often taunted with the doles made to their country!

The indirect taxation represented 75 per cent. of Irish taxation, and that fell most heavily on the poorest people. In 1821 the population of Ireland represented 32 per cent. of the entire population of the United Kingdom. In 1841 it was 31 per cent., but in 1903 it had fallen to 10.42 per cent.—a decline of population unexampled in the civilised world. In 1821 the revenue from Ireland represented 14s. 2d. per head of the population; in 1849 it was 14s. 9d.; and then commenced the system of taxation enshrined in the present Finance Bill, which relieved the people of England of a number of taxes at the expense of the people of Ireland. What was the result? In 1859 the taxation rose to £1 6s. 7d. per head; ten years later, £1 7s. 9d.; in 1879, £1 8s. 2d.; in 1889, £1 12s. 6d.; in 1899, £1 18s.; 2d. and in 1904, £2 4s. 2d.—three times what it was seventy years previously! The system was most unfair and unjust to Ireland, as Sir Robert Giffen, a great financial authority, had admitted. The Royal Commission came to the conclusion that Ireland ought not to be called upon to contribute more than one-twentieth of the entire revenue of the United Kingdom. The Irish Members held that that was excessive, but accepting the standard for the moment they found that in 1902 Ireland was contributing over £4,000,000 in excess of her share. These were very serious figures. When in 1853 the taxes were removed from corn, flour, and other commodities, a crushing blow was inflicted on Ireland. The teeming industrial population of England no doubt greatly benefited, and he would be one of the last to suggest that such taxes should be reimposed on them, but the agricultural industry of Ireland was ruined, landlord and tenant alike shared in the disaster, and no compensation was given her in return.

What remedy did the Chancellor of the Exchequer propose to apply? They were often told how generous their stepmother was to them, and what large sums of money she advanced, but it seemed to be forgotten that this money was obtained from Irish sources, and if there were any loss on the transaction it fell on the Irish and not on the English ratepayer. An hon. friend of his brought forward a Motion on the arterial drainage of Ireland, and proved how thousands of acres were absolutely ruined and worthless owing to the wretchedly imperfect system of drainage. The Chief Secretary acknowledged the great loss and ruin to Ireland, but stated that the Government could not afford the money to improve the drainage, and this at a time when Ireland was being overtaxed to the extent of several millions. The same answer was given when the Irish representatives brought forward other grievances, and asked that some of their own money should be applied to the development of the country. It was their duty to bring forward this case year after year. If they had control of their own purse they would in a very short time, whether Nationalist or non - Nationalist, remedy this state of matters, but so long as the present unfair system continued so long would grievances exist. He was not without hope that they would before long wring from a reluctant Treasury an acknowledgment of the justice of their case.

MR. ASHTON (Bedfordshire, Luton)

called attention to the periods over which repayments were made of the debt now being created for public works purposes. This debt was growing to large proportions, and it had arisen practically within the last fifteen years. It already reached about £41,500,000, and there was a much larger liability still to be met. Taking the debt of this character from the beginning we had already created nearly £48,000,000, and we had rendered ourselves liable under various Acts of Parliament, for public works loans, etc., for a further sum of £14,500,000, so that really the total debt incurred or to be incurred was £62,500,000. It was of extreme importance to the future taxpayers of this country to sec that the money should be repaid within reasonable periods. The Chancellor of the Exchequer in his Budget speech, referring to the creation of this debt, said that we held against it assets in the shape of works constructed by means of the expenditure which would outlast the currency of the debt itself. The hon. Member wished to point out that there was at least a good deal of debt which would not be repaid within the currency of these assets, and he proposed to give a few instances which, he thought, would prove his case.

Under the Naval Works Loans Act of 1903 there was an item approaching £1,000,000 for electric plant in the dockyards of this country. Electricity, as everybody knew, was practically a new force, and enormous improvements were being made every year in the use of electrical energy. Improvements were also being made in the machinery by which that energy was produced and carried to the purposes for which it was used. The other day he was at a Committee meeting in another place on the London Power Bill, and heard the evidence of a gentleman of great experience in regard to electricity. That gentleman, who was himself a maker of electrical machinery, gave a piece of evidence which was very apropos to this question. He informed the Committee that electric motors cost at the present time only about half what they did four or five years ago. If that was the case it showed how rapidly those articles were deteriorating, how very much cheaper they were becoming, and how very careful the Treasury should be in deciding the period that should be allowed for the repayment of loans granted for the purposes of electricity. Replying to a Question on this point, the Secretary of the Treasury informed him that the money was only being repaid in twenty-nine or thirty years. It was perfectly absurd to take thirty years to wipe off debt incurred for electrical apparatus. It ought to be done much more rapidly. In this case we were going to leave to future taxpayers the payment for electrical plant which would have ceased to exist long before the thirty years came to an end. Another instance was to be found in the case of the Pacific cable. The money was to be repaid in fifty years, but he did not suppose that any man connected with the cable trade would say that the Pacific cable would last that period. This was simply charging on futurity a debt which we ought to have taken upon ourselves. In the case of the Cunard Agreement, it was perfectly true that the money was to be repaid by the Cunard Company, and that it would not come out of the pockets of the taxpayers, but we were advancing money to build two steamers, and the payment was to extend to a period of twenty years. It might be that that was the life of a boat, but it was not the life of a boat for the purpose for which we wore advancing the money. Would anybody who had watched the progress of shipbuilding any that these two boats would remain for twenty years of the same use to us? That was a case in which the money ought to have been repaid in a shorter period than twenty years.

In the course of his speech on the question of Imperial defence the Prime Minister told them what was going on in regard to the fortification of certain islands in the West Indies. The right hon. Gentleman stated that St. Lucia was to be abandoned as a naval base. During the past ten years there had been expended on that naval station £475,000, and that money had all been charged on the military and naval works accounts. It was to be repaid in twenty-nine or thirty years, but those works had already ceased to be of use, and therefore the cost was to fall on future taxpayers. That was unsound finance. In regard to Halifax the Prime Minister stated that it was to be handed over to the Canadian Government. We had spent £340,000 there, and the taxpayers of this country would be going on paying for those works for the next thirty years. At Bermuda we had spent £900,000 on works, and there the garrison was to be reduced. Presumably, therefore, a large amount of the money had been spent in vain. In the same way the garrison was to be reduced at Jamaica where we had spent £250,000. These were instances where the assets would not outlast the currency of the debt, and that was a very serious matter. He was sure the Treasury would support the Chancellor of the Exchequer in shortening the period for the repayment of future loans. The right hon. Gentleman had hinted that in the future we might hope to have very much less borrowing under the Public Works Loans Acts than we had had in the past. There was a great deal of money to be raised on works already undertaken, and he hoped the Chancellor of the Exchequer would see that the repayments were made in such a way that future taxpayers would not be called upon to pay what ought to be paid at the present time.

MR. GUEST (Plymouth)

said he wished to refer to the Transvaal contribution, not for the purpose of indulging in recrimination, but because he believed the expectation which the Chancellor of the Exchequer held out with regard to this sum of money had been responsible for most, if not all, the bad finance of which complaint was made on his side of the House. It was worth while to underline the admission which was made on the Committee stage on this question. The attitude of the Government on the question of the contribution was one of apology and of hope. He did not think anybody on his side of the House for one moment accused them of any intentional deception in regard to that sum of money. Perhaps the nature and character of the guarantee might have been somewhat exaggerated and coloured in order to satisfy the right hon. Member for Croydon when, as Chancellor of the Exchequer, be made his estimates. The hopefulness of the Government in regard to the character of the guarantee on which their estimates wore based was, he thought, revealed by the right hon. Gentleman the Member for West Birmingham at a late period of the debate.

They knew that the right hon. Member for West Birmingham had a sanguine temperament, especially where colonial booms were concerned. There was not a disposition to deny that the right hon. Gentleman wished to place good faith on the promises, such as they were, which were made in Johannesburg and elsewhere, by the Rand magnates. But the point which came out in the debate was that the decision in this matter was not entirely in the hands of the mining magnates. It was very possible, if not probable, that the electors in the Transvaal, when they exercised the franchise under the new Constitution, would return a Party to power with Boer sympathies. If the Boers had a majority, the right hon. Gentleman himself admitted that it would be an insult to expect that that majority should take up the obligation which fell not on them but on the British in the Transvaal. The fact of this debt being in question would be one of the best recommendations for the candidature of the Boers, and it was therefore quite possible that they would obtain a majority. But supposing there was a British majority, were the prospects of obtaining this £30,000,000 very much better? He did not think so. In the first place there would be a powerful Boer minority and it would be one of the first objects of the British majority to try and conciliate the Boer minority. They would not willingly pass Acts which would be regarded by that minority as an insult, or which would be entirely hostile to their view. Therefore the obligation would be of the nature of, in sporting phrase, paying for a dead horse. All the advantage which accrued to the Transvaal from the bargain with the British House of Commons would have been already secured; there could be no potential advantage which they could further secure. There would be many pressing domestic matters for which money would be required. They would say that charity should begin at home and that they should look to the improvement and betterment of the condition of the Transvaal. Therefore, he thought that it was extremely probable that the market conditions would continue to be unfavourable.

The difference between those on his side of the House and hon. Gentlemen opposite was whereas the latter regarded this sum of money as a debt, the former considered it as a bad debt, and they wanted the Chancellor of the Exchequer to write it off. He held that this unpaid grant of £30,000,000 together with the size of the Unfunded Debt, was responsible for the low price of Consols. He appealed to the Chancellor of the Exchequer, from a financial point of view, to write it off and no longer regard it as a realisable asset. It had been pointed out that the additional £1,000,000 added to the fixed debt-charge did nothing else than recognise that the payment of the £30,000,000 was of the most problematical character. The Chancellor of the Exchequer had, therefore, not made any substantial addition to the fixed debt-charge, and the better way would be to regard that additional £1,000,000 as representing the interest on the £30,000,000. He urged the right hon. Gentleman, if he was still in office next year, to aim at still further increasing the fixed charge for the debt. It was a matter of common knowledge that since the calculation was made by the right hon. Member for Croydon when he fixed the debt-charge at £27,000,000 the indebtedness of the country had not been diminished, but increased; and, consequently, it was a clear obligation on the Chancellor of the Exchequer to so assess the fixed debt-charge that the total debt should be gradually extinguished.

SIR HENRY FOWLER (Wolverhampton, E.)

said he wished to clear up a conversation that took place between the Chancellor of the Exchequer and himself a day or two ago about the mode of presenting the Exchequer accounts of receipts and expenditure. The Chancellor of the Exchequer said that he was bound by the wording of the Act of Parliament to present these accounts in the shape he did. He himself did not at first dispute that construction of the Act of Parliament, although he had his doubts about it. The Act of Parliament clearly contemplated all payments being made into the Bank of England to the Exchequer account; and people had thought that the whole amount of the revenue was paid into that Bank and then divided. He held that an ordinary educated man would say, from the accounts as now presented of the weekly receipts and issues from the Exchequer, that the total amount paid in from Customs, Excise, death duties, and estate duty was £13,000,000, whereas it was over £18,000,000. It only required a stroke of the pen by the Chancellor of the Exchequer to put that misrepresentation right. They knew why the accounts were presented in that mode. It was a make-believe to induce the passing of certain legislation and to make the people believe that a new tax was being imposed in favour of the local authorities. It was nothing of the sort. It was as much a grant from the Imperial Exchequer as any other grant from that source. He asked the Chancellor of the Exchequer to state the receipts and payments on both sides and to enter the real amount he received from Customs, Excise, estate duty, and the death duties, and then enter on the other side "transferred to the local taxation account." It was as much a transfer as any made for the payment of the National Debt or for payments to Consolidated Fund expenditure. By the present system of accounts, which was very confusing, there was an item "Payment to local taxation account one million odd;" whereas the real payment was £10,000,000. The taxpayers ought to know that out of the Imperial revenue the payments to the local authorities amounted to between £10,000,000 and £11,000,000.

MR. GIBSON BOWLES (Lynn Regis)

said he entirely sympathised with the right hon. Gentleman in his desire that our national accounts should be presented in a more complete and accurate form. At present they were neither complete nor accurate. He would point out to the House that the very charter of our financial system was laid down by Mr. Gladstone—who, whatever else he was, was a very great Chancellor of the Exchequer—in the Exchequer Act of 1866. In that Act it was prescribed most solemnly that the gross receipts of all the revenue departments should be paid into the Exchequer account in the Bank of England. That was the true principle; and on that principle all this intercepted taxation to which the right hon. Gentleman had referred would have been paid into the Exchequer account in the Bank of England and all these questions would not have arisen. Our system of keeping the national accounts was on a pure cash basis. It resembled a banker's accounts. France had a different method, but ours was undoubtedly the best of all for the purpose of the control of Parliament. It should be a pure account—all the receipts on one side and all the payments on the other. But they should have all the receipts and all the payments. If the Act of 1866 had remained in full operation, that would be the precise form of accounts they would have at the present day. The Act of 1875 amended the Act of 1866. It prescribed that an account should be given of all money paid into the Bank of England with one exception—a very proper exception—namely, money raised by loan. That showed the receipts from revenue and by way of loan. If that system were maintained, the national accounts would now be complete and accurate. What had happened was that successive Chancellors of the Exchequer hid entirely departed from the Acts of 1866 and 1875; and were now rendering the accounts in accordance with amending Acts. There had been set on foot the gigantic system of interceptions. The local taxation account was held to be entirely separate from the Exchequer account, and to be subject to different rules and regulations. The loan receipts were always treated separately under the Act of 1875; but he wont further than the right hon. Gentleman, and maintained that the £9,000,000 or £10,000,000 for appropriations-in-aid should also be shown.

SIR HENRY FOWLER

said that last week the receipts from Customs, Excise, and estate duty amounted to £1,000,000. Then in a separate account a sum of £90,000 was shown as having been paid out of the Exchequer to the local taxation account. These amounts were transferred from time to time as was thought desirable by the Treasury.

MR. GIBSON BOWLES

said he did not know that there was any misunderstanding between the right hon. Gentleman and himself. Formerly, a Department such as the Inland Revenue was under an obligation to pay its receipt into the Exchequer account, and there were no interceptions. Now there were two separate payments.

SIR HENRY FOWLER

said he was referring to the weekly statement of the "Chancellor of the Exchequer which had no reference to any Act of Parliament.

MR. GIBSON BOWLES

said that the statement of the right hon. Gentleman was probably not inaccurate. Whatever else it was, the Treasury was almost always accurate. The right hon. Gentleman would, however, find that the total receipts, including those for local taxation, were not paid into the Exchequer account. He further contended that the account of receipts and expenditure should include appropriations-in-aid. At present they appeared in no account at all. They were not recognised in any shape or form in the public accounts except in the form of loans. The House of Commons had no jurisdiction over them. The £10,000,000 from the local taxation account and the £10,000,000 for appropriations-in-aid, ought to be included in the national accounts. He would suggest to the right hon. Gentleman that he would rather mislead the people by the Return he desired. The accounts should show the gross receipts and the gross expenditure, with any explanations that might be necessary. They should he prepared us was ordained in the Act of 1866 as amended by the Act of 1875; and, further, the horrible interceptions which now occurred should be stopped. The present system greatly deceived the people, and even the House if that were possible; and he was glad that the right hon. Gentleman and called attention to its inadequacy and incompleteness. He was certain that if the right hon. Gentleman and himself had a conference they would agree as to how the accounts should be presented in such a manner as would enable one year to be compared with any other. At present, not only were the accounts as false as they could be, but they were rendered in such a manner as to make it impossible to compare them with any year prior to 1866. The public did not understand the intricacy of the accounts, and very few went into details which were so fascinating and often so painful to many hon. Members. He earnestly hoped that one result of the awakening he saw in the public mind as to the importance of economy and the diminution of expenditure would be a reconstruction of the present system of accounts so that the public might know the real facts regarding national finance.

SIR WALTER FOSTER (Derbyshire, Ilkeston)

said a great many persons thought last year that the Chancellor of the Exchequer had made a great mistake from beginning to end in his treatment of the tobacco duties, and they had had sufficient evidence in the debates that had taken place during the preceding stages of the Finance Bill to show that the Chancellor of the Exchequer was a little less sure now than he was last year as to the advisability of the alterations he had made in those duties. The right hon. Gentleman had informed the House, in reply to a Question, that the yield of the extra duty put upon imported cigarettes had fallen £5,349 below what was anticipated. That was to say, there was an error in the right hon. Gentleman's calculations of no less than 27½ per cent. That was a serious discrepancy, and such a discrepancy should not be possible in the calculations of those responsible for the accounts of the national income and expenditure.

He and others agreed last year that this attempt to put extra duty on foreign cigarettes would lessen the trade in that article, and that consequently there would be a reduction in the yield from it. He had described it as a suicidal tax, and that had been proved by the fact that it had brought about the detriment of a useful and beneficial trade. He believed the right hon. Gentleman had not stated completely the amount of loss to the Exchequer in consequence of this increased duty. He found that the revenue from cigarettes when 3s. 10d. was the duty was £88,597. That was the calculated duty on the import of foreign cigarettes. He found that the amount of the cigarettes imported was 462,245 lbs., which, when the duty was at 3s. 10d. produced a sum of £88,597. In 1904 the amount of foreign cigarettes imported was 331,093 lbs. which, with the additional duty, produced £80,014. The total loss to the Exchequer was therefore £8,500, and he asked how it was that the loss was stated to be only £5,349. Since last year the trade in foreign cigarettes had declined. It was always bad finance to tax a trade out of existence, and that was what the Chancellor of the Exchequer was doing in this case. It was a declining trade under the original tenpenny extra duty which had been enough on to meet cigarettes coming from America, and which was quite sufficient to protect the British industry. But the extra shilling, which was far more than sufficient to protect British industry, was killing the trade. In 1902 619,000 lbs. of foreign cigarettes were imported; in 1903, 462,249 lbs.; and in 1904, 331,093 lbs. So that in 1904 we only imported about one-half of what we imported in 1902. There was a feeling that this by no means indicated the amount of injury that would be done in this trade if things went on as they were. There were no doubt many contracts running at the time this extra shilling was put on, yet the imports had fallen by 130,000 lbs. as against the imports of 1903.

It was a bad tax on two grounds, first, because it checked the trade upon which the revenue was raised, and, secondly, because it disappointed the Exchequer in the amount of revenue realised. His object in bringing the figures before the House was to obtain from the Chancellor of the Exchequer, if possible, some information as to the exact position of the foreign cigarette trade under this system of finance. He regretted that the right hon. Gentleman was compelled in the Finance Bill of this year to continue this duty, which would become less and less productive until, as time went on, the amount coming from this source would be infinitesimal. Finance such as this ought not to be encouraged and ought not to receive the assent of this House. As he had pointed out last year both this tax and the tax on stripped tobacco were unprofitable taxes to the Exchequer, burdensome to the community, and were only favourable to the large manufacturers, tending as they did to produce monopolies instead of encouraging competition. Taxes of this kind were not in the best interests of the community.

SIR CHARLES RENSHAW (Renfrew, W.)

said the Chancellor of the Exchequer had been attacked on the subject of the sugar duties, the coal duties and the tea duties. He desired to take this opportunity of entering a protest with regard to the incidence of the income-tax. Very little had been said with regard to the income-tax but it was not possible to expect from the point of view of those interested in the commerce of this country that the income-tax could be maintained at its existing level. The charges both in respect to the taxes and the rates of this country were becoming alarming. There was an increase in the national expenditure as compared to what it was ten years ago of £50,000,000, whilst the increase in the rates for the corresponding period had been £20,000,000, which together represented a total increase of £70,000,000. That was a heavy additional burden upon the 45,000,000 of people of this country. The right hon. Gentleman had endeavoured, as had his predecessors, to establish a fair balance with regard to revenue for Imperial purposes as between direct and indirect taxation. Last year the right hon. Gentleman estimated that 51.9 per cent, would come from indirect taxation, but the amount realised was only 50.8 per cent. There were many in this House who constantly urged the reduction of indirect taxation. He would like to impress on his right hon. friend the fact that those connected with commerce could not long support the present burden of direct taxation. He appealed to the right hon. Gentleman to consider this matter, and before his next Budget was introduced he hoped some check would be put on the extreme expenditure with regard to military matters and with regard to the expenditure on education. The Education Act was be a wise Act, but there was a rapidly growing feeling in this country that some of our expenditure on education was wasteful expenditure, and that there was room for economy. He hoped before bringing in his next Budget the Chancellor of the Exchequer would consider this question.

MR. LOUGH (Islington, W.)

heartily endorsed the protest of the last speaker against the maintenance of the income tax at anything like its present rate, which had a most oppressive effect on industry and the money market. The well-being of the country depended on there being greater ease in the money market than had been experienced for many years past, and therefore he was glad to hear so sturdy a supporter of the Government speak in favour of economy, and especially denounce the military expenditure. If only the hon. Member would go on and denounce the expenditure on the Navy—

SIR CHARLES RENSHAW

said that with regard to the Navy he believed that we were getting value for the money we spent, but he doubted whether that was so in the case of the Army.

MR. LOUGH

contended that ever though we were getting value for the money, if we could not afford it the expenditure should be reduced. He was not attacking the expenditure on the Navy, but merely pointing to the financial position of the country. Last year a proposal of his which would have had the effect of reducing the Navy Estimates by £160,000 was treated almost as high treason, but within six months the Government themselves reduced the Estimates by £3,500,000. He was glad to see a promise of better things; if only hon. Gentlemen opposite would speak and press for economy the present reign of expenditure would come to an end. The increase in local rates during the last ten years amounted to nearer £50,000,000 or £60,000,000 than the £20,000,000 mentioned by the hon. Member opposite, and the additional burden in rates as well as in taxes was creating a situation of the utmost gravity.

The Chancellor of the Exchequer was to be congratulated on having had a much pleasanter time with the Budget this year than last. His proposals were of a simple character, but from their very simplicity deserved careful attention. The right hon. Gentleman had taken off this year a tax which he put on last year, and that, broadly speaking, was the Budget. What a foolish thing it was to put on a heavy burden against a strong body of opinion in the House one year, only to be forced to take it off the next. That tax, however, had not been taken off because the revenue of the country was improving, but simply because expenditure had been cut down. The national expenditure had become so swollen that there was no chance of relief except by the cutting down of expenditure. It was a curious fact that the most impressive discussions had been on matters not in the Finance Bill at all. There was a long debate on the sugar duty, and the closest division was on the coal tax, which was denounced by every speaker in the discussion. These facts were evidences that the discontent with the financial situation was very deep, and that much reform was needed. As the Chancellor of the Exchequer had spoken of introducing another Budget, it was well for the House to consider the attitude of the right hon. Gentleman on these matters. A great change had taken place since last year. On May 17th, 1904, the Chancellor of the Exchequer stated— It has been said that I have not uttered one word in favour of economy. Those who have spoken most of economy hare been responsible for the largest increases in taxation. … I do not think what we are spending on the Navy is an undue proportion considering the interests at stake. … As long as we are responsible we cannot buy present popularity by neglecting the defence of the Empire. Not the slightest comfort could be drawn from that speech by the advocates of economy. But on December 13th the right hon. Gentleman, addressing his constituents, said— No one was more impressed than he was with the need of husbanding our resources at the present time. It had become necessary that we should place some check on the expenditure. We must restrict our burden within the narrowest limits which were compatible with the discharge of the obligations we had undertaken. What had happened between May and December that the right hon. Gentleman should so change his tone? The speeches presented a great contrast, and the conduct of the Chancellor of the Exchequer this year had been in accordance with the change.

THE CHANCELLOR OF THE EXCHEQUER (Mr. AUSTEN CHAMBERLAIN,) Worcestershire, E.

said that when addressing his constituents he dwelt, exactly as he had done in the House, on the necessity of making whatever sacrifices were necessary to maintain our Imperial position.

MR. LOUGH

did not think he had misrepresented the right hon. Gentleman, for while on May 17th he said that nothing could be taken off the Navy expenditure, it was that very Department which he had now selected for reduction to the extent of £3,500,000. It was encouraging for the advocates of economy to find that they were producing some effect on the Government, and that some progress had been made with the Chancellor of the Exchequer.

The gravest feature of the situation was that the revenue of the country was no longer elastic. We were undergoing an experience to which we had not been accustomed for the last fifty years. From a most interesting Return recently issued dealing with the yield of certain taxes, it appeared that in 1898–99 the wine duties were at practically the same figure as in 1860. On the low duty of 1s. a gallon fixed by the French Treaty forty-five years ago a noble revenue had grown up amounting in 1898–99 to £1,400,000. In 899–1900 the duty was increased by 20 per cent. and the revenue had since fallen to £1,183,000. Thus an increase of 20 per cent. in the tax had resulted in a decrease of 25 per cent. in the revenue. That was a remarkable fact, proving that, the reckless increase of taxation for which the Government were responsible, so far from benefiting the Treasury, had actually spoiled the yield of the taxes in certain directions. The same tendency was apparent in regard to other imports. The beer duty was increased by 15 per cent. and the revenue went up from £12,400,000 to £14,000,000, but this year it had fallen to £13,120,000. The worst result of all was shown in the revenue from spirits, where an increase of 5 per cent. in the duty had resulted in a decrease of yield from 25.4 millions to 22.1 millions, or a loss of £3,250,000 to the Exchequer. He might be asked whether it was not a good thing that the consumption of wine, beer, and spirits should be decreased. But that was not the object with which the increased taxes were levied. The purpose of the Chancellor of the Exchequer was to secure revenue, and instead of achieving that object he had damaged the consuming power of the country. Some hon. Members held that the high taxation of these articles was a healthy policy. If the view were a sound one, consumption having been checked with regard to wine and beer, it should be expanded in regard to other articles. But that was not the case. The consumption of tea had gone down since the tax was raised four or five years ago, and in every direction the consuming power of the people had decreased. It was absolutely useless trying to raise the taxes any higher, for what the people wanted was relief.

With regard to the changes which had been made and the condition of the money market, there was a slight boom visible when the Chancellor of the Exchequer introduced his Budget, but it had all gone off now. There was another boom after the Japanese victory, but it had passed off again. The Chancellor of the Exchequer was collecting £3,000,000 a week in hard cash from the people by taxation and another £3,000,000 a week was being taken from them in rates. While the people had to find £6,000,000 a week how could there possible be any development of new industrial enterprises? There was nothing but fear and anxiety in regard to the future. Why had the Chancellor of the Exchequer escaped so easily in regard to his Budget proposals? Simply because he took off a tax and corrected one of the mistakes he made last year by cutting down expenditure, and, to do this, above all things he chose the Navy. They were now spending £33,500,000 on the Navy and £30,000,000 on the Army, and if they added £5,000,000 for works, and £22,000,000 for India, that meant £90,500,000 which this country was asking for in hard cash for the maintenance of the Army and Navy this year. This was a cruel and wicked expenditure, and no country spending anything like this sum in a time of peace could prosper. In former times when Russia built a warship this country used to build two or three, but now the Russian Army had been defeated and the Russian Navy swept away, and why could not the Government reduce the national expenditure now? The hon. Member for King's Lynn had stated that the Budget was not the proper place to discuss naval and military expenditure, and he said that the questions should be discussed upon the Estimates. As a matter of fact they got no opportunity on the Estimates because the questions did not come up in such a concrete form as upon the Budget. He urged the right hon. Gentleman to go round to the various Departments and warn them that they must not bring up any more Estimates in the spirit of last year. He might allow £22,000,000 for the Army and £25,000,000 for the Navy, and there might be some reduction in the Edution Vote. The great spending Departments ought not to be allowed to run up huge bills. The only chance of the country returning to prosperity was for the the Government to largely cut down this bloated expenditure, for which they themselves were more responsible than anybody else.

MR. JOHN WILSON (Falkirk Burghs)

said the debate which had taken place conclusively proved that in the opinion of the House the national expenditure, which had grown so enormously during the last ten years, ought to be effectively reduced. In the light of recent events he hoped such a reduction would have the immediate attention of the Government. He desired to see a very effective reduction, not only in the expenditure on the Army and Navy, but also in other branches of national expenditure. Upon this subject he did not propose to enter at length, as it had already been very fully discussed, but there was another matter in which a large number of those sitting on both sides of the House were interested, and that was the export duty upon coal. If the course of the debate on this measure had shown anything, it had proved that a change had come over the spirit of this House since the coal tax was introduced. At that time it was said that the coalowners were making great fortunes, but those who were closely associated with the coal trade knew that they generally had two or three fat years and then two or three lean years, and now they had come to the lean years. Prices had gone down 3s. and 4s. a ton, and this tax on coal was crushing the coal industry in Scotland in particular. This tax affected Scotland, Northumberland, and the North of England very materially, whilst other districts, at the expense of the exporting areas, enjoyed immunity from this tax. Those districts whose trade was not dependent upon the export of coal paid no tax whatever. In Scotland the great bulk of the coal raised was sold at little over 7s. per ton, and he had always urged in this House that if the coal tax was to be permanent—which he sincerely hoped it would not—it ought to be imposed as an ad valorem tax. The price of Scotch coal was little more than half the price of Welsh coal, the best Welsh coal fetching 14s. per ton as compared with 7s. and 8s. per ton free on board for Scotch coal.

He thought the argument used when this tax was imposed that our national stock of coal was in danger of being exhausted had been effectively disposed of by the Royal Commission. There was no danger whatever of the prediction made I by the right hon. Gentleman the Member for West Bristol, when he imposed this tax, that our coal resources were getting perilously near exhaustion, being realised. What were the facts? It had been proved before the Royal Commission that there was no less than 101 thousand million tons of coal available in this country, or sufficient to last for 450 years at the present rate of consumption of 230 millions per annum. With the advance of science they did not know whether coal would even be wanted in the near future, and coal in another 200 or 300 years might I be of no more value than the soil which covered it. He should continue to urge that this was a tax which ought to be abandoned. In the Transvaal Loan he thought they had ample security for doing away with the coal tax and for making up any deficiency by the abolition of the coal tax. There was no doubt that the gold mines of the Transvaal were perfectly able to pay that £30,000,000. Expert authorities had estimated that £5,000,000 a year would be saved to the mineowners by the abolition of the dynamite monopoly and other changes made since the war, and why should they attempt in any way to discourage the idea of the Transvaal paying this indemnity? Hon. Members who took that view took a very wrong view altogether. Enormous profits had accrued to these South African gold mineowners, and they ought to contribute largely towards the national expenditure.

The question he wished more particularly to raise was that Scotland had suffered a great injustice by not being allowed a rebate upon small coal. He pointed out to the House, when the coal tax was introduced, that this was an injustice, and more especially after the rebate was given to Welsh small coal when manufactured into patent fuel or briquettes. It was perfectly well-known that enormous sums of money had to be spent in Scotland upon machinery for the washing and screening of coal in order to prepare it for the market, and this added greatly to the cost. They sent this small coal abroad and consequently it came in for payment of the coal duty. In most cases, on account of the high rate of carriage, more especially from Lanarkshire and the West of Scotland—which amounted to something between 2s. 4d. and 2s. 8d. per ton—the small coal had to be sold at something like 7s. or 8s. per ton free on board, and thus, though the small coal if not treated and manufactured would be sold free on board at less than 6s. and thus be free of tax, yet it became liable. Therefore this small coal could only be sold at a loss. Now that attention had been called to this subject, he hoped the Chancellor of the Exchequer would give it his sympathetic consideration. He maintained that all small coal which would be sold free on board at a less price than 6s. if the cost of production were not put upon it ought to be exempt. It was to this point that he particularly wished to draw the attention of the Chancellor of the Exchequer.

MR. MUNRO FERGUSON (Leith Burghs)

said he was very glad the hon. Member had referred to the incidence of the coal tax in Scotland. He had no doubt that this matter would receive the sympathetic attention of the Chancellor of the Exchequer. He was sure the right hon. Gentleman would also agree with the point he had brought before him the other day, namely, that there was not only the cost of putting up the mills for the washing of the coal, but also the onus of purifying rivers and streams which was put on the coalmasters, and which added very largely to the outlay necessary. He thought this added to the weight of the claim of the Scottish coal trade for the revision of this particular tax.

The hon. Baronet the Member for West Renfrewshire, in urging economy, referred to the expenditure on education as a branch on which money might be saved. In that he did not agree with the hon. Baronet. He believed there was money wasted on education, but he did not believe the total sum expended should be reduced. It should rather be added to. There was a waste of money owing to the sectarian system of education; there was waste upon school buildings in many districts; and there had been waste in the expenditure made by county councils in many directions in regard to education. But there must be further expenditure on secondary, technical, and University education if this country was to be able to hold its own in commercial competition. That was absolutely clear, and no one who had any knowledge of the manner in which secondary, technical, and University education had been developed abroad could believe that we, in the present position of education, could make any substantial saving upon that section of the Budget. He thought every effort should be made to stop the waste of money, and that the money which was at present wasted should be devoted to the development of higher education. Money might also be saved by a stricter audit of the accounts of public authorities in connection with education. The local debt of the country was certainly advancing rapidly. While he upheld communal enterprise as well as private enterprise, he did not think there was a sufficiently strict audit of public accounts. Several examples had become public lately, and he fancied there were a good many examples which had not become public. He had known many cases of money wasted by public authorities which would be prevented by a stricter audit. Certainly the audit of our national accounts was far stricter than that in connection with local expenditure.

He understood that a Blue-book was in preparation by the Treasury giving information as to the graduation of income-tax in foreign countries. He wished to ask the Chancellor of the Exchequer whether the book was likely to be published soon. He did not mean to infer that foreign countries in this matter were on all fours with us, but as an inquiry had not been permitted into the question of the possibility of graduating the income-tax they would, at any rate, be glad to get the information as to the graduation in foreign countries. He entirely agreed with what was said by the hon. Baronet opposite with respect to Army expenditure. It was to that rather than to education that they should look for a saving. Of course it was almost impossible to come to any final opinion on the matter until we knew the time in case of difficulty on the Indian frontier within which troops could be placed on the frontier. Reference had been made to the saving of £3,500,000 on the Navy Estimates. That had been done by better administration in the Navy, and there were few who would not believe that a similar saving might be effected by better administration in the Army apart altogether from the question of maintaining, increasing, or reducing the number of troops. There had been a good deal of waste in Army administration, and that waste still continued. He instanced as one example the creation of barracks at stations like Aldershot. Under that head alone very large sums of money had been wasted. If due economy were exercised in the administration of the Army a substantial saving might be made, even assuming that a considerable additional reserve of strength was necessary.

MR. AUSTEN CHAMBERLAIN

said the discursive character of the debate resembled others during the progress of the Bill, and dealt with matters other than those contained in the clauses. The view of the hon. Member for West Islington as to the functions and duties of a Chancellor of the Exchequer differed very widely from his own. The hon. Member appeared to be of opinion that a Chancellor of the Exchequer should cut down expenditure without regard to Departmental needs or the purposes for which the money was required.

MR. LOUGH

I did not say that.

MR. AUSTEN CHAMBERLAIN

said it seemed to him that was implied by the hon. Gentleman. What the hon. Gentleman said was that he as Chancellor of the Exchequer did not make up his mind how much should be spent, but that he actually waited until he heard what the Departments wanted. The plan which he followed was the more reasonable of the two, and he did not think the suggestion of the hon. Gentleman was one that would commend itself to any man who had had experience of office, and would conduce to the passing of Budget proposals in the House.

The hon. Member who opened the discussion dwelt on the amount contributed by Ireland to the common expenditure, and founded himself on the Report of the Royal Commission. But that Commission was appointed for a particular purpose—to advise on a scheme of finance applicable to a contemplated system of Home Rule. It was necessary, as the Commissioners said, to treat Great Britain and Ireland as separate financial entities, but it did not follow that, when we had not got Home Rule, and when Home Rule was not proposed, the separate treatment should be adopted. If the proposals of the hon. Member were carried out, Ireland would contribute nothing at all to the common expenses of the two countries. If the taxation were to be limited to a twentieth of the taxation of Great Britain, and if expenditure continued as largely in Ireland—and the Government were continually urged to spend more there—then instead of Ireland contributing anything to the common expenditure of the United Kingdom, she would remain a dead weight and represent a minus quantity in the contribution to the Imperial expenditure.

The hon. Member for Luton, traversing a very different field, animadverted on various proposals included in the Naval and Military Works Acts, for which, as Chancellor of the Exchequer, he was not responsible before he took that office. He had contended that some of them would lose their value before the loans incurred in respect of them were paid off. The hon. Member misapprehended the financial position in regard to the Pacific cable. There was not only a sinking fund which was to pay off the debt contracted for the first laying of the cable, but, pari passu, the Treasury were laying aside about an equal sum almost every year to form a fund for laying a new cable or even to double the cable without borrowing if the existing cable was worn out. He could not say in what time the fund would produce a sum equal to the second cable but, speaking from memory, he believed it would probably be about forty years. The new naval scheme, so far as it affected Halifax, Bermuda, and Jamaica, would not have the consequences which the hon. Member anticipated. In fact, the hon. Gentleman had misapprehended altogether the effect of the new naval scheme. It was not suggested that Halifax should not have defences. In future the Dominion Government would take over those defences, and the money would not be wasted. Bermuda and Jamaica would remain, in certain contingencies, important naval stations and depôts, and expenditure on barracks and dockyards at those places could not be considered wasted. It was quite true that much less use would be made of them in time of peace than in the past, but the hon. Gentleman must not suppose that they would be of no use at all. He might say generally that the duration of all these loans had been fixed with regard to the duration of the works created by them, and he thought the hon. Member would find that the Treasury had not erred in their calculations. If they had erred at all they had erred on the side of caution in not attaching too long a life to the various works, buildings, or machinery paid for out of these loan funds.

He respectfully declined to follow the hon. Member for Plymouth into a further discussion of the question of the Transvaal contribution, because he had said all he could usefully say at present on the subject. But he deprecated these assertions by hon. Gentlemen that we should never see any portion of that money. He thought prophecies of that kind could only tend to fulfil themselves. Those who made them on the floor of the House deprived themselves of any right to criticise the Home Government or the Transvaal Government if this contribution was never paid. For his part, he did not consider that the proposals which he had made would in any way interfere with the carrying out by the Transvaal of the obligation which rested upon honour, and he did not doubt that our fellow-citizens in the Transvaal would use their best endeavours to bear the share which it was agreed on their behalf that they should take of the great expenditure which the war in South Africa involved.

MR. GUEST

said his point was that the right hon. Gentleman should have ignored this contribution for the purposes of his finances.

MR. AUSTEN CHAMBERLAIN

said that was exactly what he had done. He was gratified to have the hon. Member's approval of the course he had taken.

The hon. Member for Ilkeston would find that the falling off in the importation of foreign cigarettes was practically as great between 1902 and 1903 as it was between 1903 and 1904. As the tax was only imposed last year, there must have been other causes at work to produce that result. These other causes were, he thought, the collapse of the attack on the English market by American manufacturers, and the agreement which they had entered into with the Imperial Tobacco Company in this country, by which they undertook not to send their goods into the United Kingdom. If the hon. Gentleman would look at the figures, he would see that the fall was almost entirely in the imports from the United States. In 1902 the imports were 309,000 lbs., in 1903 they were 162,000 lbs., and in 1904 only 19,000 lbs. That was the explanation of the great falling off in the importation of foreign cigarettes, though he did not doubt that amongst some of the cheaper qualities the tendency had been to import the whole leaf and manufacture the cigarettes here.

His hon. friend the Member for Renfrewshire drew attention to the level at which the income-tax stood and urged once more the importance of reducing it in the interests of trade and commerce. He had never concealed his feeling that the income-tax stood at too high a figure and that, both in the interests of trade and industry and the interests of sound national finance and what he might call the financial security of our war reserves, it ought to be reduced below the present figure. But he still remained of the opinion that it was his first duty to make an addition to the fixed debt-charge in order that a larger sum might be devoted to the reduction of debt. No one would rejoice more than he would when they could get the income-tax back to a more reasonable level. He had dealt with all the points raised, except two by hon. Gentlemen opposite who were not now present. But he might say that a Budget debate was not the proper time for an elaborate examination of naval, military, or educational expenditure. That must come on when the Estimates were considered.

MR. JOHN WILSON (Falkirk Burghs)

Has the right hon. Gentleman not anything to say about the coal question?

MR. AUSTEN CHAMBERLAIN

said he had nothing to add to the very full statement he had made the other night. Might he ask the hon. Gentleman to read his speech.

MR. DALZIEL (Kirkcaldy Burghs)

said he thought the House would recognise that the right hon. Gentleman had on the whole dealt fairly with the different points brought forward in the debate. This debate to him, and he believed to the House generally, had been somewhat in the nature of a surprise in regard to the lines on which it had proceeded. He thought from the notice of Motion placed on the Paper by the hon. Member for Barnstaple that they were going to-day to have an indictment of the right hon. Gentleman in regard to his unfitness to discharge the duties of his office. He could only surmise that the hon. Gentleman the Member for Barnstaple was satisfied with the speech which the Chancellor of the Exchequer made the other day, and that all the difficulties he had in his mind had been entirely removed. Presumably the Amendment was not in order, but that was no reason why the hon. Gentleman should have sacrificed his speech.

In regard to the Budget, he would say that the Chancellor of the Exchequer, considering all the circumstances of the case, had brought forward a Budget which was fairly satisfactory. The two blots on it were more in the nature of a promise of the future attitude of the right hon. Gentleman. In the debate in Committee the right hon. Gentleman, as it were, closed the door against any demand for a graduation of the income-tax. Now, he heard that declaration with some regret. No one supposed that graduation could have been dealt with in the present Budget; but it was a reasonable contention that a person with £300,000 or £400,000 a year should pay more income-tax proportionally than a person whose income depended upon his daily labour. If that were possible in other countries, it ought to be possible in this country; but the right hon. Gentleman had shut out all hope of the question being dealt with. Another declaration of the right hon. Gentleman was that the war taxes were to be continued in future without any reference to the fact that they were introduced as war taxation. That was a most important departure. Hitherto, it was generally understood that these taxes would be removed at the earliest possible opportunity. The right hon. Gentleman the Member for West Bristol left the House distinctly under the impression that these were temporary taxes.

MR. AUSTEN CHAMBERLAIN

said that his right hon. friend the Member for West Bristol stated in debate that his great difficulty was, not war expenditure, but the expenditure which would remain after the war, and that he must, therefore, broaden the basis of taxation. It was quite true when his right hon. friend made the first increases in 1900 that he expressed the hope that they would be short lived; but the next year he explained he was unable to repeal those taxes, and even had to impose fresh taxation. He also repeatedly pointed out the difficulties which would follow after the war.

MR. DALZIEL

said that the right hon. Gentleman the Member for West Bristol did express the hope that these taxes would be short lived; and surely the House was correct in concluding that they were of a temporary character. Nine out of every ten hon. Members were of opinion that the first duty of the Government would be, after the war, to devote themselves to the reduction of the war taxation. Tue Chancellor of the Exchequer had departed from that standpoint; and now they were told that it was a mistake to regard this as war taxation. That was a matter for regret.

He wished to ask the right hon. Gentleman a Question with regard to the war contribution from the Transvaal. He quite understood the right hon. Gentleman deprecating discussion on the subject, on the ground that it would not help him to get this money; but the House was entitled to know what hope he had that it would be paid, or whether the matter was to be allowed to drift entirely until a new Government came into office and had the responsibility removed to their shoulders. Only the other day the right hon. Gentleman the Member for West Birmingham stated that it would be an insult to the Boers to expect them to willingly contribute this money. That was a statement which would not assist in getting this contribution. He could imagine a Boer majority in the Representative Council in the Transvaal regarding it as their charter for refusing to vote this money. In his opinion, the right hon. Gentleman closed the door against any contribution. The Chancellor of the Exchequer had had many opportunities of bringing home to the Transvaal that this money should be paid. The right hon. Gentleman had taken part in raising money for the Transvaal; and he ought to consider the contribution as a realisable asset. The position in which the question was now being left was very unsatisfactory indeed; and probably another opportunity would be taken of impressing on the right hon. Gentleman what his duty ought to be. The contribution was part of a bargain entered into between the right hon. Gentleman the Member for West Birmingham, on behalf of this country, and the Rand magnates; and the late Colonial Secretary received the gratitude of the people on his return to this country for having arranged this contribution. If the Rand magnates entered into that bargain they ought to keep it.

Then as regarded the Colonies and the Navy, did the right hon. Gentleman ever suggest that the Colonies should bear a portion of the naval expenditure of this country. They heard a great deal nowadays about the enthusiasm of the Colonies for the mother country; but was it not time that they should pay part of the expenditure which was incurred by the taxpayer of this country in protecting them? It was suggested that the question should be discussed by the representatives of the Colonies. Would the right hon. Gentleman put it in the forefront of the programme for the next Colonial Conference? With regard to war taxation and the failure of the Colonies to contribute to the Navy, they had reason to be dissatisfied with the position taken up by the right hon. Gentleman; and in order to emphasise his protest he would move that the Bill be read a third time that day six months.

MR. BRIGHT (Shropshire, Oswestry)

said that he desired to second the Motion. The expenditure of the country had been increasing by leaps and bounds. Since the commencement of the war the revenue taxes had increased by £25,000,000. Taxation on the necessaries of life pressed most heavily on the people least able to bear it, viz., the classes which had to work for their daily bread. They were piling up indirect taxes one by one, and the result was that they were curtailing the prosperity of the country by diminishing its purchasing power. The prosperity of the country depended on the working classes having money to spend; but if 4d. or 6d. a week were deducted by indirect taxes their purchasing power was correspondingly diminished. Further, the piling up of indirect taxes was a most insidious form of taxation. The people did not know what it was that was diminishing their purchasing power. They might think it was hard times; it was, however, indirect taxation, largely due to the Imperialism of the last few years, which had been a curse to this country. It had resulted in largely increased expenditure on the Army and Navy; but that did not mean efficiency. The Japanese Navy, for the three years preceding the Russo-Japanese War, cost only £10,000,000, whereas the Russian Navy, which was practically annihilated, cost £35,000,000 for the same period. It was not expenditure that secured efficiency. In the time of Elizabeth our expenditure was very small as compared with the nations opposed to us. The great resource of a nation was small expenditure, and a great reserve to be called upon in time of trouble. There were £8,000,000 or £9,000,000, for which no provision was made in this Bill, which would have to be provided by adding to the Debt. Broadening the basis of taxation really meant narrowing the means of subsistence and, that being so, he objected to it. In regard to the taxation of the ordinary necessities of life, he believed in the old theory that a man should not be taxed until after he had had his dinner, and he would also add nor a woman until she had had her tea, and he sincerely hoped that the time was coming when these taxes on commodities would be abolished.

With regard to the question of graduated income-tax, he himself had been an Assistant Commissioner of Income-tax, and knew of what he was speaking when he said he was perfectly convinced that there was no difficulty whatever in evolving a scheme of graduated income - tax. It could be easily done by putting a surplus charge on the individual, because those who were called the "big fish" were well known to the income-tax officials. But he was more concerned in the reduction of expenditure. He hoped to see a return to a system of commonsense and the getting rid of this "Imperialism," which had been a source of such expenditure and such a burden to the country.

Amendment proposed— To leave out the word 'now,' and at the end of the Question to add the words, 'upon this day six months.'"—(Mr. Dalziel.)

Question proposed, "That the word 'now' stand part of the Question."

MR. O'MARA (Kilkenny, S.)

said if he were an Englishman he should not have considered this Budget a bad one, because the right hon. Gentleman had, so far as in him lay, reduced the burden of taxation and had established a sinking fund for the repayment of loans. But looking at it from the Irish point of view, which was the only point of view from which he regarded Imperial expenditure, he could not see that the observations of the Chancellor of the Exchequer left much hope of there being any reduction in taxation in favour of Ireland. He regarded the present Chancellor of the Exchequer as much more unsympathetic with regard to Irish economic questions than his predecessors. Though the right hon. Gentleman the Member for West Bristol did not do very much for Ireland his utterances were always sympathetic. Such utterances, even, did not come from the Chancellor of the Exchequer. From him they had a cold, unsympathetic, and, from the Irish standpoint, a hopeless view of the situation. When the right hon. Gentleman the Member for West Bristol imposed the coal tax he called attention to the fact that although that tax brought in £2,000,000 revenue it did not impose a penny of extra taxation on Ireland. The present Chancellor of the Exchequer had promised on the first opportunity to take off the coal tax, and if that were done, instead of commencing with some of those taxes which affected Ireland, he would regard that as an injustice. Even that evening the Chancellor of the Exchequer had called attention to the fact that the Royal Commission which recommended that Ireland should only pay one-twentieth of the Imperial expenditure was appointed by a Government which included Home Rule in their programme. It was not the Home Rule Bill which influenced the Royal Commission in its findings. It was the careful inquiry, perhaps the most careful that had ever taken place, into the economic condition of Ireland and the capacity of the people to be taxed, that led them to the conclusion at which they arrived. That Royal Commission sat ten years ago, and in the years that had intervened between then and now the taxable capacity of Great Britain had increased, whilst that of Ireland had decreased, and was decreasing more rapidly every day.

The test of the poverty of a country was the emigration of the people because they could not live at home, and from Ireland the people were rushing away in ever-increasing numbers year by year. In the first three months of this year 12,000 left the country, as against 9,000 in the corresponding period of last year. Another test of the wealth of a country was the railway receipts. The receipts of English railways went up year by year, but in Ireland they were falling. He himself did not believe that even yet Ireland had touched the bottom in national decay. With regard to direct and indirect taxation, so far as England was concerned taxation was about equally divided between direct and indirect taxation, but so far as Ireland was concerned indirect taxation amounted to same 79 per cent. of the whole, whilst direct taxation was only 21 per cent. If such a thing as that occurred in England the whole country would be up in arms against the tax; the whole population, the poorest of the poor, would rise against it. These figures in themselves proved that, not only was the taxation of Ireland unjust, but the system of finance which taxed the poor to such excess was not sound.

Surprise was sometimes expressed that Nationalist Members should object to contributing so much to Imperial taxation seeing that Ireland was benefited by being protected against foreign invasion. Even admitting that that were so, in what way was Ireland more protected than the Colonies? £500,000 was being spent on the West Indies this year, but the people of Ireland were unable to get an extra gunboat to protect their fisheries. While Canada did not contribute a cent, towards the cost of the Navy, Ireland was taxed to such an extent that the people were being driven from the country. Australia contributed £30,000 against Ireland's £3,000,000, and nothing could be got out of South Africa. He submitted that Ireland had a legitimate ground of complaint in this matter.

In reply to the Chancellor of the Exchequer's declaration that differential Customs could not be levied as between the two countries, he might point out that the Irish Customhouse was not established until 1859, and that there were means by which Ireland could be relieved apart from Customs duties. As to the contention that the excessive taxation was counter balanced by excessive expenditure, the Nationalist Members were not responsible in the smallest degree for the government of the country; their suggestions were never adopted by the House, and the sole responsibility must rest upon the benches opposite. That being so, it was most unfair for the Chancellor of the Exchequer to say that the excessive taxation was set off by the excessive expenditure in Ireland. The Irish people could not in any way be held responsible, as the government of the country was inspired by half-a-dozen Members, representing only a very small section of the people. He deeply regretted the thoroughly unsympathetic attitude which the Chancellor of the Exchequer had adopted in reference to the Irish financial grievances.

MR. WHITLEY (Halifax)

hoped the Secretary to the Treasury would be able to reassure the House as to the attitude now being taken up by the Treasury in regard to expenditure. During the last few years Treasury control had not been as strict as it used to be, or as careful as it ought to be. Until recently the great safeguard of the national finances had been the watchfulness of the Treasury, but it was necessary to go back no farther than the Estimates of the present year to see how that watchfulness had been relaxed. There was the question of entering upon schemes involving expenditure without the authorisation of Parliament. For instance, the Treasury had given permission for the spending of £4,000 on Whale Island, knowing full well that it involved a further expenditure of £30,000 during the present year, and not a penny of that expenditure had been authorised by this House. An assurance ought to be given that the Treasury intended to abandon this laxity of control and to revert to their earlier and better practice of strictly forbidding the initiation of great schemes by spending Departments until authority had been given by the House of Commons. There was also the Rosyth case, in regard to which the House did not know how matters stood. Were the Treasury refusing to allow any further expenditure there until the matter had been placed fully before Parliament? One of the evil results of the war was that having been repeatedly overridden by the urgent demands of the military and naval Departments, the Treasury appeared to have lost the grip it used to have over the natural tendency of Departments to spend money far too easily.

Stricter supervision was required also in regard to appropriations-in-aid. Recently, by the assistance of appropriations-in-aid, an Estimate really for £1,500,000 had been made to appear as for only £590,000. Departments were pressed to realise so-called surplus stores in order to swell the appropriations-in-aid, and thus to decrease the net amount of the Estimates, with the result that great waste ensued. That would probably be found to account for some of the waste in South Africa, where stores were sold at half price and bought back immediately after the turn of the financial year, so that the expenditure came into a different annual account. He appealed to the Treasury to resume its old position as the watch-dog of national finance, and to remove the idea that the spending Departments had only to press hard enough to cause the Treasury to give way.

Without going into details of taxation he might point out how entirely the prophecy of the hon. Member for North Bristol with regard to the duty on stripped tobacco had been carried out. He then told the House that one halfpenny per 1b. would cover any proper differentiation between the duties on whole leaf and stripped tobacco. Everything that had happened since then had fully confirmed his judgment, and one of the features of this Budget was that everybody but the Chancellor of the Exchequer had admitted that a great mistake was made when that differentiation in the tax was made. He hoped the hon. Member for North Bristol would again be able to give the House the benefit of his expert knowledge in regard to this tax before the debate upon the Budget closed, because the tax was unjust and unfair to a large body of men who were engaged in the same trade as the hon. Member opposite.

MR. AINSWORTH (Argyllshire)

said they had often been told that certain parties in South Africa undertook to underwrite a loan of £30,000,000 to pay to this country; but the House ought to know who was to raise the loan. Until they knew that, the underwriting of the loan was a matter of no moment whatever. As the right hon. Gentleman the Member for West Birmingham was in his place, he hoped he would tell the House who were the parties with whom he made his bargain. The right hon. Gentleman the Member for West Bristol had told them that if this transaction had been properly carried out the Government ought to have entered into an undertaking as to when and under what circumstances this loan would be raised. Before they proceeded to a division he hoped they would have a full explanation from somebody who knew all the circumstances.

MR. SPEAR (Devonshire, Tavistock)

thought it was unfortunate that speeches such as they had just listened to, questioning the bona fides of people in South Africa, should go forth from that House. He regretted that speeches should be made in the House of Commons which would probably go forth and be repeated in South Africa, even suggesting to those who happened to read them that there was no moral obligation whatever on the part of the people of the Transvaal to fulfil the terms of the arrangement made at the end of a devastating war, an arrangement which, up to the present moment, they had no reason whatever for believing would not be faithfully and honourably fulfilled. He regretted that the Chancellor of the Exchequer was unable to make a larger remission in taxation, but he believed the right hon. Gentleman had done the best he could in the interest of sound finance and with just regard to all classes of the people. He rejoiced in the reduction of the tax upon tea, because he felt that it was necessary to reduce some of these duties in order to maintain the financial credit of the country. He regretted that the Chancellor of the Exchequer was not able to reduce the income-tax. Had it not been for the reduced revenue from liquor, the right hon. Gentleman would no doubt have been able to lower the income-tax. But while regretting that there had been no remission of the income-tax, he was sure they would all rejoice to hear of the reduced drinking habits of the people, although it had caused some inconvenience to the Chancellor of the Exchequer and to the revenue.

He was bound to admit that he regarded with some apprehension the large expenditure of the country, and he hoped the Government would do what they could, while maintaining the efficiency of the public services, to reduce expenditure. On the other hand, he could not help remembering that much of that expenditure had arisen in reference to the Army, in making better provision for the men and giving them better pay. This expenditure was absolutely necessary if they desired to maintain the British Army in a state of efficiency, and if they wished to avoid conscription. With regard to the expenditure upon the Navy, it seamed a big sum, but having regard to the crisis through which they had been passing the fact that they possessed a strong and an efficient Navy had been of great value to this country. He ventured to say that but for the fact that they had got such a strong Navy there would have been a great danger of complications abroad, and perhaps a serious and a very expensive war. He noticed that hon. Members opposite were very strong just now in their advocacy of the further reduction in the tea duty, but when the Party opposite wore in power they placed the tea tax at 6d. per 1b. year after year, and that occurred in time of peace. The Unionist Government reduced the tea tax to 4d., at which figure it remained until it was raised to meet the expenses of the war. Therefore, the great enthusiasm of hon. Members opposite for economy was of very recent birth, because if only one-third of the claims they had brought before the House had been granted the national expenditure would have been very much higher than it was at the present time. Speaking as a business man he wished to say that the method of dealing with Supply in this House was unbusinesslike, and did not tend, in his opinion, towards the promotion of economy. It was true that at the beginning of the session a certain number of days were set apart for Supply—

MR. DEPUTY-SPEAKER

Order, order! That is a matter relating to the rules of the House, and it cannot be dealt with now.

MR. SPEAR

urged the Government to exercise a closer supervision over national expenditure, in order that economy might be observed. They were all agreed that the Army and Navy should be maintained in a state of complete efficiency so that they should be able to protect their interests wherever they might be attacked.

MR. CATHCART WASON (Orkney and Shetland)

said the few remarks which the hon. Member opposite had just made had convinced him that the Army and Navy was a subject about which they talked a great deal too much. He could not imagine anything more mischievous than the comparisons which had been made during the discussions in this House between our Army and Navy and those of foreign countries, and the suggestions as to what this country would do in certain eventualities. As long as the country was satisfied that the Army and Navy were sufficiently strong the less they said about the matter in that House and outside of it the better.

Many hon. Members thought that the negotiations with regard to the loan had been conducted with a singular want of knowledge, business capacity, and ordinary commonsense. The negotiator came back with a great account of what had been done, and as to the promises to pay in the future. Those promises had been sharply criticised in this House. It had been pointed out that they were illusory, and that the nature of the security was absolutely worthless. It had never been made clear inside this House, or outside of it, that there was any person in South Africa responsible for this money. He wished to direct the attention of the House to the necessity of sending out an impartial Commission to find out the position of affairs there. He was told on what he regarded as unimpeachable authority that the state of affairs in that country was intolerable.

Referring to the tea duty the hon. Member said it should be remembered that it represented 100 per cent. on the market value of the article. It was outrageous that this country should put such a duty on an article which came so largely from our own Colonies. If we were to have colonial preference now was the time, when it could be given on tea, for the great bulk of it came from our own possessions, and gave employment to our own people. The feeling which was engendered among our fellow-citizens in Ceylon and India on account of this enormous imposition was very injurious to the best interests of this country. The duty was the same on all qualities of tea, and it was inequitable that the poor, who bought low-priced tea, should pay at the same rate as the rich, who used tea at 3s. or 4s., or it might be £3 or £4 per pound. In regard to all articles of luxury there ought to be an ad valorem duty, so that the consumer would contribute to the revenue in proportion to the value of the commodities he consumed. At present the poor had to pay through the nose for what they consumed, while the rich escaped their fair contribution. He was not sorry the Chancellor of the Exchequer had not reduced the income-tax. He would have brought more money into the Treasury if he had introduced a system of graduation. There were people with great incomes who really did not know how to spend their money. They wasted it in the most scandalous and sinful way, and it would he very much better if it went into the Treasury instead of being thrown away.

MR. MARKS (Kent, Thanet)

said he thought the House would regard with great and sympathetic interest the speech of the hon. Member for South Kilkenny as to the distressful condition of Ireland. It certainly appeared from what the hon. Member said that the people of Ireland had great cause of complaint. No doubt the general feeling was that Ireland was taxed, if not unfairly, at any rate in excess of the means and resources of her people. That condition of things unfortunately was not confined to Ireland. A similar complaint might be made by the inhabitants of this country. The conditions which had led to that state of things were not far to seek. When one heard of trade languishing, employment scarce and uncertain, difficulty arising from public burdens, and increasing want among the people, it appeared that there was something radically wrong, something rotten in the State. The hon. Member for South Kilkenny had complained that the state of affairs in Ireland received little notice or sympathy from this House. He ventured to say that a debate on the Third Reading of a Finance Bill did not afford a very convenient opportunity for dealing with the subject, and it was perhaps regrettable that the grievances of Ireland had been brought forward at this time and in this way. He suggested that a better test of the sympathy of the House would be obtained if the hon. Member for South Kilkenny or some of his friends were to bring forward a Motion for the appointment of a Committee to inquire into the economic condition of Ireland. If the work of the Committee were properly carried out, as no doubt it would be, and if such evidence as the hon. Member was in a position to place before it were given, the House would be in a position to judge of the effects of the economic conditions in Ireland, and to apply some remedy. The hon. Gentleman with whom the Member for Kilkenny acted would no doubt support a Motion for such a Committee. He thought the suggestion would find a great deal of sympathy of that side of the House.

MR. KEIR HARDIE (Merthyr Tydvil)

said the Chancellor of the Exchequer had some hard things to say of the colliery proprietors in this country as to the way in which they neglected to prepare the coal for the market so as to enable them to hold their own with the output from the Westphalian coalfields. The right hon. Gentleman specially referred to the washing of coal nuts, and pointed out that in Westphalia expensive machinery had been erected and precautions taken to ensure that the coal before being placed on the market was properly cleaned and sorted out so as to render it most adapted to the needs of the consumer. But the right hon. Gentleman omitted to say that if the colliery owner in this country erected expensive machinery for the purpose of washing and sorting out coal, thereby increasing its market value, he brought himself within the scope of the coal tax, and was fined for his industry and enterprise. If low-priced coal was washed and exported, the shilling tax handicapped the exporters in the neutral markets of the world. The Chancellor of the Exchequer should have assured himself that he was not putting by this tax an impediment in the way of the enterprise of the colliery owners of this country. The right hon. Gentleman had stated frequently in the debates on this Bill that he received £2,000,000 a year from the coal tax, which sum was required by the financial condition of the country, and that no suitable substitute for the coal tax had yet been suggested which would bring in the same amount. Everything depended on what was meant by a suitable substitute. Over and over again it had been pointed out that a penny per ton on all coal raised in this country—half to be paid by the colliery owners and half by the mineral owners who received the royalties—would yield £2,000,000 per annum. But the difference would be this: that a halfpenny per ton would come from the rents of the royalty owners and a half penny per ton from the profits of the colliery owners, whereas the shilling per ton duty on exported coal came out of the colliers' wages. The Chancellor of the Exchequer held that that was no proper substitute for the coal tax in its present form. It was significant that the whole method of our financial relations—whether in Ireland or Great Britain—so operated that the burden of taxation was made to press with undue severity on the poor.

The hon. Member for Tavistock said that if the schemes which were propounded on this side of the House were to be agreed to, the national expenditure would be considerably increased, and further taxation would be necessary. He ventured to say that if all the schemes which had ever been propounded on this side of the House had become law during the last twenty years, they would not have entailed as much expense as the recent criminal war in South Africa. Moreover, there would have been something to show for the expenditure. The right hon. Gentleman the Member for West Birmingham, speaking on Saturday night, said that the working classes did not easily forget anything which had been of benefit to them. The remark was true; but neither did they forget readily when anything had been done which was of disadvantage to them. When they had been misled once, they were not likely to allow themselves to be misled a second time from the same quarter and by the same authority. The result of the recent elections showed that while the working classes had been misled by specious fallacies concerning the war which had cost the country so very dear, they were not going to be misled again by economic fallacies from the same quarter. In regard to this question of increased expenditure there was a Bill now before the House which, according to the estimate made by the Home Office, would cost the country some £30,000 for its administration.

MR. DEPUTY-SPEAKER

said the hon. Gentleman must confine himself to the subject of the Finance Bill.

MR. KEIR HARDIE

said he would confine himself to past expenditure, but he only wanted to show that the proposals made by the Government themselves would mean extra expenditure.

As to the income-tax, the hon. Member for Tavistook expressed regret that it had not been reduced. He joined in that expression of regret in so far as salaries under £500 a year were concerned. It had always seemed to him that people who earned a salary by professional services should not be classed on the same scale as people who derived large incomes—whether by war in South Africa, by swindling contracts, or by oppressing and grinding down the workers in this country. Therefore, he would have welcomed a reduction of the income-tax on those whose incomes were under the figure he had named, provided that the depletion of the revenue falling to the Chancellor of the Exchequer by that reduction, had been made up by an increased tax upon higher incomes. It was perfectly ridiculous for the Chancellor of the Exchequer, or for anyone with the slightest pretension to the understanding of finance and of the incidence of taxation, to stand up and proclaim that a graduated income-tax was not, in practice, easy of application. Suppose that the incidence of taxation were the other way, and that the graduation was going to make the tax fall more heavily on the poor, a thousand and one means would be found to carry out that graduation. But because graduation promised to relieve the poor and the lower middle classes, and to place the burden of taxation more equitably on the shoulders of those most able to bear it, then they were told that there was no way to apply the graduation.

He did not think the time spent on these questions of a graduated income-tax and the remission of the coal tax had been at all wasted at a period like the present when the wages in the coal trade had been going down and with every prospect of their continuing to go down. Surely the Government in general, and the Chancellor of the Exchequer in particular, should remember that he was the son of the only Labour Member in the House, and the right hon. Gentleman might see his way to ease the pressure a little on the working colliers. He should have thought that a sense of filial responsibility and duty would have led the right hon. Gentleman to do

this good turn to his distinguished father. The colliers of the country objected to this tax, which ought never to have been imposed, and which should be removed at once. It was because he believed it was an improper tax, and one which put an extra burden on the rates in order to afford relief to people whose guilty conduct in the House and out of it had rendered it in the first case necessary, that he opposed it. He hoped that the tax would be removed when another Budget was introduced.

MR. JOHN. WILSON (Falkirk Burghs)

said that the right hon. Gentleman had referred him to Hansard for his views on the coal tax but that number of Hansard had not yet been issued. Referring to The Times report, however, he found that the right hon. Gentleman stated that he was unable to accept the views of the hon. Gentleman the Member for North-West Lanark to exempt Scottish coal-owners from the tax on small coal. This coal was a great asset to the nation. Formerly, thousands of tons of this class of coal were left in the mines.

MR. DEPUTY-SPEAKER

The hon. Gentleman is not in order in repeating the arguments he has already used.

MR. JOHN WILSON

said he only wished to state that the tax was a peculiar hardship in Scotland. The manufacturers of Welsh patent fuel were exempt and the Scottish manufacturers should be given equality of treatment.

Question put.

The House divided:—Ayes, 216; Noes, 132. (Division List No. 194.)

AYES.
Allsopp, Hon. George	Banbury, Sir Frederick George	Brodrick, Rt. Hon. St. John
Anson, Sir William Reynell	Barry, Sir F. T. (Windsor)	Butcher, John George
Arnold-Forster, Rt. Hn. H. O.	Bartley, Sir George C. T.	Campbell, Rt. Hn. J A (Glasgow)
Arrol, Sir William	Bhownaggree, Sir M. M.	Carlile, William Walter
Atkinson, Rt. Hon. John	Bignold, Sir Arthur	Cautley, Henry Strother
Bagot, Capt. Josceline FitzRoy	Bill, Charles	Cavendish, V. C. W. (Derbysh.
Bailey, James (Walworth)	Blundell, Colonel Henry	Cecil, Lord Hugh (Greenwich)
Balcarres, Lord	Bond, Edward	Chamberlain, Rt. Hon. J (Birm.
Baldwin, Alfred	Boacawen, Arthur Griffith	Chamberlain, Rt. Hn. J. A (Worc.
Balfour, Rt. Hn. A. J. (Manch'r	Boulnois, Edmund	Chapman, Edward
Balfour, Rt. Hn. G. W. (Leeds	Bowles, Lt.-Col. H. F. (Middl'x)	Coates, Edward Feetham
Balfour, Kenneth R. (Christch.	Brasaey, Albert	Cochrane, Hon Thos. H. A. E.
Coddington, Sir William	Hope, J. F (Sheffield, Brightside	Pryce- Jones, Lt.-Col. Edward
Cohen, Benjamin Louis	Howard, J. (Kent, Faversham	Purvis, Robert
Colston, Chas. E. H. Athole	Hozier, Hn. Jas. Henry Cecil	Pym, C. Guy
Cook, Sir Frederick Lucas	Hudson, George Bickersteth	Rankin, Sir James
Corbett, A. Cameron (Glasgow	Hunt, Rowland	Rasch, Sir Frederic Carne
Corbett, T. L. (Down, North)	Hutton, John (Yorks, N. R.)	Reid, James (Greenock)
Craig, Chas. Curtis (Antrim, S.	Jeffreys, Rt. Hon. Arthur Fred	Remnant, James Farquharson
Cripps, Charles Alfred	Jessel, Captain Herbert Merton	Renshaw, Sir Charles Bine
Cross, Alexander (Glasgow)	Kenyon, Hn. G. T. (Denbigh)	Ridley, S. Forde
Cross, Herb. Shepherd (Bolton	Kenyon-Slaney, Rt. Hn. Col. W	Ritchie, Rt. Hon. Chas. T.
Cubitt, Hon. Henry	Lambton, Hn. Frederick Wm.	Roberts, Samuel (Sheffield)
Dalkeith, Earl of	Laurie, Lieut.-General	Robertson, Herbert (Hackney
Dalrymple, Sir Charles	Law, Andrew Bonar (Glasgow)	Rollit, Sir Albert Kaye
Davenport, William Bromley	Lawrence, Sir J. (Monm'th)	Rothschild, Hon. Lionel Walter
Denny Colonel	Lawrence, Wm. F. (Liverpool)	Round, Rt. Hon. James
Dickson, Charles Scott	Lawson, Hn. H. L.W.(Mile End	Royds, Clement Molyneux
Dixon-Hartland, Sir F.	Lawson, J. Grant (Yorks, N. R.	Rutherford, John (Lancashire
Douglas, Rt. Hon. A. Akers-	Lee, A. H. (Hants., Fareham	Sackville, Col. S. G. Stopford
Doxford, Sir William Theodore	Lees, Sir Elliott (Birkenhead)	Samuel, Sir H. S. (Limehouse
Dyke, Rt. Hon. Sir William H.	Legge, Col. Hon. Heneage	Seely, Chas. Hilton (Lincoln)
Faber, George Denison (York)	Leveson-Gower, Frederick N. S	Seton-Karr, Sir Henry
Fellowes, Rt. Hn Ailwyn Edward	Lockwood, Lieut-Col. A. R.	Sharpe, William Edward T.
Fergusson, Rt. Hn. Sir J (Manc'r	Long, Col. Chas. W. (Evesham	Skewes-Cox, Thomas
Finch, Rt. Hon. George H.	Long, Rt. Hn. Walter (Bristol, S.	Smith, Abel H. (Hertford, East
Finlay, Sir R. B. (Inv'rn'ss B'ghs	Lowe, Francis William	Smith, Rt. Hn J Parker (Lanarks
Fisher, William Hayes	Loyd, Archie Kirkman	Spear, John Ward
Fison, Frederick William	Lucas, Col. F. (Lowestoft)	Stanley, Edward J. (Somerset
FitzGerald, Sir R. Penrose	Lyttelton, Rt. Hon. Alfred	Stanley, Rt. Hn. Lord (Lancs.
Fitzroy, Hn. Edw. Algernon	Macdona, John Cumming	Stewart, Sir Mark J. M'Taggart
Flannery, Sir Fortescue	M'Arthur, Charles (Liverpool)	Stroyan, John
Forster, Henry William	M'Calmont, Colonel James	Strutt, Hon. Charles Hedley
Foster, Philip S. (Warwick, S W	M'Iver, Sir Lewis (Edinburgh W	Talbot, Lord E. (Chichester)
Galloway, William Johnson	Majendie, James A. H.	Taylor, Austin (East Toxteth)
Gardner, Ernest	Manners, Lord Cecil	Thorbura, Sir Walter
Garfit William	Marks, Harry Hananel	Thornton, Percy M.
Gibbs, Hon. A. G. H.	Martin, Richard Biddulph	Tollemache, Henry James
Godson, Sir Augustus Fredk.	Maxwell, Rt Hn Sir H.E (Wigt'n	Tomlinson, Sir Wm. Edw. M.
Gordon, Hn. J. E (Elgin & Nairn	Melville, Beresford Valentine	Tritton, Charles Ernest
Gore, Hon. S. F. Ormsby	Milner, Rt. Hon. Sir Fredk. G.	Tuke, Sir John Batty
Gorst, Rt Hon. Sir John Eldon	Milvain, Thomas	Turnour, Viscount
Goschen, Hn. George Joachim	Mitchell, William (Burnley)	Vincent, Col. Sir C E H (Sheffield
Graham, Henry Robert	Montagu, G. (Huntingdon)	Walrond, Rt. Hn. Sir Wm. H.
Gray, Ernest (West Ham)	Montagu, Hon. J. Scott (Hants	Welby, Lt.-Col. A C E (Taunton
Greene, Sir E W (B'ry S Edm'nds	Morgan, D. J. (Walthamstow	Wentworth, Bruce C. Vernon
Greene, H. D. (Shrewsbury)	Morpeth, Viscount	Wharton, Rt. Hn. John Lloyd
Greene, W. Raymond (Cambs.	Morrell, George Herbert	Whiteley, H. (Ashton und Lyne
Grenfell, William Henry	Morton, Arthur H. Aylmer	Whitmore, Charles Algernon
Gretton, John	Mowbray, Sir Robert Gray C.	Williams, Colonel R. (Dorset)
Greville, Hon. Ronald	Muntz, Sir Philip A.	Wills, Sir Fredk. (Bristol, N.)
Guthrie, Walter Murray	Murray, Charles J. (Coventry)	Wilson, John (Glasgow)
Hain, Edward	O'Neill, Hon. Robert Torrens	Wilson-Todd, Sir W. H. (Yorks
Halsey, Rt. Hon. Thomas F.	Palmer, Sir Walter (Salisbury)	Wodehouse, Rt. Hn. E. R. (Bath
Hamilton, Marq of ((L'nd'nd'ry	Parker, Sir Gilbert	Worsley-Taylor, Henry Wilson
Hare, Thomas Leigh	Pease, Herbert P. (Darlington	Wortley, Rt. Hon. C. B. Stuart
Harris, F. Leverton (Tynem'th	Pemberton, John S. G.	Wrightson, Sir Thomas
Hay, Hon. Claude George	Percy, Earl	Yerburgh, Robert Armstrong
Heath, Sir J. (Staffords, N. W.	Pierpoint, Robert
Heaton, John Henniker	Pilkington, Colonel Richard	TELLERS FOR THE AYES—Sir
Henderson, Sir A (Stafford, W	Platt-Higgins, Frederick	Alexander Acland-Hood and
Hickman, Sir Alfred	Plummer, Sir Walter R.	Viscount Valentia.
Hoare, Sir Samuel	Powell, Sir Francis Sharp
Hogg, Lindsay	Pretyman, Ernest George
NOES.
Abraham, William (Cork, N. E.	Benn, John Williams	Burt, Thomas
Ainsworth, John Stirling	Black, Alexander William	Buxton, N. E. (York, N R Whitby
Ashton, Thomas Gair	Blake, Edward	Buxton, Sydney Chas. (Poplar
Barlow, John Emmott	Boland, John	Caldwell, James
Barran, Rowland Hirst	Bolton, Thomas Dolling	Cameron, Robert
Beaumont, Wentworth C. B.	Brigg, John	Campbell, John (Armagh, S.)
Bell, Richard	Burke, E. Haviland	Channing, Francis Allston

Cheetham, John Frederick	Kearley, Hudson E.	Russell, T. W.
Craig, Robert Hunter (Lanark	Kennedy, Vincent P. (Cavan, W	Samuel, Herb. L. (Cleveland)
Cremer, William Randal	Labouchere, Henry	Schwann, Charles E.
Delany, William	Lambert, George	Shackleton, David James
Dewar, John A. (Inverness-sh.	Lamont, Norman	Shaw, Chas. Edw. (Stafford)
Dilke, Rt. Hon. Sir Charles	Lawson, Sir Wilfrid (Cornwall	Shaw, Thomas (Hawick B.)
Duncan, J. Hastings	Layland-Barratt, Francis	Shipman, Dr. John G.
Edwards, Frank	Loose, Sir J. F. (Accrington)	Sinclair, John (Forfarshire)
Elibank, Master of	Leng, Sir John	Slack, John Bamford
Ellice, Capt. E C (S Andrw's B'ghs	Lewis, John Herbert	Smith, Samuel (Flint)
Ellis, John Edward (Notts.)	Lough, Thomas	Soames, Arthur Wellesley
Emmott, Alfred	Lyell, Charles Henry	Soares, Ernest J.
Evans, Samuel T. (Glamorgan	MacVeagh, Jeremiah	Spencer, Rt. Hn C R (Northants
Fenwick, Charles	M'Hugh, Patrick A.	Stanhope, Hn. Philip James
Findlay, Alex. (Lanark, N. E.	M'Killop, W. (Sligo, North)	Strachey, Sir Edward
Flynn, James Christopher	M'Laren, Sir Chas. Benjamin	Sullivan, Donal
Foster, Sir Walter (Derby Co.	Mooney, John J.	Tennant, Harold John
Furness, Sir Christopher	Moulton, John Fletcher	Thomas, Abel (Carmarthen, E
Goddard, Daniel Ford	Murphy, John	Thomas, Sir A (Glamorgan, E
Grant, Corrie	Nolan, Col. John P. (Galway, N	Toulmin, George
Guest, Hon. Ivor Churchill	Nolan, Joseph (Louth, South)	Villiers, Ernest Amherst
Gurdon, Sir W. Brampton	Norman, Henry	Walton, Joseph (Barnsley)
Harcourt, Lewis	Norton, Capt. Cecil William	Wason, John Cathcart (Orkney
Hardie, J. Keir (Merthyr Tydvil	Nussey, Thomas Willans	White, George (Norfolk)
Harwood, George	O'Brien, K. (Tipperary Mid.)	White, Luke (York, E. R.)
Hayden, John Patrick	O'Brien, Patrick (Kilkenny)	Whiteley, George (York, W. R.
Hayter, Rt. Hon. Sir Arthur D.	O'Brien, P. J. (Tipperary, N.)	Whitley, J. H. (Halifax)
Helme, Norval Watson	O'Connor, Jas. (Wicklow, W.)	Whittaker, Thomas Palmer
Higham, John Sharp	O'Connor, John (Kildare, N.)	Williams, Osmond (Merioneth)
Hobhouse, C. E. H. (Bristol, E.	O'Malley, William	Wilson, Chas. Henry (Hull, W
Hutchinson, Dr.'Charles Fredk.	O'Mara, James	Wilson, Henry J. (York, W. R.
Hutton, Alfred E. (Morley)	Pirie, Duncan V.	Wilson, John (Falkirk)
Isaacs, Rufus Daniel	Redmond, John F. (Waterford	Wilson, J. W (Worcestershire, N
Jacoby, James Alfred	Richards, Thomas	Woodhouse, Sir J T (Huddersf'd
Joicey, Sir James	Rickett, J. Compton
Jones, David Brynmor (Swansea	Roberts, John H. (Denbighs)	TELLERS FOR THE NOES—Mr.
Jones, Leif (Appleby)	Robson, William Snowdon	Dalziel and Mr. Bright.
Jones, Wm. (Carnarvonshire	Roe, Sir Thomas

Main Questions put.

The House divided:—Ayes, 215; Noes 143. (Division List No. 195.)

AYES
Allsopp, Hon. George	Campbell, Rt. Hn. J. A. (Glasgow	Douglas, Rt. Hn. A. Akers-
Anson, Sir William Reynell	Carlile, William Walter	Doxford, Sir William Theodore-
Arnold-Forster, Rt. Hn H. O.	Cautley, Henry Strother	Dyke, Rt. Hn. Sir Wm. Hart
Arrol, Sir William	Cavendish, V. C. W. (Derbyshire	Elliot, Hon. A. Ralph Douglas
Atkinson, Rt. Hon. John	Cecil, Lord Hugh (Greenwich)	Faber, George Denison (York)>
Bagot, Capt. Josceline FitzRoy	Chamberlain, Rt. Hon. J (Birm.	Fellowes, Rt Hn Ailwyn Edward
Bailey, James (Walworth)	Chamberlain, Rt. Hn J A (Worc.	Fergusson, Rt. Hn Sir J. (Manc'r
Balcarres, Lord	Chapman, Edward	Finch, Rt. Hon. George H.
Baldwin, Alfred	Coates, Edward Feetham	Finlay, Sir R. B. (Inv'rn'ss B'ghs)
Balfour, Rt. Hn. A. J. (Manc'r	Cochrane, Hon. Thos. H. A. E.	Fisher, William Hayes
Balfour, Capt. C. B. (Hornsey	Coddington, Sir William	Fison, Frederick William
Balfour, Rt. Hn. G. W. (Leeds)	Cohen, Bejamin Louis	FitzGerald, Sir Robert Penrose
Balfour, Kenneth R. (Christch.	Colston, Chas. Edw. H. Athole	Fitzroy, Hon. Edw. Algernon
Banbury, Sir Frederick George	Cook, Sir Frederick Lucas	Flannery, Sir Fortescue
Barly, Sir F. T. (Windsor)	Corbett, A. Cameron (Glasgow	Forster, Henry William
Bartley, Sir George C. T.	Corbett, T. L. (Down, North)	Foster, P. S. (Warwick, S. W.)
Bhownaggree, Sir M. M.	Craig, Charles Curtis (Antrim S	Galloway, William Johnson
Bignold, Sir Arthur	Cripps, Charles Alfred	Gardner, Ernest
Bill, Charles	Cross, Alexander (Glasgow)	Godson, Sir Augustus Fredk.
Blundell, Colonel Henry	Cross, Herb Shepherd (Bolton)	Gordon, Hn. J. E (Elgin & Nairn,
Bend Edward	Cubitt, Hen. Henry	Gore, Hon. S. F. Ormsby
Boscawen, Arthur Griffith	Dalkeith, Earl of	Goschen, Hon. George J.
Boulnois, Edmund	Dalrymple, Sir Charles	Goulding, Edward Alfred
Bowles, Lt.-Col. H. F. (Middl'x	Davenport, William Bromley	Graham, Henry Robert
Brassey, Albert	Denny, Colonel	Gray, Ernest (West Ham)
Brodrick, Rt. Hon. St. John	Dickson, Charles Scott	Greene, Sir E. W. (B'ry S Edm'nds.
Butcher, John George	Dixon-Hartland, Sir F. Dixon	Greene, H. D. (Shrewsbury)
Grenfell, William Henry	Majendie, James A. H.	Rothschild, Hon. Lionel Walter
Gretton, John	Malcolm, Ian	Round, Rt. Hon. James
Guthrie, Walter Murray	Manners, Lord Cecil	Royds, Clement Molyneux
Hain, Edward	Marks, Harry Hananel	Rutherford, John (Lancashire)
Halsey, Rt. Hon. Thomas F.	Martin, Richard Biddulph	Samuel, Sir H. S. (Limehouse)
Hamilton, Marq. of (L'nd'nd'ry	Maxwell, Rt. Hn. Sir H. E (Wigt'n	Seton-Karr, Sir Henry
Hare, Thomas Leigh	Melville, Beresford Valentine	Sharpe, William Edward T.
Harris, F. Leverton (Tynem'th	Mildmay, Francis Bingham	Skewes-Cox, Thomas
Hay, Hon. Claude George	Milner, Rt. Hn. Sir Fredk. G.	Smith, Abel H. (Hertford, East
Heath, Sir J. (Staffords, N. W.)	Milvain, Thomas	Suiith, Rt. Hn. J Parker (Lanarks
Heaton, John Henniker	Mitchell, William (Burnley)	Spear, John Ward
Henderson, Sir A. (Stafford, W	Montagu, G. (Huntingdon)	Stanley, Edw. Jas. (Somerset)
Hickman, Sir Alfred	Montagu, Hn. J. Scott (Hants.	Stanley, Rt. Hon. Lord (Lancs.
Hoare, Sir Samuel	Morgan, D. J. (Walthamstow)	Stewart, Sir Mark J. M'Taggart
Hogg, Lindsay	Morpeth, Viscount	Stirling-Maxwell, Sir John M.
Hope, J. F. (Sheffield, Brightside	Morrell, George Herbert	Stroyan, John
Howard, J. (Kent, Faversham	Morton, Arthur H. Aylmer	Strutt, Hon. Charles Hedley
Hozier, Hn. James Henry Cecil	Mowbray, Sir Robert Gray C.	Talbot, Lord E. (Chichester)
Hudson, George Bickersteth	Muntz, Sir Philip A.	Taylor, Austin (East Toxteth)
Hunt, Rowland	Murray, Charles J. (Coventry	Thorburn, Sir Walter
Hutton, John (Yorks, N. R.)	O'Neill, Hon. Robert Torrens	Thornton, Percy M.
Jeffreys, Rt. Hn. Arthur Fred	Palmer, Sir Walter (Salisbury)	Tollemache, Henry James
Jessel, Captain Herb. Merton	Parker, Sir Gilbert	Tomlinson, Sir Wm. Edw. M.
Kenyon, Hn. G. T. (Denbigh)	Pease, Herbert P. (Darlington	Tritton, Charles Ernest
Kenyon-Slaney, Rt. Hn. Col. W	Pemberton, John S. G.	Tuke, Sir John Batty
Lambton, Hn. Frederick Wm.	Percy, Earl	Tunour, Viscount
Laurie, Lieut.-General	Pierpoint, Robert	Vincent, Col. Sir C. E. H. (Sheffield
Law, Andrew Bonar (Glasgow)	Pilkington, Colonel Richard	Walrond, Rt. Hn. Sir Wm. H.
Lawrence, Sir J. (Monm'th)	Platt-Higgins, Frederick	Welby, Lt.-Col. A. C. E (Taunton)
Lawrence, Wm. F. (Liverpool)	Plummer, Sir Walter R.	Wentworth, Bruce C. Vernon
Lawson, Hn. H. L. W. (Mile End	Powell, Sir Francis Sharp	Wharton Rt. Hn. John Lloyd
Lawson, John Grant (Yorks, N R	Pretyman, Ernest George	Whiteley, H. (Ashton-und Lyne
Lee, Arthur H. (Hants Fareham	Pryce-Jones, Lt.-Col. Edward	Whitmore, Charles Algernon
Lees, Sir Elliott (Birkenhead)	Purvis, Robert	Williams, Colonel R. (Dorset)
Legge, Col. Hon. Heneage	Pym, C. Guy	Wills, Sir Fredk. (Bristol, N.)
Leveson-Gower, Frederick N. S	Rankin, Sir James	Wilson, John (Glasgow)
Lockwood, Lieut.-Col. A. R.	Rasch, Sir Frederic Carne	Wilson-Todd, Sir W H (Yorks.)
Long, Rt. Hn. Walter (Bristol, S	Reid, James (Greenock)	Wodehouse, Rt. Hn. E. R. (Bath
Lowe, Francis William	Remnant, James Farquharson	Worsley-Taylor, Henry Wilson
Loyd, Archie Kirkman	Renshaw, Sir Charles Bine	Wortley, Rt. Hon. C. B. Stuart
Lucas, Col. Francis (Lowestoft)	Renwick, George	Wrightson, Sir Thomas
Lyttelton, Rt. Hon. Alfred	Ridley, S. Forde	Yerburgh, Robert Armstrong
Macdona, John Cumming	Ritchie, Rt. Hn. Chas. Thomson
M'Arthur, Charles (Liverpool)	Roberts, Samuel (Sheffield)	TELLERS FOR THE AYES—Sir
M'Calmont, Colonel James	Robertson, Herbert (Hackney	Alexander Acland-Hood and
M'Iver, Sir Lewis (Edinburgh, W	Rollit, Sir Albert Kaye	Viscount Valentia.
NOES.
Abraham, William (Cork, N. E.	Campbell, John (Armagh, S.	Fitzmaurice, Lord Edmond
Ainsworth, John Stilling	Campbell-Bannerman, Sir H.	Flynn, James Christopher
Ashton, Thomas Gair	Causton, Richard Knight	Foster, Sir Walter (Derby Co.)
Asquith, Rt. Hn. Herb. Henry	Channing, Francis Allston	Fowler, Rt. Hon. Sir Henry
Barlow, John Emmott	Cheetham, John Frederick	Furness, Sir Christopher
Barran, Rowland Hirst	Craig, Robert Hunter (Lanark)	Gladstone, Rt. Hn Herbert J.
Beaumont, Wentworth C. B.	Cremer, William Randal	Grant, Corrie
Bell, Richard	Dalziel, James Henry	Guest, Hon. Ivor Churchill
Benn, John Williams	Davies, M. Vaughan (Cardigan	Gurdon, Sir W. Brampton
Black, Alexander William	Delany, William	Harcourt, Lewis
Blake, Edward	Dewar, John A. (Inverness-sh.	Hardie, J. Keir (Merthyr Tydvil
Boland, John	Dilke, Rt. Hon. Sir Charles	Harwood, George
Bolton, Thomas Dolling	Duncan, J. Hastings	Hayden, John Patrick
Brigg, John	Edwards, Frank	Hayter, Rt. Hn. Sir Arthur D.
Bright, Allan Heywood	Elibank, Master of	Helme, Norval Watson
Brunner, Sir John Tomlinson	Ellice, Capt E. C (S Andrw's Bghs	Higham, John Sharp
Buchanan, Thomas Ryburn	Ellis, John Edward (Notts.)	Hobhouse, C. E. H. (Bristol, E.)
Burns, John	Emmott, Alfred	Hutchinson, Dr. Charles Fredk
Burt, Thomas	Evans, Samuel T. (Glamorgan)	Hutton, Alfred E. (Morley)
Buxton, N. E. (York N R, Whitby	Eve, Harry Trelawney	Isaacs, Rufus Daniel
Buxton, Sydney Chas. (Poplar	Fenwick, Charles	Jacoby, James Alfred
Caldwell, James	Ferguson, R. C. Munro (Leith	Joicey, Sir James
Cameron, Robert	Findlay, Alex. (Lanark, N. E.	Jones, David Brynmor (Swansea

Jones, Leif (Appleby)	O'Brien, K. (Tipperary Mid.)	Spencer, Rt. Hn. C. R. (Northants
Jones, William (Canarvonsh.	O'Brien, Patrick (Kilkenny)	Strachey, Sir Edward
Kearley, Hudson E.	O'Brien, P. J. (Tipperary, N.)	Sullivan, Donal
Kennedy, Vincent P. (Cavan, W	O'Connor, James (Wicklow, W	Tennant, Harold John
Kitson, Sir James	O'Connor, John (Kildare, N.)	Thomas Abel (Carmarthen, E.
Lambert, George	O'Malley, William	Thomas Sir A. (Glamorgan, E.
Lamont Norman	O'Mara, James	Toulmin, George
Lawson, Sir Wilfrid (Cornwall	Pearson, Sir Weetman D.	Trevelyan, Charles Philips
Layland-Barratt, Francis	Perks, Robert William	Villiers, Ernest Amherst
Leese, Sir J. F. (Accrington)	Pirie, Duncan V.	Walton, Joseph (Barnsley)
Leng, Sir John	Redmond, John E. (Waterford	Wason, John Cathcart (Orkney
Lewis, John Herbert	Reid, Sir R. Threshie (Dumfries	White, George (Norfolk)
Lough, Thomas	Richards, Thomas	White, Luke (York. E. R.)
Lyell, Charles Henry	Rickett, J. Compton	Whiteley, George (York, W. R.)
MacVeagh, Jeremiah	Robson, William Snowdon	Whitley, J. H. (Halifax)
M'Hugh, Patrick A.	Roe, Sir Thomas	Whittaker, Thomas Palmer
M'Killop, W. (Sligo, North)	Russell, T. W.	Williams, Osmond (Merioneth)
M'Laren, Sir Chas. Benjamin	Schwann, Charles E.	Wilson, Chas. Henry (Hull, W.
Mooney, John J.	Shackleton, David James	Wilson, Henry J. (York, W. R.
Moulton, John Fletcher	Shaw, Charles Edw. (Stafford	Wilson, John (Falkirk)
Murphy, John	Shaw, Thomas (Hawick B.)	Wilson, J. W. (Worcestersh, N.
Nolan, Col John P. (Galway, N	Shipman, Dr. John G.	Woodhouse, Sir J T (Huddersf'd
Nolan, Joseph (Louth, South)	Sinclair, John (Forfarshire)
Norman, Henry	Slack, John Bamford	TELLERS FOR THE NOES—Mr.
Norton, Capt. Cecil William	Smith, Samuel (Flint)	Goddard and Mr. Herbert
Nussey, Thomas Willans	Soares, Ernest J.	Samuel.

Bill read the third time, and passed.