HC Deb 16 May 1905 vol 146 cc582-604


Order read, for resuming adjourned debate on Question [15th May], "That the Bill be now read a second time."

Question again proposed.


resuming his speech, said the main issue he desired to bring before the House was the relative incidence of taxation upon different classes of taxpayers. The additional expenditure of £50,000,0000 a year had been estimated to involve extra taxation to the extent of a penny per working day upon every man, woman, and child in the country. To the women employed in "closing" Army boots whose case had recently been brought to the notice of the House, whose wages were 6s. a week, this meant that one-twelfth of their wages was taken as a contribution towards the expenses of the State, or the equivalent of an income-tax of 18d. in the £. This, it should be remembered, was simply for the additional expenditure of the last few years apart from other taxes. Allowing for the repayment of capital charges for military and naval works, the total expenditure on war and armaments during the last ten years amounted to something like £400,000,000. Through the policy of war, expansion, and reckless Imperialism, the whole of that money had been thrown into the sea. Placed at 5 per cent. the mere interest on that sum would have provided universal old-age pensions for ever without any further appeal to the taxpayer. Invested in small holdings at rents representing 2 or 3 per cent. on the outlay, it would have added immensely to the happiness of the people and provided a revenue more than sufficient to clear away the sugar tax. Or if the interest had been applied to the relief of rates, one of the most pressing grievances of the people might have been removed for ever so far as the majority of the large towns were concerned. These were tremendous facts. The whole of this fund had been thrown into the abyss of extravagance, and not one penny would ever be recovered. And what had been the effect of the extravagance of the Government upon the value of securities? On Consols and the chief railway and colonial stocks there had been a decrease of some 26 per cent., which meant that in capital values an income of £10,000 in 1898 was now represented by only £7,400. For that the wealthy had to thank the Government. If that were the effect on the rich, how much more serious was the effect on the poor.

Even if the increased expenditure could be justified on the ground that the total wealth of the community had increased, it was absolutely unjust to raise so vast a sum without a scientific investigation and thorough readjustment of the incidence of taxation upon those who felt the burden most severely. It was no answer to say that the nation was rich enough. Even if that were true, how could it be just for the Government to go on increasing the burden without any regard for the people upon whom the burden pressed with unexampled and cruel severity. The small income-tax payers, and such people as those who made trousers at 2¼d. per pair, had a tremendous claim for consideration. There had been not only reckless extravagance, but a cruel negligence of the fact that they were asking the poor man to pay for extravagance which could enrich only the wealthy speculators and capitalists whose fortunes were advanced by adventures abroad. Income-tax payers, at any rate, knew what they were paying. Successive Chancellors of the Exchequer had declared that the income-tax ought not to be raised or maintained at so high a figure without some further extension of exemptions to persons of small incomes, and, as in former years, he should press strongly for some consideration of the claims of the small income-tax payers for further relief. The so-called equitable division between direct and indirect taxation was an absolute and transparent fallacy. What did it matter whether indirect taxation was 53 or 49 per cent. of the whole? What had to be considered was the proportion of income paid by the individual to the expenses of the State.

The recent Board of Trade inquiries into the wages and expenditure of the working classes afforded an admirable means of testing the actual incidence of indirect taxation. The Blue-book contained a very large number of family budgets, from which it appeared that upon wages of 21s. a week, the duties payable on tea, coffee, and sugar alone amounted to nearly 7d., or an income-tax of 6.3d. in the £. On wages of 52s. the same duties amounted to 11d., representing an income-tax of 4¼d. But the corresponding duties in the case of wealthy people represented an income-tax of only a penny in the pound on an income of £1,500, of ½d. in the £ on incomes between £3,000 and £4,000, and of ⅛d. in the £ on incomes of £20,000. Those figures illustrated the enormous pressure of indirect taxation upon the poor. Having regard to the enormously greater pressure of indirect taxation upon the poor, and especially upon the lowest grades of the wage-earning classes, it was an intolerable injustice that taxation should be raised to so high a point without some scientific inquiry into its incidence or the establishment of some machinery by which the pressure upon the poor might be mitigated. The enormous burdens imposed by the present rate of expenditure were not only ruinous to the country as a whole, but they pressed with such intolerable injustice upon certain sections of the community that he wondered the people did not rebel against them.

*MR. JOHN WILSON (Falkirk Burghs)

desired to associate himself with those who had protested against the growing expenditure of the country. The fact that the ordinary expenditure of the country, not only on the Army and Navy, but on all the branches of the service had risen by over £50,000,000 in ten years was viewed with profound dissatisfaction throughout the country and had done more than almost anything else to alienate the people from the Unionist cause. With regard to the proposal of the noble Lord the Member for Ealing that an inner Committee of the Cabinet should be constituted to check expenditure, the record of the Cabinet in the matter of expenditure connected with the South African War was such that the country would have no confidence in their ability to form an effective check. A committee of business men, who had conducted great enterprises successfully, and whose whole training had been a matter of saving and reducing expenditure, would be a far better body for the purpose. Such men were available if only their services were sought; they desired no place or reward, but simply to place their experience and services at the disposal of the country. There was a feeling of deep dissatisfaction among the people that the Transvaal war contribution of £30,000,000 did not appear in the Finance Bill of the present year, and that the Government had not made that payment part and parcel of the new Constitution. It had been obtained from Parliament on the express condition that it would be repaid, and the late Colonial Secretary had expressly stated that it would be. The money ought to have been paid long ago, and on this point he dissociated himself entirely from those of his hon. friends who deprecated any demand being made upon the Transvaal for payment. In opposition to their views he preferred to take the opinion of the highest experts as to the riches of the Transvaal. From the highest sources calculations had been made that £2,781,000,000 sterling of gold had been proved to exist by borings in the Transvaal, which was sufficient, at the present output, to last for 150 years. He had no hesitation in saying that the Transvaal was able to pay not only £30,000,000, but £100,000,000. By the substitution of British for Boer rule a saving was being effected in the Transvaal of £4,800,000 a year. The Transvaal gold mineowners had got that, but where was the indemnity? This indemnity ought to have been paid by this time.

He regretted that no proposal had been made to abolish the coal export duty, and this in spite of the condemnation of this tax by the Royal Commission appointed to consider the whole question. He heard on a former occasion the right hon. Gentleman the Member for Bristol, when Chancellor of the Exchequer, advance his reasons for imposing the duty on coal, and he stated that they were getting perilously near exhausting their coal supply. What did they find? The Royal Commission had concluded that there was at the present time a coal supply which would last this country at the present rate of output of 230,000,000 tons yearly for not less than 450 years, and with other forms of fuel now being used the probable duration of the supply might be considerably extended. The Royal Commission had also reported against the export duty on coal. The facts he had stated showed that there was absolutely no need to restrict the exportation of coal. The price of coal had fallen since the duty was imposed by 4s. and 5s. a ton, and they were losing a large proportion of the export coal trade of this country. To France alone last year 432,000 tons of coal less were sent from this country whilst Germany had sent 500,000 tons more to France during the same period. That fact alone showed the great injury which was being caused to the coal trade. The tax was a very heavy direct tax upon labour, for it should be remembered that 800,000 persons were employed in the coal trade, and they were paid £40,000,000 sterling in wages annual. That was a fact which ought to have made hon. Members think twice before imposing an export duty. The right hon. Gentleman the Member for Bristol stated that although freights had gone up yet the prices of coal had also kept up, and therefore argued that they could quite easily bear another shilling of export duty. He would give the House the converse of that, because now the rate of freight had fallen 50 per cent., and yet the price of coal had fallen as well. He thought they had a right to ask why the Government had not considered the abolition of this duty, which was an interference with the principles of free trade, in fact, it was a direct preferential tariff in favour of foreign as compared with British coal. For these reasons he entered his protest against the Bill.

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

said that national expenditure was not in any sense a Party question, and the object on both sides of the House ought to be to secure for the overburdened British taxpayer the best value for his money. Judging by the number of empty benches on both sides of the House, when they were considering a Finance Bill, which provided for an expenditure of £161,000,000 sterling, it was certainly true that this House had become defunct, and the sooner it was reinvigorated by a general election the better it would be for economy and retrenchment in national expenditure. This question of increase in expenditure was one which it was their duty to examine even in the presence of empty benches. An increase in ten years of £58,000,000 in a time of peace was certainly a matter that ought to cause great alarm. This year the normal expenditure was £10,500,000 greater than it was in 1902–3. A great many powerful arguments had been advanced in favour of more rapidly reducing the National Debt in order to restore their national credit. He was still more anxious that they should reduce national expenditure, which was, after all, the foundation of national debt. Reference had been made to the increase of £6,000,000 upon the Education Vote. It might be true that they were not getting value for their money in regard to this increased expenditure upon education, but having regard to the enormous increase in the expenditure upon the Army and Navy from £35,500,000 to £71,250,000 in time of peace, he submitted that this increase in the Education Vote was insignificant, and in his opinion the money spent upon education was the best spent money in the whole of the Budget. That reminded him of an incident at a Scotch election, where the candidate was heckled by being asked— Am I to understand, Sorr, that whilst you are prepared to spend £31,000,000 over the Army and Navy, you are only willin' to spend £8,000,000 on education—that is, £31,000,000 for blawin' brains oot and only £8,000,000 for pittin' brains in. It was upon maintaining a high standard of education that the prosperity of a country mainly depended, both commercially and otherwise. They had heard a great deal lately of fiscal proposals to promote the commercial prosperity of this country, but what they were more in need of was to have set up a higher and more efficient system of education. He hoped that the expenditure upon education would not be stinted, and that expenditure upon the Army and Navy would go down. They had had from the Prime Minister the other day an interesting statement in regard to the Committee of Defence. He should have thought that that Committee would not only have had to put before the House hypothetically cases of possible attempts at invasion, and the view taken by the Government of India as to the defence of the North - West Frontier, but that they would also have put before them some statement as to how to provide for the defence of the Empire at the least possible cost to the taxpayers of this country, and also have indicated how they could reduce the enormous expenditure upon the Army and Navy, which had now reached £71,250,000. It was a remarkable fact that while the expenditure on the British Army had gone up during the last fifteen years no less than £16,000,000 sterling, on the other hand the expenditure of the armies of France and Germany combined had diminished £5,500,000 during the same period. Not only had they to consider the interests of the taxpayers of this country, but they had also to pay some regard to the taxpayers of India. He would suggest to the Prime Minister that the attention of the Imperial Defence Committee might very well have been directed not only to the question of Russia passing through Afghanistan—that great mountainous region—in her advance upon India, but also to the question as to whether it was not advisable to further safeguard British interests in Persia, because it was through Persia that Russia would advance if she advanced at all.


The hon. Member is not in order in discussing that subject now.


said he thought the debate at the morning sitting was allowed to extend to the speech of the Prime Minister, and it would be remembered that the question of the defence of India and Canada was considerably debated.


Yes, it is true that those questions were debated, but it was in regard to the expenditure upon the Army.


said he was only pointing out that the best way to meet the danger of an invasion of India by Russia was to safeguard and maintain British interests in Persia.


Order, order! I hope the hon. Member will not continue arguing with the Chair.


said that what they needed was a much more stringent examination of national expenditure in every department. They had been promised a day for the discussion of expenditure on the Public Accounts Committee, and he would like the Prime Minister to inform them when he was prepared to grant that day. The Committee on National Expenditure in 1902 made a strong recommendation that in order to reduce excessive expenditure each of the four great classes of Estimates should be considered, one class being taken each year, and they recommended that those Estimates should be subjected to the closest examination. That recommendation had not been acted upon. There was no question whatever now that the expenditure upon the Army and Navy had risen to a point at which they were not getting value for their money. The late Chancellor of the Exchequer had stated that the amount of money spent upon the Army might safely be reduced if the War Office only laid out the money to the best advantage, and in this way the strength of the Army could be increased.

With regard to the financial statement he found that the revenue last year, but for the fact that the expenditure was £924,000 less than the estimate, and the fact that £800,000 of arrears of income-tax were got in amounting together to £1,750,000, instead of a surplus of £1,400,000, they would have had to face a deficit of £300,000. The Estimates for this year showed a reduction of £3,500,000 in regard to the Navy, and yet there had been no reduction in national expenditure. They needed a more definite and fuller statement as to how it came about when the country was groaning beneath the burden of taxation that some greater effort had not been made to reduce the expenditure upon the Army and in other directions in order to lessen the great burden which the trade and commerce of this country was suffering under. This expenditure was largely unproductive, and it limited the productive power of the people in a way that was most injurious to the prosperity of the home trade. They were told that the remedy was to criticise the Estimates more than they did, but the House would recollect that when they attempted to do that they were closured and millions of money were passed through every year in this way without being criticised in this House. They would never secure retrenchment until some more earnest effort was made by the House when considering the Estimates and when considering the Finance Bill to insist upon reductions. Although the first £10,000,000 of the Transvaal loan had not been paid, he thought the Government might very well direct their attention to making the Transvaal and the Orange Free State bear the cost of the British garrison now quartered there. Did they wish to treat India worse than South Africa? India paid the entire cost of the British garrison. Why should South Africa not pay the £2,500,000 which was spent upon the British garrison which was maintained in South Africa for the benefit of the people there?

The coal tax had been referred to, and the Chancellor of the Exchequer had expressed the opinion that a more suitable occasion to deal with that question would be in Committee. Perhaps he might be allowed to state that he intended putting down a new clause on the Committee stage of this Bill dealing with that question, and therefore he would not deal further with that subject tonight. The coal tax was a tax upon export coal only and no corresponding tax was put upon any other great industry. The coal tax was obviously and flagrantly unjust, and other means might be found for raising revenue, while this and indirect taxation which pressed heavily on the working classes might be abolished. Adjustment was needed between direct and indirect taxation, and though the Finance Bill remitted taxation fairly between the two sources the gross injustice of 1902–3 had yet to be remedied. He hoped that the Chancellor of the Exchequer, if he had the good fortune to be in office next year and had a balance in hand, would not leave out of consideration the injustices to which he had alluded.

MR. SCARES (Devonshire, Barnstaple)

said that as was declared in the terms of an Amendment of which he had given notice though he could not move it, the finances of the country could not be safely or satisfactorily administered by a Chancellor of the Exchequer who publicly repudiated the fiscal system under which he was compelled to administer such finances. He might say at once that he did not intend to refer in any way to the fiscal question; neither had he the slightest intention of making any personal attack upon the right hon. Gentleman the Chancellor of the Exchequer. The right hon. Gentleman had been perfectly straightforward, but his position was an improper one from a practical point of view and constitutionally unsound. A Chancellor in a free-trade Administration, he brought in a Finance Bill in accordance with the views of his colleagues and yet he had publicly repudiated free-trade principles. To the taxes he was imposing he preferred others which would have the magical character that they would be paid by nobody and benefit everybody. He imposed the income-tax, tea, sugar, and tobacco taxes until foolish constituencies would consent to taxes on food. This was bad from a practical point of view. This was only the right hon. Gentleman's second best kind of Budget, and it was not the best which the Chancellor of the Exchequer believed he could produce if he had a free hand. He did not like second-rate articles, whether they were produced by the Chancellor of the Exchequer or anybody else, but if the right hon. Gentleman had only second-rate articles to give them then they wanted to be sure that it was the best he had got in his possession. Although they thought that everything which was protectionist was bad, it did not follow that everything which was free trade was necessarily good. If a doctor used drugs in which he did not believe he should be sorry for the patient. That was analogous to the position of the right hon. Gentleman, because he was using principles on which he based the Finance Bill in which he did not believe at the present time. Therefore the finance of the country could not be safely administered under such circumstances.

In the cynical manner in which the Government managed these matters one did not know what would happen. The Lord-Lieutenant of Ireland believed in devolution but managed Ireland on Unionist lines; a protectionist Chancellor of the Exchequer brought in a Budget on free-trade lines; and the Secretary of State for War brought in Estimates which conflicted with the statement made the other day by the Prime Minister. In fact, it seemed to him that the principles which a Minister was most strongly opposed to were the principles which he was called upon to defend in the House. The right hon. Gentleman was not speaking from a brief in this House, and he would ask whether he was not now defending a Bill which was founded on principles which he had denounced as principles which ought to be abolished. From the practical point of view, therefore, he thought the present position was invidious. No man ought to be called upon to defend a Bill which was founded on principles which he did not absolutely believe in. What, for instance, would be thought of the present Government if they were to appoint Dr. Clifford as Minister of Education, and Dr. Clifford were to bring in a Bill to coerce Wales? There was one supposition which he had not dealt with, namely, that it was possible that before bringing in this Finance Bill the right hon. Gentleman had changed his views with regard to the fiscal question. They were told that there had been a great deal of change on the other side of the House lately. When gentlemen went to the Treasury they were sometimes imbued with protectionist views, but they very often changed their views with regard to these matters. That might be the case with the right hon. Gentleman. If it was so all he could do was to congratulate him and withdraw everything he had said. Looking at the situation from the constitutional point of view he should like to know how far the right hon. Gentleman was justified in bringing in a Bill based on principles of which he disapproved. That was a question of some difficulty, and he did not wish to speak in any dogmatic manner upon it, but so far as he knew there was no parallel in history for the present position. It was true that when Sir Robert Peel abolished the Corn Laws he was elected as a protectionist, but when he did abolish them he had been converted and spoke as a free-trader. This constitutional point of view must have occurred to the Chancellor of the Exchequer, and he should be very glad indeed to hear what he had to say about it. Until he heard the defence he must say that the present position was not only dangerous but constitutionally incorrect.


said the object of the speech to which the House had just listened was apparently to convince the House that he was not a fit and proper person to be Chancellor of the Exchequer. On that question it would be unbecoming in him to express any opinion. It was one to be decided by the Prime Minister in the first place, and by the House of Commons in the second place. If they were content to give him their confidence he was proud to be permitted to discharge the functions of that office.

The most remarkable thing about the debate was the area it had covered and the wide scope of the speeches made. It would be improper that he should follow in detail the arguments of hon. Gentlemen on one side or the other in regard to our strategical position in every portion of the globe, or deal with the character of the attack to which the British Empire in its different portions was liable, or with the nature of the preparation we should make for it. The only possible justification for introducing these topics was the allegation that after the speech made by his right hon. friend the Prime Minister in the discussion of the Defence Committee the other day it was no longer necessary to provide the ways and means which were the basis of the present Budget, and that our naval and military Estimates ought to be, but had not been, revised in the light of the principles laid down by his right hon. friend on that occasion. He noted in passing an observation made by his noble friend the Member for Ealing, from which he appeared to think that, by the establishment of the Committee of Defence, his right hon. friend had taken away the Cabinet's old authority for naval and military finance. It would have been impossible for his noble friend to have advanced that argument if he had read or considered the speech of the Prime Minister. Nothing was more clear from that speech than that the authority of the Cabinet was maintained unimpaired, and that the Defence Committee in no way derogated from the authority of the Cabinet, but was rather a means of gathering and digesting information for the consideration of the Cabinet in order that the Cabinet might more easily arrive at a correct conclusion.

The right hon. Member for Cambridge University said that after the speech of the Prime Minister he did not see why as a humble taxpayer he should be required to pay more for the Army this year than last year. The most casual study of the speech should disclose at once the cause of the increase in the military expenditure this year. It was wholly due to the determination of the Government to rearm the artillery rapidly and pay for that rearmament as fast as the guns were received from the contractors. As long as hon. Gentlemen thought it was the intention either not to rearm the artillery or to postpone the payment, they were ready to denounce the Government for not doing what it now appeared the Government had done. The right hon. Member for Cambridge University drew an altogether erroneous and illegitimate inference after stating imperfectly and inaccurately the purpose of the Prime Minister's argument. The statement of the Prime Minister as to the impossibility or great difficulty of invasion was based expressly upon our having the force to resist invasion. His right hon. friend guarded himself and endeavoured to guard the House against the possibility of falling into misconception as to allowing any great reduction in the military forces which we had to maintain. The right hon. Member for Cambridge appeared to think that the defence of India was easier now than twenty years ago; but he ignored the whole change of circumstances which had taken place since that time, and which had not tended to make the task of defending our frontier a lighter one. That being the case, it was obvious we must maintain a large force. You could not improvise an Army in these days, officers and men, guns, and the many stores that were required. All these things must be the result of careful and deliberate preparation in time of peace; and to lay themselves down to rest with the comfortable security which the right hon. Gentleman would have them feel that there would always be time after war had broken out to make the necessary preparations was not only to court obvious military disaster, but, what was more germane to the present purpose, to prepare for ourselves or our successors the most terrible financial disaster. Preparations made in haste were always doubly or trebly costly, and could not be as efficient as if undertaken at the present time. The great reductions of which some hon. Members loosely spoke would be found to be impossible of execution if ever they should be charged with the responsibility of considering what was necessary for the defence of the Empire.

The second subject raised was the financial control exercised over the various Departments of Government. Such control as the House exercised over the Estimates, though it might be effective in regard to policy, was not in these days likely to contribute to reduction of expenditure. The hon. Member for the Dumfries Burghs suggested that a series of Committees of the House should be constantly examining the Estimates with a view to securing reductions in them. But the Committees which were appointed on the initiative of Lord Randolph Churchill for this purpose resulted, not in a reduction, but in an increase of the expenditure of the Departments inquired into. The noble Lord the Member for Ealing suggested that a Finance Committee of the Cabinet should be appointed on the same lines as the Defence Committee. Apart from the abolition of the Treasury and the making of such provision as would be due to the distinguished officials of the State whose work would be taken off their hands, a Committee of that kind would not give to the Chancellor of the Exchequer any greater control over finance than he now possessed, or place at his disposal any greater means for checking the demands of Departments. Besides, if given effect to, it would still further overwork Cabinet Ministers, and would tend to render Cabinet Government unworkable in the present pressure of business. It was only because the responsibility was mainly concentrated on individuals, and that a great portion of the work was done for individuals, that Ministers were able to get through the enormous amount of work which the Cabinet had to consider in these days. If there were any defects in the control exercised, the machinery at their disposal was sufficient in wise hands to provide effective control. The kind of inquiry which the noble Lord suggested into the demands of other Departments was constantly undertaken either by himself personally or in collaboration with his colleagues and other persons, not members of the Cabinet, believed to be desirable owing to their special knowledge, or by the officers of the Treasury acting under his directions. There was a periodical review, and the continuity of information desired was secured by the knowledge possessed by the Treasury officials, as well as by the information freely placed at their disposal.

As to the statement that taxation was unfairly proportioned between the direct and indirect taxpayers, the proportion paid by the latter was very much lower than it had been at any time when the Party opposite were in power. In 1894–5 the indirect taxation was 54.6 per cent. of the whole; and according to the Estimates of the present year it would be only 49.8 per cent.


said that his contention was that, as direct and indirect taxation had been equally imposed during the war, they ought to have been equally remitted after the war.


asked whether in the figures just given the coal tax was included.


said that the coal tax was obviously excluded. [Cries of "Why?"] As to the point of the hon. Member for Barnsley when taxation was remitted, it must be remitted in the light of the facts and conditions of the moment. It was impossible and absurd to go back to the earliest times of financial history to see how taxation stood then.

The criticism of the Budget was summed up in the allegation that the provision made for the reduction of the Debt was not enough, or that our borrowings were too large. Yet the proportion which the Sinking Fund now bore to the aggregate debt was higher than it had been in any but two of the last fifteen years. Not only the capacity of the taxpayer to bear the burden, but the amount of the burden to be borne, must be taken into account; and between these two considerations he had held the scales fairly, and, while increasing the amount set apart for the payment of debt, he had given some relief to the taxpayer. It was said that the pressure of this taxation was specially hard on the very poor, and on the small income - tax payer; but both classes would be the greatest beneficiaries in the relief given by the present Budget. He hoped the House would now come to a decision on a Bill which in its main principles and provisions had met with general acceptance.

MR. BUCHANAN (Perthshire, E.)

said that those who had experience of the House must have heard with surprise the observations of the Chancellor of the Exchequer when he endeavoured to set aside certain criticisms which had been offered in the course of the debate as not germane to this Bill. It had been the universal practice of the House to regard every subject as germane on the Second Reading of the Finance Bill. The right hon. Gentleman had asked to be excused from replying to a number of comments on account of the lateness of the hour, but on the Opposition side of the House they were not to blame for the want of time at his disposal. They ought to be allowed sufficient time for discussion, because this was in all probability the last Budget which would be proposed by the Party opposite in this Parliament.

Reference had frequently been made to the increase in capital expenditure by the present Government. The Chancellor of the Exchequer stated in his Budget speech that he could only give a provisional estimate of the amount required for additional capital expenditure in the current year, and he put it at £9,000,000. The right hon. Gentleman further stated that he would be able at a later date to give full details of that expenditure. Surely this was the occasion on which the House should have had from the Chancellor of the Exchequer the further particulars which he promised. How was it possible for the House to consider the expenditure of the year unless they were supplied with this information? The Chancellor of the Exchequer knew very well that the two important purposes for which this capital expenditure was to be incurred were military and naval works, and he knew also that such expenditure was nothing more nor less than expenditure ancillary to that provided for in the ordinary Estimates of the year for the Army and Navy. The Chancellor of the Exchequer ought to be able to say within a couple of millions what the expenditure on the Army and Navy for the year would be. It was not treating the House fairly not to give that information. This process of delaying the details of expenditure had been going from bad to worse during the past ten years. This year they were to have a Military Works Bill and a Naval Works Bill, and yet the Chancellor of the Exchequer when making his general proposals did not tell the House what amount of money would be required for these purposes, nor did he state when the Bills would be introduced. In regard to these most important matters they would have to deal with a supplementary Budget later, but at present they knew nothing of the details of the proposals.


said he was not in a position to give the hon. Gentleman any further figures at present. The details of the Military Works Bill and the Naval Works Bill were being considered. He had given what he hoped would be the outside figure.


asked how much of the £9,000,000 was for military works and how much for naval works.


said he had given his best estimate of what were likely to be the total requirements. He could not give separate estimates for the different services at the present time.


thought the House ought to have had the particulars before now. Until two years ago they had always had them earlier. They had always in the past had an estimate of the amount required for military and naval works, but this year they had not had it, and it showed that the Chancellor of the Exchequer did not exercise his control over the Departments in the proper manner. Surely what his predecessor was able to do the present Chancellor of the Exchequer should do. If anything the estimate of the amount this year would be easier than it would have been in previous years. He agreed that the Chancellor of the Exchequer was the only person who should control the expenditure of the country and control the excessive demands on the part of the spending Departments. His desire was to increase the responsibility of the Chancellor of the Exchequer, in order that he might resist the demands of his colleagues.

There had been as yet no answer to the question as to how far these Estimates were consistent with the speech of the Prime Minister last Thursday. What, they wanted to know, were to be the financial consequences of the speech of the Prime Minister? The Secretary of State for War had told them that during the last two years the Estimates for the Army were provisional, and then the Prime Minister came down and gave them a scheme of Imperial defence. Yet no proposal was made to adapt the Army Estimates to this scheme of national and Imperial defence. The moral was that we had wasted month in and month out millions of money. Who was responsible for it? The Government and the Chancellor of the Exchequer, who, during two successive years, proposed an expenditure upon the Army which the Government were not themselves prepared to support. One of the faults which they had to find with the general finance of the Government during the years that had passed was that there was no stability in regard to their finances, and they took no step for laying their policy before the country. Last year they put 2d. on tea, and this year they took it off. A year ago they took 4d. off the income-tax and then they put 1d. on, and year after year they were altering their policy. Then in regard to the South African War debt, for which the Government were responsible, the Government did not come and lay before the House or the country a settled scheme for dealing with the grave financial condition in which the country found itself at the conclusion of the struggle. There was a vast and increasing debt, and those who were responsible for the finances of the country should have come before them and told them of the greatness of the burden, and of the necessity of getting rid of it. If they had asked the country to submit for a longer period to the war tax he believed the country would have assented to it. But no such scheme was submitted, and they had to go on bearing the war tax without any decrease whatever. For these reasons he thought that the general scheme of the Government for the management of the finances of the country had been by no means worthy of the confidence of the nation.

MR. HARWOOD (Bolton)

said the recent speech of the Prime Minister was really a declaration of policy upon which could be founded a good case for a reduction of expenditure, but the Chancellor of the Exchequer had now watered it down until it meant nothing at all. The Prime Minister had said that we were practically safe from invasion so long

as we kept our Navy up to its present strength, and everybody at once declared that it afforded grounds for reducing the Army so far as it was required for the defence of these shores. The only purpose for which the Prime Minister suggested it might be wanted was in connection with India. But who was going to attack us in India? The military problem had been considerably modified by the fate which had come upon Russia in the present war, and the idea of being frightened now with regard to that Power was preposterous. On these grounds the country had a right to expect considerable reductions in Army expenditure. But in the Estimates of the present year there was a decrease of £3,500,000 for the Navy, and an increase for the Army. Did the Prime Minister really mean business, or were the people building their hopes on the sand? If the Prime Minister's speech meant what the country had taken it to mean, the Army Estimates ought to be framed in accordance with the policy then enunciated, and the result would be a considerable reduction.

Question put.

The House divided:—Ayes, 155; Noes, 99. (Division List No. 160.)

Agg-Gardner, James Tynte Chamberlain, Rt Hn. J. A. (Worc. Gray, Ernest (West Ham)
Allhusen, Augustus Henry Eden Clive, Captain Percy A. Green, Walford D. (Wednesbury
Anson, Sir William Reynell Cochrane, Hon. Thos. H. A. E. Greene, Sir E W (B'ry S Edm'nds
Arkwright, John Stanhope Colomb, Rt. Hon. Sir John C. R. Grenfell, William Henry
Arnold-Forster, Rt. Hn. Hugh O Corbett, T. L. (Down, North) Hall, Edward Marshall
Arrol, Sir William Craig, Charles Curtis (Antrim, S Hambro, Charles Eric
Atkinson, Rt. Hon. John Cross, Alexander (Glasgow) Hamilton, Marq. of (L'nd'nderry
Bagot, Capt. Josceline FitzRoy Cross, Herb. Shepherd (Bolton) Hardy, Laurence (Kent, Ashford
Bailey, James (Walworth) Crossley, Rt. Hon. Sir Savile Harris, F. Leverton (Tynem'th)
Baird, John George Alexander Davenport, William Bromley Harris, Dr. Fredk. R. (Dulwich)
Balcarres, Lord Denny, Colonel Haslam, Sir Alfred S.
Balfour, Rt. Hn. A. J. (Manch'r) Dickson, Charles Scott Hay, Hon. Claude George
Balfour, Rt Hn Gerald W. (Leeds Doughty, Sir George Heath, Sir James (Staffords, N W
Balfour, Kenneth R. (Christch. Douglas, Rt. Hon. A. Akers- Henderson, Sir A. (Stafford, W)
Banbury, Sir Frederick George Doxford, Sir William Theodore. Hickman, Sir Alfred
Banner, John S. Harmood- Egerton, Hon. A. de Tatton Hoult, Joseph
Bentinck, Lord Henry C. Fellowes, Rt Hn. Ailwyn Edward Hozier, Hon. James Henry Cecil
Bhownaggree, Sir M. M. Finch, Rt. Hon. George H. Hunt, Rowland
Bignold, Sir Arthur Fisher, William Hayes Hutton, John (Yorks. N. R.)
Bingham, Lord Forster, Henry William Jessel, Captain Herbert Merton
Blundell, Colonel Henry Foster, Philip S. (Warwick, S. W. Kenyon-Slaney, Rt. Hn. Col. W.
Bond, Edward Galloway, William Johnson Kerr, John
Brodrick, Rt. Hon. St. John Gardner, Ernest Keswick, William
Carson, Rt. Hon. Sir Edw. H. Godson, Sir Augustus Frederick Knowles, Sir Lees
Cavendish, V. C. W. (Derbyshire Gordon, Hn. J. E. (Elgin & Nairn) Law, Andrew Bonar (Glasgow)
Cecil, Lord Hugh (Greenwich) Goschen, Hon. George Joachim Lawrence, Sir Joseph (M'nmouth
Lawson, John Grant (Yorks. N. R Morton, Arthur H. Aylmer Scott, Sir S. (Marylebone, W.)
Lee, Arthur H. (Hants. Fareham Muntz, Sir Philip A. Sharpe, William Edward T.
Legge, Col. Hon. Heneage Murray, Charles J. (Coventry) Sinclair, Louis (Romford)
Leveson-Gower, Frederick N. S. Myers, William Henry Smith, Rt Hn J Parker (Lanarks
Long, Rt. Hn. Walter (Bristol, S. O'Neill, Hon. Robert Torrens Smith, Hon W. F. D. (Strand)
Lowe, Francis William Parkes, Ebenezer Spear, John Ward
Lowther, C. (Cumb., Eskdale) Peel, Hn. Wm. Robert Wellesley Stanley, Hon. Arthur (Ormskirk
Loyd, Archie, Kirkman Percy, Earl Stanley, Rt. Hon. Lord (Lancs.)
Lucas, Col. Francis (Lowestoft) Pilkington, Colonel Richard Stewart, Sir Mark J. M'Taggart
Lyttelton, Rt. Hon. Alfred Platt-Higgins, Frederick Strutt, Hn. Charles Hedley
Macdona, John Cumming Plummer, Sir Walter R. Thornton, Percy M.
M'Arthur, Charles (Liverpool) Powell, Sir Francis Sharp Tomlinson, Sir Wm. Edw. M.
M'Iver, Sir Lewis (Edinburgh W Pretyman, Ernest George Tuff, Charles
Majendie, James A. H. Pryce-Jones, Lt.-Col. Edward Turnour, Viscount
Marks, Harry Hananel Purvis, Robert Warde, Colonel C. E.
Martin, Richard Biddulph Randles, John S. Webb, Colonel William George
Maxwell, W. J H (Dumfriesshire Rankin, Sir James Whitmore, Charles Algernon
Melville, Beresford Valentine Rasch, Sir Frederick Carne Willoughby de Eresby, Lord
Mildmay, Francis Bingham Renwick, George Wilson, A. Stanley (York, E. R.)
Milvain, Thomas Ridley, S. Forde Wortley, Rt Hon C. B. Stuart
Mitchell, Edw. (Fermanagh, N.) Ritchie, Rt. Hon. Chas. Thomson Wrightson, Sir Thomas
Montagu, G. (Huntingdon) Roberts, Samuel (Sheffield) Wylie, Alexander
Moon, Edward Robert Pacy Robertson, Herbert (Hackney) Wyndham, Rt. Hon. George
Moore, William Round, Rt. Hon. James
Morgan, David J (Walthamstow Rutherford, John (Lancashire) TELLERS FOR THE AYES—Sir
Morpeth, Viscount Rutherford, W. W. (Liverpool) Alexander Acland-Hood and
Morrell, George Herbert Sadler, Col. Samuel Alexander Viscount Valentia.
Abraham, William (Cork, N. E. Helme, Norval Watson Partington, Oswald
Ainsworth, John Stirling Henderson, Arthur (Durham) Power, Patrick Joseph
Allen, Charles P. Higham, John Sharp Price, Robert John
Barran, Rowland Hirst Hutchinson, Dr. Charles Fredk. Rea, Russell
Beaumont, Wentworth C. B. Johnson, John Reddy, M.
Black, Alexander William Jordan, Jeremiah Redmond, John E. (Waterford
Boland, John Joyce, Michael Richards, Thomas (W. Monm'th
Brigg, John Kennedy, Vincent P. (Cavan, W. Rickett, J. Compton
Bright, Allan Heywood Lamont, Norman Roche, John
Brown, George M. (Edinburgh) Lawson, Sir Wilfrid (Cornwall) Roe, Sir Thomas
Buchanan, Thomas Ryburn Layland-Barratt, Francis Rose, Charles Day
Caldwell, James Levy, Maurice Shackleton, David James
Campbell, John (Armagh, S.) Lewis, John Herbert Sheehan, Daniel Daniel
Cawley, Frederick Lough, Thomas Slack, John Bamford
Channing, Francis Allston Lundon, W. Soares, Ernest J.
Cheetham, John Frederick MacVeagh, Jeremiah Stanhope, Hn. Philip James
Churchill, Winston Spencer M'Crae, George Sullivan, Donal
Cogan, Denis J. M'Fadden, Edward Thomas, D. Alfred (Merthyr)
Condon, Thomas Joseph M'Hugh, Patrick A. Toulmin, George
Cremer, William Randal M'Kean, John Walton, Joseph (Barnsley)
Cullinan, J. M'Kenna, Reginald Warner, Thomas Courtenay T.
Delany, William Mansfield, Horace Rendall White, George (Norfolk)
Devlin, Charles Ramsay (Galway Mooney, John J. White, Luke (York, E. R.)
Doogan, P. C. Murphy, John Whitley, J. H. (Halifax)
Edwards, Frank Nannetti, Joseph P. Whittaker, Thomas Palmer
Eve, Harry Trelawney Nolan, Joseph (Louth, South) Williams, Osmond (Merioneth)
Farrell, James Patrick Norman, Henry Wilson, John (Durham, Mid.
Ffrench, Peter O'Brien, K. (Tipperary Mid) Wilson, John (Falkirk)
Field, William O'Brien, P. J. (Tipperary, N.) Woodhouse, Sir J T (Huddersf'd
Flavin, Michael Joseph O'Connor, John (Kildare, N.)
Fuller, J. M. F. O'Donnell, John (Mayo, S.) TELLERS FOR THE NOES—
Gurdon, Sir W. Brampton O'Dowd, John Captain Donelan and Mr.
Harrington, Timothy O'Kelly, Conor (Mayo, N.) Patric O'Brien.
Harwood, George O'Malley, William
Hayden, John Patrick O'Shaughnessy, P. J.

Bill read a second time, and committed for Monday next.

Adjourned at eighteen minutes before One o'clock.