§ MR. BENNETT (Oxfordshire, Woodstock)rose to call attention to the incidence of taxation in connection with the question of social reform, and to move, "That, in the opinion of this House, having regard to the wealth of the United Kingdom and the nature of its distribution, it is necessary to readjust the burden of taxation in order to make provision for social reforms which are urgently needed." He said the terms of the Resolution covered so considerable an area that, so far as he was concerned, he would confine his attention that evening to the incidence of Imperial taxation, without making any attempt to deal with the vexed questions of local rates and taxes—a subject which must of necessity be revised throughout its length and breadth by the present Government before it went out of office. The Liberal Party had been returned to power in order to save the country from the menace of protection and to carry out a genuine programme of social reforms. Some of those reforms would not involve the outlay of public money. Some methods of dealing with the temperance problem, 1730 for example, or, again, laws which endeavoured to cope with the admitted evils of the sweated industries—legislation of that type would make practically no; demand on the pockets of the British taxpayer. On the other hand, it was easy to draw up a list of social reforms which must inevitably come and just as inevitably bring with them fresh demands upon the public purse. He would naturally that evening have accorded a foremost place in his remarks to the almost universal demand in this country for the establishment of some system of old-age pensions, but he was precluded from touching on that topic because of the existence of several Bills which blocked the way. That method of blocking discussion by private Bills which could never under any conceivable circumstances become law was rapidly developing into a fine art, and he ventured to think a very undesirable one. Another social reform, however, which would necessitate additional expenditure from the National Exchequer was the provision of some complete system of secondary and technical education. That reform, he was convinced, must come sooner or later, unless indeed we were prepared as a nation to lag behind in the international race for efficiency. One of the most painful experiences of any modern English traveller was the discovery that in the other countries of the civilised world the aged poor were better treated than they 1731 were in wealthy England, and that the children of the poorer classes enjoyed in other countries far greater equality of opportunity, far more facilities for securing the higher types of education than they did in Great Britain. He felt very strongly on that point, for he had spent a good many years of his life as fellow and tutor of an Oxford college, and no thoughtful resident in one of the older Universities could fail to realise the immense difficulties which stood in the way of any able young man who wished to secure the benefits of a University education. Occasionally a boy struggled up from the board school, but how rarely, and in almost every case the educational ladder was placed against the walls of the University, not by the State, but by the private generosity of some wealthy benefactor who had noticed the boy's abilities and paid for his University career. The social reformer then started with the postulate that much more money was required, and that that could only be furnished by a thorough re-adjustment of taxation. The researches of Sir Robert Giffen, Mr. Charles Booth, Mr. Rowntree, and others had proved conclusively that one-half of the national income was enjoyed by one-ninth of the population—that at one end of the social scale were 8,000,000 of workers earning less than £1a week, and at the other end a tiny fraction, about one-thirtieth of the whole number—some of them workers, others drones, nati consumere fruges, possessing in wealth, or at any rate comfort, one-third of the entire wealth of the country. With these facts before them they found that the actual incidence of taxation, direct and indirect, was almost incredibly unfair. An average working class income from £50 to £80 per annum was taxed at the rate of 7 percent.; an income of £200 at only 4½ per cent.; of £500 at 7 per cent., while larger incomes of £5,000 and over incurred a very slight increase in taxation over the working man's, for they were taxed at only 8½ per cent. No Liberal Government worthy of the name could, he thought, allow that manifest unfairness to continue. The weaker shoulders must be relieved as far as possible of the heavy imposts at present laid upon them, and the stronger shoulders must prepare themselves for the imposition of some additional burdens. He would leave the discussion of land 1732 values, a graduated income-tax, and a revision of the death duties to subsequent speakers, merely remarking in passing that it was now sixty years since John Stuart Mill urged the Government of his day to secure the immediate valuation of site values in Great Britain, in order that all subsequent increments in those values might be available for purposes of taxation. By the failure of successive Governments, Liberal and Conservative, to carry out; such a valuation immense revenues had been lost for ever to the State, for no scheme of taxing land values could be retrospective. As to a graduated income-tax, the average elector might well say that if Pusssia, Sweden, Austria, and Denmark had been able to establish a complete graduation of that tax such a scheme ought not to be beyond the resources of British statesmanship. With respect to the death duties, it was interesting to remember the fierce cries of "confiscation" which were raised against their introduction in 1894. But he did not think that there was a single Member of the House who would now get up on a public platform and denounce the death duties as "confiscation." In fact what was called "confiscation" in one decade became in the next decade a recognised basis for the imposition of fresh taxation of a similar type. And, all said and done, the entire duty levied on the colossal sum bequeathed from the dead to the living in this country did not amount to more than about 6 per cent. of the whole. There existed also another source of national income, practically untapped at present, in connection with the gigantic monopoly of the liquor trade, valued at £250,000,000 sterling. He had recently received a number of letters from innkeepers—which from the amazing similarity in their diction must, he thought, be redactions of some common document furnished by the brewers—and in those letters the liquor trade was described as a harassed industry. He was quite ready to admit that the innkeeper was himself in many cases a harassed individual. The fierce competition of the trade, the tyranny of the tied-house system, and the overbearing treatment often meted out to the publican by the brewery firms—these things frequently rendered it a difficult task for the innkeeper to make a decent living. But to talk of the great brewing and distilling 1733 firms, who were allowed by the State to enjoy that monopoly, as "harassed" was surely a misuse of language. He would take, for instance, the licensing fees. While the small village inn was called upon to pay a comparatively heavy licensing fee in relation to its rateable value, the biggest gin palace in London was not required to contribute more than £60. The licensing fee of vast hotels like the Carlton, the Ritz, and the Metropole was actually a miserable sum of £20 per annum. A wealthy distilling firm like Messrs. Dewar were mulcted in the sum of ten guineas for their licence, and the great firm of Messrs. Bass paid the amazing sum of twenty shillings per annum for their licence to brew. Surely such licence taxation was taxation pour rire. He did not think that any man who was not to some extent blinded by; prejudice or self-interest would maintain that such taxes were adequate. If that position was maintained, then all he could say was that other countries had been wiser in their generation. The licensing fees of New York State alone amounted to more than double the entire fees exacted from the whole of Great Britain. In Norway and Sweden—the most sober countries in Europe—the profits of a wisely regulated liquor trade did not find their way wholly into the pockets of the brewers, but went largely into the coffers of the State, and were expended on reasonable and beneficent objects—amongst others, the formation of a fund for old-age pensions. He was aware that some of his extreme temperance friends held up their hands in horror at the idea of such "complicity" with what they described as an "accursed traffic." But after all, he would rather drink himself into an old-age pension than drink a brewer into a peerage. He had not alluded to possible demands which might from time to time be made upon the Exchequer in order to relieve distress caused by unemployment. But he ventured to think that a readjustment of taxation would provide a powerful stimulus to the home trade, and so to employment. Tariff reformers who regarded the taxation of imports as the panacea for all social evils constantly urged their hearers to fix their eyes on the export trade of the country—that they held to be the chief and best criterion of a nation's commercial 1734 prosperity. But had those gentlemen realised the economic fact that of all the workers in this country probably not more than 15 per cent. were engaged in producing commodities for the foreign market? The remaining 85 per cent. were occupied with the infinitely more important industries of the home market. Sir Robert Griffin had, he believed, said on one occasion that the loss of our entire foreign trade would indeed be a calamity but a measurable calamity. The readjustment of taxation involving as it would a remission of taxation to the poorer classes of the community, would add enormously to the spending power of the poor and enable them to purchase useful and necessary commodities. For example, the hon. Member for West Wolverhampton had recently uttered a feeling appeal in that House on behalf of the unemployed boot makers at Leicester, some thousand in number. Now if the working families of England could, by a lessening of their taxation, purchase two or three extra pairs of boots per annum, there would, he thought, be less unemployment in the boot factories at Leicester. In conclusion he ventured to suggest that in this question of there adjustment of taxation lay one of the greatest opportunities ever presented to Liberalism. They had for the moment failed to carry out their educational policy and to abolish the plural voter—thanks to obstruction in another place. What might be the nature and outcome of their struggle with the powers of political darkness in that other place he did not know. But this he knew—that the people of England would say that in the matter of financial reform, at any rate, the Liberal Party had a free hand and that results were expected in accordance with that freedom. He was convinced that the talk of "not enough money" would not be accepted as an excuse for ever. Not enough money for old-age pensions—not enough money for a sound and democratic measure like the payment of Members—a reform which would need only one-ninth of the cost of a single "Dreadnought." The hollowness of the cry had been demonstrated by the economic facts of the South African war; for even the terrific drain upon our national resources caused by that war—at least £300,000,000—had apparently produced no permanent effect upon the finances of our wealthy 1735 country. He was conscious, of course, of having treated the subject of the discussion very inadequately. He laid no claim to any expert knowledge of finance but had merely tried to voice the general sort of attitude felt towards the question of taxation by the average British elector of the more thoughtful type. He had, at any rate, started a good many fiscal hares that evening and he now left the pursuit of them to hon. Members in various parts of the House who possessed far more detailed knowledge of financial questions than any he could claim for himself. He begged to move.
§ * MR. CHIOZZA MONEY (Paddington, N.)said the House was grateful to his hon. friend for moving this Motion, and for the unanswerable and convincing way in which he had placed the question before the House. He was sure also that the right hon. Gentleman the Chancellor of the Exchequer would be grateful for the opportunity to shadow forth the nature of the Budget proposals which they were all so eagerly anticipating. When he surveyed the Budgets of the last quarter of a century he was struck by the fact of how much they had been concerned with a little more on tea, a little less on sugar or a slight increase of the income-tax. With the exception of the measure of Lord Goschen dealing with the consolidation of debt and that of Sir William Harcourt which readjusted the Death Duties, all the Budgets of the last twenty years had been concerned with some trifling readjustments of a recognised gamut of duties. Such Budgets were of far more value to Mincing Lane than they were to the nation at large. It was high time that something more than mere rule-o'-thumb reigned at the Treasury in this matter. In time of peace we tinkered these taxes a little this way or a little that way, and in time of war we borrowed as much as the market would stand and divided the rest between direct and indirect taxation. When that had been the rule with Chancellors of the Exchequer for the last twenty years one did not wonder that a paper like the Spectator recently expressed surprise that no Chancellor with all the means at his command for such a purpose had as yet found it worth while to institute an inquiry into the national income. We 1736 had no properly equipped Census Bureau to act as the eye and ear of a Government determined to base its taxation not on surmise but on fact. No one need be surpised therefore that a member of the present Government a few years ago should have risen in his place and said it was impossible to find out the number of income-tax payers in the country. They were, however, able to arrive at the fact that the income-tax payers now were about 1,000,000 in number and that they took about half the national income. They were also able to ascertain that one-thirtieth of the whole population took one-third of the national income. Those were facts, now that they were ascertained with approximate exactitude, that must guide Chancellors of the Exchequer in the future, and especially Liberal Chancellors of the Exchequer, in framing their Budgets. They were also able to find out through the Death Duties with sufficient precision the distribution of property in which was involved the distribution of income. One-ninth of the people owned practically all the property in the country, and one-seventieth of the population owned half the entire land, capital, and accumulated wealth of the United Kingdom. He disclaimed, however, the view that it was the office of taxation to redress inequalities of wealth by means of taxation. Social reform did not mean robbing the rich in order to increase the incomes of the poor. The national income, if evenly distributed, would only furnish the people with a very small and inadequate income, Social reform worthy the name must look to the raising of the masses of the people by the production of a much larger material output. He desired to emphasise the point that whether our national expenditure was large or small, whether it was £50,000,000 or £500,000,000, the amount of revenue required ought to be raised with due regard to the distribution of the national wealth. Even if it were possible largely to reduce our present expenditure it would still be necessary to adjust out taxation in such a manner as to have proper regard to the distribution of the wealth of the United Kingdom. Taxation, in the first place, should have regard to the distribution of wealth, and, in 1737 the second plane, it should not be imposed in such a manner or to such an extent as to restrict the employment of new capital by private individuals. If anyone imbued with Collectivist ideas assumes that with a State organised as our State was we could levy taxation to a very high degree, or that it could be imposed in a reckless manner, they made a very great mistake, because such a course would reduce the existing prosperity of the country by reducing private capital without, under present conditions, increasing public capital. He laid down the maxim that whatever taxation might be it should not exceed the amount which, while it might decrease expenditure on luxuries, would not decrease expenditure in the direction of new capital applied to industry. Taxation at present was roughly divided into direct and indirect taxation. We had a certain amount of direct taxation in the form of income-tax and stamp duties and so forth. That was balanced by the levying of indirect taxes, as he should show, very unjustly. Those taxes took the form of raising a revenue income from such articles as tea, sugar, liquors, and tobacco, and partly in the form of licence duties. Owing to want of knowledge of the income of the country, it had been very difficult for Chancellors of the Exchequer to decide how the incidence of these taxes bore on the various sections of the community. All these taxes, whatever their name might be, were in essence income-tax. The sugar tax and the tea tax were income-taxes. He did not care in what form they levied the taxes to which he referred, they were income-taxes, but their precise incidence, from their very nature, was in a very large degree uncertain, but in so far as they were able to ascertain the incidence, they found that it was exceedingly unjust. He had taken the trouble to boil down each of the different taxes into an income-tax. He had even taken the Post Office profits and treated them as a tax, although he thought they might be justly held not to be a tax at all. He found as a result that total taxation, reduced to the form of an income-tax, was even more unfair in its incidence than had been shown by his hon. friend 1738 the mover of the Resolution. First as to that part of the population whose income lay between £3 a week and £700 a year. There were the middle-class income-taxpayers who were granted abatements under the present income-tax system. They numbered 4,000,000, with wives and children. In that class there were 800,000 income-taxpayers—roughly 4,000,000 of people—and he found that they paid total taxes to the amount of 1s. 6½d. in the £ That included all their indirect taxes as well as income-tax, all Post Office profits, and everything that could properly be put to their account. He took the class of taxpayers which lay above £700 a year and under £5,000 a year. They only numbered 235,000, or with wives and children rather more than 1,000,000 of people. He found that they paid 1s. 9½d. in the £, or 3d. more than the class below them. Then he took the class at the very top of the scale, the most fortunate people, with £5,000 a year and upwards. They only numbered 15,000 people, or with their wives and children 75,000. They paid a total income-tax of 1s. 7d. in the £, or 2½d. less than the people with between £700 a year and £5,000 a year. Again, he took the great mass of the people whom the income-tax collector never troubled—numbering nearly 39,000,000, taking the population roughly at 44,000,000. He found that the income-tax which they paid amounted to 1s. 3d. in the £, or only 4d. less than was paid by the people with over £5,000 a year. That was an average for the 39,000,000. But what of the men who earned about 25s. or 35s. a week? What of the men who, like the road sweepers in his constituency, were paid only 21s. to 23s. a week by a generous Moderate borough council? What was their income-tax? It was higher than that which was paid by the limited class with over £5,000 a year. Yet in arriving at the rich man's total taxation he had included not only the Post Office profits but also the Death Duties, and he had every reason to state that that was not taxation which ought to be included in this estimate of the incidence of taxation. The Death Duties, it had been argued with very great force, were not paid by the dead or by the 1739 living. Sir Robert Giffen had very truly said that—
Duties upon the succession to property at death are sums reserved by the State out of property which dying people leave behind them and which are therefore not taxes upon the dying, because they are not levied until they have ceased to own the property, and not taxes upon the inheritors because they only inherit by the will and permission of the State itself.The figures which he had given therefore so far from exaggerating the case left it under-stated. It was true that the taxes which he had been dealing with were commonly called Imperial taxes, but, if they made inquiry into local taxation it would be found that the case would be strengthened. If they considered the ordinary rates levied by local authorities, they would find that the incidence of taxation bore more and more unjustly as they descended the scale, and that our taxation was levied without any regard to the means of those who had to bear it. In view of the incidence of these taxes it would be seen how cruelly they bore upon the poor; it would be seen how indirect taxes were increased to pay their share of the expenses of the late war and had never been removed. These indirect taxes, like the effects of famine, pressed most hardly on the poor. What to a rich man was 1d. in the pound on sugar, or 6d. in the pound on some other article? It mattered very little to him, but to the poor man's budget it meant everything. He would impress upon the minds of those who talked so freely about widening the basis of taxation that it would simply mean robbing the poor, and putting on their shoulders an unjust burden of taxation. His way was now clear to consider the Resolution as a whole. Our present national expenditure was about £124,000,000—a sum not alarming in itself. On what was it spent? We spent £90,000,000 on armaments and the expenses of past wars, and only £34,000,000 remained for peace purposes. We spent on the Navy, £31,000,000, and on the Army about £30,000,000, and a similar sum for past wars, making about £90,000,000 in all. But the nation was becoming aware that it had that fierce thing we call a conscience; it at last was aware of the woes of the aged poor, of the unlovely homes of its people; of the denial of 1740 opportunity to the child. The people were becoming increasingly conscious of their condition and the causes of it, and as the late Sir William Harcourt said, we were all Socialists nowadays. Even the noble Lord the Member for South Kensington condemned the Government because they had not sufficient regard for social reform. Things must indeed be in a bad way when they found such an appeal coming from South Kensington. The national expenditure meant one-fourteenth of our income, and a high authority had set it down that when the national expenditure did not exceed one tithe of the national income, that really could not be said to be too large. With that opinion he very heartily agreed. There was general agreement that more money was needed for social reforms and all Parties had joined in a desire to grant old-age pensions, which were included in the general scheme of social reform. For his part he termed old-age pensions not a social reform but a shame-offering. Whatever the proper term, they were all agreed that it was high time that old-age pensions were granted. Speech after speech had been delivered full of sympathy for the aged poor. The facts had been pointed out again and again with wearisome reiteration, but it all ended in one cry, "Where is the money to come from?" The aged poor men and women of sixty-five years of age and over numbered about 2,000,000, and, therefore, an old-age pension of 5s. a week would cost about £26,000,000 a year. If the pensions were made claimable by persons sixty-five years of age and over the cost of pensions at sixty-five might be reduced to £21,000,000.
* MR. DEPUTY-SPEAKERI would remind the hon. Member that there is a Bill dealing with this subject before the House, and therefore it is not in order to discuss the details of the question now.
§ * MR. CHIOZZA MONEYsaid he would, of course, bow to that ruling, but he wished to enter his protest against the existence of a system which precluded him from alluding to such an important subject on such an occasion as this. As he could not discuss old age pensions he 1741 would discuss the possibility of granting some other benefit, it mattered not what, to the aged. If the age was raised to seventy and the pensions were made claimable, the cost might be only £13,000,000. It was possible to obtain that sum by a readjustment of the income-tax. The upper 5,000,000 of the population paid in income-tax only 3 per cent. of their income. If their payment was increased to 5 per cent. it would raise £45,000,000 per annum, and 6 per cent. would raise £54,000,000 per annum. He claimed that it was not only possible to carry out a scheme of old-age benefit costing from £13,000.000 to £20,000,000 a year, but it was also possible, at the same time, to relieve the middle and lower middle classes of a share of the burden of taxation which now fell upon them. He did not think it was necessary for him to consider the bitter cry of those who had incomes from £1,000 to £3,000 a year, and he would like, by way of illustration, to show what was the amount of taxation borne by a man with an income of £1,000 a year at the present time. He would have to pay £50 a year in income-tax, about £33 a year in local rates, £3 15s. house duty, and his share of indirect taxation would probably be about £7 a year, making a total taxation for all purposes of £93 15s. a year, or less than one-tenth of his total income. If he pursued his calculation into the case of the man with £2,000 a year the taxation could be shown to be even less onerous. With regard to what had been said about the hardship of taxation upon men with incomes of £1,000 a year and upwards, he would remind the House that upwards of 43,000,000 out of a population of 44,000,000 had incomes below £1,000 a year. The £1,000 man was thus far up the social scale and mounted upon the shoulders of nearly the whole of the population, and to argue that a man with an income of £1,000 a year ought to be taxed at a lower rate was simply disregarding the elementary facts relating to the distribution of incomes in this country. If in rearranging the taxation of the country they had too much regard for the persons who were in such fortunate positions they would necessarily be compelled to have too little regard for the middle 1742 and the lower middle classes and the working classes. He had framed a scale beginning at one penny in the pound and rising to 2s in the pound which would have regard to the necessities of the middle class, and especially the lower middle class, and yet would secure a larger revenue than we now enjoyed. He found that an income-tax was possible which infringed none of the maxims of taxation to which he had alluded, which had regard to the means of all classes of the community, which did not, even in the case of the millionaire, exceed a tax of 2s. in the pound, and which would raise a revenue sufficient, to carry out a scheme of old-age benefit costing £13,000,000 per annum. Under that scheme—which compared favourably with our existing roughly graduated plan of taxation—a payment of 16d. in the pound was only reached on incomes of £2,500, and yet there would be a revenue sufficient to grant any beneficent reform which occurred to them. It might be said that the scheme would produce so much evasion of the tax as would render nugatory all their efforts to get a larger revenue. He would like to point out in reply to that argument that during the war in South Africa the income-tax was raised to 1s. 3d. in the pound. Before the war the income-tax was 8d. in the pound and during the war it was raised to 1s. 3d., or nearly doubled. But that great increase in the tax did not lead to any evasion; the figures of the revenue authorities showed that. In the year 1900, when the income-tax was 8d. in the pound, it yielded £2,300,000 per penny. In the following year, when it was raised to 1s. in the £, in spite of the increase in abatements the yield was nearly £2,500,000 per penny. It was afterwards raised to 1s. 2d., and the yield was still £2,500,000, and when it reached 1s. 3d. the yield was £2,535,000 per penny. In view of the time at his disposal he was compelled to pass over the many other revisions of taxation which might furnish additional sources of income. He would only refer to the fact that it had been clearly shown that the licence duties might easily be readjusted to produce an extra £8,000,000 per annum, while the death duties particularly deserved their attention. The Liberal Party were pledged to show 1743 that it was possible on a basis of free trade to carry on a programme of social reforms. They had been returned not only to keep flying the free trade flag, but also to show that it was possible, on a basis of free trade, to carry out a wide and generous policy of social reform. They would not be true to the trust which had been reposed in them if they did not pursue the policy to which he had alluded. It had been pointed out that in Germany where they had protection, there was a system of old-age pensions, but in free-trade England, old-age pensions had not been secured. That was a point which had lately been taken up by hon. and right hon. Gentlemen opposite, and they were representing in the constituencies that quite a small duty on the manufactured articles imported into this country would produce a revenue large enough to provide a pension scheme. That was to his mind a dangerous propaganda, and it was especially dangerous when they considered the great mass of misery and misfortune which existed in the ranks of the common people. He had in his hand only last week a document showing the terrible conditions under which the youth in one of our great industrial centres were growing up. Our cities contained 80 per cent. of the people of the country. The document to which he referred dealt with the conditions in Bradford. He found that only 10,000 out of nearly 50,000 children were sent to school decently clean, and that only about the same number could be said to be properly nurtured by their parents. Those were facts which ought to give them pause. If they turned to other great cities, whether in England, or Ireland or Scotland, they found that a similar condition of things prevailed. The poor were growing up under conditions which were not creditable to the citizens of the British Empire. In his own constituency he saw day by day the terrible poverty which existed. What, it might be asked, had that to do with the Chancellor of the Exchequer? He said that it had every thing to do with the Chancellor of the Exchequer. So long as the Treasury was poor in a rich State, so long would they continue to pass in that House Acts of 1744 Parliament which would be futile in their operation. They might pass measures dealing with the housing of the working classes, the unemployed, the condition of children in the schools, and other matters relating to the social well-being of the people; but the desired reforms could not be properly carried out until they had a readjustment of taxation to provide the means to give those reforms effect. It was insufficient for hon. Gentlemen opposite to reply that the country should adopt the system of tariff reform which they advocated. The condition of the poor was very much the same in Germany, and even in America with all its national resources. They must make up their minds that they could afford to carry out the reforms which they had set their hands to, and that the Government must no longer be a poor Government in a rich State. Viewed in that way the Budget ceased to be a mere matter of finance; it ceased to be a collection of cold facts and colder figures. It became charged with matter of life and death; with the masses who were rotting in our unlovely towns and the thousands of little children who looked up and were not fed. It was not figures alone they were dealing with; they were concerned with the lives and labours of great multitudes of people whose future prosperity depended on the action which might be taken there to remedy the evils from which they suffered.
§ Motion made, and Question proposed, "That, in the opinion of this House, having regard to the wealth of the United Kingdom and the nature of its distribution, it is necessary to readjust the burden of taxation in order to make provision for social reforms which are urgently needed."—(Mr. Bennett.)
§ THE CHANCELLOR OF THE EXCHEQUER (Mr. Asquith, Fife, E.)My hon. friends have shown, in admirable and instructive speeches, that from their point of view this is an opportune moment for introducing this discussion. The speech of the hon. Member for the Woodstock Division was a thoughtful and admirable presentation of the main outlines of the case. As to the seconder of the Motion, during the fiscal controversy no one contributed more to a sound 1745 and healthy state of public opinion, and to-night he has shown that he is capable of preparing and developing and expounding a Budget to the House of Commons. I congratulate them both heartily on the contribution they have made to our stock of knowledge. I regret, however, that I am not myself in a position to follow their example. I must reserve whatever I have to say on this subject for another three weeks. The House will believe, however, that in saying that I am not treating the Motion with any disrespect. For obvious reasons it is impossible for me to go into matters tonight which I am very much afraid I shall not be able to shrink from two or three weeks hence. The Government accept the Motion, and ask the House to assent to it, both in letter and in spirit. Speaking for myself, I believe the business of Liberal finance at this time, after we have made adequate provision for the services of the country, and its security and good administration, consists negatively in the maintenance of our system of free trade, and affirmatively in doing everything that lies in our power to maintain and improve the national credit, and to provide funds for social reform. Whether we shall succeed in carrying out a policy based on those lines time alone can show, but I shall ask in advance, as I shall have to ask again before very long that, if we proceed by cautious steps, our efforts may be watched with patience as well as with sympathy. The House may be assured that no one is more determined than we are, so far as our opportunities offer, to bring about, I hope in the lifetime of this Parliament, some, at any rate, of the most important of the great social reforms which have been alluded to.
§ * MR. HILLS (Durham)said he desired in the first place to direct the attention of the House to the speech of the hon. Member for North Paddington. The hon. Member had told them that the present system of taxation fell too heavily on the poorer classes, and then he produced his own budget. He understood that the scheme of the hon. Member was to keep all taxes, except the income-tax, at the same level, and in order to get the money he wanted he would place a surtax on large incomes, and thereby get a revenue of between £13,000,000 and £14,000,000. 1746 He would not at present discuss whether that could be done or not. He had always been a believer in a graduated income-tax. He thought there would be less dislocation of industry, and less difficulty in connection with a fairly graduated income-tax than with any other single tax. But surely the conclusion arrived at by the hon. Member opposite left untouched the question of the burden of taxation on the poor. Our present system of taxation was extremely hard and unfair on the poorer classes of the population. We had slowly shifted all our taxes to articles which we did not produce, and for ease of collection the imposts were placed on articles from which a large amount could be raised. Hence it had come about that the vast burden of indirect taxation was now borne by the very poorest classes. Everybody drank tea or coffee, and most people took sugar with it, and a great many people smoked tobacco. All these articles were necessities, or quasi necessities of life, and they were necessities of the very poorest householders. When they came to deal with the question of taxation they must look at it as a whole. It was no good for the hon. Gentleman to say that an extra sum could be got from a graduated income-tax. We had to readjust the whole scheme of our taxation, and find a way of raising the same amount of, or more, money by some means which would not hit our people so hard. The Chancellor of the Exchequer had spoken about free trade and protection. He quite agreed that the real struggle between the two policies would come on the revenue question. That would be the field of battle, for the Party opposite had got to show that they could finance their social programme on a free trade basis. The hon. Member for North Paddington was perfectly fair about that. He had stated clearly that if the Party opposite did not do that, it would be they who were to blame, and not the advocates of tariff reform. We raised £34,000,000 in import duties, and yet we called ourselves a free trade and non-tariff country, because in imposing those duties we looked to the revenue return of the tax only, and not to the protective character of the tax. We confined ourselves to a duty on a few articles, because the duty was 1747 easy of collection. But why should we not extend the list? The only argument that he could see against the extension of the list of dutiable articles was the argument of convenience. The first objection to a revenue tax was that if a small tax on an article which we produced was imposed, the cost of that article would be raised all round. But all economists from Mill downwards agreed that in the case of small duties, importers would pay the tax rather than lose the market. The question of the incidence of taxation was no doubt a very thorny one. But he would point out that it could not be said for certain that import duties must raise prices. Internal competition would keep them down. At any rate, even if the Chancellor of the Exchequer wished to keep in his mind the revenue side of the question only, and to avoid all protective tendency, there was no reason why the present list of dutiable articles should not be extended so as to include articles that we were able to produce in this country. By that means he did not think the cost would be increased, nor did he think the tax would be strictly protective. He believed that by that means a large revenue could be raised. It was said that if this tax was imposed on imported things which were produced in this country, it would benefit the home producer, and lead to the formation of trusts. But such an argument could not be sustained, for trusts existed in free trade countries like ours. The newspapers of this country were a few months ago ringing with denunciations of a trust, and the free Press, not free trade, killed it. Even admitting a tendency to the aggregation of industries which we called trusts under a high tariff, there would not be that tendency with a low duty upon a more extended list of articles than now bore duty. There might be a large extension, and the taxes would fall very lightly on the people. In protectionist countries, in America, for instance, luxuries, not the common articles daily used by the poor, bore the brunt of this form of contribution to the revenue. A comparison of the price lists in New York and London would show that many things were as cheap or cheaper in New York. It was not the cost of living, but the price of 1748 luxuries that was raised. [Ministerial and Labour cries of "No!"]
§ MR. CHIOZZA MONEYsaid there was evidence to show that the cost of living in the United States had risen 50 per cent. since 1897.
§ * MR. HILLSsaid that he was aware of that, but even now articles used by the poor, were as cheap as in England. [MINISTERIAL and LABOUR cries of "No, no!"] Imported articles, such as clothes and carpets, were a great deal dearer. The Chancellor of the Exchequer might also include a few luxuries in his list. He might raise a considerable revenue on silk manufactures and still not raise the price sufficiently to cause the transfer of the silk trade to this country, which, of course, would be against the free trade creed. He hoped that a more effective Budget would be produced than we had recently been accustomed to. There had been enough of niggling with the tea and tobacco duty. Our Chancellors of the Exchequer must go further a field.
§ MR. HEMMERDE (Denbighshire, E.)agreed that in a graduated income tax and an increase in the license duties they might find a convenient source of revenue to carry out social reforms. He had intervened because of the omission by previous speakers of one possible source of revenue for which he quoted the authority of the right hon. Gentleman the member for West Birmingham himself. He referred to the land. It would not be wise on the part of the present Government to adhere to the present basis of taxation, and to pledge the national credit up to the hilt for social reforms, only to leave the Tariff Reform Party to argue that they could not find further taxes except by recourse to protection. Why should a tax not be put upon land values? That would then only resume a part of the wealth which the growth of the community and the labour of the people had created. This would be more defensible economically than putting taxes on the food or necessities of the people. The hon. Member for Durham had suggested a number of revenue taxes, but he became confused more than once as to which were protective taxes and which were revenue taxes. There were very few actual 1749 revenue taxes which could be put on, and the hon. Member did not suggest any new ones. In dealing with the land question they would always find the same objections as those which were raised when dealing with the licensing question. When it was proposed to tax licences more highly and to deal more drastically with the drink trade, they were told that the person they would be attacking was the small publican; but they knew they were attacking the great brewer and not the small freeholder at all. When they come forward with proposals for the taxation of land values they would no doubt be again reminded of the small friendly societies with their property and trust funds invested in land, and then they would remember the case of the licensed victuallers and the brewers. In dealing with the question of the taxation of land values they had the great advantage of being supported by the great economists of the country and by the experience of other countries and some of the Colonies; while the great protectionist leader pointed twenty years ago to what could be done by it. Not only would it provide revenue, but it would have important collateral effects. It would have an important effect on the housing problem in. making land cheaper. If they taxed land upon its real value it must have the effect of clearing out the rookeries and slum dwellings in all our great towns, and of making land cheaper for housing schemes. If they were right upon the question of taxing land values, and if the theory was a sound one, then it would provide them with the best of all taxes. A tax of 1d. in the pound on the capital value of land would produce a revenue of £15,000,000 a year. He personally hankered after the abolition of the present tax on sugar and tea. When they were told, almost ad nauseam, that there were 12,000,000 people in the country on the verge of starvation, the best way to relieve them was to take off the taxes which pressed most hardly upon them; and that could be done if the taxation of land values were adopted. It would also have an indirect effect. The man who supported tariff reform or protection when he faced the country at an election declared that he was against food taxes and only wanted to take them off one article and put them on another. 1750 If the taxes were taken off all articles of food, not only would the poor be relieved, but those gentlemen would be prevented from making that double-shuffle. He hoped that the Government would be able, by developing the great resources of revenue, such as the drink monopoly and the great land monopoly, to spare these smaller sources of revenue. He hoped they would be able to take all these indirect taxes off the people. Indirect taxation could never be graduated. It always struck the poor out of all proportion to the rich. People sometimes said the poor did not feel it, but he had never heard a person defending a pickpocket argue that he should be acquitted on the ground that the person who was robbed did not know it at the time. He believed indirect taxes were bad taxes, and that there were many much better sources of revenue. It was because he believed that and wanted to see land really dealt with and the proposed charges on land made what they really ought to be that he had intervened in the debate.
§ MR. LANE-FOX (Yorkshire, W.R., Barkston Ash)said the scheme of the hon. Member for North Paddington was as simple as possible. All they had to do was to raise a considerable amount from income tax and institute a system of graduation on incomes over a certain amount. The scheme of the mover of the Motion was not nearly so well defined; and then came the most amazing speech of the hon. Member who had just sat down, who had confined himself entirely to the taxation of land. The hon. Gentleman seemed to think that by the simple means of taxing land they would solve all the social problems which faced them at the present time. What was it that the land was suffering from? Surely it was that it was overburdened by taxation, whether local or Imperial, and the question with those who represented rural districts was how to remove that great burden rather than how they were to impose fresh taxation upon the land. The man who lived in an urban district got a direct benefit from the gas and water and other things for which he was taxed; but what about the man who had an outlying farm, who paid a sanitary rate for works which were three miles off, and who also paid a police rate and a highway 1751 rate for roads which he himself did not need? That was the form of taxation which did most harm in rural districts. It was not by increasing but by reducing the burdens on the land that they would give the greater benefit to the country. The distribution of wealth had Completely changed. The incidence of taxation in rural districts was grossly unfair and was levied on the class least able to bear it. The rich man in the rural districts was not the man who paid the greatest share of the rates, but the man who paid least; the imported commercial man who had built a house on a small plot of land and the wealthy tradesman in the village, though they might not be very wealthy, did not pay anything like the rates the farmer of the land paid. A farmer was paying income-tax on £566 a year with a rateable value of £1,050, and he paid £157, as compared with a tradesman in the same neighbourhood who had £600 a year, and paid only £13 10s. All these things made it perfectly clear that the incidence of taxation in rural districts was grossly unfair. What he was perfectly certain of was that it must injure the cause of social reform in rural districts, and that the condition of the labourer and workman in those districts was bound to be worse because of this unfair incidence. It was the incidence of the rates which pressed unfairly on the rural districts; and he thought it would be freely admitted that if the rural districts could be taxed more fairly there would be greater chance of employment and of better wages. The social condition of the labourers might then be expected to improve. It was often suggested that it would be better to take the burden off the occupier and put it on the owner, but that only brought them back to the question of the land paying the rate in one form or another. They could not get away from the fact that as between the owner of land and the owner of personalty the amount of rates paid by the former was unfair and unjust. When Members discussed the better housing of the working classes and the provision of small holdings, he hoped that they would realise that this rating question was one which underlay the possibility of making those reforms a success. Many Members, in all parts of the House, earnestly 1752 desired to see some better form of rural housing and some successful form of small holdings. But how were they going to get men to improve their holdings, or invest their money in small holdings, if, the moment they did one or the other, a heavy rate was put upon them out of all proportion to the value of their property? He hoped that the House would excuse him for having brought the subject before them at length, but he believed that a great many who lived in urban districts, and who had not considered this problem, were not aware of the great grievance of which they had to complain in rural districts—a grievance which was well deserving the consideration of the House.
§ * MR. WEDGWOOD (Newcastle-under-Lyme)said that would-be reformers should in no way cavil at each others' methods if their ends were the same, and he rose, not in any degree in hostility to any other hon. Members who had addressed the House, but as the mouthpiece of that group of Members who believed that no scheme, however excellent., could cause a lasting improvement in the country's prosperity until the incidence of taxation had been removed from improvements and personal effort, and was imposed instead in such a manner as to stimulate production He referred to the scheme, widely advocated throughout the world and already successfully practised in many countries, of taxing the unimproved value of land. In their opinion, none of the other proposed reforms could attain to their full effect until that had been done; for this reason, that a large part of any improvement, whether in the condition of the worker, or in the condition of trade, went, and must necessarily go, to enhance land values. At present, by far the heaviest tax on industry were the local rates, both urban and rural. It was those local rates that did most to check improvements. In their view, no reform could be so beneficial as one which removed from improvements the hampering effect of that charge. Would the House tolerate a very short parable which exactly illustrated his point? "There was a Sultan in Egypt and he taxed the people. For each fig tree he took payment of ten dinars. So it came to pass that the people cut down their fig-trees. Then another Sultan arose, 1753 and he took the tax off fig-trees, and taxed instead the soil from which all good things must come. And behold, the people planted fig-trees with diligence, and the land flourished exceedingly." That parable put in a nutshell the main case for the taxation of land values. At present every improvement, every fig-tree, was taxed, and therefore few improvement, were made; manufactories got out of date, slums fell into worse disrepair, houses stood empty, and agricultural land was starved of capital.—all because the tax was on improvements. If a man put up a new warehouse in his factory he was taxed more; if a railway company put up a goods shed to accommodate traffic, it was taxed more; if a landlord drained a marsh, worth nothing, and made it worth £5 an acre, he was taxed more. In the borough of Hanley they put a tax of 50 per cent. on improvements. No wonder they did not get capital for improvements in Hanley, and that it was invested instead in the Pennsylvania Railroad or in Japanese bonds. There was a most unfortunate impression abroad—quite an erroneous one—that their scheme was intended to penalise the landlords. Nothing of the sort. They wanted merely to stop the system which penalised the man who used his land or his talents well and taxed him for the benefit of the man who used them badly. They did not want to tap new sources of revenue. They wanted substitution, and not now taxation. Their scheme was backed and exactly defined in the Report of the Select Committee on the Taxation of Land Values (Scotland) Bill; signed by the Solicitor-General for Scotland, and drafted by him in wording so admirable that he made no apology to the House for quoting the conclusion he arrived at—
A valuation of land values should be set on foot throughout Scotland in both burghs and counties….All local taxation should be transferred from the present valuations of the valuations of land value, thus substituting local taxation of land value for all the present local taxation of landed property.And again—We consider the benefits of the proposed system lie, not so much in 'tapping a new source of revenue', as in the economic benefits which would result from fundamental reform of the system of taxation….The positive side is the taxation of landed property on the basis of its market value…The negative side is the untaxing of buildings and improvements.1754 To show the effects of this change on the urban landlord, he gave one instance. A firm, whose name he had the honour to bear, but in which he unfortunately had no financial interest, had a freehold potworks in the Borough of Hanley. It was recently revalued for assessment purposes, and they found the value of the land was £300 and the buildings,£600 a year. That was one-third land and two-thirds buildings. Now, those best qualified told him the valuation of the whole of Hanley was about one-third land and two-thirds buildings and improvements. Rates were at present 10s. in the £ on land and buildings in Hanley. If rates were based on land alone, and the same revenue had to be raised, the assessment would rise to 30s. in the £ on the unimproved land value. It sounded enormous. They would be paying 30s. in the £ on their land. Yet they would only be paying exactly the same amount that they paid at present, for they would be assessed on their land value alone, one-third of their full present assessment. And they would be better off, for they could improve their property without being taxed for doing so. Manufacturers would be better off, because they would be able to improve their business. The people of Hanley would be better off, because they would get more; and everybody who valued good ware would be able to get the best cheaper than at present. Everybody, therefore, would benefit by the change. The average urban landlord would therefore benefit by the change; but what was true of the average urban landlord was also true of the average rural landlord. And what was true of local rates was also true of Imperial taxation. Suppose the rural landlord developed his land by small holdings, suppose he investor his money in building, fencing, draining and manuring. When, by intensive cultivation, and great expenditure of thought, labour and capital, he had doubled the return from his land, his rates were raised by the present system, and he was actually punished for his improvements. The land next door, of the same unimproved value, owned it might be by an absentee and starved of capital, actually paid less and less in proportion to its owner's inactivity, in proportion to his incapacity. But, if the Report of the Scotch Committee were adopted, and rates were 1755 based not on the rent received for land and buildings, but on the unimproved value of the land, that suicidal policy would be reversed. The tax, instead of being a deterrent, would be an encouragement to the proper employment of brains and Capital. Then his friends wished to take a further step. In order to obviate the injustice which so often arose through limitations of boundary, as for instance, in the London boroughs—an injustice which frequently laid a heavy burden on a poor district, and a comparatively light one on a rich district—they proposed to take part of the local rate on land values, and make it a uniform Imperial tax. The revenue which was thus obtained, irrespective of these fancy boundaries which municipalities setup, could be used to free local authorities from the poor rate and education rate—rates which pressed with undue severity on poor districts and on rural areas. That would spread the burden over the whole country in accordance with their ability to pay, and therefore it would largely relieve rural areas from the crushing rates which oppressed the agricultural industry. Incidentally it would do away with the necessity for those complicated, extravagant, and at the same time often wasted subsidies known as grants-in-aid. This change in the incidence of taxation had therefore two objects—(1) the freeing of improvements from taxation and the equalisation of burden between rich and poor districts; (2) the securing for the community the full benefit of all future unearned increment of land—of all future accidental improvement in land values. The rate and tax on unimproved land values would practically absorb into the national and local exchequers the whole of the unimproved land value, and that without in any way increasing the burden which the good landlord had to bear, but rather diminishing it. Therefore, if the value of land went up anywhere through outside causes and not through the owners' efforts, the increased value would increase the assessment and would increase the revenue to be got from that assessment; so that the whole of the unearned increment would not go as at present to the private individual, but would become the earned increment of the community or State 1756 which had given the value, [Dissent.] He was assuming that the improvement was not due to the owner, but solely to some outside cause for which the owner was not responsible. The London County Council had lately found out to their cost that a large part of the benefits they had conferred upon Londoners—parks, tramways, free ferries, and street improvements—had gone to increase rents. Unfortunately for them this increase in the value of land had only occurred in patches, where the improvements were made, so that the majority of London landlords could not be accused of ingratitude for their action in the late elections. What Parliament had to do was to see that all their social reforms did not end in the same way. If small holdings re-peopled the countryside, up would go the price of land. If aged pensioners were able to end their days in their own homes instead of the workhouse, the demand for cottages would be greater all over the country, and consequently cottage rents would rise. If they dissuaded the people from wasting their money in drink, trade would improve, and the value of land would rise in consequence. Public money, however expended, whether in helping landlords to build good cottages or to finance small holders, or to plant forests, or to dig canals, or to reclaim foreshores, raised the unimproved value of land throughout the whole neighbourhood. If Parliament would only preface these reforms by the taxation and rating reform which he and his friends advocated, the whole of the increased value would go back to the community and help to pay for the improvements. If they did not do that, more than half the advantage that they expected to see from these great reforms would drift into private and undeserving pockets. He asked the House to support the reform which was recommended by the Solicitor-General for Scotland in his Report of the Scottish Committee last session when he said that—All local taxation should be transferred from the present valuations to the valuations of land value, thus substituting the local taxation of land value for all the present local taxation of landed property.If they did that they would free the improvements from taxation, cause an enormous boom in the industries of the 1757 country, equalise the burden between rich and poor districts, and secure for the community the full benefit of all the reforms they carried out.
§ * MR. BRIDGEMAN (Shropshire, Oswestry)said that after listening to the speeches of various hon. Members one was driven to the conclusion that the present system of taxation was thoroughly unsatisfactory. It was a pity that the Chancellor of the Exchequer had not heard all the arguments. The hon. Member for East Denbighshire had quoted the right hon. Gentleman the Member for West Birmingham in support of the statement that a tax of a penny in the pound on land values would produce £15,000,000 a year of revenue.
§ Mr. HEMMERDEOn the capital value of land values.
§ * MR. BRIDGEMANsaid he would have very much liked to hear the Chancellor of the Exchequer's opinion on that particular point. Of course it was a matter which was very hard to decide. It rested entirely on the method in which the land values were going to be computed and assessed. Although there was a great deal to be said in favour of additional taxation of land in large towns, he thought it was difficult to draw the line, and to form a basis of taxation except in respect of the return it gave to the owner. He would like to ask the hon. Member for New-castle-under-Lyme how he proposed to raise sufficient revenue for all local and imperial purposes, if he was going to put a tax only on the unimproved value of land.
§ MR. WEDGWOODI do not think we should get anything like the whole of our taxation in that way.
§ * MR. BRIDGEMANsaid that was the admission which he hoped to get from the hon. Gentleman. He was entitled to ask where the rest of the money was to come from. He understood that the hon. Gentleman approached the question from a practical point of view. He gathered from the remarks of the hon. Member that by putting this very heavy 1758 tax on the unimproved value of land they would tax unimproved land out of existence altogether. He did not know whether other hon. Gentlemen assented to that proposition. In other words the hon. Gentleman said that the local authority would become the owner of the unimproved land by default on the part of the owner.
§ MR. WEDGWOODThe unimproved value of the land—say a field—will not be the full value of the field, and the landlord will remain the landlord of the capital sunk in the field, but the local authority will become automatically the owner of the unimproved value.
§ * MR. BRIDGEMANsaid that was a very good theory, and he would like very much to be able to support it from the practical point of view. It meant that land on which nothing had been spent for improvement, which had been considered worthless, or practically worthless, and not worth spending money on to improve, would be taxed out of existence, and would become the property of the State or of the local authority. The result would be that the State and the local authority would be left in the possession of all the worst land in the country, a great deal of which could not be turned to any use. Then there was another point to which he wished to refer, viz., the incidence of the poor rate if there was any charge which should be paid by the wealth of the country it was the poor rate. It was the duty of the rich to pay for the poor, but that was not the principle on which the poor rate was at present based. There might be two men living in similarly-sized houses in the same place, one with an income of £300 a year, and the other with an income of £3,000 a year, and yet they paid exactly the same poor rate. That was an absolutely rotten system, which bore hardly on rural districts which paid far more than their proper share of the poor rate. He maintained that the poor rate, as at present, levied, was a most unjust tax, especially in the rural districts, and he believed that if it were placed on a proper basis they would do a great deal for the promotion of small holdings, and of agriculture generally.
§ * MR. REES (Montgomery Boroughs)said he was sorry that the hon. Member for Durham had spoken somewhat contemptuosly of taking off 1d. from the duty on tea. For his part he only despised a 1d. when he had 2d. in sight. He hoped that the Chancellor of the Exchequer would be able to take 2d. off the tea duty. The tea industry was peculiarly deserving of the sympathy of that House. Tea was grown by British capital, in British possessions, and by British-Indian labour. Such labour in no way competed with white labour; only natives could work in the Indian sun, and the more worked on these estates the more work there was for white labour by way of supervision. He wished it was understood that where white and coloured labour met, the function of white labour was the supervision of coloured labour, and there really was no competition between the two classes. They should do all they could to equalise taxation, but he deprecated the habit of dividing the people of the country into rich and poor, and suggesting that there was a necessary antagonism between classes, or that some classes were "propertied" and others were not. What was the limit of property, which made a man one of the "propertied classes"? The hon. Member for Denbighshire had spoken of making an attack on the drink monopoly. He himself supported to the utmost the temperance policy, but it was from a love of temperance, and not from a desire to attack the brewers, who, at this moment, were not absolutely rolling in ill-gotten wealth. An attack on brewers or on railway companies might be a very good cry for an outside political platform, but, in the result, it did the Liberal Party no good, but rather harm, for most people had something to lose, and no one knew whose turn might come next, if "attacks" became lawful politics. The hon. Member for Newcastle-under-Lyme had treated the House to a very interesting tale of an Egyptian Pasha, whose fig tree by careful compression he had, to use his own phrase, put into a nutshell. If he might venture to indulge in anecdotal mood he might say that he remembered a case of a beggar who cried aloud to a Persian ruler, "Give me a brother's fortune." As everybody knew, beggars in the East were very importunate, and could not be treated with 1760 indifference, though the courtiers try to drive them away. The King said, "Come to me to-morrow." The beggar went the next day to the palace of the king, who gave him a 1d.; but the beggar said, "I wanted a brother's portion," whereupon the King replied, "If I gave all my brothers a 1d., I should not have a ½d. left for myself." This tale was much to the point when the rich and poor were treated, as if they were sharply defined different classes, as indeed they were in the great Protectionist Empires of Europe, and in the East, but as fortunately they were not in this island. He did not think the poor were in this country so sharply divided from the rich as they were in other countries. He thought there was great sympathy between the different classes in this country, and it was absolutely impossible to say where the line of demarcation between rich and poor began. Though unhappily there were more who were undoubtedly poor—than he could wish. As to the taxation of the country, let them be fair to everybody who owned anything, while they should be slow to put the onus of taxation on their poorer brethren wherever it could be avoided. He would take the case of the experimental politician to illustrate his point. The experimental politician said that everything should be divided equally. He remembered an account of a conversation upon that point. One man said to the other, "If you had two horses would not you give me one?" and the answer was "Yes, certainly." The next question was, "If you had two cows would you give me one?" and again the answer was "Yes." Then the question was asked, "If you had two pigs would you give me one?" and the answer this time was, "That is not fair, because you know that I have two pigs." Let every one who was not abjectly poor remember he had something to lose, and that there were always idle wastrels prepared to divide what he had as well as the greater fortunes of the rich. The small belongings of the small owners in the aggregate, were more than the possessions of the rich, and would in their turn be plundered, if once the policy of division all round were adopted. He did want the House to do all they could 1761 to equalise taxation, but let not them get into the habit of dividing the people of this country into rich and poor, and making out that there were two classes between whom there was a necessary antagonism. His hon. friend the Member for Newcastle-under-Lyme had dealt with the question of rates, which he had very truly said were very heavy, and he had proceeded to show that the best way of dealing with high rates was to pass them on to somebody else. For himself he believed that was the best way of dealing with high rates, so long as one could do it and from one's own point of view, but under that system the time came when there was nobody to whom to pass them on. Moreover a time would come when they would have to consider whether the rates were spent in a manner of which they could fully approve. Then the hon. Member spoke of the unimproved value of the land, and he would like to have that phrase exactly defined, because it was difficult without exact definition to know what the hon. Member really did propose. Did he mean the prairie value? Hardly. But what exactly did he mean? Several hon. Gentlemen had offered Budgets to the House, but they had all been in some respects either too experimental or too sentimental to suit practical politics, and the net result in his own case was that he was glad that the national finances were in the hands of the experts, and he believed that while that continued to be the case, there was a far better chance of funds being available, not only for the necessary services of the country, but for much needed social reforms.
§ MR. BENNETTrose in his place, and claimed to move, "That the Question be now put"; but Mr. Speaker withheld his assent, and declined then to put that Question.
§ MR. HUNT (Shropshire, Ludlow)argued that protection was the only financial system under which it would be possible to make provision for social reform, and said that according to the last statistics the poor people of this country paid more in taxation than the poor people of Germany or America.
Mr. Carnegiehad told them recently that a sovereign would buy more food and clothes for the people of America than it would for the people of this country. Under a system of free imports Germany and America had fewer poor people than we had here, fewer unskilled persons who were unable to gain a livelihood, and fewer people who were untidy in the streets or in their houses. The reason was that the necessaries of the poor were so heavily taxed in this country. The people of this country had to pay the whole of the taxes. Nearly all the luxuries of the poor were taxed, whilst with the exception of alcohol and tobacco the luxuries of the rich were allowed to come into this country free.
§ MR. BENNETTrose in his place, and claimed to move, "That the Question be now put"; but Mr. Speaker withheld his assent, and declined then to put that Question.
§ MR. HUNTargued further that everything that the poor consumed was taxed, while the rich to a large extent escaped.
§ Resolved, "That, in the opinion of this House, having regard to the wealth of the United Kingdom, and the nature of its distribution, it is necessary to readjust the burden of taxation in order to make provision for social reforms which are urgently needed."