Commons Sitting of 7 May 1908

Preamble
The House met at a quarter before Three of the Clock.

PRIVATE BILL BUSINESS.
Manchester Corporation Bill.—Read the third time, and passed.
Leith Harbour and Docks Order Confirmation Bill.—Considered; to be read the third time upon Monday next.
Edinburgh Corporation (Tramways, etc.) Order Confirmation Bill [by Order].—Considered; to be read the third time upon Monday next.
Local Government Provisional Orders (No. 1) Bill [by Order]; Local Government Provisional Orders (No. 2) Bill [by Order].—Read a second time, and committed.
Camborne Water Bill; Rhymney Railway Bill [Lords].—Reported, with Amendments; Reports to lie upon the Table, and to be printed.
Interoceanic Railway of Mexico Bill [Lords].—Reported, without Amend-
386
ment; Report to lie upon the Table, and to be printed.
Norwich Union Fire Insurance Society Bill [Lords].—Reported, with an Amendment; Report to lie upon the Table.

MESSAGE FROM THE LORDS.
That they have agreed to:—Derby Gas Bill, with Amendments.
That they have passed a Bill, intituled, "An Act for the dissolution and reincorporation of the Bognor Gas Light and Coke Company, Limited; and for other purposes." [Bognor Gas Light and Coke Company Bill [Lords].]
And, also, a Bill, intituled, "An Act for incorporating and conferring powers on the Swansea Valley Gas Company; and for other purposes." [Swansea Valley Gas Bill [Lords.]
Companies (Consolidation) Bill and Post Office (Consolidation) Bill.—That they communicate that they have come to the following Resolution, viz.:—"That it is desirable that the Companies (Consolidation) Bill and the Post Office (Consolidation) Bill be referred to a Joint Committee of both Houses of Parliament."
Bognor Gas Light and Coke Company Bill [Lords]; Swansea Valley Gas Bill [Lords].—Read the first time; and referred to the Examiners of Petitions for Private Bills.

PETITIONS.
  CHILDREN BILL.
  Petitions in favour: From South Tottenham (two); and Tottenham; to lie upon the Table.
  COAL MINES (EIGHT HOURS) (No. 2) BILL.
  Six Petitions from Hull, against; to lie upon the Table.

  COAL MINES (EIGHT HOURS) (No. 2) BILL.
  Petitions in favour: From Brotton; Buckhill Pit; Bullgill Pit; Carlin How; Chaloner; Clifton Pit; Delph Lodge;

  387
  Dowlais; Earnock Branch; Ellenborough Pit; Eston (two); Grinkle; Harthill and West Benhar; Holmwood; Lingdale; Liverton; Loftus; Long Acres; Lumprey; Measham; Netherseal; Netherton; North Skelton; Oughterside Pit; Quarry Bank; Rawdon; Reservoir; Roseberry (two); Seaton; Seaton Moor Pit; Siddick Pit; Skelton; Skelton Park; South Skelton; Spa Wood (two); Upleatham; Watergate Pit; and Wilton; to lie upon the Table.

  ELEMENTARY EDUCATION (ENGLAND AND WALES) BILL.
  Petitions in favour: From Crosshills; Dudley; and Nidd Valley; to lie upon the Table.
  LICENSING BILL.
  Petitions against: From Birmingham; Chippenham; Cockermouth; Emmer Green; Glasgow; Harrogate (eight); Knaresborough (five); Madley; Pontypridd; Reading; Ripon (two); Scunthorpe; St. John's Wood; Thwing, Hunmanby; and Workington; to lie upon the Table.
  LICENSING BILL.
  Petitions for alteration: From Bedlington; Bill Quay on Tyne; Cardiff; Dudley; Gateshead (six); Gosforth (two); Holywell East; Leamington (two); Newcastle on Tyne (fourteen); Ouston; Pelton Fell; Swalwell; Tottenham(two); Walker on Tyne; Wallsend on Tyne (two); and Windy Nook; to lie upon the Table.

  LICENSING BILL.
  Petitions in favour: From Aberdeen; Abertridwr; Ambleside; Appleby; Applecross; Aston Manor (two); Ballater; Bargoed (three); Barrhead; Barrowford (three); Birkdale; Birmingham; Blairdaff; Bloomsbury; Bootle (two); Borgoed; Bournemouth; Bowes Park; Bradford (two); Brierley Hill; Bristol; Bush Hill Park; Cumbernauld; Cardiff (twenty-eight); Castle Douglas; Cathays (three); Chanonry; Chelmsford; Cocker-mouth; Crosshills; Deane; Dudley; Dumfries; Edmonton; Enfield (two); Exeter (four); Fenny Stratford; FerryHill; Finchley; Fochriw; Frome (two); Fulham; Glanyllyn; Glasgow (seven); Grangetown; Gwaelodygarth;
  388
  Harborne; Harrogate; Haslingden; Heathfield; Hebron; Helsby; Hitchin; Honiton; Hove; Huddersfield; Hull; Inverary; Inverness; Keswick; Kingston (Wilts.); Kirkcudbright; Leeds (two); Leyton; Leytonstone (eight); Liverpool (two); Llanferres; Llangeitho; Llangollen; Llantrissant; Llantwitfardre; London; Macclesfield; Maidenhead; Maidstone (two); Market Lavington; Membury; Merthyr Vale; Nant; Nantwich; Nelson; Nidd Valley; New Southgate (six); Norwood; Nuneaton; Ottery St. Mary; Palmers Green; Peterhead; Plaistow; Pontlottyn(two); Pontypridd (three); Pulverbatch; Ripon; Rotherham; Rothesay; Rugby; Shieldhill (two); Senghenydd; Shildon; Silsden; South Molton; Southwick; Stockton on Tees; Sunderland; Tanyfron; Towyn; Trefor; Treforest; Trehafod; Usk; Walsall (four); Warcrop; Wednesbury; Whetstone (two); Winchmore Hill; Woodford; Wood Green; and Wolverhampton; to lie upon the Table.

  LIQUOR TRAFFIC (LOCAL OPTION) (SCOTLAND) BILL.
  Petition from Perth, against; to lie upon the Table.
  LIQUOR TRAFFIC (LOCAL OPTION) (SCOTLAND) BILL.
  Petitions in favour: From Aberdeen; Barrhead; Cranstonhill; Dumfries; Glasgow; Huntley; Longhope; and Peterhead; to lie upon the Table.
  PUBLIC-HOUSES (EXCLUSION OF CHIL- DREN) (SCOTLAND) BILL.
  Petition from Barrhead, in favour; to lie upon the Table.
  SALE OF INTOXICATING LIQUORS ON SUNDAY BILL.
  Petitions in favour: From Bath; and Nantwich; to lie upon the Table.
RETURNS, REPORTS, ETC.

  ALIENS ACT, 1905.
  Copy presented, of Return of Alien Passengers brought to the United Kingdom from Ports in Europe or within the Mediterranean Sea during the three months ending 31st March, 1908; together

  389
  with the number of Expulsion Orders made during that period requiring Aliens to leave the United Kingdom [by Command]; to lie upon the Table.

  ULTIMUS HÆRES (SCOTLAND) (AC- COUNT AND LIST OF ESTATES).
  Return presented, relative thereto [ordered 6th May; Mr. Hobhouse]; to lie upon the Table, and to be printed. [No. 136.]
  IRISH UNIVERSITIES BILL.
  Copy presented, of List of Persons to be proposed for Nomination to be Members of the First Governing Body under a new Charter for the Constituent College at Galway [by Command]; to lie upon the Table.
  IRISH UNIVERSITIES BILL.
  Copy presented, of List of Persons to be proposed for Nomination as Members of the First Governing Body of the College to have its seat in Dublin [by Command]; to lie upon the Table.
  SEA AND COAST FISHERIES FUND(IRELAND) (NON-CONGESTED DISTRICTS).
  Account presented, for the year ended 31st December, 1907 [by Act]; to lie upon the Table.

  FINANCIAL STATEMENT (1908–9).
  Copy ordered, "of Statement of Revenue and Expenditure as laid before the House by the First Lord of the Treasury when opening the Budget."—(Mr. Hobhouse.)
  Copy presented accordingly; to lie upon the Table, and to be printed. [No. 137.]

  CORPORAL PUNISHMENT.
  Address for "Return of all sentences of Corporal Punishment inflicted under 26 and 27 Vict., c. 44, upon persons convicted of offences under Section 43 of the Larceny Act, 1861, and Section 21 of the Offences against the Person Act, 1861, in England and Wales, from the 31st day of December, 1906, to the 31st day of December, 1907 (in continuation of Parliamentary Paper, No. 224, of Session 1907.)"—(Mr. Lloyd-Morgan.)
  NAVAL EXPENDITURE (PRINCIPAL NAVAL POWERS).
  Return ordered, "of the Naval Expenditure of each of the Principal Naval Powers, showing their total estimated Naval Expenditure in each of the last ten years, their expenditure in each of the years named on new construction, including armament, and the amount of their new construction in each of those years expressed in tonnage."—(Mr. Thomasson.)
QUESTIONS AND ANSWERS CIRCULATED WITH THE VOTES.

  Exemptions from School Attendance.
  VISCOUNT CASTLEREAGH: To ask the President of the Board of Education whether he will state, in respect of each year since 1898, the total number of children exempted from the obligation to attend school under the provisions of the Elementary Education (School Attendance) Act (1893) Amendment Act, 1899, the number of exemptions in respect of children in Lancashire, and the number of exemptions under the provision of the above - mentioned Act of 1899, relating to children employed in agriculture.
  (Answered by Mr. Runciman.) No statistics are available as to the number of children entitled to exemption under the bye-laws or under the Act to which the noble Lord refers. My right hon. friend the Secretary of State for the Home Department, in an Answer given on 11th March, stated the number of children employed as half-timers in factories, workshops, and laundries in the United Kingdom, and in textile factories in Lancashire and Yorkshire, and he could also furnish the number of children between thirteen and fourteen years of age certified for employment as "young persons" under Section 63 of the Factory Act. I regret I have no information as to the number of agricultural exemptions, but I may say that, out of 364 separate sets of bye-laws approved by the Board of Education, ninety-seven contain the special clause enabling children to be employed in agriculture at the age of eleven.

  School Attendance Regulations Abroad.
  VISCOUNT CASTLEREAGH: To ask the President of the Board of Education whether he will state, as regards France, Germany, Italy, Spain, Portugal, the United States of America, Canada, and Australia, the minimum age at which children can obtain exemption from the obligation to attend school; whether such exemption is partial or total, and obtained as the result of passing an examination; and, if so, the subjects of the examination.
  (Answered by Mr. Runciman.) The arrangements as to school attendance in the several countries named are too varied to admit of a clear Answer being given to the Question, except by means of a memorandum. I am having a memorandum prepared, which will give such information on the point as the Board of Education possess, and it will be laid in a few days. I may add that, so far as the Board are aware, no arrangements appear to exist in any of the countries referred to for the partial exemption of a child from school attendance.

  Elphin Cattle-Drive.
  CAPTAIN CRAIG: To ask the Chief Secretary to the Lord-Lieutenant of Ireland whether he is aware that on Tuesday, 28th April last, a cattle-drive took place at Bealragh, near Elphin, county Roscommon, in the midst of the country where the anti-ranching campaign of the United Irish League is in full swing, off the farm of a Mr. Stafford; whether this is the farm, let to a Mr. Hanley, which the local branch of the League have moved on several occasions to have divided up among its members, and is in close vicinity to the 1,200 acres of the Palace lands, belonging to Mr. O'Connor, Elphin, which were boycotted so rigidly last year that no farmers dare take them for grazing; whether on the 29th April last the whole 1,200 acres had to be set on fire in order to promote the growth of the new grass; and will he state what action the police propose to take.
  (Answered by Mr. Birrell.) On the morning of 27th April it was found that during the previous night cattle had been driven off a farm which Mr. Hanley holds as tenant from Mr. Stafford. The
  392
  cattle were recovered on the same morning. The police have been informed that Mr. Hanley was asked last autumn to surrender the farm for division amongst the people in the locality. The Palace lands referred to have upwards of seventy cattle upon them, but are not fully stocked. They contain 780 acres, of which forty acres of uncut meadow have been burnt by order of the owner. The force of the neighbouring police stations has been strengthened with the object of preventing interference with cattle and affording full protection to persons who may require it.

  Ballinrobe Outrage.
  CAPTAIN CRAIG: To ask the Chief Secretary to the Lord-Lieutenant of Ireland whether he is aware that on Saturday, the 25th April last, two shots were fired into the house of a man named Murphy, of Ballyboccagh, near Ballinrobe, county Mayo, one of which narrowly missed an old man sitting at the fire whether the police investigations go to show that the shots were intended as murder or merely as intimidation of Mrs. Morris, who holds a boycotted farm in the district; will he say how this outrage is classed by the Government; and whether any arrests have been made, or what steps have been taken by the police.
  (Answered by Mr. Birrell.) This is the same case about which I answered a Question put by the hon. Member for Mid Armagh yesterday. Two shots were fired at the house of James Murphy on the evening of 19th April, and a window was broken by grains of shot. Some of the grains flattened against the glass and fell outside, and those that penetrated the glass fell on the window sill immediately inside. The police therefore concluded that the shots were fired from a considerable distance, and that intimidation and not personal injury was intended. The case is still under police investigation, and its classification as an offence has not yet been decided upon by the Inspector-General. No sufficient evidence to justify arrests has yet been obtained.

  Irish Special Reserve.
  CAPTAIN CRAIG: To ask the Secretary of State for War whether regulations for the Special Reserve in Ireland are in

  393
  course of preparation; and, if so, will they be issued prior to the period of the final annual training this year of the old Militia Force, in order that officers and men may have an opportunity of studying the new scheme when mobilised.
  (Answered by Mr. Secretary Haldane.) The regulations for the Special Reserve are in course of preparation, and it is hoped will he ready by the end of June.

  Roman Catholic Soldiers in the British Army.
  CAPTAIN CRAIG: To ask the Secretary of State for War whether his attention has been called to a letter written by Cardinal Gotti, prefect of propaganda, purporting to regulate the affairs of Roman Catholic soldiers in the British Army; and whether, in view of the right of the War Office to send Roman Catholic chaplains wherever they may think fit to minister to Roman Catholic soldiers, as guaranteed by Rome after the Crimean War and exercised by the War Office ever since, he will say what steps he proposes to take to prevent Roman Catholic soldiers serving in India and South Africa being compelled to accept the religious ministrations of foreigners who may be unsympathetic to, and imperfectly acquainted with, the English tongue, and the subordination of the spiritual requirements of British Roman Catholic soldiers to the pecuniary interests of Foreign Roman Catholic ecclesiastics.
  (Answered by Mr. Secretary Haldane.) After the South African War the Government of the day were approached by the Roman Catholic Bishop of Southwark, now Archbishop of Westminster, who issues to Roman Catholic Army chaplains the faculties which the law of their church requires that they should receive for their functions as priests. Through the good offices of His Grace the authorities of the Vatican agreed that commissioned chaplains should continue to serve the chief stations in South Africa, and there are now five such chaplains. The War Office has no intention of withdrawing them. At stations where the Roman Catholic troops are too few to warrant the presence of an Army chaplain use must be made, and is made everywhere, for all denominations, of the services of the local civilian clergy. Religious
  394
  ministrations to the troops in India are not under the control of the War Office.

  The Army Council.
  MR. BOWLES: To ask the Secretary of State for War if he will state by what statutory authority the Army Council exists.
  (Answered by Mr. Secretary Haldane.) The Army Council is created by the prerogative of the Sovereign exercised through Letters Patent, and the powers and responsibilities of its various members are defined in Order in Council.

  5th Lancers—Alleged Mutiny at Colchester.
  MR. BOTTOMLEY: To ask the Secretary of State for War whether, in 1904, whilst under the command of Colonel Allenby and stationed at Colchester, A squadron of the 5th Lancers mutinied, and this mutiny was condoned; and, if so, whether such condonation is in violation of the King's Regulations and without precedent in the British Army.
  (Answered by Mr. Secretary Haldane.) Nothing is known of the mutiny referred to by my hon. friend.

  Willenhall Drill Hall.
  MR. T. F. RICHARDS: To ask the Secretary of State for War whether he is aware that the sergeant instructor who has the letting of the drill hall, Willenhall, has refused to let the same for the use of a Labour and Socialist meeting, although the same building has been let for Liberal and Conservative meetings; whether this building is in any way kept up by public money; and, if so, whether he will take action to remove disabilities which in this case prevent Labour men and Socialists from the exercise of their citizen rights.
  MR. T. F. RICHARDS: To ask the Secretary of State for War whether he is aware that Colonel Waterhouse, magistrates' clerk, refused the use of the drill hall, Wolverhampton, to the free trade candidate, but let the same to the tarift reform candidate; whether this building is in any way a public or semi-public building; and, if so, whether his Department will advise local public servants

  395
  that equal opportunities for the use of these buildings shall be granted to all applicants on equal terms and conditions irrespective of party politics.
  (Answered by Mr. Secretary Haldane.) In reply to these Questions, I have called for reports from the general commanding officer concerned.

  Army Ordnance Department Writers.
  MR. COURTHOPE: To ask the Financial Secretary to the War Office whether writers of the Army Ordnance Department at out-stations perform work superior to that of copyists at Woolwich Arsenal; and, if so, why they are not allowed to rise to at least the rates of pay fixed for second-class writers at Woolwich Arsenal and Pimlico.
  MR. COURTHOPE: To ask the Financial Secretary to the War Office whether His Majesty's Government will extend the same rates of pay to writers employed at out-stations as to those employed at Woolwich and Pimlico.
  (Answered by Mr. Acland.) In reply to these Questions it is admitted that the writers at out-stations perform work somewhat superior to that of copyists; but in view of the higher all round level of rates of pay at Woolwich and Pimlico it is considered that the rates paid at out-stations to the writers are adequate. I am, however, inquiring into this matter.

  Petitions to the War Office.
  MR. COURTHOPE: To ask the Financial Secretary to the War Office whether the Regulations prohibit the presentation and forwarding of petitions by civilian employees of Army departments; and, if so, for what reason.
  (Answered by Mr. Acland.) There is a regulation prohibiting the forwarding of petitions to the War Office, but it is not maintained in practice, petitions being frequently received and considered. These petitions have to be forwarded through the proper authorities.

  Army Ordnance Writers.
  MR. COURTHOPE; To ask the Financial Secretary to the War Office whether, seeing that the Admiralty revised the rates of pay granted to their writing staff on 1st April, 1907, the War
  396
  Office will undertake a similar revision in the case of Army Ordnance writers.
  (Answered by Mr. Acland.) The conditions of entry into the Admiralty service for writers are more stringent than in the service of the War Department, where there is no entrance examination, and the remuneration of the former is accordingly greater.

  Indian Staff Corps.
  SIR SEYMOUR KING: To ask the Under-Scretary of State for India whether any Royal Warrant has been published modifying the system laid down in the Royal Warrant of 1861 for the Indian Staff Corps, now Indian Army, under which officers were promoted after fixed periods of service; whether lieutenants of six years service and captains appointed to certain staff or regimental posts can be promoted to the next higher ranks on the recommendation of the Commander-in-Chief in India, thus superseding other officers of the same length of service; whether this practice is sanctioned by Royal Warrant, and the date of such Warrant; whether majors are promoted to the rank of lieutenant-colonel, irrespective of length of service, on appointment to the command of a regiment or battalion and to other posts; whether this practice is sanctioned by Royal Warrant, and the date of such Warrant; whether this rule has caused the supersession of efficient officers, especially of those of Indian cavalry; whether, in the case of a field officer in military employ whose promotion it is desired to withhold, the practice of the military authorities in India is to suggest to the officer that he should take leave and retire at the expiration of such leave period; whether this practice has the approval of the Secretary of State for India; and whether all these new conditions do or do not specifically contravene the principle of Indian Army promotion as established by Royal Warrant.
  (Answered by Mr. Buchanan.) The system of promotion laid down for the Indian Staff Corps in the Royal Warrant of 1861 was superseded by provisions in successive Royal Warrants from 1881 to 1907, directing that promotion in the

  397
  Indian Staff Corps, now the Indian Army, should be made under such regulations as might be laid down from time to time by the Secretary of State for India in Council. Under regulations thus laid down in 1904 a limited number of lieutenants and captains may be specially promoted, and majors are promoted as stated in the Question without completing the periods of service ordinarily required. Some supersession of individuals is necessarily involved in this system, in so far as it is a departure from the old system of promotion after certain fixed periods of service, and I believe it is a fact that regimental commands in the Indian cavalry are, on the average, not attained until after longer service than in the infantry. The cases of officers whose promotion is withheld on account of unfitness are dealt with on their merits, and a special period of leave pending retirement is sometimes granted in such cases. The present system does not appear to the Secretary of State to contravene the Royal Warrants.

  Kingwilliamstown Teachers' Residences.
  MR. FLYNN: To ask the Secretary to the Treasury whether he ran state the grounds upon which the Treasury ignore the application of the parish representatives for a refund pro rata of the amount contributed by them out of the purchase price offered for two teachers' residences in Kingwilliamstown, County Cork; are the Treasury authorities aware that the parish raised a considerable sum by way of contribution towards the erection of these residences, but they were vested in the Commissioners of National Education; that the parish priest, the Very Reverend Canon Riordan, frequently called the Commissioners' attention, and through them that of the Board of Works, to the condition of disrepair into which these houses were allowed to fall, and that inspectors of the Commissioners also complained of, and reported upon, their condition, notwithstanding which no steps were taken by the Board of Works towards their repair and necessary upkeep; and whether, in view of this continued neglect on the part of a public department, whereby the dwellings have now to be offered for sale, the Treasury will refund to the parish's responsible representative a reasonable
  398
  share of the purchase money received from their sale.
  (Answered by Mr. Hobhouse.) The aplication of the parish representatives has not been ignored. The residences before erection were estimated to cost not less than £400. One half of this sum was contributed from public funds, the parish representatives, who were solely responsible for the erection of the houses, undertaking to defray the remainder of of the cost. The residences were built at a cost considerably below the estimate, only £61, in addition to the Government grants, being spent on the work. There has been no neglect by the Board of Works to maintain the buildings since erection. Since the buildings were completed in 1880, in consequence of the original under-expenditure by the local authorities, a sum of £250 has had to be spent on repairs and maintenance out of public funds, which would have been unnecessary if the full amount of the estimated cost had been spent on the erection of the houses. The local representatives have therefore received more than the full assistance to which they are entitled in respect of the erection and maintenance of the buildings, and in the circumstances I do not consider that they have a claim to any portion of the purchase money.

  Local Government Indebtedness.
  MR. RIDSDALE: To ask the President of the Local Government Board what was the aggregate debt of the various local authorities of the United Kingdom at the close of the following financial years: 1870, 1880, 1890, 1900, 1904, 1905, 1906, 1907.
  (Answered by Mr. John Burns.) The following tables, which give as far as possible for the under-mentioned years the information desired by my hon. friend, have been compiled as regards England and Wales from the Annual Local Taxation Returns (England and Wales), and, as regards Scotland and Ireland, from particulars furnished by the Secretary for Scotland and the Local Government Board (Ireland). Information cannot be given for the year 1869–70, and complete information for the United Kingdom for the years 1905–6 and 1906–7 is not yet available.

  Local authorities in

  Total amount of the outstanding balances of loans.

  1873–4.

  1879–80.

  1889–90.

  1899–1900.

  1903–4.

  1904–5.

  £

  £

  £

  £

  £

  £

  England and Wales

  84,194,956

  136,934,070

  198,671,312

  293,864,224

  393,882,146

  466,459,269

  Scotland*

  *

  *

  25,380,723*

  47,705,830

  59,314,968

  61,338,728

  Ireland†

  3,068,863†

  4,374,453†

  6,542,137†

  11,493,914†

  16,008,311

  16,917,091

  Totals

  —

  —

  230,594,172*†

  353,063,968†

  469,205,425

  544,715,088

  The amounts given in the table are stated in gross, i.e., no deduction has been made in respect of the sums remaining in sinking funds or other similar funds towards the repayment of so much of the debt as may have been repayable by means of such funds.

  MR. RIDSDALE: To ask the President of the Local Government Board what is the number of local authorities in the United Kingdom which have in any manner the power to utilise sinking funds set aside to meet existing debts for the purposes of fresh capital expenditure.
  To ask the President of the Local Government Board if he will state in what year the power to use sinking funds for the purpose of fresh capital expenditure was first exercised by a local authority, the name of the local authority which first exercised it, and the number of times that power has been exercised since.
  (Answered by Mr. John Burns.) I will answer these two Questions together. I only have information with regard to the matter to which they relate so far as England and Wales are concerned. The number of local authorities in them who have in any manner the power referred to is 105. So far as I am aware, the first year in which the power was given was 1892, when it was conferred on the Town Council of Birmingham by Section 72 of the Birmingham Corporation Water Act. The power was used to a considerable extent in the years 1893 to 1900, when the section was repealed and replaced by a provision in Section 4 of the Birmingham Corporation (Stock) Act, giving the power in an altered form. I am unable to state the number of times in which the power has been exercised.

  Chinese in the Transvaal.
  MR. CORRIE GRANT: To ask the Under-Secretary of State for the Colonies if he will state the number of Chinese in the Transvaal and on their way there respectively in January, 1905 and 1906; and the number of licences issued, and the date when they were issued, in each of the months of 1905.
  (Answered by Colonel Seely.) In January, 1905, there were 27,222 Chinese in the Transvaal, and in January, 1906, 47,166. I cannot say how many were then on the way. The licences granted for each
  402
  month in 1905 were as follows:—January, 4,225; February, 5,374; March, 0; April, 1,931; May, 3,477; June, 2,285; July, 1,529; August, 2,221; September, 0; October, 2,351; November, 13,199; December, 3,000. The licences issued in November were all issued between 12th and 18th November.

  Welford-on-Avon Charity.
  MR. ESSEX: To ask the hon. Member for the Elland Division, as representing the Charity Commissioners, whether the three funds left prior to 1829 by the following persons for the benefit of the inhabitants of Welford-on-Avon are still in existence, and, if so, under whose control they are: Thomas Mills left £3 per annum for ever, Richard Rawlins a sum for the teaching of eight boys, Lady Anne Milward a sum of money for the annual relief of the poor.
  (Answered by Mr. Charles Hobhouse.) The Charity Commissioners inform me that in 1885 they ascertained that the charge constituting the Charity of Thomas Mills had not been paid since 1872 and they considered that it was irrecoverable. The Charity of Richard Rawlins has been transferred to the jurisdiction of the Board of Education as a solely educational endowment. The Commissioners have no record of any Charity of Lady Anne Milward at Welford or elsewhere.

  National Memorial to Queen Victoria.
  MR. CLAUDE HAY: To ask the Secretary of State for the Home Department what is the reply he has advised His Majesty to give to the memorial presented to His Majesty on 20th February last, through the Secretary of State, as to the work connected with the National Memorial to Queen Victoria being entrusted to foreigners in England and abroad.
  (Answered by Mr. Secretary Gladstone.) The Answer I have to give is that I have, by the King's command, given careful consideration to the prayer of the petition, but regret that I have been unable to advise His Majesty to take any action in the matter. On such occasions as this the choice of workmen and the

  403
  method of carrying out the work are invariably left in the hands of the sculptor entrusted with its execution, and in this case his reasons for having the hard Sicilian marble, which was chosen for the central portion of the Queen Victoria Memorial, in order to ensure as much resistance as possible to the London climate, worked at the quarries at Carrara, appear to me to be conclusive. In the first place, this plan has afforded an opportunity of securing in the rough the most suitable and enduring material, free from all flaws and defects. Secondly, it has ensured a better result by the employment of men accustomed from their boyhood to the working of extremely hard marble such as that selected. Thirdly, it has saved the great expense of importing over a thousand tons of raw material which in the course of working would have had to be discarded owing to the discovery of defects. I may add that the granite for the steps and paving of the central portion of the memorial, as well as all the surrounding architectural work, is being carried out by British workmen.

  Westminster Relieving Officership.
  DR. AMBROSE: To ask the President of the Local Government Board whether the Westminster Board of Guardians have for the fifth time refused to recognise his ruling in declining to sanction the appointment of their own chairman to the position of relieving officer of the union, for which he had not the necessary qualifications; whether the chairman so selected has himself presided over meetings of the guardians at which the Local Government Board was practically defied; and whether, in view of the continued contumacy of this board of guardians, he will assert his authority and recognise as relieving officer the present assistant relieving officer of the union, who has rendered faithful and efficient service for more than eight years.
  (Answered by Mr. John Burns.) It is the case that I have several times intimated to the guardians that I do not feel able to sanction the appointment by them of their chairman as relieving officer, and that they have not at present
  404
  accepted the view which I have expressed on this subject. It is also the case that the chairman referred to has himself presided and voted at meetings of the guardians at which this matter has been considered. I have definitely decided not to sanction the appointment, but I understand that the guardians at their meeting on Tuesday last referred the matter to their general purposes committee for consideration and report, and I still hope that they will appoint someone else with suitable qualifications to the office without its being necessary for me to take more decided action in the matter.

  Instructions to Income-tax Surveyors.
  MR. WHITEHEAD: To ask Mr. Chancellor of the Exchequer whether, in view of the abrogation of Section 133 of the Income-Tax Act, 1842, new instructions have been, or will be, issued to surveyors of taxes modifying the instructions of 1890, so that there will be uniformity of practice in appeals where loss has been sustained in business; and, if so, whether such new instructions will, on application, be supplied to any persons desirous of appealing, so that they may know what are their right under the Act of 1890 as modified by the abrogation of Section 133.
  (Answered by Mr. Lloyd-George.) The Act of 1890 was in no way affected by the repeal of the 133rd Section of the Income-Tax Act of 1842. Surveyors of taxes are of course aware of the circumstances under which, as the result of the Finance Act, 1907, appeals can now be preferred at the end of the year, and instructions for the information of taxpayers will be given in the notice of assessment to be issued for 1908–9.

  Irish Land Stock.
  MR. J. MACVEAGH: To ask Mr. Chancellor of the Exchequer what amount of Two-and-three-quarters Guaranteed Land Stock was issued up to 31st March, 1907, for the purposes of the Land Purchase Aid Fund, what was the average price of issue, and what was the average rate of interest so to be paid on the money thereby obtained; what was the average price paid for Consols purchased on Sinking Fund Account

  405
  during the years in which such issues of Guaranteed Land Stock were made, and what was the average interest yield on the investment so made; what is the annual charge for interest on sums so raised for the Land Purchase Aid Grant payable out of moneys to be provided by Parliament, and what is the annual return on a like sum so invested in Consols on Sinking Fund Account; and whether he can explain what is the advantage derived by the Exchequer from the process of borrowing money at a high rate of interest on direct Imperial security, and at the same time investing a like sum at a lower rate of interest.
  (Answered by Mr. Lloyd-George.) The amount of Guaranteed Two-and-three-quarters per cent. Stock issued between 19th March, 1904, and 31st March, 1907, for the Land Purchase Aid Fund was £1,901,444. The average price of issue was £88 18s. 3d., involving a charge of interest of £3 1s. 10d. per cent. The average price paid for Consols purchased on Sinking Fund Account during the same period was £86 12s. 4d., corresponding to a rate of interest of £2 17s. 9d. per cent. The annual charge for interest in respect of the cash raised for the Land Purchase Aid Fund is £52,291, and the interest return on a like amount of cash invested in Consols at the average price paid on Sinking Fund Account would be £48,791. The matter of policy to which allusion is made is not one which can usefully be discussed within the limits of an Answer to a Question.

  Belfast Football Clubs.
  MR. FETHERSTONHAUGH: To ask the Chief Secretary to the Lord-Lieutenant of Ireland whether he is aware that the Royal Irish Constabulary have no power to preserve order within the enclosures of the various football clubs in Belfast; has he received complaints from Belfast football clubs and the Irish Football League on the subject; and can any effective steps be taken to enable the police to control the rowdy element present at the larger matches.
  (Answered by Mr. Birrell.) The powers of the police in reference to private football matches are somewhat restricted;
  406
  but the police attend all important football matches in Belfast with the object of preserving the peace, and upon the request of the officials they remove from the ground any persons who may be guilty of rowdyism. No recent complaint has been received from any football club or from the Irish Football League, and no disturbance of moment has arisen at any football match in Belfast for a considerable time past.

  Derrygore Estate.
  MR. FETHERSTONHAUGH: To ask the Chief Secretary to the Lord-Lieutenant of Ireland on what grounds the Estates Commissioners refused to sanction an advance to enable James Flanagan, of Drumlaghy, Letterbreen, County Fermanagh, a tenant on the estate of Mr. Arthur Irwin, of Derrygore, to purchase his holding when the rest of the estate was being sold to the tenants; and have the Commissioners excluded this holding from the sale, or can they reconsider the case.
  (Answered by Mr. Birrell.) The only purchase agreement in the case of the estate of Mr. Irwin which has been lodged with the Estates Commissioners was that signed by James Flanagan. The Commissioners, in the exercise of their discretion, declined to declare this single holding to be an estate for the purposes of the Act.

  Militia Battalions, Inniskilling Fusiliers.
  MR. FETHERSTONHAUGH: To ask the Secretary of State for War when it is proposed to clothe and arm the staff of the Special Reserve with modern outfit and weapons; is he aware that the late permanent staff of the Militia battalions of the Inniskilling Fusiliers were wearing old pattern caps, leggings, great costs, and tunics, and were armed with obsolete rifles and bayonets; and that the Special Reserve is in the same condition?
  (Answered by Mr. Secretary Haldane.) Permanent staff of Militia or Special Reserve battalions are clothed in new pattern caps, greatcoats, and tunics concurrently with their line battalions. The permanent staffs of the 3rd and 4th Inniskilling Fusiliers have received

  407
  their new caps. The drab greatcoats will be supplied as soon as the officers commanding have indented for them. Puttees cannot be issued until the stock of leggings is exhausted. It is intended to arm and equip the men of the Special Reserve infantry with the same pattern rifle and accoutrements as are held for the Regular Reservist. No alteration will, however, be made until after the completion of the annual training this year.

  1st Devon Royal Garrison Artillery.
  MR. LAYLAND-BARRATT: To ask the Secretary of State for War if his attention has been called to the dismissal of two sergeants of the Dartmouth Company of the 1st Devon Royal Garrison Artillery; and, if so, if they have any right to appeal; and, if not, whether he will grant a special inquiry into the case.
  (Answered by Mr. Secretary Haldane.) My attention has been drawn to the matter mentioned. These men have no right of appeal to the Army Council. I do not consider that the circumstances of the case justify any special inquiry.

  Catholic Truth Society.
  MR. SLOAN: To ask the President of the Board of Education if he can say why the publications of the Catholic Truth Society are accepted for prizes in public elementary schools and given to Protestant pupils; and will these same schools be permitted to receive publications of Protestant societies for the same purpose.
  (Answered by Mr. Runciman.) The selection of prizes awarded to children in public elementary schools rests with the bodies or individuals who present them. It is not a matter on which the Board of Education issue regulations.

QUESTIONS IN THE HOUSE.

  H.M.S. "Majestic."
  MR. BELLAIRS: I beg to ask the First Lord of the Admiralty whether he is aware that the battleship "Majestic" was sent to sea, after her refit at Chatham, and remained cruising
  408
  for some time without her port hawse pipe and cable and with the hawse pipe blocked up, so that one anchor was useless; and whether he will put a stop to so dangerous a practice when there is no emergency to justify it.
  THE FIRST LORD OF THE ADMIRALTY (Mr. MCKENNA,): The port hawse pipe, being defective, was removed for use as a pattern for the new one, and during the time the latter was being made, the hawse pipe was blocked up and plated over so that the ship could proceed to sea if required. As the vessel had two anchors and hawse pipes fit for use, it cannot be acknowledged as a dangerous practice. No special orders are considered necessary, the defect being an uncommon one.
  MR. BELLAIRS: Is the right hon. Gentleman aware there are such things as gales around the British coast?
  MR. MCKENNA: Yes, Sir.

  Accidents to Destroyers.
  MR. BELLAIRS: I beg to ask the First Lord of the Admiralty whether he is aware that an assurance was given by the Admiralty in the House on 11th June, 1907, that an adequate reserve of plates for the repair of destroyers would be
  kept in future; whether the destroyer "Quail" had the whole of her bow torn off by a collision with the "Attentive," and the destroyer "Kestrel" lost a portion of her bow in collision with the "Teviot," both on the night of 6th August; and whether he can state what interval of time elapsed before sufficient plates were received from the contractors to enable both vessels to be repaired at Portsmouth.
  MR. MCKENNA: Yes, such an assurance was given; and my hon. friend correctly describes the damage done in the accident referred to. The reserve of ordinary plates was not drawn upon because they were not of the exact dimensions required, and time permitted of plates of exact sizes being obtained from contractors.

  The Accident to the "Gladiator."
  MR. DICKINSON: I beg to ask the First Lord of the Admiralty whether, at the time of the

  409
  accident to H.M.S. "Gladiator," two of the seamen on that vessel were in irons awaiting court martial; what was the fate of these men; and whether he will consider the desirability of discontinuing the practice of placing men in irons on board ship.
  MR. MCKENNA: The rumour that there were two men in irons on board the "Gladiator" on the day of the accident is without foundation: there were two men under a sentry's charge at the time, and both of them were saved. The practice of placing men in irons is only resorted to in a case of absolute necessity.

  Life-saving Device for Submarines.
  MR. ARTHUR LEE: I beg to ask the First Lord of the Admiralty whether the Siebe-Gorman life-saving device has been ordered as part of the equipment for all new submarine boats of the C class; whether only one of the earlier type of submarines has so far been supplied with this apparatus; and whether the remainder of the older submarine boats, over forty in number and with crews aggregating some 500 men, will also be furnished with this, or some equally efficient, life-saving device at the earliest possible opportunity.
  MR. MCKENNA: The hon. Member may rely upon the best life-saving device available being supplied at the first opportunity to all submarines in His Majesty's Navy.

  Rosyth Dock Contracts.
  MR. JOHN WARD: I beg to ask the First Lord of the Admiralty whether, in the proposed contract for dock construction at Rosyth, it is intended to include a clause providing machinery for the settlement of disputes which may occur between the workmen and the contractors as to the wages paid or the working conditions imposed during construction, with a view to prevent possible delays in its completion.
  MR. MCKENNA: The Board have had the matter under careful consideration. As at present advised, we do not think it practicable to incorporate in works contracts special machinery for the settlement of labour disputes. The past experience of contracts for works, over
  410
  many years, has been that no case of serious labour trouble has been brought to the notice of the Admiralty by either the contractor or representatives of the men. While the Board are very glad to hear representations on the subject from my hon. friend, we do not consider that any useful purpose would be served by formulating provisions other than those already defined by Act of Parliament.

  H.M.S. "Highflyer."
  MR. MITCHELL-THOMSON: I beg to ask the First Lord of the Admiralty whether H.M.S. "Highflyer," of the East Indian section of the Eastern Fleet, has sustained damage to the main crank-shaft; what is the extent of such damage; and whether a new crank-shaft is to be fitted at once.
  MR. MCKENNA: An extended fracture has developed in the main crank-shaft of the starboard engine of the "Highflyer," and this is now being temporarily repaired at Bombay to enable the vessel to return to England using both engines, when the new shaft will be fitted.

  H.M.S. "Terrible."
  MR. BELLAIRS: I beg to ask the Secretary to the Admiralty, in view of the fact that the cruiser "Terrible" broke her propeller shaft on 28th September, 1906, and has been lying at Portsmouth ever since her return, can he state by what date all repairs and the refit of this vessel will be completed, and so render her able to perform services in repayment of the great outlay on capital cost and subsequent upkeep; and for what length of time a nucleus crew has been on board this vessel.
  MR. MCKENNA: All repairs and refit will be completed by the end of the current year. She has had a nucleus crew on board since November, 1906.

  Naval Ordnance Stores.
  MR. NIELD: I beg to ask the Secretary to the Admiralty whether the stocks of Naval Ordnance Stores purchased in previous years to be drawn upon without replacement during 1908–1909, include stocks of guns, projectiles and ammunition, torpedoes, and guncotton.
  MR. MCKENNA: The Naval Ordnance Stores drawn on without replacement include projectiles, ammunition, and guncotton, but not torpedoes or guns.

  British Programme of Naval Construction.
  MR. NIELD: I beg to ask the Secretary to the Admiralty whether the size of the British programme of new construction for 1908–9 was influenced to any extent by the speed of construction of armoured ships in Great Britain.
  MR. MCKENNA: The reply to the hon. Member's Question is in the affirmative.

  Oriental Learning at Madras University.
  MR. REES:"I beg to ask the Under-Secretary of State for India whether the Senate of Madras University has decided to institute courses of study in Oriental learning; and, if so, whether he will deposit in the Library the Papers relating to this departure.
  THE UNDER-SECRETARY OF STATE FOR INDIA (Mr. BUCHANAN,): The hon Member has no doubt seen the full reports of the discussions in the Senate, ending in a decision to the effect stated, which have appeared in the Indian newspapers. The Secretary of State regrets that be has no official Papers which he could deposit in the Library as suggested.

  The Gordon Highlanders in India—The Church Difficulty.
  CAPTAIN KINCAID-SMITH: I beg to ask the Under-Secretary of State for India under what circumstances the Gordon Highlanders under orders to proceed from Peshawar to Jullundur were suddenly ordered on 13th February, 1908, to proceed within a few days to Calcutta, at great inconvenience and expense to all concerned; whether this alteration in the destination of the Gordon Highlanders was made owing to the want of a Presbyterian Church at Jullundur, or for military reasons, or at the instigation of the Presbyterian Church authorities; and whether it is now proposed to have a separate roster of garrison stations for Scottish regiments by which they will necessarily be restricted to the comparatively few stations where there are Presbyterian Churches.
  MR. BUCHANAN: With regard to the first part of the hon. and gallant Member's Question, I would refer him to the Parliamentary Papers recently issued. As regards the last part of the Question, there has never been any intention of having a separate roster for Scottish regiments. The question how to provide adequate Presbyterian Church accommodation at stations to which Scottish regiments may he sent, where it does not now exist, is under the consideration of the Secretary of State.
  CAPTAIN KINCAID-SMITHasked for a further Answer to the latter part of the Question.
  MR. BUCHANAN: I must demur to the word "instigation." The hon. Member will find a full Answer in the Papers to which I have referred.
  CAPTAIN KINCAID-SMITH: Is it not in accordance with Liberal principles to make these regulations optional with Scottish regiments instead of putting them on a separate roster?
  MR. BUCHANAN: There is no separate roster.
  MR. MITCHELL-THOMSON: Can the hon. Gentleman make a statement showing at what stations there are Presbyterian Churches?
  MR. BUCHANAN: That is in the Papers.
  AN HON. MEMBER: Are we to understand that the military stations in India are to be subject to the differences of British denominations in that country?
  MR. BUCHANAN: No, sir.
  MAJOR ANSTRUTHER-GRAY: May I ask how long it will take the Government to arrive at some satisfactory conclusion on this subject?
  MR. BUCHANAN: If the hon. and gallant Gentleman would refer to the statement of the Secretary of State some time ago he would know that we are engaged, and have been for some years, in trying to find the necessary funds.
  CAPTAIN KINCAID SMITHWill the right hon. Gentlemen cancel this order?
  MR. BUCHANAN: No, Sir.
  MAJOR ANSTRUTHER-GRAY: Will the Government appoint a Commission to inquire into this business?
  MR. BUCHANAN: No, Sir.

  The Afghan Government and the Recent Raid.
  MR. B. S. STRAUS: I beg to ask the Under-Secretary of State for India, whether he can say that the Afghan Government were officially cognisant of the raid into British territory last week or not.
  R. BUCHANAN: There is no information to support the view that the Afghan Government were officially cognisant of the recent raids.

  Indian Government Contracts.
  MR. T. F. RICHARDS: I beg to ask the Secretary of State for India whether, he can supply the names and addresses of the firm or firms who obtained the order for some 100-feet and 150-feet spans as per advertisement in the Engineer newspaper of 31st May, 1907.
  MR. BUCHANAN: No advertisement for spans was issued on behalf of the Secretary of State on the date mentioned, nor can any such advertisement be found in the issue of the Engineer for the 31st May, 1907. It has not hitherto been the custom to publish the names of firms whose tenders are accepted by the Secretary of State, but I have no doubt the Secretary of State will be ready to take it into consideration.

  St. Helena Doctor.
  MAJOR ANSTRUTHER-GRAY: I beg to ask the Under-Secretary of State for the Colonies whether, in view of the position which has lately arisen, and may arise again, owing to the only doctor in St. Helena being incapacitated from work, and the distance and delay involved in procuring other medical assistance, he will consider the desirability of appointing an assistant medical officer for that Colony.
  THE UNDER-SECRETARY OF STATE FOR THE COLONIES (Colonel SEELY,): The Secretary of State has not received any intimation of the Colonial Surgeon of St. Helena being incapacitated from work and regrets that he cannot add anything to answer returned by my predecessor to the Question asked by the hon. and gallant Member on the same subject on the 26th March last.

  Mr. Mackenzie King and the Colonial Office.
  MR. REES: I beg to ask the Under-Secretary of State for Colonies whether he is in a position to communicate to the House the result of the conference of Mr. Mackenzie King with the Colonial Office.
  COLONEL SEELY: No Sir. I do not think this is a matter upon which any statement can properly be made at any rate at the present time. Mr. Mackenzie, King, whose presence was cordially welcomed here, had several conferences with the Secretaries of State for India and the Colonies upon matters of interest to Canada and took back with him the information which he desired and which it is hoped will be of material assistance to the Dominion Government.
  MR. REES: Was the account published in Canada of the result of the mission official?
  COLONEL SEELY: I have no information whether it was accurate or not.

  Natives and the Natal Legislative Council.
  MR. REES: I beg to ask the Under-Secretary of State for the Colonies whether the Government of Natal proposes to provide for the special representation of Natives in the Legislative Council, for the creation of a council for Native affairs, for the granting to Natives of inalienable titles to their allotments, for the establishment of Native land settlements, and for appointing Native district councils to control such settlements.
  COLONEL SEELY: A Bill of this description has been published by the Natal Government, but the text has not yet been received.

  Cape Naval Volunteers.
  MAJOR ANSTRUTHER-GRAY:I beg to ask the Under-secretary of state for the Colonies whether he has had any correspondence with the authorities at Cape Town with regard to the disbanding of the cape Naval Volunteers; and, if so, will he lay it upon the Table.
  COLONEL SEELY: No, Sir, the Secretary of State has had no correspondence on this subject.

  Inter-Colonial Conferences.
  MR. LONSDALE: I beg to ask the Under-Secretary of State for the Colonies whether it was by arrangement with the Home Government that His Majesty's High Commissioner has been excluded from the Inter-Colonial Conference on Customs and Railways now meeting at Pretoria; and whether he will lay any correspondence which has passed with reference to this subject upon the Table of the House.
  MR. ADKINSasked whether it was not the fact that this conference was exclusively one of self-governing colonies, and that, therefore, it was not in accordance with precedent for the High Commissioner to be present.
  COLONEL SEELY: In reply to the supplementary question I have to say that that is the case. No suggestion has been made by his Majesty's Government that the High Commissioner should preside. The matter has been regarded as one for the Ministries of the four colonies to arrange. During the time that the Transvaal and Orange River Colony were under Crown Colony Government the High Commissioner has been accustomed to preside at such conferences, but the circumstances are clearly altered now that all the four large South African Colonies possess responsible Government. It is not intended to lay any correspondence.

  Unskilled White Labour in the Transvaal Mines.
  Mr. FELL: I beg to ask the Under-Secretary of State for the Colonies what was the rate of pay per day offered to the unemployed unskilled white workmen of Johannesburg to work in the Transvaal mines; and
  416
  was this pay in addition to board and lodging.
  COLONEL SEELY: The men were not employed as I understand by the day but on piece work, and the money earned by them varied, as shown by the figures, so far available, from 3s. 6d. to 5s. 10d. per shift. The rates offered in every case were calculated as nearly as possible on the cost of Kaffirs to the mines with a slight difference in favour of white men. No board or lodging was given.
  MR. FELL: I beg to ask the Under-Secretary of State for the Colonies what work the unskilled unemployed workmen of Johannesburg could do in the mines except that ordinarily done by Kaffirs; and what was the grievance which made 274 out of the 395 engaged abandon the work without giving it a fair trial.
  COLONEL SEELY: The material in possession of the Colonial Office does not I enable me to give details of the work assigned to the unemployed workmen, but it appears to be clear that those who refused work did so because they objected to being put on a level with Kaffirs. The Rand Unemployment Investigation Committee are, however, still hopeful of the, success of the experiment.

  West Indian and Canadian Trade.
  SIR GILBERT PARKER: I beg to ask the Under-Secretary of State for the Colonies whether there are any constitutional considerations which would prevent the West Indian Colonies from making preferential commercial arrangements with Canada; and whether he cam give any information concerning the progress of the negotiations between the West Indies and the Dominion.
  COLONEL SEELY: In reply to the, first part of the hon. Member's question. I am not aware of any constitutional considerations, as such, but I would refer the hon. Member to my reply to a Question by the hon. Member for Govan on the 5th instant. As to the second part, no negotiations are at present in progress.
  MR. R. DUNCAN: Can the hon. Gentleman give any indication of the state of public opinion in the West Indies?
  COLONEL SEELY: I am afraid I cannot.
  SIR GILBERT PARKER: Are any negotiations in progress?
  COLONEL SEELY: Not at present.

  Colonial Crown Agents Office.
  MR. CLAUDE HAY: I beg to ask the Under-Secretary of State for the Colonies whether he can now state the names of the persons who will constitute the Committee to inquirein to the organisation of the office of the Crown Agents for the Colonies; whether he will undertake that some experienced commercial men will be placed upon the Committee; and whether he will undertake that the House of Commons shall have an opportunity of expressing an opinion upon the terms of reference to the Committee before the terms of reference are finally settled.
  COLONEL SEELY: The composition of the Committee is as follows:—The Right Honourable Sir Francis Mowatt, Sir Ralph Moor, formerly High Commissioner for Southern Nigeria; H. J. Gibson, Esq., Assistant Comptroller and Auditor-General; Rowland Bailey, Esq., Comptroller of Stationery Office; Stanley M. Leathes, Esq., Second Civil Service Commissioner; C. Alexander Harris, Esq., a principal Clerk in the Colonial Office, and my noble friend the Secretary of State for the Colonies has requested me to act as Chairman. The terms of reference are settled and are as follows:—"To report upon the best method of selecting the clerical and technical staff for the office of the Crown Agents for the Colonies, and particularly to consider the conditions of tenure, the scale of payment of salaries and pensions, and how far arrangements in that office are in accord, or can be brought into harmony, with the principles governing the Civil Service." My noble friend authorises me to say that he will favourably consider the propriety of adding to the Committee a gentleman with special commercial experience.
  Mr. CLAUDE HAY: Are these terms of reference finally settled or is the Government willing to accept suggestions upon them?
  COLONEL SEELY: I am afraid not. I am afraid the terms are settled, but I think the hon. Gentleman will agree that they are of wide scope.
  MR. REES: Will the position of the Crown Agents as intermediaries between the Colonial Office and the commercial world come within the terms of reference?
  COLONEL SEELY: This is a matter to be decided by the Committee when they meet.
  MR. REES: Are the terms of reference confined to minor members of the clerical staff?
  COLONEL SEELY: No, Sir, not at all. If my hon. friend will read the terms of reference as to the conditions of tenure he will see that that is not so.

  Russia and Persia.
  MR. LYNCH,: I beg to ask the Secretary of State for Foreign Affairs whether Russian troops are in occupation of any Persian territory; should the answer to this Question be in the affirmative, whether he can inform the House of the nature and extent of this occupation; and what steps His Majesty's Government are taking to preserve the integrity of Persian territory which Great Britian and Russia under the terms of the Anglo-Russian Convention mutually engaged to respect.
  THE SECRETARY OF STATE FOR FOREIGN AFFAIRS (Sir EDWARD GREY,): I have received no information to this effect.

  Turkey and Persia.
  MR. LYNCH: I beg to ask the Secretary of State for Foreign Affairs, whether Turkish troops or irregulars are in occupation of any portion of Persian territory; and what steps His Majesty's Government are taking to secure the integrity of Persian territory on the side of Turkey.
  SIR EDWARD GREY: His Majesty's Chargéd Affaires at Tehran reported by telegraph on April 30th, that a very serious raid had been made by Kurds who had penetrated as far as Urmi. This news has since been confirmed by His Majesty's Minister at Constantinople,

  419
  who has further reported that the Ottoman Government has sent stringent orders to the authorities on the frontier to do all in their power to prevent Kurds from committing depredations. I cannot say to what extent Turkish troops or irregulars are involved at this moment in violation of Persian territory: there has been a great deal of trouble on this part of the frontier during the last few months, which has formed the subject of representations at Constantinople, both by His Majesty's Government and the Russian Government, who desire to do all they can to promote an equitable settlement of the dispute.
  MR. LYNCH: Will the right hon. Gentleman inquire to what extent Turkish troops have participated in these raids?
  SIR EDWARD GREY: The whole matter is being closely watched—we are doing all we can to promote an equitable settlement. I cannot say more.

  Siamese Treaty.
  MR. MITCHELL-THOMSON: I beg to ask the Secretary of State for Foreign Affairs whether he is now in possession of information with regard to the terms of the Siamese Treaty which he can communicate to the House?
  SIR EDWARD GREY: I am unable at present to communicate to the House any further information as to the terms of the proposed agreement, which are now under consideration. But, as I informed the hon. Member for Stirlingshire on April 30th, whenever any agreement has been come to, it will be presented to Parliament.

  The Soudan—The Murder of Mr. Scott- Moncreiff.
  MR. LONSDALE: I beg to ask the Secretary of State for Foreign Affairs whether he can communicate to the House any facts with reference to the murder of Mr. Scott-Moncreiff, Deputy-Inspector of the Blue Nile Province of the Soudan, and the steps taken to the punish assassins?
  SIR EDWARD GREY: According to telegraphic reports received from His Majesty's Agent and Consul-General at Cairo, a certain Abd-el-Kadr collected a
  420
  party of armed Arabs near Messellamia in the Blue Nile Province, proclaimed a prophet, and defied the authority of the Government. The Egyptian "Mamur" and Mr. Scott-Moncrieff, Deputy-Inspector of the province, with some police, proceeded to the spot, and there to cur great regret lost their lives, but details as to the actual circumstances of their death are so far lacking. The Governor of the province proceeded to the scene of the disturbance with 400 Soudanese Infantry, on the approach of which the Dervish band abandoned their position and broke up. Several were captured, and their leader has since been caught by the people of a neighbouring village, and handed over to the authorities; he will be brought to trial. The body of Mr. Scott-Moncrieff was found in the Dervish camp.
  MAJOR ANSTRUTHER - GRAY: I beg to ask the Secretary of State for Foreign Affairs whether he can give any information regarding the murder of the late Mr.Scott-Moncrieff, Deputy-Inspector of the Blue Nile Province, and the attack on the force under Dickenson Bey, in which he, Major Logan, and two native Egyptian officers were wounded.
  SIR EDWARD GREY: I beg to refer the hon. Member to the reply just returned to the hon. Member for Mid Armagh.
  MAJOR ANSTRUTHER-GRAY: Can the right hon. Gentleman give any information as to Dickenson Bey and Major Logan who were reported wounded?
  SIR EDWARD GREY: I will inquire.

  British Subjects in Morocco.
  MR. LONSDALE: I beg to ask the Secretary of State for Foreign Affairs whether the British Consular announcement that in future His Majesty's Government cannot undertake to make any pecuniary advance for the ransom of British subjects captured by brigands in Morocco indicates a wish on the part of His Majesty's Government that British subjects should quit Morocco and British firms should close business relations with the country; and whether he will state the authority to whom British subjects

  421
  in Morocco should in future apply for protection.
  SIR EDWARD GREY: The Answer to the first part of the Question is in the negative. I may point out that the notice embodied no new principle, but merely repeated the warning contained in a circular which was issued in 1881 and was published in a Parliamentary Paper, Miscellaneous No. 8 of that year. It is to the effect that His Majesty's Government cannot undertake pecuniary liability for what may happen in countries which are not under their control; but it did not imply at the time of issue that His Majesty's Government would give any less protection than heretofore. It does not imply that now, and it does not apply only to Morocco, but to all countries where life and property are insecure.

  Osman Digna.
  MR. J. M. ROBERTSON: I beg to ask the Secretary of State for Foreign Affairs, whether there is reason to suppose that Osman Digna has developed a form of religious mania during his imprisonment at Damietta; whether a milder form of exile in a congenial climate would satisfy the needs of public security; whether his imprisonment is regarded as a punitive measure; and, if so, by what right he is punished without trial or sentence.
  SIR EDWARD GREY: I have no information to the effect that Osman Digna is suffering from religious mania. As to the reasons for Osman Digna's retention at Damietta, I beg to refer the hon. Member to the letter which I caused to be addressed to him on 15th April in connection with a previous Parliamentary Question on this subject, in which it was stated that his return to the Soudan was undesirable from a political point of view as it might cause uneasiness among those who once suffered under his rule, and produce unrest among his former followers, but that the question might be reconsidered when sufficient time had elapsed to enable the authorities to judge of the effects of the repatriation of the other prisoners. Osman Digna remains at Damietta in the interests of public security. It must be remembered that an Emir who was released and allowed to return to the Soudan last year was murdered almost immediately.

  The Dervish Emirs at Damietta Prison.
  MR. J. M. ROBERTSON: I beg to ask the Secretary of State for Foreign Affairs whether it is proposed to make any change in the conditions of imprisonment of the Dervish Emirs confined at Damietta prison; whether they were subjected to close imprisonment within a single building and its courtyard; whether it is usual to allow prisoners of war a certain freedom of movement and intercourse; whether several of these prisoners were mere boys at the date of their capture nine years ago; whether the condition of the Soudan is still so disturbed that their release could lead to political difficulties; and whether, in any event, a warmer and more congenial climate than Damietta will be selected for prisoners accustomed to the heat of the Soudan.
  SIR EDWARD GREY: If the hon. Member will refer to the letter which I caused to be addressed to him on 15th April in connection with a previous Parliamentary Question on this subject, he will see that, with the exception of Osman Digna, all the Dervish prisoners who were recently confined at Damietta have now been transferred to Wadi Halfa. Nearly all the Emirs have now been released, and those above referred to who are still in confinement are those considered by the inhabitants of the Soudan as responsible for the massacres perpetrated during the years immediately preceding the reconquest of the country. Sufficient time has not elapsed for the bitter feeling of resentment against these men to have died out, and they would, if brought back to the Soudan, undoubtedly be exposed to insults if not to violence of a serious nature. As the hon. Member, however, will see from the letter above referred to, the question of the release of some of the less important of these prisoners will be considered later by the Government of the Soudan. As regards the disciplinary regulations to which the prisoners were subjected while they were at Damietta, Lord Cromer reported on 8th March of last year, in connection with a Parliamentary Question asked by the hon. Member for Brentford on 21st February, that they were treated as political prisoners, comfortably housed, and well fed, and not subjected to any severe disciplinary regulation. Their wives

  423
  and families remained with them, and their children were being educated. Further information may be found in the reply returned to the Question asked by the hon. Member for Brentford on 3rd March last. I have no information as to the ages of the prisoners at the time of their capture.

  Reported Resignation of the Persian Government.
  MAJOR ANSTRUTHER-GRAY: I beg to ask the Secretary of State for Foreign Affairs whether he can give any information with regard to the reported resignation of the Persian Government; and whether any steps have been deemed necessary to safeguard the lives and interests of British subjects in the event of disturbances in the capital.
  SIR EDWARD GREY: I have no information as to the reported resignation of the Persian Government. So far as I am aware, there is no reason to apprehend any disturbances at Tehran involving danger to the lives and interests of British subjects in the capital.

  Port Hamilton.
  MR. NIELD: I beg to ask the Secretary of State for Foreign Affairs whether the arrangement made with China in 1887 by which Great Britain agreed to evacuate Port Hamilton has been amended in view of the Treaty of Portsmouth or the events leading thereto; and whether Port Hamilton has since been the subject of communications between His Majesty's Government and the Governments of China and Japan.
  SIR EDWARD GREY: The Answer to both Questions is in the negative.

  Coal Mines (Eight Hours) Bill.
  MR. BOWLES: I beg to ask the Secretary of State for the Home Department whether he has received any resolution or petition in support of the Coal Mines (Eight Hours) Bill from any person or association interested in the general commerce of the country and unconnected either with colliers or with colliers' associations.
  THE SECRETARY OF STATE FOR THE HOME DEPARTMENT (Mr. GLADSTONE,): Yes, Sir, I have
  424
  received resolutions in favour of the Bill from a large number of trades councils and associations of workers in different industries.

  Aliens' Right of Appeal.
  MR. CLAUDE HAY: I beg to ask the Prime Minister when he proposes to introduce legislation to carry out the pledge given by His Majesty's Government through the President of the Board of Trade to secure to would-be-immigrants the right of appeal to the High Court against refusal to land.
  MR. GLADSTONE: My right hon. friend has asked me to answer this Question. No pledge to introduce legislation was given. The Government have only undertaken to consider the question whether such legislation would be practicable and whether it would be beneficial to immigrants.
  MR. CLAUDE HAY: Is the right hon. Gentleman aware that on 14th April Mr. Churchill declared to a deputation of the representatives of the Jewish race that the Government would introduce legislation in order to set up receiving houses? Does the Government intend to carry out that pledge? If not, was the statement made in order to deceive and humbug the Jewish electors?
  MR. SPEAKER: The hon. Member has put three questions by way of supplementaries. It will be advisable for him to put them down—two of them, anyhow.

  Coal Mines (Eight Hours) Bill.
  MR. BOWLES: I beg to ask the Secretary of State for the Home Department, whether he can state the number of miners throughout the country who, on ballots taken, have declared themselves opposed to the Coal Mines (Eight Hours) Bill; and what proportion does this number bear to the total number of miners voting at the same ballots.
  MR. GLADSTONE: I have no special sources of information on this subject which are not open to any inquirer, and I have no official figures; but I have of course general information contained in statements which have been made to me as showing the state of opinion among the miners expressed by the ballots which

  425
  have been taken. I think the matter is one which can best be dealt with in the course of the debates on the Bill.
  MR. HARVEY: Is the right hon. Gentleman aware that false representations have been made on this subject at by-elections?
  MR. GLADSTONE: I do not know to what particular statement the hon. Member refers.

  Victoria Wages Board.
  MR. CHIOZZA MONEY: I beg to ask the Secretary of State to the Home Department if, in view of the official information which they afford, he can see his way to publish, as an appendix to the forthcoming Report of Mr. Aves on the wages boards system of Victoria, the official memoranda and statistics on the subject contained in the Victorian factory inspectors' Reports published since the wages boards were established.
  MR. GLADSTONE: I am informed by Mr. Aves that the bulk of the official statistics are already included in his Report, and that the appendices which will accompany the Report will contain a great deal of information as to the views and experience of different representative persons in the colony. To print the official reports on the subject of wages boards in full would occupy a disproportionate amount of space in the Report, but I will consider what further information from those Reports can usefully be printed.
  MR. RAMSAY MACDONALD: Before the right hon. Gentleman finally makes up his mind to publish the figures will he submit them to an expert in industrial statistics?
  MR. GLADSTONE: Why?
  MR. RAMSAY MACDONAD: I am referring to the Victorian inspectors' Report on the operation of the wages board.
  MR. GLADSTONE'Sreply was inaudible.

  German Cutlery Trade.
  MR. CHIOZZA MONEY: I beg to ask the Secretary of State for the Home Home Department if his attention has been directed to a report on the cutlery trade of Solingen, by Dr. Harold Scurfield, the medical officer of Sheffield, according to which one of the most noteworthy features among the German factories is that it is compulsory for the owners to provide lavatory basins with hot and cold water, shower baths, and clothes lockers for the use of the employees, with the result that the men go home from their work in clean clothes and with clean hands and faces, whereas at one time the Solingen workmen worked under the filthy conditions which frequently obtain at Sheffield; and whether he can promise legislation to increase health and industrial efficiency through the compulsory provision of the means of cleanliness for British work-people.
  MR. GLADSTONE: Yes, Sir, the attention of the Home Office has been called to this report, and I may say that the conditions of work at Solingen had already been the subject of inquiry by the Home Office in connection with the framing of regulations for the grinding industry. The feature mentioned by my hon. friend, as well as other and more important features in the German factories, are receiving our attention. The provision of washing and cloak-room accommodation has hitherto only been required by law in factories and work-shops in this country where danger to health exists, as for example from the use of poisonous materials. The point is always borne in mind in framing regulations for dangerous trades, and requirements on the subject have been included in a number of the existing codes. I am not prepared, however, to promise legislation to make such provision generally compulsory in all factories and work-shops.
  MR. CHIOZZA MONEY: Is the right hon. Gentleman aware that the report referred to in the Question shows that the death-rate among German cutlers is only one-third of that among British cutlers?
  MR. GLADSTONE: The matter is receiving our attention.

  Law of Truck—Burslem Magistrate's Decision.
  MR. JOHN WARD: I beg to ask the Secretary of State for the Home Department, whether his attention has been called to a case at the Burslem police court on 14th April, in which the stipendiary magistrate appears to have recommended a system of striking a percentage of the wage paid instead of making deductions from the worker's wages; and whether any steps have been taken to inquire into the effect of the stipendiary's advice upon the proper enforcement of the law with reference to truck in the general trades of the country.
  MR. GLADSTONE: My attention has been called to this case, as the prosecution was one undertaken by the Factory Inspector of the district. The question at issue was whether the percentage system was equivalent to a deduction from wages or was merely a statement of the method of calculating the worker's wage. I have referred the point to the Truck Committee for their consideration.

  Fines in West End Teashops.
  MR. ARTHUR HENDERSON: I beg to ask the Secretary of State for the Home Department whether his attention has been called to the system of deductions and fines prevailing in teashops in West London; whether he is aware that for being five minutes late a fine of sixpence on a wage of eight shillings weekly has been imposed; and whether, in view of the provisions of the Truck Acts, 1831–96, he has any power to order an investigation or to institute summary proceedings in such cases.
  MR. GLADSTONE: My attention has not been specially called to this matter; and the enforcement of the provisions of the Truck Act of 1896, in so far as they apply to shop assistants, does not rest with the Home Office. The whole question of fines is under the consideration of the Departmental Committee appointed to inquire into the working of the Truck Acts, and I understand they have taken evidence with regard to the system of fining in shops.
  MR. ARTHUR HENDERSON: When may we expect the Report of the Committee?
  MR. GLADSTONE: I cannot give a definite reply. The inquiry has taken a longer time than was expected.

  Mercuric Chloride in Blasting Explosives.
  MR. BELLAIRS: I beg to ask the Secretary of State for the Home Department if he will state to the House the resolution which was unanimously passed by Lord Rayleigh's Committee in reference to the destruction of all blasting explosives containing mercuric chloride; and whether the Committee, in addition to the Home Office experts, included many distinguished War Office and independent experts.
  MR. GLADSTONE: The resolution to which the hon. Member refers related only to those blasting explosives containing mercuric chloride which were at the time under seizure in Messrs. Kynoch's magazines. It was passed unanimously by the Conference after hearing what Messrs. Kynoch's representatives had to say, and its terms were as follows:—"That inasmuch as these explosives are admitted to contain an unauthorised constituent which masks the official test on which the acceptance of the explosives depends, and inasmuch as an explosion has occurred which has been ascribed to spontaneous combustion in the official report to the Home Office by the Inspector of Explosives, the Conference cannot with the evidence before them recommend that these explosives may consistently with the public safety be put to any useful purpose or dealt with in any manner otherwise than by destruction." The Conference included distinguished Admiralty and independent experts, but, in view of the litigation pending between the War Office and Messrs. Kynoch, it was not deemed desirable that the War Office experts originally appointed members should attend this particular meeting.

  A Russian Prisoner.
  MR. JOHN WARDasked the Home Secretary a Question, of which he had given private notice, whether a Russian subject, now serving a sentence of imprisonment for assault in Wandsworth Prison, was to be deported to

  429
  Russia on 12th May; and whether, in view of the fact that this man was to be shot on his return for some offence alleged to have been committed in his own country, the Secretary of State would consider the advisability of varying the order for deportation.
  MR. GLADSTONE: I have no information at this moment on the subject, but will make inquiries.

  Tramway Brake Failure.
  MR. C. E. PRICE: I beg to ask the President of the Board of Trade whether his attention has been directed to the frequency of tramway accidents from failure of brakes; and whether he proposes introducing any legislation which will render an independently-acting emergency brake, under the control of either driver or conductor, compulsory on all tramways in the United Kingdom.
  THE PARLIAMENTARY SECRETARY TO THE BOARD OF TRADE (Mr. KEARLEY,): The whole question of tramway brakes and their efficiency is now being investigated by a Committee appointed by the Municipal Tramways Association and another by the Tramways and Light Railways Association, and when their conclusions are received as to the best form of brake the question of legislation will be dealt with.

  Board of Trade's "Cost of Living" Tables.
  MR. COURTHOPE: I beg to ask the President of the Board of Trade in what way, and from what basis, the Board's calculations of the cost of living in different towns and districts are made.
  MR. KEARLEY: The information will be found fully set out in the Prefatory Note and in the General Report on the "Cost of Living of the Working Classes" (Cd. 3864) of this year.

  Trade and Market Trusts.
  SIR GILBERT PARKER: I beg to ask Mr. Chancellor of the Exchequer whether he will grant a Return showing the number and names of the Foreign and British trusts, rings, cartels, and other combinations having for their
  430
  object the monopolisation of trade and markets, regulating the output, and keeping up prices, operating in this country.
  MR. KEARLEY: My right hon. friend has asked me to reply to this Question. I regret that it is not possible to grant this Return as there are no sources available from which the desired information could be compiled in the form of an Official Return. There is literature on the subject with which the hon. Member is no doubt familiar.
  SIR GILBERT PARKER: I beg to ask Mr. Chancellor of the Exchequer whether he has taken into consideration any means for checking the operations of trusts, rings, cartels, and syndicates, which have for their object the restraint of trade and the restriction of free competition in a country thus far committed to free trade.
  THE FINANCIAL SECRETARY TO THE TREASURY (Mr. HOBHOUSE,): I shall be very happy to consider any suggestions submitted to me by the hon. Member. In my opinion, however, the best method for reducing to a minimum the prejudicial effects of such operations as those to which the hon. Member refers is to maintain the existing free fiscal system of this country.

  Dangerous Motor Speeds.
  MR. CHIOZZA MONEY: I beg to ask the President of the Local Government Board if his attention has been directed to the fact that John de Solla, who on 30th April was convicted at Marylebone Police Court of driving a motor car in a manner dangerous to the public, was shown to have driven at 35 to 40 miles an hour in Maida Vale, and to have charged a cab, knocked its driver into the road, and injured its two lady passengers; if he is aware that the total penalties inflicted on Mr. de Solla were a fine of £5 5s. and £2 2s. costs; and whether he can promise legislation to secure that such offences, which are becoming quite common, shall be punished by imprisonment without the option of a fine.
  THE PRESIDENT OF THE LOCAL GOVERNMENT BOARD (Mr. JOHN BURNS,): I have seen a newspaper

  431
  report of this case. Whether any alteration should be made in the law as regards penalties for the offence of driving a motor car in a manner dangerous to the public is a matter which will receive my consideration, but I do not think I can promise to introduce legislation to the effect suggested in the Question. It does not seem to me that it would be reasonable to inflict the penalty of imprisonment without the option of a fine in all cases of this kind. I may point out that in the particular case referred to in the Question, the magistrate did not think it right even to impose the maximum fine allowed by the Motor Car Act.
  MR. CATHCART WASON: Is the right hon. Gentleman aware that a motor car is not by legislation permitted to proceed more than twenty miles an hour, and where persons deliberately break the law would it not be wise to introduce special punishment, especially in view of the fact that many cars are specially built for the purpose of breaking the law.
  MR. JOHN BURNS: I may also inform the hon. Member that cars are not allowed to go even two or three miles an hour if in the opinion of the police such speed is dangerous to the public.
  MR. CHIOZZA MONEY: Does the right hon. Gentleman really think £7 is a proper price to pay for injuring two of my constituents?
  MR. JOHN BURNS: Perhaps my hon. friend will pardon me for not attempting to appraise the value, elective or otherwise, of his constituents.

  Motor Car Legislation.
  MR. WATT: I beg to ask the President of the Local Government Board, whether it is the intention of the Government to introduce legislation this session dealing with motor cars, or whether it is intended to renew the Motor Car Act, 1904, for another year in the Expiring Laws Continuation Act.
  MR. JOHN BURNS: I do not think I can give any promise to introduce legislation dealing with this subject during the present session. In the absence of such legislation I should propose to renew the present Motor Car
  432
  Act for another year by including it in the Expiring Laws Continuance Bill.

  Rights of Members.
  MR. WATT, who was seated under the gallery on the Opposition side, rose to put a supplementary Question to the Question just answered regarding motor car legislation. Members of the Opposition immediately raised loud cries of "Order," and the hon. Member, after several attempts, was finally compelled to resume his seat.
  MR. SPEAKER: If the hon. Member would sit on his own side of the House he would catch my eye more readily.
  MR. JOHN REDMOND: On a point of order, may I ask whether, if all the seats are taken on the other side of the House—[OPPOSITION cries of "They are not!"]—and if seats are vacant on this side—that is, seats on which no Member's card is put—is not any Member entitled to go and take one of those seats—and having taken a seat, is he not entitled to address the Chair from it as much as from any other part of the House?
  MR. SPEAKER: It is true that an hon. Member has that right—but whether it is always convenient to exercise the right is another matter. The space occupied by the Opposition is small, but there is no reason why it should be invaded.
  MR. JOHN REDMOND: That, Sir, is not the point I put. If an hon. Member unable to find a seat on his own side of the House comes over here and finds a seat unoccupied, is the fact that he has been crowded out of his own side and has found refuge here to deprive him of his right of addressing the Chair?
  MR. SPEAKER: I have said that the hon. Member has the right, but whether it is always advisable to exercise your right is another matter, and I think that what has occurred this afternoon shows that it is not desirable.
  MR. WATTagain essayed to speak, but the Opposition protest was at once renewed, and he was compelled to give up the attempt.

  Fenton Death from Vaccination.
  MR. LUPTON: I beg to ask the President of the Local Government Board if he is aware that, on the 9th March, 1908, Doris Irene Leese, daughter of George Leese, of 8, Grove Road, Fenton, Staffordshire, died, at the age of three months, as the result of vaccination, as shown in the death certificate; and if, in consequence, he will take steps to stop the distribution by the Local Government Board of vaccine lymph until some stuff has been discovered which can be used without danger.
  MR. JOHN BURNS: My attention has been called to this case, and I am making inquiry with regard to it. I could not, however, undertake to stop the issue of glycerinated calf lymph.

  Rothesay Post Office.
  MR. LAMONT: I beg to ask the Postmaster-General whether the post office buildings at Rothesay are being enlarged in order to adapt them for taking over the telephones in 1911, or in order to cope with an increase in postal work?
  THE POSTMASTER-GENERAL (Mr. SYDNEY BUXTON,): The primary object of the enlargement is to meet the increase of ordinary Post Office business, but space is also being provided for the transfer of telephone business in 1911.

  Canadian Pacific Mail Contract.
  MR. P. A. MCHUGH: I beg to ask the Postmaster-General whether negotiations are in progress in reference to the carriage of mails by the Canadian Pacific Railway Company; what are the terms of the existing contract with that Company, and when does the contract terminate; and if he is in a position to assure the House that neither a new contract nor a continuation of the existing contract will be decided on until the House has had an opportunity of considering the matter.
  MR. SYDNEY BUXTON: The contract with the Canadian Pacific Railway Company, which expired on the 6th ultimo, was subject to a payment of £60,000 per annum of which £15,000 was paid by the Dominion. The document is printed in
  434
  full in the Parliamentary Return No. 76 made to an order of this House on the 12th of March, 1907. A new contract on a different basis is now under negotiation, and will be submitted to this House for confirmation.

  Foreigners in the Telephone Service
  MR. CLAUDE HAY: I beg to ask the Postmaster-General, whether he has taken any special measures, and, if so, whether he will state the nature of those measures, to secure British subjects competent in the French language for the posts now occupied by aliens in His Majesty's telephone service in the United Kingdom.
  MR. SYDNEY BUXTON: Special inquiries have been made, and are being made, with the object of securing British subjects who possess such familiarity with colloquial French as is necessary for the service of the Continental Telephone lines by night. There are two foreigners only employed.
  MR. CRUDE HAY: When will the special inquiries be completed?
  MR. SYDNEY BUXTON: We are always on the look out for men who will suit us and if the hon. Member can suggest anyone, or will himself volunteer for the job, I shall be very glad to take him on.
  MR. CLAUDE HAY: I will certainly give consideration to that offer.

  Night Duty in the Post Office.
  MR. COURTHOPE: I beg to ask the Postmaster-General whether Post Office servants performing extra work at night receive the same allowances, in the shape of extra pay and extra time off duty, as those doing similar extra work by day; and, if not, for what reason this differentiation is made.
  MR. SYDNEY BUXTON: No difference is made except that seven hours duty by night (8 p.m. to 6 a.m.) is treated as equivalent to eight hours duty by day.

  County Court Funds in the Post Office Savings Bank.
  MR. JOHN O'CONNOR: I beg to ask the Postmaster-General

  435
  whether he can state the amount of money standing to the credit of the Registrars of County Courts in the Post Office Savings Bank on the 31st day of March last.
  MR. SYDNEY BUXTON: I regret that the figures asked for by the hon. Member are not available. They are not required for Departmental purposes; and their special preparation would involve considerable labour and some expense. The latest returns available show that on the 30th of June, 1904, the sum of £301,770 6s. 9d. stood to the credit of accounts opened by Registrars of County Courts under the County Courts Acts and the Workmen's Compensation Acts.
  MR. JOHN O'CONNOR: And are the sums included in the "savings of the people"?
  MR. SYDNEY BUXTONasked for notice.

  Walsall Grammar School Dispute.
  MR. T. F. RICHARDS: I beg to ask the President of the Board of Education whether he is aware that at Queen Mary's Grammar School, Walsall, where cigarette-smoking is punishable by flogging or expulsion from the school, no written rule or minute exists which prohibits this offence; and whether, seeing that there are already more than seventy schools, including some of an equal and higher grade than Queen Mary's School, Walsall, where corporal punishment is not used, he will, in the absence of any such rule, recommend the prohibition of flogging.
  THE PRESIDENT OF THE BOARD OF EDUCATION (Mr. RUNCIMAN,): I am not aware whether the rule referred to is in writing, but my information is to the effect that the boy admitted that he knew of its existence, and the question does not, therefore, seem material. As I have already stated, I am reluctant to interfere with the responsibility of governing bodies for the measures they adopt to enforce discipline in their schools, and I do not think the facts which have been brought to my notice call for a recommendation such as my hon. friend suggests.

  Welsh University Grants.
  MR. REES: I beg to ask Mr. Chancellor of the Exchequer whether he proposes to
  436
  increase the grant to the constituent colleges of the Welsh University.
  MR. HOBHOUSE: A Committee was appointed by my predecessor to inquire into the position of the University of Wales and its colleges; and until I have received the Report of the Committee I am unable to make any statement on the subject.

  British Investments Abroad.
  SIR GILBERT PARKER: I beg to ask Mr. Chancellor of the Exchequer whether he can give an estimate of the amount of British capital invested abroad during the last ten years; and if he can also state at the same time the income received from foreign investments during the last ten years respectively.
  MR. HOBHOUSE: I will refer the hon. Member to the statistics given on page 217 of the Fiftieth Report of the Commissioners of Inland Revenue (Cd. 3686 of 1907) which gives the only figures available on this subject, and to the remarks on page 216 of the same Report which explain why fuller statistical information is not available.

  Sugar Imports.
  MR. FELL: I beg to ask Mr. Chancellor of the Exchequer what was the quantity of sugar imported into the United Kingdom in the year 1907 and its value; and the amount of duty paid upon it?
  MR. HOBHOUSE: The quantity of sugar imported into the United Kingdom during the year 1907 was 34,649,775 cwts., and the value was £19,134,154. The duty paid on the net quantity (30,926,044 cwts.) of sugar cleared for home consumption during the year was £6,169,678.

  Stock Dealing Libel Case.
  MR. BOTTOMLEY: I beg to ask Mr. Attorney-General whether his attention has been called to a recent libel case in the Courts, in which certain persons trading as Arnold and Butler, and describing themselves as stock and share dealers, general bankers, and investment experts, were accused of obtaining money by fraud, and in which such persons, when the case was called for trial, stated, through their counsel, that they were not prepared to offer any

  437
  evidence in refutation of such accusation; whether he is aware that these persons are still extensively circularising people in the country, soliciting subscriptions from small investors upon extravagant promises of profit; and whether he will direct the attention of the Public Prosecutor to the matter.
  THE ATTORNEY-GENERAL (Sir W. ROBSON,): I have already drawn the attention of the Public Prosecutor to this case.

  Land Registry Return.
  MR. ROWLANDS: I beg to ask Mr. Attorney-General whether he can state when the Return ordered on the 19th February, showing the work done in the Land Registry in each of the years 1906 and 1907, will be issued.
  SIR W. ROBSON: It is nearly completed and will be issued almost immediately.

  Glasgow Distress Committee.
  MR. CLELAND: I beg to ask the Secretary for Scotland whether he is aware that the distress committee of the city of Glasgow have, at the present moment, only sufficient funds in hand to maintain the existing relief works for a few weeks; and whether, having regard to the growing unemployment in the shipbuilding industry, he will consider the advisability of increasing the grant of £9,600 already given to the distress committee.
  I beg also to ask the Secretary for Scotland whether he is aware that the Government grant to the Distress Committee of the city of Glasgow amounted to £9,600, while the funds raised locally amounted to £7,975, that the grant to the Edinburgh Distress Committee amounted to £6,595 and the funds raised locally to £586, and that the county of London raised locally a little over £100 and received a grant of £62,000; and whether, in view of the growing unemployment in the West of Scotland and the inadequacy of the Government grant, he is prepared to recommend a further grant to the Glasgow Distress Committee in proportion to the grants received by other similar bodies.
  THE SECRETARY FOR SCOTLAND (Mr. SINCLAIR,): I am aware of the position to which my hon. friend refers, and I have been in personal communication with the Lord Provost and Chairman of the Distress Committee. The situation is being examined by the Local Government Board, and as soon as their Report is received it shall be considered.
  MR. WATT: Is it the case that the city is being penalised because of the magnanimity of its citizens in giving more than any other city?
  [No Answer was returned.]

  Royal Scottish Museum.
  MR. MITCHELL-THOMSON: I beg to ask the Secretary for Scotland what is the estimated value of the objects exhibited in the Royal Scottish Museum, Edinburgh; and whether any of these objects are insured against risks by fire.
  MR. SINCLAIR: No estimate of the present value of the objects exhibited in the Museum has been made and, having regard to the extent and varied character of the collections, to make even an approximately correct valuation of them would occupy much time and involve considerable cost. No insurance is effected by the Treasury on any objects in the Museum.
  MR. MITCHELL-THOMSON: I beg to ask the Secretary for Scotland whether he is aware that objects have been lent on loan to the Royal Scottish Museum by lenders who have not been informed that loans to the Museum are at owner's risk in case of fire; and whether, in the event of the destruction of these objects by fire, originating in those buildings, which, as the directors' report states, are in dangerous proximity to the Museum, any compensation will be paid to the owners by the Government.
  MR. SINCLAIR: The practice of the present director in regard to loans of objects to the Museum is to inform the lender that the authorities cannot be responsible for loss or damage to objects and that no insurance is effected against fire. He is not aware of any cases in which this procedure has been omitted. In the event of loss by fire no provision exists for compensating the owner.
  MR. MITCHELL-THOMSON: There are cases of lenders of valuable objects who have not been so informed.
  MR. SINCLAIR: If the hon. Member can give me them I will see that they are informed.

  Irish University Bill.
  CAPTAIN CRAIG: I beg to ask the Prime Minister whether, in view of the recrudescence of cattle-driving and boycotting and outrages in which firearms are used in Connection with agrarian disputes in the South and West of Ireland, the Cabinet will drop the proposed State endowed Roman Catholic University Bill.
  THE CHIEF SECRETARY FOR IRELAND (Mr. BIRRELL,): My right hon. friend is very pre-occupied to-day and he has asked me to answer the Question in the negative.
  CAPTAIN CRAIG: Does the right hon. Gentleman repudiate the statement he made at Southampton warning people against cattle-driving?
  MR. BIRRELL: I shall require notice of that Question.

  Agitation in the South and West of Ireland.
  CAPTAIN CRAIG: I beg to ask the Prime Minister whether he is fully informed of the condition at present prevailing in the South and West of Ireland as regards the Unionist minority; whether he is aware that a vigorous campaign has been restarted since 1906 by the United Irish League, in which firearms are used with increasing frequency, directed against farmers who graze their holdings; and whether he can make any statement to the House as to the steps the Government propose to take to restore law and order, and insure that the United Irish League will cease holding courts and terrorising the peasantry into attending them.
  MR. BIRRELL: The Government are fully informed of the condition of the South and West of Ireland, but if the hon. and gallant Member means to suggest that Unionists in particular are affected, there is no foundation for the suggestion. It is unfortunately the fact that in some districts there has been a
  440
  considerable increase in the number of offences in which firearms are used, and that an agitation against the grazing system, mainly in the form of cattle driving, is in operation. The Government are taking all possible measures for the preservation of the peace and the punishment of offenders, and for the protection of the persons and property of those who are affected by the agitation. The Royal Irish Constabulary has been strengthened by the addition of 400 men, who have been assigned to the counties affected, together with 236 men drawn from the Reserve and from other counties. In all there are serving in the disturbed counties 636 extra police, for whom the local authorities have to pay. Offenders are prosecuted according to law in all cases in which evidence is forthcoming.
  MR. WALTER LONG: Is it not a fact that in several cases recently it has happened that the police have been driven back by the mob and compelled to retire? In the interest of the preservation of the law is it not desirable that the force detailed for special service should be sufficient to resist attack?
  MR. BIRRELL: I agree that it is a matter of the utmost importance that the police force should be in sufficient numbers to resist any attack that may be made upon them, and the most careful endeavours are being made to ensure that result.
  MR. JOHN REDMOND: Has the right hon. Gentleman seen a telegram which appeared in a morning paper from the police officer in charge of the district saying that this story is untrue?
  MR. BIRRELL: I have not seen the telegram.
  MR. JOHN REDMOND: It is in the Daily Mail this morning.
  CAPTAIN CRAIG: Will the right hon. Gentleman consider the advisability of reintroducing the Arms Act and of applying the Pistols Act to Ireland?
  MR. BIRRELL: The question of applying the Pistols Act has been under consideration for some time, and I am

  441
  willing again to consider whether its introduction would do any good. Personally I have come to the conclusion it would not.
  MR. MOONEY: Is the right hon. Gentleman aware that the last published statistics of crime show that Derry and Down are the worst counties?
  MR. LONSDALE: Will the right hon. Gentleman do something to prevent the distribution of arms among the peasantry in the South and West?
  MR. J. MACVEAGH: And on the 12th July in the North?
  [No Answer was returned.]

  Irish Teachers' Classification.
  MR. BOLAND: I beg to ask the President of the Board of Education whether he is aware that the teachers who have passed through training colleges in Scotland and Wales when applying for posts in England are classed as trained teachers, but that teachers who have passed through similar institutions in Ireland when employed by local educational authorities in England are regarded as untrained, and are consequently in receipt of lower salaries; and whether, in view of the fact that the qualifying examinations in Ireland are as difficult as those in Scotland and Wales, he will say what steps he proposes to take in order to remove the difference of treatment of Irish trained teachers.
  MR. RUNCIMAN: I am not aware that any uniform basis of classification as "Trained" or "Untrained" has been adopted by local education authorities, but the matter is entirely one for the discretion of each authority and it is not a question upon which it is within the province of the Board to advise. The Board have had no occasion to adopt such a classification for the purposes of their own administration. For statistical purposes the Board endeavour to include as trained only those teachers who have completed a course of training in a college recognised under their own regulations.

  Breaches of the Game Laws in Ireland
  MR. LONSDALE: I beg to ask the Secretary to the Treasury whether he will state the number of cases of breaches
  442
  of the Excise game laws, brought to the notice of the Board of Inland Revenue by the Irish Game Protection Association last year, in which no action was taken by the Board; and whether, having regard to the evidence available that a large number of unlicensed persons continue to kill, sell, and buy game, the Board of Inland Revenue will take more vigorous measures to prevent the destruction of a national asset in Ireland.
  MR. CHARLES HOBHOUSE: There were twenty-five cases last year in respect of which, from one cause or another, no action was taken by the Board. All possible vigilance is exercised by the Board's officers to detect evasions of gun and game duty.

  Irish Land Stock.
  MR. J. DEVLIN: I beg to ask the Secretary to the Treasury if he will state what amount of two and three-quarters per cent. of Guaranteed Irish Land Stock has been issued under the Irish Land Act of 1903 to date; what has been the total amount of the issues made to the public within this period, on what dates such issues were made, and what were the average prices received on each issue thus made; what were the flotation charges on the respective issues made by means of public subscription; what has been the total amount of this stock issued to the National Debt Commissioners; on what dates and for what amounts were such issues made, and what were the respective prices paid by them; what has been the total amount shown in detail for discount losses charge able to date on the Irish Development Grant; and what is the amount of money the Estates Commissioners have on their hands at the present date for advances to tenants who have purchased through direct sales from landlords.
  I beg also to ask the Secretary to the Treasury what has been the total amount received and credited to the Sinking Fund Account under the Land Purchase Acts previous to the Act of 1903; what has been the amount for the credit of this account for the year 1891 to 1907, both years inclusive, and what have been the respective amounts received in each of the years covering this period; to what purpose has this fund been applied; if invested in two and three-quarters

  443
  per cent. Guaranteed Irish Land Stock, what has been the amount invested and the average price paid for it in each of the years mentioned; what has been the total amount of the Sinking Fund Account to date under the Irish Land Act of 1903; what have been the respective amounts credited to it in each of the years from 1904 to 1907, both years inclusive; and to what purpose has it been applied
  MR. HOBHOUSE: The information asked for by the hon. Member in these Questions has been supplied to me, but it is in a tabulated form and very voluminous, and I will not take up the time of the House by reciting it. If the hon. Member will allow me I will have it circulated with the Votes.

  Down and Louth Mail Service to Wales.
  MR. J. MACVEAGH: I beg to ask the Postmaster-General whether arrangements can be made whereby letters from county Down and county Louth for Bangor, North Wales, may be sent by the Greenore route and sorted at Bangor, thus avoiding the delay caused in delivery by sending them to Crewe and then back again to Bangor; and whether letters intended for delivery between Greencastle and Kilkeel, county Down, could be sorted so as to secure delivery on the day of arrival, instead of being kept overnight at Kilkeel and then sent back to Greencastle.
  MR. SYDNEY BUXTON: I regret to find that a despatch for Bangor such as that suggested would not be justified owing to the small amount of correspondence affected. Letters from England for the districts referred to do not arrive in time for the morning delivery, and as a second delivery is not warranted, no improvement can, I fear, be made in this service. The letters may, however, be obtained by callers at the Kilkeel and Ballyardle Post Offices.

  Carlisle Pier, Kingstown.
  MR. JOHN REDMOND: I beg to ask the Postmaster-General whether the Papers laid in connection with the permission given the London and North Western Company to sail boats to and from Carlisle Pier, Kingstown, includes the report of Captain Meldrum, nautical adviser to the Post
  444
  Office, made since the London and North Western Company applied for permission to go to the pier, as to the feasibility of sailing two lines of steamers from Carlisle Pier without interference with the mail service.
  MR. SYDNEY BUXTON: All the correspondence asked for by the hon. Member is given in the Paper issued to-day. The report of the late Captain Meldrum did not form part of the correpondence between the Post Office and the City of Dublin Steam Packet Company and the London and North Western Railway.
  MR. JOHN REDMOND: Why does the right hon. Gentleman refuse to include that report from the nautical adviser of the Post Office as to the suitability of this pier for the service?
  MR. SYDNEY BUXTON: It is a confidential report to the Department.
  MR. JOHN REDMOND: Am I right in supposing it condemned the action of the Post Office in this matter?
  [No Answer was returned.]

BUSINESS OF THE HOUSE.
MR. AKERS-DOUGLAS: May I ask the Prime Minister the business for the next week?
THE PRIME MINISTER AND FIRST LORD OF THE TREASURY (Mr. ASQUITH,): On Monday the first order will be the Resolution in Committee for expenses under the Children Bill, and after that the Second Reading of the Irish Universities Bill. On Tuesday we shall move a Resolution to enable the House to take Reports of the Committee of Ways and Means after eleven o'clock, and after that the Second Reading of the Housing Bill. If, as I hope will not be the case, that Bill is not completed on Tuesday, we shall continue it on Wednesday. Otherwise the Orders will be the Third Reading of the Prosecution of Offences Bill, the Second Reading of the Public Offices Sites Bill, and some other minor Bills.

NEW MEMBER SWORN.
George Rennie Thorne, esquire, for the Parliamentary Borough of Wolverhampton (East Division).
NEW MEMBER SWORN.

  SELECTION (STANDING COMMITTEES).
  Sir WILLIAM BRAMPTON GURDON reported from the Committee of Selection, that they had discharged the following Member from Standing Committee A (in respect of the Education (Local Authorities) and Coroners' Inquests Bills): Colonel Seely; and had appointed in substitution (in respect of the Education (Local Authorities) Bill), Mr. Mallet (and in respect of the Coroners' Inquests Bill), Mr. Cooper.
  Report to lie upon the Table

Ordered, "That Mr. Mitchell-Thomson be added to the Public Accounts Committee."—(Mr. Whiteley.)
BUSINESS OF THE HOUSE (WAYS AND MEANS).
Ordered, "That the Committee of Ways and Means have precedence this day of the Business of Supply."—(Mr. Asquith.)
BUSINESS OF THE HOUSE (WAYS AND MEANS).
Ordered, "That the proceedings of the Committee of Ways and Means, if under consideration at eleven o'clock this night, be not interrupted under the Standing Order (Sittings of the House)."—(Mr. Asquith.)

WAYS AND MEANS.
Considered in Committee.
(In the Committee.)
[Mr. EMMOTT (Oldham) in the Chair.]

WAYS AND MEANS.

  THE BUDGET STATEMENT.
  THE PRIME MINISTER AND FIRST LORD OF THE TREASURY, (Mr. ASQUITH,): This is, I suppose, the first time in the memory of any of us when the annual financial statement has been submitted to the Committee of Ways and Means by any other Minister than the Chancellor of the Exchequer, although there are precedents for that course as far back as the time of the Ministry of Sir Robert Peel. I need hardly say that it would have been more
  446
  agreeable to me to leave the task where it naturally falls, in the hands of my right hon. friend; but we both felt that my relinquishment of his office, and his accession to it, are so recent that for me to take his place this afternoon would be a matter not merely of personal, but of public convenience. But it is only for this afternoon. I hope and believe that in the later stages of our discussions the Committee and the House will have the full benefit of the assistance and guidance of the Chancellor of the Exchequer.

  THE YEAR'S TRADE.
  It is usual and appropriate on this occasion, by way of preface to that part, of the financial statement which deals with the national accounts, to make one or two observations of a more general character with regard to the trade and economic conditions of the country. Sir, as regards the calendar year—we are dealing with the calendar, and not the financial year—1907, the foreign trade of the United Kingdom, that branch of our trade which admits of statistical measurement and therefore most readily challenges comparison, was greater than in any previous year, in volume as well as in value, in imports as well as in exports. In my Budget speech of two years ago I pointed out that the exports of British and Irish produce in the preceding year, as compared with those of 1900, which we always take for this purpose as the standard year, and measured by the prices of 1900, showed an increase of 23 per cent. This growth has continued in the two succeeding years at an augmented pace, so that in 1907 the exports of British and Irish produce, compared with, and valued at the prices of, 1900, showed an increase of more than 43 per cent.
  Imports during the same period showed expansion, but of less extent absolutely and to a much smaller degree relatively. The increase of imports, tested again by the 1900 standard of values, rose from £523,000,000 to £600,000,000, or rather less than 15 per cent. in the course of these years. But, Sir, this expansion in our foreign trade is part of an international movement, and the signs that the tide had begun to ebb were everywhere visible before the end of 1907. The trade returns for the first quarter of

  447
  1908 showed that both imports and exports had in that period fallen below the high water mark of 1907; but what has been lost in this way is only a part of the gain of a year ago, because the reduced figures of 1908 are still well in advance of those of 1906, which was, in its turn a record year. If we look for a moment at the domestic side of the matter, employment improved in the first half of 1907, compared with 1906, while the decline which in the latter half we find was more marked than in the first quarter of 1908. On the other hand, the Board of Trade statistics of the rates of wages relating to interests in which 9,000,000 of people are employed showed a higher level of wages at the end of 1907 than at any other time in the period since 1903, over which these records extend. The upward movement lasted continuously from the second half of 1905, and was still in progress at the end of the first quarter of 1908. British trade, then, I think one may say, has suffered no violent shock; and, while it is dangerous to prophesy, so far as present indications go they do not point to more than a slackening in the rate of expansion that has been proceeding with extreme and unparalleled rapidity.

  FINANCIAL REVIEW.
  I say so much for the general conditions of our trade, and now pass to a review of the finances of the State for the year which ended on 31st March last. The Budget of 1907 was based on the system under which a portion of the revenue raised by Imperial taxes was not paid into the Treasury, but handed over to the Local Taxation Account. That system was brought to an end by Section 17 of the Finance Act of last year, and according to its provisions the whole revenue of the year has been paid to the Exchequer and all the grants to the Local Taxation Account have been issued from the Exchequer. The result is that the Exchequer accounts for 1907–8 contain a complete record of the transactions both on the receipt and issue side. In comparing the Budget estimates of last year with the actual results, the following figures represent the totals. The total revenue for this year was estimated at £152,835,000, the total expenditure £152,502,000, leaving a margin of £333,000 for contingencies. In fact, it has turned out
  448
  that the revenue estimated at the figure I have just stated actually produced £156,538,000, showing an increase on the estimate of £3,703,000. And instead of an expenditure as estimated of £152,502,000, the actual issues from the Exchequer amounted to £151,812,000, showing a reduction on actual as compared with estimated expenditure of £690,000. If you add together these totals you obtain the figure of £4,726,000, which is the amount of the realised surplus for the year.

  REVENUE.
  I will say a few words first on the revenue and the causes which account for the excess in the actual receipts over those I estimated for a year ago. On a comparison between the estimated and actual Exchequer receipts from revenue in 1907–8, it will be found that under ten of the twelve heads set out increases over the estimates are shown, the only exceptions being Excise and Stamps. Customs revenue, owing to the loss of the coal duty, which contributed nearly £1,500,000 in the previous year was estimated to produce less by £1,192,000 last year than in the preceding year. The actual receipts of the Exchequer, however, exceeded estimate by £567,000, reducing the loss from £1,192,000 to £625,000. This striking recovery has been caused by the increased revenue from sugar, in which the estimate has been exceeded by £310,000; tea, showing an excess of £208,000; and tobacco, with in increase of £240,000.

  CUSTOMS AND EXCISE.
  On the other hand, the decline in productivity of the alcoholic group of Customs duties has been maintained. Foreign spirits show a falling off of £80,000 compared with the receipts of the previous year, and of £47,000 as compared with the Budget estimate in the year just ended. In the case of wine a slight increase over the previous year's receipt had been anticipated, but the result shows a further reduction of £59,000 on the receipts from that source. Under the head of Excise the total receipt has remained almost stationary. An increase of £153,000 was anticipated from beer, of which only one half has been realised. Instead of an increase of £110,000 from British spirits, there is a decrease of

  449
  £90,000. I pointed out in my Budget statement of last year that the total revenue from alcoholic liquor, after declining steadily since 1899, had at last in 1907–8 shown an upward tendency. The reaction had been short-lived. Although beer in 1907–8 continued to improve the total revenue from beer, wine, and spirits combined shows a decrease of £151,000.

  ESTATE DUTIES.
  Now I come to the estate duties, which by their nature would appear to be one of the most speculative and uncertain branches of revenue. I am glad to say that they have once more vindicated their claim to trustworthiness. In the first three quarters of the year the receipts were lower by three quarters of a million than for the corresponding period of the preceding year; but they righted themselves in the last quarter. The result is that the full year's receipts into the Exchequer were below the record figure of 1906–7 by only £14,000, while the Budget estimate was exceeded by £373,000. We have had the benefit during the year to some extent of the enhanced rates of duty which were authorised by the Finance Act of 1907. I estimated that in a full year those enhanced duties would realise £1,200,000. In the first year of their operation I said that they might be expected to produce £600,000. The actual yield in 1907–8 was £610,000. These figures reflect the highest credit upon the officers of the Inland Revenue. Stamps have been a stationary source of income. The revenue fell short of the estimate by £30,000; but that result does not point to any abatement of business activity except in the region of the Stock Exchange. The receipts from the transfer of stocks and shares show a diminution compared with the previous year of £357,000. There was a substantial increase on balance under the remaining heads of stamp duties.

  INCOME-TAX.
  I now come to the most interesting item—namely, the income-tax. In last year's Budget I estimated that the income-tax, if the basis had remained unchanged, would have yielded £32,500,000 in 1907–8, or an increase of £900,000 over
  450
  the Exchequer receipts in the preceding year. But, as the Committee remembers, the basis of the tax was altered by reducing its rate from 1s. to 9d. on the earned incomes of all persons whose total income from all sources does not exceed £2,000. The estimated loss to the revenue from this differentiation I put down at £1,250,000 for the year, and I further reckoned that a sum of £750,000 would be lost to the year's revenue through delays in collection in consequence of the change in the law. On this account the estimated yield of the tax for 1907–8 would be £30,500,000, or £1,100,000 less than the actual receipts in the preceding year. The payments into the Exchequer last year on account of income-tax amounted actually to £32,380,000, being £1,880,000 in excess of the Budget estimate and actually £780,000 in excess of the sum paid before the alteration of the tax in the preceding year. It is desirable to analyse these figures in order to see what the explanation of them is. I estimated the relief to the taxpayers as the result of the differentiation at £1,250,000. Here again I have to thank the officers of the Inland Revenue for their extraordinary prescience in these matters. It is actually £1,240,000—a difference of £10,000 between the estimate and the actual result. That is a subject matter of congratulation and of commemoration. The number of taxpayers who participated in this relief of differentiation was approximately 750,000. But the zeal and efficiency of the Inland Revenue officers have been so admirable that, instead of the arrears being £750,000, the whole of that sum was brought in and collected within the time. The result, therefore, is this. The tax which would have been raised on the amount of profits, in excess of the estimate, disclosed within the year at the old rate would have been £2,370,000. The loss by differentiation was £1,240,000, leaving a balance of £1,130,000. If you add the amount of £750,000 allowed for delay and as arrears not collected within the financial year, you get the figure £1,880,000, which represents the actual excess over the estimate. How has this been brought about? I see it often stated, and it is commonly supposed, that the reason why the benefits of differentiation have cost so little is due to

  451
  the more stringent regulations with regard to the disclosure of salaries of employees and others in the Finance Act of last year. That is not the case. These provisions have produced, I admit, a certain amount of additional revenue; but the main cause of this remarkable increase is to be found in the differentiation clause itself. The mere offer of the lower rate of tax has sufficed to increase the amount of income submitted. Thus I may say that differentiation has worked, not only a financial, but a moral reform. The gross income brought under review in 1906–7 was £943,000,000. In 1907–8 (the differentiation year) the amount was £980,000,000, being an increase of £37,000,000 in the gross income brought under review for the year, compared with an average increase of £14,000,000 in in the three preceding years. I have often heard it said, and I fancy it is a common belief, that the income-tax in this country is at the rate of 1s. in the £. It is nothing of the kind. The average rate of the income-tax per £ during the year which has just concluded was 9 6d., a little over 9½d., as compared with an average rate of 10d. in the two preceding years. I hope I may say, without undue self-complacency, before I depart from this matter, that differentiation, always deemed to be just and fair, was for sixty years strongly denied by almost every great authority to be workable in practice. Differentiation has been proved by experience to be not only practicable, but smooth and easy in its operation; and it has in fact paid for itself, and it has removed, once and for all, the most obvious and crying grievances and inequalities—I do not say all of them by any means—but the most crying grievances and inequalities which have marred the equity and clogged the efficiency of the income-tax as a permanent instrument of revenue.
  Now, Sir, to sum up the first part of the account, the total revenue derived from taxation, as hon. Members will see by the Table, was £130,320,000, or £268,000 more than the corresponding revenue of the preceding year, and £2,635,000 more than the Budget estimate. The non-tax revenue amounted, as the Table shows, to £26,218,000, being an increase of £1,068,000 over the Budget estimate, and of £1,234,000 over the corresponding
  452
  revenue of 1906–1907. The revenue derived from the Post Office and Telegraph Service exceeded the Budget estimate by £300,000, a very satisfactory increase, and showed an increase over the preceding year of £875,000. The Post Office ascribes this increase to an all-round extension of business and not to any one specific cause. Under the head of "Miscellaneous," as hon. Gentlemen will see, the excess of receipts over the estimate is no less than £658,000, and to it is mainly attributable the surplus of the non-tax revenue. The receipts from the Mint, which I estimated at £210,000, realised £721,000. For some years before 1906–1907, as I said last year, the Exchequer receipts from this source showed a steady decline and they seemed about to disappear altogether. I think that was the case when the right hon. Gentleman opposite was at the Exchequer. But a sudden revival took place in 1906–1907, largely owing to an exceptional demand for silver coin for the West African Colonies and Australasia. That was thought by the authorities to be a spasmodic revival, but it has continued since. In West Africa, I am bound to say, these coins are largely used, not as a currency, but as articles of ornament. In 1907 the shipments of silver to West Africa and Australasia exceeded those of 1906 by more than 50 per cent. Those, I think, are all the observations I have to make in order to account for the very large difference between the estimated revenue and that which has been actually received.

  EXPENDITURE IN 1907–8.
  I pass now, and I shall deal with it very briefly, to the other side of the account—the expenditure, which is set out in Table I. The Budget of 1907 provided for a total expenditure of £152,502,000. There were other grants voted on Supplementary Estimates amounting to a total of £942,000. The principal items were £200,000 for the Unemployed Act, £100,000 for the Small Holdings Act, and £260,000 as the first instalment of the additional charge imposed upon the Post Office in order to give effect to the recommendations of the Committee of this House on Post Office servants. There was also an

  453
  exceptional issue under the head of the Consolidated Fund Services in connection with the Exchequer liability to the Supreme Court fund. On the other hand, as hon. Gentlemen will see if they look at the headings of Supply Services, the Exchequer issues to the Army and Navy and the Civil Service were reduced to the extent of £1,869,000 by savings on expenditure on the Army £645,000, on the Navy £278,000, and on the Civil Service, mainly the Board of Education, no less than £809,000. As a result the issues from the Exchequer amounted to a total of £151,812,000, against an estimate of £152,502,000 showing a net saving of £690,000 on the expenditure provided for by the Budget. It is in that way that we have a realised surplus for the year of £4,726,000, which in due course, subject to a deduction which I shall hereafter explain, becomes the old Sinking Fund of last year, and will be applied during the current year to the reduction of the National Debt. I will ask the Committee to look for a moment at the figures shown in Table III., which give the Exchequer balance at the beginning and the end of the year. The balance at the beginning of the year was £6,932,000, and at the end of the year it was £8,919,000.

  REDUCTION OF DEBT.
  Now I come to what, I think, is perhaps a more interesting, and, certainly, in my view, a more important aspect of the finance of last year—that is, the reduction of debt that took place in 1907–8. I want to explain again—previous Chancellors of the Exchequer have done it more than once—the distinction, which, I am sure, is thoroughly familiar to the minds of hon. Members, between what we call National Debt in the strict sense—that is to say, dead-weight debt—and the gross capital liabilities, which include sums borrowed under various Naval and Military Works Acts, Post Office Telegraph Acts, and so forth, each of which has a sinking fund of its own. Dealing first with the dead-weight debt which is popularly recognised as constituting the National Debt, we have during the year that has gone by effected the following reduction in the three categories of which it is composed: The Funded Debt has been reduced by
  454
  £6,319,000, Terminable Annuities by £1,457,000, and the Unfunded Debt by £10,254,000; so that the capital of the National Debt at the end of the financial year, as compared with the beginning of the year, showed a reduction of £18,030,000. This reduction, I need hardly say, is wholly without precedent. To show how that is brought about, the following figures may be interesting: I pointed out in my Budget speech last year that the net provision that would be available for the reduction of our aggregate liabilities would be no less than £13,400,000, assuming that the Fixed Debt Charge remained at the statutory figure of £28,000,000. But, as the Committee will remember, I increased the Fixed Debt Charge for the year by £1,500,000, making it £29,500,000, thus raising the estimated provision for the reduction of the debt to £14,900,000. In point of fact, the addition during the year to the other capital liabilities—liabilities under the various Acts I referred to a moment ago—was less than had been estimated by £800,000, the actual addition being £1,191,000, as against the estimate of £1,970,000. This raised the net sum available for the reduction of debt to, approximately, £15,700,000, a sum which sufficed to cancel debt to the nominal amount of £16,839,000. The Committee will, therefore, see that while the reduction of the National Debt was £18,030,000, the reduction effected in the aggregate gross liabilities of the State, is £16,839,000. Whichever way you look at it, whether at the reduction of the dead-weight Debt by over £18,000,000 or at the reduction of the gross liabilities of the nation by very nearly £17,000,000, I think that is a result upon which the Committee and the country may fairly congratulate themselves. As I shall show in a moment, it has an important bearing upon the future of our finance.
  Before I come to the estimate of the revenue and expenditure of the current year, perhaps this will be a convenient point to deal with the anticipated reduction of debt in the year 1908–9. Assuming that the Fixed Debt Charge is placed for the current year 1908–9 at £28,000,000 and I intend to keep it at that; and assuming, further, that no part of the realised surplus of last year is diverted

  455
  from its statutory destination as Old Sinking Fund, then the estimated amount of the provision which will be available for the reduction of debt in 1908–9 will be £14,376,000. That is made out in the following way: The Old Sinking Fund of last year—the realised surplus of last year—amounts to £4,726,000, the portion of the Fixed Debt Charge of £28,000,000 representing repayment of capital to £9,785,000, and the miscellaneous receipts applicable to the reduction of debt to £500,000, making a total of £15,011,000. Against that I have to set off the estimated borrowings on capital account, of which hon. Members will find the details at the bottom of Table VI., page 5, under the Telegraphs Acts and various other Acts. I estimate the borrowings on capital account at £2,785,000, but from that has to be deducted the amount provided on the Votes for the repayment of principal, £2,150,000, leaving a net addition of £635,000. If you subtract that sum from £15,011,000 you get the reduction of the liabilities of the nation by £14,376,000. I must say here that I am going to make a charge upon that amount, and £600,000 will be diverted for further capital expenditure on new public offices instead of entering upon a fresh loan by way of terminable annuities. Following a precedent of 1897–8, I divert £600,000 from the Sinking Fund which is very properly applicable to bricks, mortar, and land, to a purpose to which I think it may appropriately be applied. The amount then applicable to the reduction of debt will be £14,411,000. Now, when that amount in cash comes to be applied to the actual extinction of debt, I do not think I am going into the region of speculation—at any rate, not into the region of hazardous speculation—when I say there will be further reduction in the nominal capital of the Debt during the financial year to not far short of the enormous amount of £15 000 000, or from £711,476,000 to £696,500,000. Allowing for the estimated increase of £635,000 on other capital liabilities, the estimated reduction of total capital liabilities in 1908–9 is £13,776,000. These are very remarkable figures, and I wish the Committee to allow me to dwell on this point for a few minutes longer,
  456
  because I wish hon. Members to appreciate how we stand with regard to our financial liabilities and what has been done in the last three years in that respect. I deal first with the National, or dead-weight Debt for a reason that will be apparent later on. I start with the figure showing the total amount of the National, or dead-weight Debt twenty years ago. On 31st March, 1889, the amount of the dead-weight Debt was £697,000,000; the Committee will bear that figure in mind. In 1903, at the close of the South African War that figure had risen from £697,000,000 to £770,700,000. On 31st March 1906, which may be said for all effective purposes to be the time when we first became responsible for the conduct of the financial affairs of the country, two or three months after we came into office, the amount was £743,200,000. On 31st March, 1909, the last year for which I shall have responsibility for national finance, it is estimated that the amount will be reduced to £696,500,000. In other words, the figures will be brought back to what they were twenty years ago. I do not in any way want to depreciate the financial policy of my predecessors, but the figures show that, while from 1903 to 1909 the total reduction was £74,200,000, in the first three years it was £27,500,000, at the rate of about £9,000,000 a year; in the second three years it was £46,700,000, or about £15,500,000 a year.

  CAPITAL LIABILITIES.
  I come next to compare the capital liabilities, not in regard to dead-weight Debt alone, but as regards the aggregate capital liabilities of the nation. Here again I start reminding the Committee of the date I have already mentioned. On 31st March, 1889, our total capital liabilities amounted to £697,600,000; in 1903 the amount was £798,300,000; in 1906 it was £789,000,000; and for 1909 it is estimated at £748,000,000. In other words, applying the same analysis as before, in the years between 1903 and 1906 the gross liabilities of the nation were reduced by £9,300,000, or at the rate of £3,100,000 a year, and in the second three years the reduction, in round

  457
  figures, was £41,000,000, or at the rate of £13,700,000 a year. Finally, there is the item, a very important item, of the interest on the dead-weight Debt. When we came into office, in my first financial statement the total interest charged on the National Debt on 31st March, 1906, was £18,812,000, and on 31st March, 1909, at the expiration of three years, it will be £17,585,000. In other words, there is a saving, a permanent saving, in the interest to be annually provided for the National Debt of very nearly £1,250,000.
  Now let me summarise this statement. In three years to 31st March, 1909, we shall have paid off nearly £47,000,000 of National Debt; we shall in three years have reduced, we estimate, the aggregate capital liabilities of the nation by £41,000,000, and we shall have effected a saving in interest annually of nearly £1,250,000. We shall have brought back the capital of the National or deadweight Debt, notwithstanding the South African War and other sources of liabilities which have since arisen, to the same figure as that at which it stood at the corresponding date of 1889. Now all this has been done out of the taxation of the country. And, when people talk about the demands of democracy, I may be allowed to say that there is not a more creditable chapter in the annals of democratic finance than that which records the fact that during three years, with a passionate desire for diminution of expenditure and for the mitigation of burdens on the people and on industry, they should have acquiesced in the appropriation of this enormous sum of between £13,000,000 and £15,000,000 a year out of taxation to redeem the principal of our National Debt. I do not know that there is anything like it or approaching it in the history of national finance. For seventy years between 1835 and 1905 there were only two occasions, and these widely apart, on which the reduction of the principal of the National Debt amounted to more than half as much as the figures I have mentioned. In 1853–4, Mr. Gladstone being then Chancellor of the Exchequer, the principal was reduced by about £10,000,000, and in 1865–1866 by over £9,000,000, but the occasions were
  458
  separated by twelve years interval. Now when our attention is directed to the advantages other countries are supposed to enjoy—I do not wish to go into controversial matters—when it is represented that they have a better fiscal system than our own, and when we find they are obliged to borrow year by year, and even decade by decade to make both ends meet—I say nothing as to the rate at which they have to raise their money—I think it is rather a source of satisfactory reflection when we find we have been able to make this reduction in our National Debt. I state these facts, not as affording an opportunity for self-glorification, but to draw a solid lesson from them, a lesson that will bear very much on the finance of future Chancellors of the Exchequer. I have pointed out that we shall have brought back by 31st March next the aggregate of our National or dead-weight Debt to the same figure as that at which it stood in 1889. What was the provision then made for reduction of the burden of debt? Mr. Goschen was then Chancellor of the Exchequer, a most cautious and conservative financier, who set very great store upon reduction of the permanent burden on the nation. In that year the total sum applicable to Sinking Fund purposes was £5,100,000. This year, 1908–9, with practically the same capital debt, we are applying a a fixed debt charge of £28,000,000, in cluding a Sinking Fund of £9,785,000, with the addition of the Old Sinking Fund of over £4,000,000 from the realised surplus of last year. Mr. Goschen reduced the permanent annual charge from £26,000,000 to £25,000,000. I do not hesitate to say, I am entitled to say—after the efforts it has been my duty and my pleasure to make in this matter—that the time has come, in the various interests we have to safeguard and promote, and in connection with finance and the reductions we shall have made in March next, to justify a review of the situation. I do not think—though, of course, the Chancellor of the Exchequer will exercise his unfettered judgment in making future proposals—I do not think that if I were in his position I should be justified in asking the taxpayers of the country to continue to pay £14,000,000 or £15,000,000 a year for further reductions of Debt. I think the efforts we

  459
  have made, unprecedented in their character, will justify a review of the situation and the setting free of some substantial part of the revenue which in the last three years we have applied to that purpose.

  ESTIMATED EXPENDITURE IN 1908–9.
  I am sorry to detain the Committee so long, but I am coming now to a matter of general importance, the estimated revenue and expenditure of the year. Hon. Members will turn to the table of figures I have supplied to the Committee. That shows the estimated expenditure for the current year to be £152,869,000. The estimated expenditure for the current year exceeds last year's estimate by £367,000, and exceeds the actual issues of last year by £1,057,000. The first item that calls for remark is the reduction under the heading Consolidated Fund Services of £1,500,000, which means the difference between the special sum of £29,500,000 last year appropriated for Debt and the statutory figure of £28,000,000 fixed by the right hon. Gentleman opposite to which we now revert. Apart from that automatic reduction the estimated ex-expenditure shows an increase of £1,867,000. The items of increase are almost entirely due to the Navy and the Post Office, each of which contributes about £900,000, or one-half of the total net increase. The Committee is quite familiar with the causes which have led to the increase in the Navy Vote; and in the Post Office service the increase is about half due to the automatic and inevitable growth of expenditure and the remaining half to the recommendations of the Committee presided over by the present Secretary to the Treasury. The ultimate cost of those improvements is calcuated to amount to £700,000 a year. Large as this additional expenditure is, I do not myself consider it an undue price to pay for an authoritative settlement of the outstanding grievances of so large a body of Government servants. The other items call for no special remark.

  ESTIMATED REVENUE IN 1908–9.
  I now come to what is a more interesting topic—namely, the estimated revenue.
  460
  Before I deal with the specific heads I may make one or two observations of a general character. The first is this. The revenue of 1907–1908 benefited at the expense of 1906–1907 owing to the holding back on a large scale of the clearances of dutiable articles, in view of anticipations—which were not realised—of possible Budget changes. The result was that we got into the revenue of last year a good deal more than we should have done under Customs if those anticipations had never come into existence. The Customs think the revenue of 1907–1908 gained £250,000 from this source, and there will be no equivalent gain in 1908–1909. Another point to be noticed is that last year was Leap year and very happily situated in regard to the there were two more days for the receipt of revenue in 1907–1908 than in 1908–1909, and the Customs Department estimate the extra days to be worth about £200,000 to them. Those two facts must be borne in mind by those who think perhaps that our Estimates are of too conservative a kind. The Customs have estimated as against the receipts in 1907–1908 amounting to £32,490,000, for receipt on the basis of existing taxation, of£32,600,000, or an addition of £110,000. That might have been a little larger if it had not been for the two facts to which I have called attention. Excise, as I pointed out, was a disappointing head of revenue. Population grows but the people, instead of drinking more, drink rather less. I am speaking in the character of an ex-Chancellor of the Exchequer. Excise is estimated for the ensuing year, as against £35,720,000, the receipts in 1907–8, at £35,500,000. We estimate for a falling off of £220,000. I am afraid we must contemplate something like that. Estate duties—the most gambling head undoubtedly in the whole series, but one of which past experience encourages a sanguine view—realised £19,070,000 in 1907–8. I am going to put them at £19,500,000, or an increase of £430,000. The Committee may ask why I do that. I take the receipts from estate duties of the last three years, which were £55,499,000. The year 1907–8, of course, included £610,000 derived from the enhanced scale of duty on the large

  461
  estates. Deduct that from the total of the three years and you arrive at £54,889,000, the total under the old scale of duties. That gives an averagee receipt in the three years of £18,300,000. Our duties we hope will yield £1,200,000. I do not say they will at once, but we hope they will, and if you add that to the other sum you get £19,500,000—which is the figure I ventured to estimate—or an increase of £430,000 over last year. Stamps I put up very slightly. I put them at £8,100,000, which is an increase of £130,000; land tax, £700,000, a decrease of £30,000; house duty, £1,900,000, a decrease of £60,000. Then I come to income-tax, and here the Committee may be surprised. But I am going to estimate—and I think I am justified in doing so—the receipts at £33,000,000, as against the actual receipts last year of £32,380,000, or an increase of £620,000. If I am asked why I do that my answer is this. The income-tax assessments for the current financial year will be based upon the average of the past three years. We bring a very good year into the average—namely, last year—in place of a rather bad year which was still affecting the average in the income-tax receipts for last year. The income-tax for this year will be on an average of three extremely good and indeed booming years, and under these circumstances, I think, we may reasonably assume that a larger amount of income will be brought under review, and we are justified in raising the estimate to the extent which I have suggested. That brings the total receipts from taxation to £131,300,000, or an increase on the receipts of last year of £980,000.
  I come now to the non-tax items. The Postal Service I put at £18,250,000, as against £17,880,000, an increase of £370,000. In the next year we propose to separate the telegraph and telephone services, a change which has long been needed. The telegraph service I put at £3,000,000, the telephone service at £1,520,000, or a total of £4,520,000. The increase on the two together is £100,000. Crown lands I put at £530,000, an increase of £10,000; Suez Canal shares, £1,170,000, a decrease of £20,000; miscellaneous, which includes
  462
  that very uncertain item of the Mint, we go as far as to put at £2,000,000 which shows a diminution of £208,000 as compared with the very exceptional receipts of last year. That will bring the total non-tax revenue to £26,470,000, or an increase of £252,000. If tax and non-tax revenue are now added together, the total estimated revenue is £157,770,000, or an increase of £1,232,000. We will put the two figures together and subtract one figure from the other and you will get—estimated revenue, £157,770,000; estimated expenditure, £152,869,000; which brings out an estimated surplus of £4,901,000.
  Before I go further I must mention a matter which, although comparatively small in its dimensions, is of great interest to the mercantile community—I mean the duty on marine policies of insurance. The present scale for voyage policies is at the rate of 3d. for every £100 insured; for time policies at the same rate of 3d. where the time is not longer than six months; and at the rate of 6d. where the time exceeds six months. As a general rule, under modern conditions time policies are taken out for ships and voyage policies for goods. The vast majority of voyages are quite short—perhaps only a few days—and it is not equitable that the same duty should be charged on a policy for goods covering a short voyage as on a policy for ships covering a period of six months. I propose, therefore, as from 1st January next, to reduce the duty on voyage policies from 3d. to 1d. per cent. (except in cases where it is already a fixed duty of 1d. as regards which no change is proposed). The total amount produced at present is not more than £250,000, and, although it is impossible to forecast the effect of the change, I estimate that it will result in a loss to the revenue with a full year of about £80,000, and, in the present year, when the change will operate for only one quarter, at about £20,000. It sounds a small sum, but I believe it will be a great convenience and a change which will be much appreciated by the mercantile community.
  Another, and more far-reaching change which I propose to take power to make in the Finance Bill is to transfer the Excise Department from the Inland

  463
  Revenue to the Customs. From the point of view of administrative economy and efficiency I think—and my opinion is shared by almost all these distinguished Government officials who have had the closest experience of the inner working of both offices—a substantial gain will result to the public service from that change. It will have no effect upon the finances of the present year, but I wish to take power to effect the transfer by Order in Council if and when the time should arrive.

  OLD-AGE PENSIONS.
  Now I come to questions of greater general interest. Last year, in introducing the Budget, I said that this Parliament and this Government had come here pledged to social reform; and I pointed to two figures in our modern society that make an especially strong and, indeed, an irresistible appeal, not only to our sympathy, but to something more practical, a sympathy translated into a concrete and constructive policy of social and financial effort. One is the figure of the child. I reminded the House that in less than forty years—since 1870—you have added to your annual provision for the education of the children of this country out of taxes and rates an annual sum of over £24,000,000 sterling. There is not one of us who would go back upon that. The other figure is the figure of old age, still unprovided for except by casual and unorganised effort, or, by what is worse, invidious dependence upon Poor Law relief. I said then that we hoped and intended this year to lay firm the foundations of a wiser and a humaner policy. With that view, as the Committee may remember, I set aside £1,500,000, which was temporarily applied to the reduction of debt, and I anticipated that other £750,000 which, through the activity of the Inland Revenue, has been swept into the old Sinking Fund of last year, would also be available. I propose now to show how we intend to redeem the promises which I then made. I need not remind the Committee that this question in one shape or another has been before the country now for the best part of thirty years. The first schemes that were put forward proceeded on the footing either
  464
  of compulsory or voluntary insurance, accompanied and fortified by State aid. The Royal Commission on the Aged Poor in 1895 reported adversely to all the proposals which had up to that time been made. There followed a series of inquiries into schemes for granting immediate pensions to the aged and deserving poor. There was Lord Rothschild's Committee, there was a Select Committee of this House presided over by the right hon. Gentleman the Member for Wimbledon in 1899, and there was Sir Edward Hamilton's Departmental Committee of 1900, and again a Select Committee of this House in 1903. Much valuable information was accumulated and classified in the course of these inquiries, with the result, I think, that all the material facts may now be said to have been ascertained. But up to this moment nothing has been done, nothing at all. In the meantime other countries have been making experiments. The German system, which is one of compulsory State-aided assurance, has been in existence since 1889. Under it pensions averaging a little over £6 13s. a year are paid to insured persons of the age of seventy and upwards. The State contribution amounts to less than 40 per cent. of the whole, and it would seem that in 1907 not more than 126,000 persons out of a population of over 52 millions were in receipt of old-age pensions. More instruction, I think, for our purposes is to be derived from the legislation initiated in Denmark in 1891, in New Zealand in 1898, and subsequently in New South Wales and Victoria. These systems, though differing widely in their details, have several important features in common. In the first place, they do not depend for their application upon either voluntary or compulsory contribution on the part of the pensioner. In the next place, they are limited in all cases to persons whose income or property is below a prescribed figure; and, thirdly, in all cases they impose some test or other varying in stringency and in complexity, of character and desert in regard to such matters, for instance, as past criminality or pauperism. Although both in Denmark and in New Zealand the expenditure upon the pensions has, in the course of time, exhibited a tendency to increase beyond the original estimate,

  465
  yet the cost of administration has turned out to be relatively small, amounting in New Zealand in 1907 to not more than 1·67 per cent.; and I think I may say that in none of these communities is there any dissatisfaction either with the principles or with the working of the law, and certainly no disposition to go back to the state of things which prevailed before old-age pensions were set up. His Majesty's present Government came into power and went through the last general election entirely unpledged in regard to this matter, not that they were insensible to its importance or to its urgency, but they felt it right to enter into no binding engagement until they had had full time to survey the problem in all its aspects, and—what is still more important—to lay a solid financial foundation for any future structure it might be possible to raise. It was accordingly not until we had seen our way to make some substantial provision for the reduction of the national liabilities that I found myself able to announce in the Budget of last year that this year it was our intention to make a beginning—and more than a beginning I never promised—in the creation of a sound and workable scheme. I have sometimes seen pledges and assurances on this subject rather misinterpreted, and I may in passing just refer to what on two occasions, speaking for myself and for the Government, I said upon the subject. First in the debate on the Address on 13th February, 1907, I said this:—
  "I am as anxious as the hon. Gentleman"—
  one of my hon. friends, I think, below the gangway opposite—
  —"to make a start. Let me say I have long since come to the conclusion that it is not necessary, I am not sure that it would be either expedient or politic, to proceed by what I may call a direct frontal attack and attempt to take the whole position with a single blow. I believe on the contrary you will have to proceed more or less tentatively and by stages."
  Later on I said—
  "Speaking for myself and the Government, there is no object within the sphere of social reform we are more desirous to have a share in bringing about than the starting of a really effective scheme, even though it be on a small and limited scale, on lines socially and financially sound, for further development."
  I repeated the same statement in opening the Budget last year in language which
  466
  is on record, and which I need not now repeat.
  Let me pause to say that there is one governing consideration which in framing our proposals we have kept steadily in view. The problem of making better provision for the aged is only one of a group of questions the settlement of which, although it cannot be simultaneous, should as far as possible be harmonious and self-consistent. A Royal Commission, as the Committee is aware, has now been at work for some time investigating the administration of the Poor Law, and we understand that its Report may be expected before many months. Without in any way anticipating what, of course, we do not know—namely, the character and extent of the recommendations of that Commission, I think we may assume that it will give effect in some shape or other to what has long been regarded by careful observers as the most urgent of all reforms—namely, the reclassification of that vast heterogeneous mass of persons, young and old, sound and infirm, underserving or unfortunate, who at present fall within one province or another of the area of Poor Law administration. It appears to the Government to be a preliminary specially necessary in itself—and reasonably certain not to clash with any wider proposal which the Commissioners may make to take the care of the aged and place it once for all outside both the machinery and the associations of our Poor Law system.
  Having referred to these general considerations let me come to rather closer quarters with the actual problem. We have had to consider this matter very carefully, and the first conclusion at which we arrived, and as to which I do not think there will be any really serious difference of opinion in this House, was that all so-called contributory schemes must be ruled out. They do not meet the necessities of the case. If the contribution which is to be the condition of a pension were left to the option of the would-be pensioner, the assistance of the State might be confined to a comparatively small class, and that not by any means necessarily the most necessitous or the most deserving class. On the other hand, if it, were sought to

  467
  make the contribution compulsory with no practical machinery in this country—whatever might be the case in Germany—by which it could be worked, you would certainly have to face the hostility of many other competing bodies like the trade unions, friendly societies, insurance companies, and a host of others. Moreover—and this in itself, though not an argument against the merits of a contributory scheme, is conclusive against it as a solution of the problem, or an attempt to solve the problem—none of its benefits would come into actual enjoyment until after the lapse of twenty or more years. The best statement you can find, and it is not only cogent, but conclusive, of the objections to a contributory scheme from the point of view of practical politics and the actual exigencies in our own British social and economic life, is to be found in the speech of the right hon Gentleman the Member for West Birmingham, delivered in this House on 22nd March, 1899. I refer everybody to that speech who wants as lucid and as forcible a statement as can be made of the overwhelming objections to such a scheme. It is well known that the right hon. Gentleman favoured the contributory principle at one time, and this speech represents his considered views after he had carefully studied the whole problem and realised its difficulties. The next, what is called the universal scheme, associated with the name of Mr. Charles Booth, is also out of the range of practical politics. The actual working cost of such a scheme is problematical, because no one can tell in advance how many of the people legally entitled would fail or decline to claim their pensions, nor is there any reason why that proportion should remain constant from time to time. The possible cost, as distinguished from the actual, might vary according as seventy or sixty-five was selected as the qualifying age, from £16,000,000 to something over £27,000,000—figures which are obviously prohibitive. It is, at any rate, certain that under such schemes pensions would be claimed and received by those who had no right to them from any view of necessity or desert. A further point is that in our view the obligation to provide the pension must, as between the State and the pensioner, rest on the Treasury and not
  468
  on the local authority. The objections to any other plan are grave and insuperable. It is sufficient for the moment to point out that to make the charge a, local burden would first of all lead to every inequality and make large differences between place and place as the proportion of the aged poor to the whole population varied. It would reintroduce the terrible evils of the old laws of settlement and bear most heavily on the most necessitous districts. The Government are clearly of opinion that, as between the State and the pensioner, the obligation must rest on the State and the Treasury. It must not, however, be left out of account that the saving to local rates in respect of poor relief, which will result from a system of State pensions, ought in the long-run to be considerable, and account will of course have to be taken of this in future adjustments of the Exchequer contributions in aid of local rates. But that will not affect the position as between the State and the pensioner.
  It follows from these considerations that any practical scheme must be based on some kind of discrimination—by which I mean upon the ability of the claimant to comply with certain qualifying conditions. Those conditions resolve themselves into four distinct categories—age, means, status, and character. As to age—sixty, sixty-five, seventy, and seventy-five have all been put forward as the minimum age. In New Zealand and Australia sixty-five is the age. In Germany seventy. As to means, this, of course, is a necessary basis of any scheme that proceeds by way of discrimination. The means of the applicant may be taken into account in one or in both of two ways—either as an absolute disqualification or as pro tanto reducing the amount of the pensions. In New Zealand both tests are applied. The possession of an income of £60, or of property of the value of £200, disqualifies, and the amount awarded is limited to such sum as will not bring the total income above £60 a year, £1 being deducted in respect of every £10 of capital value of property. In Denmark, private income up to £5 10s. a year is left out of consideration, and the amount of the award is calculated according to the needs of the applicant. In this country, the Reports of the

  469
  Committees of the right hon. Gentleman the Member for Wimbledon and of Sir Edward Hamilton disqualified all persons whose income from any source exceeded 10s. a week, that is to say, £26 a year. What does that mean? The actual result in figures of the 10s. disqualification for the year 1907, and for the whole of the United Kingdom, is as follows. I will take two cases—persons over sixty-five and persons over seventy. Of persons over sixty-five, the total number was 2,116,267. Deduct the number with incomes over 10s. a week, which is 778,283, that would bring the total pensionables to 1,337,984. Of persons over seventy, there were 1,254,286. Deduct the number with incomes of 10s., which was 393,405, that brings the total pensionables to 860,881. But all these figures I would point out are in the highest degree conjectural.
  Then as to status. It will be common ground that any scheme should be confined to British subjects, and as naturalisation in this country is on the whole cheap and easy, it will be necessary to add as a qualification either ten years, or twenty years if you like, residence in the United Kingdom. Under this heading criminals and lunatics must also be excluded. By criminals, I mean persons actually under sentence. The deduction on this account is very small—about 1½ per cent. A more serious question is how far the status of pauper is to be regarded as a disqualification for a pension. In Denmark, the receipt of Poor Law relief within ten years disqualifies for pension. The right hon. Gentleman's Committee fixed it at within twenty years. Most of the Bills which have been introduced have made similar suggestions. I may say at once that the Government do not take that view. It is a very hard thing and a very unnecessary thing to make the mere fact of receipt of Poor Law relief during twenty, ten, or even within five years an absolute disqualification. We propose, therefore, and this is provisional, for the whole thing is necessarily experimental in the first year and subject to revision as experience is gained, to exclude in the first year actual paupers, that is, persons actually in receipt of Poor Law relief, and not to go back ten
  470
  or fifteen years. We do not go back on the past.
  As character, I think the less you go into that question, short of actual conviction for crime, the better. All those suggested tests which look so well on paper, thrift, prudence, good repute, etc., when you put them into a concrete shape, are not only extremely difficult to apply, but in their application produce cases of unwarrantable hardship. Subsequent misconduct, of course, is a totally different matter. I am speaking now of past character. Having run through these various heads, let me again trouble the House. I will take the case of persons over sixty-five years and persons over seventy years. Persons over sixty-five years, as I have already said, number 2,116,000. If you deduct those with incomes over 10s. a week, as I have already done, the number is 778,000; aliens, criminals, and lunatics, 33,000; and paupers, 368,000, or a reduction to a total of 1,179,000, leaving the total of pensionable persons at 937,000. The number of persons over seventy being taken at 1,254,286, and making similar deductions, you get a total of pensionable persons of 572,000. Here, again, the figures are very conjectural. That is the best estimate that we can make, and we must not be held too closely to it, if experience shows different results.

  AMOUNT OF PENSION.
  As regards the amount of the pension, it has been generally agreed in this country that 5s. a week, or £13 a year, should be the sum. Let me assume that the maximum of—13 a year—and I prefer to speak of it as so much a year instead of so much a week—was to be awarded in all cases, and to make no allowance, as you must do, for the differential treatment of married couples. The annual cost of providing pensions for the total number of pensionables—and I hope I shall be forgiven for that barbarous word—would work out as follows. For persons over sixty-five the cost would be £12,180,000; and for persons over seventy the cost would be £7,440,000. To both these figures you must add the cost of administration, estimated by Sir Edward Hamilton's Committee at 3 per cent.;

  471
  and the experience of New Zealand shows that that is a very outside figure. On the other hand, there are certain heads of deduction which ought to be taken into account in forming the estimate of cost. In the first place, it is reasonable to suppose that, through ignorance, inadvertence, and other causes, a substantial proportion of persons legally entitled to pensions would not claim or receive them. In the next place, married couples ought, when living together, to be pensioned at a lower rate than single people. The number of husbands and wives so living together over sixty-five years of age and upwards, form about 26 per cent. of the total population at that age in any year; that is, roughly speaking, about a quarter, not more, of the total number of pensioners will receive not more than 3s. 9d. instead of 5s. per head, or £9 15s. instead of £13 a year. Then, of course, there is another very important consideration. There must clearly be provision for the forfeiture or suspension of the pensions if they are shown to have been obtained by fraudulent misstatements, or if the pensioner is subsequently convicted of serious offences.
  Now I will bring these various considerations to a head in a moment. We think, first of all, the financial situation admits of a substantial first step being now taken. We think next that the social and economic conditions of the United Kingdom are so different from those in other countries, like Denmark, New Zealand, and so on, in which alone any relevant experience has been obtained, that we ought in the first instance to proceed with great caution upon lines which may admit of subsequent development; and we think, further, that the experimental effort which we are about to make should be one of which, as far as it goes, we should from the first be able to foresee—I do not say with precision, but with reasonable accuracy—the ultimate cost, and thus avoid committing Parliament to a mortgage of indefinite amount upon the future resources of the country. The proposals that we make having regard to these various considerations are as follows: First, the income limit, apart from pension, should be fixed at £26 a year,
  472
  subject to reduction in the case of married couple living together from £52 to £39 per year. I say a year because, as many of these old people are in more or less casual employment, now with a job and now without one, it is very much better to take the whole income for the preceding year than the weekly income from time to time. Secondly, we think that the age limit, having regard to the figures which I quoted to the House a short time ago, at which a pension should accrue, should, in the first instance at any rate, and for the purpose of our present proposal, be fixed at seventy. Thirdly, there is no substantial difference of opinion, I believe, as to the amount of the pension, which should be £13 a year and in the case of married couples living together £9 15s. per head. Fourthly, we think that stringent conditions should be provided—and by stringent I mean effective—for forfeiture or suspension, following in the main those which prevail in New Zealand. A much more difficult question, and one as to which I am bound to confess that my own opinion and that of many of my colleagues in considering this matter has fluctuated, is whether or not we are to follow the example of New Zealand and Denmark and adopt a sliding scale, and proportion the amount of the pension given to the means of the pensioner—that is to say, if a man has only 2s. a week, give him 5s.; and if he has 10s., give him only 1s. We have come to the conclusion, on the whole, to do nothing of the kind. I quite agree there is an apparent paradox in a man with 10s. getting the same pension as one who has nothing at all, but as the sums with which we are dealing are relatively so small, we are inclined to the conclusion that it is not desirable to introduce any sliding scale, and that we should have a fixed pension of 5s. for everybody who satisfies the prescribed conditions. Then, further, to make clear what I have already stated about the status of the candidates, we think that all persons should be disqualified who have within, say, five years of their application been convicted of serious crime or of such offences as desertion, habitual vagrancy, and so on.
  MR. AUSTEN CHAMBERLAINhere asked a question which did not reach the Gallery.
  MR. ASQUITH: We intend to take property into account—if the right hon. Gentleman asks me the precise figure, I cannot give it to him at this moment—as they do in New Zealand.

  METHOD OF WORKING.
  Let me say a word now as to the manner in which this scheme is to be carried out, before I come to deal with its cost. I am only going into the broadest outline, as the House will understand. I am ashamed to take up so much time, but this is a matter in which I am sure everybody is interested. The outline which I am supplying will be filled up in detail by my right hon. friend the President of the Local Government Board and others on further inquiry and at a later stage. I want now just to get the main features. The applicant will be supplied at the post office with a form of application, in the filling up of which it will be the duty of the local postmaster to give him all the assistance which he needs. The application when filled up will then be transmitted to the local pension authority. The selection of an area over which the pension authority is to act is a difficult matter, but on the whole, we have come to the conclusion to take administrative counties and municipal boroughs and urban districts with a population of 20,000 and over. The pension authority will be a committee appointed by the county, or the borough, or the urban district council, as the case may be, either from within or from without its own body. To meet the case of very large boroughs like Liverpool, with its population of 700,000, it will be necessary to enable the committee to appoint sub-committees; or again in the counties the area is too large to secure effective administration by one committee, and we propose that the pension authority shall act through local committees appointed by them for suitable areas. As this money is entirely provided by the State and not by the locality, as it comes out of the taxes and not out of the rates, it is perfectly clear that the central authority must have some voice in the
  474
  matter, and, indeed, a very decided voice; and so to secure central control, we propose to set up in each of these districts a pension officer who will act with the pension committee. The pension officer will be an excise officer, for they are the class of man best fitted for this kind of work, and we hope to come to an arrangement with the local authority by which, in consideration of our handing over to them the collection and enjoyment of what are called the establishment licences which it is now part of the duty of the excise officers to collect, making a fair contribution of course out of State funds for the expense so cast upon them, these excise officers will be set free during the necessary part of their time for the purpose of pension duties. If the pension authority and the pension officer between them agree, there is an end of the matter, and the pension is granted; but if there is a difference of opinion, then there must be an appeal, and that appeal ought to be to the Local Government Board or to some officer appointed by them. That seems to be the simplest machinery that could possibly be devised for the purpose. The pensioner, then, as soon as his application is granted will receive a pension certificate with a book of weekly or monthly coupons, as the case may be, which will be payable to him at the post office. The pension, of course, will be inalienable and incapable of being charged, and will be payable only to the pensioner or to those authorised to receive it. I think that is all I need say on this point about machinery.

  COST OF SCHEME.
  Now, Sir, as to cost. All estimates, as I have said, either of the number of pensionable persons or the ultimate cost of the scheme, are, on our present materials, in the highest degree conjectural; but we think it safe to assume that, given the above conditions, the maximum number of actual pensioners will not exceed 500,000, and that the maximum cost, after making the allowance I have suggested in the case of married couples living together and so forth, in any year is not likely to exceed, and will probably fall somewhat short of, £6,000,000 sterling. As it will take time

  475
  and much adjustment of detail to get the necessary machinery into working order, no scheme can be brought into operation until 1st January, 1909, and as, even then, it will not be in full blast, I estimate that the charge upon the actual current financial year will not be more than £1,200,000.
  Now, Sir, I am well aware that in laying these proposals before Parliament they will be assailed, I will not say in an unfriendly spirit, for, as a matter of fact, I am sure they will not. When I say assailed, I mean in the way of friendly criticism upon different lines of attack. It will be said, on the one hand, by some of my hon. friends that our proposals do not go far enough. They will tell me that the income-limit is too low and the age-limit too high, and that, perhaps, in other respects the conditions are more stringent than they need be, though they are much less stringent than in any system which is now in actual working order. My reply is, and it is a reply which I beg my hon. friends to follow, that you make by this scheme immediate provision for something like half a million aged persons who are at present, to a large degree, dependent on the precarious charity of relatives and in imminent danger of becoming dependent on Poor Law relief, with all its humiliating disqualifications. On the other hand, it will be said, perhaps, by some Gentlemen above the gangway, though I do not think by very many of them, that this is a Socialistic experiment discouraging to thrift; that it is the inauguration of the policy, as I have seen it described in some quarters, of doles and largesses which was fatal to Rome—the first step of an inclined plane of which no one can see the bottom. Our reply is that, if this is Socialism, it is Socialism of a kind for which both parties in this country have made themselves responsible and for which they are equally ready, I believe, to accept responsibility. It stands, in our view, in principle on precisely the same footing as the free education of children. As for the well-worn metaphor of the inclined plane, it has been enlisted in the past against every effort to achieve reform by experiment and by instalment, and I need not dwell upon that. Perhaps, indeed, the most singular of all
  476
  objections made by way of anticipation against our proposals is that they involve not only a plunge into Socialism but—and here I am on more delicate ground—a return to protection. Old-age pensions, I see, in some much-esteemed quarters are represented as the necessary or the inevitable forerunner of tariff reform. I do not know whether I am suspect in this matter or whether the Chancellor of the Exchequer is suspect. I can only repeat what I said last year—that I would not buy even such a boon as this for the veteran and worn-out workers of this country at the cost of free trade.
  I must now pass to the concluding part of what I have to say. The charge upon the current year for this scheme of old-age pensions is not estimated to exceed £1,200,000. I am still left, therefore, as far as the current year is concerned, with a balance undisposed of amounting to about £3,700,000. We are making ample, and, indeed, unprecedented provision for the repayment of the Debt. Is the Chancellor of the Exchequer justified in all the circumstances in drawing from the taxpayers £3,500,000, of which the State has no immediate need? In our view, the answer to that question, in accordance with the sound traditions and almost unvarying practice of British finance, is in the negative.

  REDUCTION OF SUGAR-TAX.
  Last year I gave relief, and substantial relief, to a large class of income-tax payers. This year, therefore, assuming that relief by way of remission of taxation is to be given, it would be the natural course for the indirect taxpayer to be relieved. There is one impost in particular to which, as my declarations in the past will have prepared the Committee to believe, my colleagues and myself have felt compelled to give special attention. I refer to the sugar duty. The sugar duty is one of those experiments in indirect taxation which were introduced by Sir Michael Hicks Beach, primarily, no doubt, to meet the expenses of the war, but which were regarded by him as permanent additions to our fiscal system. That was in the pretariff reform days, and that was the way in which he sought to broaden the basis of taxation. When we look back upon

  477
  those experiments however, we find that neither the corn tax nor the coal tax survived for long, and the sugar tax was, I think, almost universally regarded—quite as much, I believe, by the occupants of the benches opposite as by anyone else, judging from their public declarations—as sooner or later doomed to the same fate. The truth is that a sugar duty is one of the most objectionable of all our indirect taxes, because it is at one and the same time a tax upon food and a tax upon raw material. Unfortunately, it is very productive. Last year it brought in £6,700,000. You will see in a moment that the resources at my disposal do not enable me to propose its immediate and total abolition. I am compelled to stand in a white sheet, but I do not think I am quite such a bad offender as some hon. Gentlemen may think. Undoubtedly I have on previous occasions expressed doubts whether a partial remission of the sugar tax, although I have always said it would be a great boon to manufacturers who use sugar as a raw material, would reach the ordinary consumer in the shape of a measurable reduction in the retail price. I also expressed a doubt, that subsequent investigation showed to be ill-founded, as to whether a reduction of a farthing would have any effect upon retail prices. I am satisfied that it would. I do not think it would in the case of tea, but in the case of sugar I think it would. Every Chancellor of the Exchequer has to learn something. Although I was wrong in saying that a partial remission of the sugar tax, although it would benefit the manufacturer, would not be brought home to the consumer, the difficulties are very considerable, and they ought to be explained to and realised by the Committee before I come to the proposal I am about to make. This customs duty upon imported sugar is 4s. 2d. per cwt. The popular idea is that the rate of duty is a halfpenny per lb. In point of fact it is 100 halfpennies upon 112 lbs. of sugar. The figure is not a halfpenny per lb., but 893 or, in round figures, nine-tenths of a halfpenny per lb. The rate was fixed for a good, or at any rate plausible, reason. When Sir Michael Hicks Beach imposed the duty in 1901 it was extremely important
  478
  for him to conciliate the trade, and in order to make the thing work smoothly, and also, no doubt, to compensate the trade for the new restrictions which it had to undergo, he said that while the burden to the consumer would no doubt be at the rate of a full halfpenny in the pound, he would charge the importer, not 4s. 8d., but only 4s. 2d. per cwt., leaving him 6d. to compensate him for all the incidental drawbacks and disadvantages of the new state of things. The Committee will see that the moment you realise that the rate is not a full two farthings but only one farthing and a fraction of another, the practical problem not of abolishing altogether but reducing the tax is one of considerable complexity. There are three ways in which it can be done. The first is to halve the duty a it stands. That, I think, is an objectionable way, and I have very great doubt whether, if you adopted that course, the half would actually go to the consumer. A considerable amount would go to him in time, but I think there would be considerable delay before he got the full benefit. Another way of dealing with the matter would be to reduce the duty to one farthing per lb., giving the consumer the benefit of the four-fifths of the farthing, which represents the difference between one farthing and the total duty now. That would be much the cheapest way. There again, I very much doubt whether the consumer would reap the real benefit. The third course, the course the Government proposes to adopt, is this—the most expensive but the most effective—to reduce the duty by one farthing, not to one farthing, so that the Exchequer would retain only the benefit of the odd four-fifths of a farthing which remains. If you do that you give the consumer an irresistible claim to the benefit of the farthing on the retail price; it is the only way in which I believe that that result can be absolutely attained. We propose to reduce the duty of 4s. 2d. per cwt. to 1s. 10d. We propose that that reduction, as far as raw and refined sugar is concerned, should take effect as from May 18th, and on drawbacks at the same date. On articles manufactured, of which there is, no doubt, a considerable quantity in stock, it is only fair to give the persons

  479
  concerned longer notice; and we, therefore, propose that the reduction, as far as they are concerned, shall not take effect till July 1st. There is a further point to be remembered as to the financial effect for the current year of this reduction. We shall still have nearly six weeks of imports at the old rate of duty. The total loss to the revenue for the year I estimate at £3,400,000.

  FINAL BALANCE SHEET.
  I am now in a position to show a final balance-sheet. For the year 1908–9, the estimated revenue on the existing basis of taxation is £157,770,000, and the expenditure is estimated at £152,869,000, showing a surplus of £4,901,000. The revenue given up in connection with the sugar duty is £3,400,000, and in connection with the stamp duty on marine insurance policies £20,000 (for the quarter which will fall in 1908–9). There is thus a total remission of taxation estimated at £3,420,000. To the expenditure side of the account has to be added the amount required for old-age pensions. The cost of the scheme for the quarter of the year for which it will be in operation will be £1,200,000. It is further proposed to grant to the local authorities for the cost of collecting certain licence duties £40,000. The total increased expenditure is £1,240,000. This, added to the amount of taxation remitted, will involve the reduction by £4,660,000 of the surplus, which was estimated at £4,901,000. There is thus a final balance of £241,000. That is the effect of our proposals. I do not know in what spirit they are to be attacked. I will only in my concluding words anticipate one obvious but, I think, superficial criticism. It will be said, I imagine—I should probably say it myself if I were a critic of this Budget—"You are looking out for the present and leaving the future to lookafter itself." That is as far as possible from being true, and let me say why. As I have shown, by the conjoint operation of the proposals in this Budget with the fruits of last year's surplus revenue, we are making in this year, 1908–9, provision for the further reduction of the Debt of the country by £15,000,000. It follows that next year, even if, in this matter of Debt reduction my right hon. friend
  480
  emulates and indeed outstrips the most strenuous efforts of Mr. Gladstone and Mr. Goschen, he will still have at his disposal a free revenue of a very substantial amount. He will further have in hand £1,200,000—this year's contrition to old-age pensions. In my judgment there cannot be a greater mistake than to suppose that a free trade Finance Minister has come to or is nearly approaching the end of his resources in the matter of new taxation. My solitary contribution in that direction during my three years of office has been a comparatively trivial addition to the death duties last year, because, as I have said, I regarded it as my first and main duty to do what I could to reduce the national liabilities. The field is open to my right hon. friend, and I have the most complete confidence in his ability, if he should be in need—I do not know that he will—to make it yield a fruitful and abundant crop. This year, at any rate, we have done all that seemed to us possible. After meeting every obligation that the service of the country requires, we ask the House to sanction the application of the residue of the national income at our disposal in cheapening the raw material of some of our most important industries, in mitigating the cost of the consumer of one of the prime necessaries of life, and in laying a solid basis for a fuller and more humane provision for old age.

  TEA.
  1. Motion made, and Question proposed, "That the Customs duty now charged on tea shall continue to be charged until the first day of July, nineteen hundred and nine, that is to say—Tea, the pound, fivepence.—(Mr. Asquith.)
  MR. AUSTEN CHAMBERLAIN: If the Prime Minister does not think it impertinence on my part I would congratulate him on the method and manner of his statement. I hope he will permit me to do so on behalf of myself and my hon. friends. He is a master of lucid statement, and he makes his way clear as he proceeds, never wasting time by unnecessary words, and I must say, without any disrespect to his successor, that to listen to such a statement as we have heard to-day must make us regret that we are not to have any

  481
  more Budget statements from the Prime Minister himself. The statement made by the Prime Minister to-day is, without the possibility of contradiction, one of the most important Budget statements made for many years in this House. It has been the subject, as the Prime Minister has said, of many months' consideration on his own part and on the part of his colleagues, and he may be quite certain that I am not going to be so rash in following him to go, without even a moment for consideration, into any detailed criticism of the great schemes which he has outlined, or the great reforms which he has proposed. I venture however to make one or two observations, I think I can the assure right hon. Gentleman for all who sit on these benches, whatever we may have to say as these debates proceed in the way of criticism of his proposals for old-age pensions, our criticisms, as he himself anticipated, will not be conceived in any hostile or unfriendly spirit. There are distinguished gentlemen outside this House who are opposed to any State-aided system of old-age pensions except such as we have been long accustomed to through the Poor Law. I doubt whether there are half a dozen in this House who take the same view. We have, without distinction of party, watched the growth of this movement. Many Members on both sides of the House have contributed to the formation of public opinion on the subject, and I think the state of public opinion has reached a point where this question had to be dealt with in some form or another by any Government on the first occasion on which they could see their way not merely to make some provision in the current year, but, to use the right hon. Gentleman's words, on the first occasion on which they could lay the foundation of a future scheme on a solid basis. I am not likely to under-rate the difficulties which surround any attempt to deal with this question. I have been very conscious of them, as I have shown by such references as I have made to the subject in public or in this House, and no doubt, whatever solution the Government had arrived at, they would have been open to much criticism, as I have said, not of an unfriendly character, but of a reasonable and friendly kind. There is much to be said against any particular settlement at which you arrive. For my part I have favoured
  482
  the idea of a contributory scheme. I am well aware of all the difficulties that can be urged against such a proposal, but I believe that the growth of public opinion was such that many of those difficulties were lessened by criticism, and it had become possible to frame, or it might have been possible to frame, a contributory scheme, which would also have been a compulsory scheme, with the prospect at any rate of sufficient acceptance. That is my own view, and had the Government decided to follow that course, of course there would have been certain obvious advantages. If you frame a contributory scheme you at once lessen the burden on the Exchequer, or, to put the matter in another way, which, I think is clearly a practical way to state it, any given amount of money you have at your disposal will go much further than it will with a non-contributing scheme. It will contribute to make provision for a much larger number of people when those people make a personal contribution of their own during their young years, and if you associate with those personal contributions of their own what I should have liked to see, compulsory contributions from those who employ them—if the Chancellor of the Exchequer will allow me again to quote Germany—on the German model, with a given sum of money you could reach three times the number of people you can reach with a non-contributory scheme. But I am bound to recognise from the moment a responsible Minister propounds a noncontributory scheme, and as long as that non-contributory scheme is not rejected by the House, which I do not anticipate it will be, the non-contributory scheme holds the field and a contributory scheme becomes, in my opinion, impossible, not merely in the present but in the future. No one supposes that the right hon. Gentleman himself desires, and no one desires, that, assuming his scheme to go through this year as he has described it, it should be the last word said about pensions or pension schemes in this House or the country. He has cut his coat according to his cloth, more or less, and he has fixed the amount of the pension to a certain extent on the conditions of the income of the pensionable people, and in regard to the amount of money he has available. But I imagine that he and all of us would

  483
  like the pension to begin at a lower age, and would like some other changes in the direction of making them more beneficial at least to the deserving poor—I do not use that word in too narrow a sense—than he has been able to do. I think the tabling of a non-contributory scheme of this kind makes it impossible in any development we may make in future to go back to any contributory form, and more difficult than it otherwise would have been to go the length which all of us would desire to go. I will make one more observation on that part of the right hon. Gentleman's statement. He sketched to us some of the conditions which were to debar people who had arrived at the pensionable age from receiving pensions. He sketched them very vaguely, and I make no complaint whatever about that, but naturally all the conditions about the granting of pensions will need careful examination as we proceed with the discussion of the measure. I confess that, as I listened to the right hon. Gentleman, I felt that unless the scheme when it is developed is better safeguarded than would at present appear, I should fear that there might be a good deal of abuse and that the pensions might reach a good number of people who were very little deserving of such special aid from the State. After all, what you give to those who do not deserve it, you withdraw from those who do deserve it. And with any given sum of money I would much sooner that it was spent on the more deserving than wasted on those which have no claim on our sympathy and who in their earlier years have not behaved as the average decent citizen should. I guard myself by again saying that I do not want anything in the nature of an inquisitorial investigation into character. I do not believe that to be for one moment possible, and I do not mean to suggest that every man should be excluded who has not for all the years of his life a stainless record. But I do say that those who have been ne'er-do-wells, those who have been thriftless, those who have been of no use to themselves and very likely a burden to their relations and to the State during a long period of their lives, have not a claim to the benevolence of the State, such as the great mass of the more deserving poor have. I will not press that part of the subject at the present time. I think it
  484
  would be unfair to myself to do so, and after the speech of the right hon. Gentleman, it would be unfair to his statement and to all the work that that statement indicates to attempt to criticise his plan in more detail.
  I turn from that to his general Budget statement. There are one or two observations which I would like to make. He opened it with a cheerful account of the state of trade during last year. No doubt the figures of exports and imports were all that the late President of the Board of Trade could have desired, if he had had the liberty of framing them for himself. But I do not think that they indicate an equal degree of increase of prosperity throughout the nation; and I think that a more careful inquiry would show that except in one or two very large and very important trades no doubt, but still except in these one or two trades, last year was not a particularly good year either for the manufacturers or the people they employ. If you look at the Board of Trade returns as to the increase of wages, you will find that increase on which the Prime Minister commented; but if you analyse them a little further you find that it is almost wholly accounted for by the increase in the amount of wages paid to miners and to operatives in the textile trades. If you take out the miners and the operatives engaged in the textile trades you have practically taken out the whole additional boon which this prosperity has brought to the working classes of the country. Well, that is not a very satisfactory feature. But incidentally, with regard to an observation which the Prime Minister threw out, I mean his reference to coal—I suppose he wanted me to tread on the tail of his coat—I do not quite know on what authority he said that we, on this side of the House, were pledged to the abolition of the coal tax.
  MR. ASQUITH: The right hon. Gentleman knows what I was referring to.
  MR. AUSTEN CHAMBERLAIN: What I said to many of my friends was that this tax, of course, stood in a peculiar position. It was unlike any other tax in our fiscal system, and I expressed to them, partly on that ground, partly by reason of the nature of the trade, and

  485
  partly by reason of the political influence which the trade had in this House, my belief that the tax could not be permanently maintained. But as far as public utterances are concerned I have gone no further than that. I do not believe that the tax had up to this time last year done any injury to the coal trade of the country. I made no other promise to the deputations which waited upon me than that it might be repealed. But that is very different from saying that it was right and proper to take off the coal tax when the right hon. Gentleman did take it off, viz., at a time when the export coal trade was booming and when the demand was growing. It has been growing ever since, and had the tax been continued in force, the result would, in my opinion, without the shadow of a doubt, have been that the foreign purchaser would have paid the tax. I do not believe that the coal trade of this country has benefited in the least since the abolition of the tax. It might be benefited when the export trade became slack, but when the tax was taken off it was no benefit to the trade here but a gift to the foreign purchaser of the money he would have had to contribute to our Exchequer. Of the other taxes, the most noticeable feature in the results of last year is, I think, the repetition in the failure of the Excise to show any elasticity. When outside Committee of Ways and Means, we congratulate ourselves on this fact, because it means lessened drinking habits on the part of the people; but when inside Committee of Ways and Means, it gives some of us a little anxiety, because the drinking habits of the people are themselves the cause of so large a proportion of the revenue we collect. Indeed, I think the right hon. Gentlemen—the Prime Minister and the Chancellor of the Exchequer—when they are in the course of other debates denouncing the liquor trade at large, should remember that, so long as they hold office, they are partners in that trade, and partners who go off with a very large portion of the "boodle." Now, it is not excessive drinking which profits the revenue; neither is it excessive drinking which profits the brewers and the publicans. It is the moderate, steady drinker who brings in the steady revenue. I commented three or four years ago when I was Chancellor of the Exchequer upon
  486
  the continued fall in the revenue from Excise. Now it has not fallen so much, but it remains stationary. I believe that no doubt in good times there is always a tendency for the people to spend more freely on luxuries of this kind, but does that indicate a permanent change in the habits of the people? There is a permanent change which I do not believe any return of prosperity, however large it may be, will undo. It means that they are increasingly spending their spare money in other ways; that all the additional attractions which games and the opportunity of travel offer, are now being more fully taken advantage of by them, and that if more be spent in this particular way they want to spend less on exciseable liquors. Now, as to our Income Tax Returns. In this connection, as an old Chancellor of the Exchequer, I would like to express my congratulations to the late Chancellor of the Exchequer and his authorities upon the extraordinary accuracy of the forecasts on which they based the returns of income. That must be indeed a source of satisfaction to the right hon. Gentleman. The Prime Minister, however, made one observation in treating of the income-tax which, I think, perhaps, had some bearing on our general fiscal system, and upon the future changes which he foreshadowed in the concluding observations which he made. He said that the reduction in the amount of the tax charged on earned incomes had actually resulted in more income being presented for taxation.
  MR. ASQUITH: Had been followed by.
  MR. AUSTEN CHAMBERLAIN: Had been followed by more income being presented for taxation; and therefore the right hon. Gentleman thought that probably the removal of a sense of injustice, the idea that there was something to get—even if they were to give something—that there were various motives induced by this change which themselves called forth more income subject to the tax and had brought that income within the purview of the tax-collector. That may very well be true, but if true the reverse action would bring about a reverse tendency. And when you talk with a light heart of a further increase of the death duties and a graduation on a higher

  487
  scale of the income-tax, you will find that, just as when you offer a boon more income comes forth to the tax, so when you inflict punishment more income is withheld from you. I think that the remarkable fact to which the right hon. Gentleman referred has a direct bearing on the expediency of enlarging the income-tax and death duties on big estates. I congratulate the right hon. Gentleman, without any arrière pensie, or any reservation, on what he has been able to accomplish in the way of reduction of the National Debt. It was an urgent need. I think I am entitled to say that, acting as Chancellor of the Exchequer in circumstances of very considerable difficulty, I added £1,000,000 to the Fixed Debt Charge in order that we might make faster progress with that reduction. I venture to make two criticisms on what the right hon. Gentleman has accomplished, not in an unfriendly spirit but by way of painting in details, which, in the large picture with which the right hon. Gentleman was concerned, may have escaped his notice and might escape the notice of the Committee. The first observation I have to make is that the right hon. Gentleman has, of course, added nothing to the Fixed Debt Charge in the course of the years for which he is responsible. He added £500,000 in one year and some £1,500,000 in another year. But in each case he withdrew these sums by extraordinary Supplementary Estimates. He took for the Volunteers the £500,000 allocated for the Fixed Debt Charge in the first year; and in the second year £1,500,000 for the same purpose. And I have to observe that in the reduction of £47,000,000 in the Debt for which the right hon. Gentleman—not unfairly—claimed credit in the years for which he was responsible, no less than £13,000,000 accrued from the realised surpluses, that is to say from the old Sinking Fund. They are not voluntary contributions which the right hon. Gentleman has made; it was not his intention to make them, but they arise through having under - estimated his revenue, and £3,500,000 of what he claims was really my contribution.
  MR. ASQUITH: I quite agree, but I am not claiming that.
  MR. AUSTEN CHAMBERLAIN: I thought the right hon. Gentleman included that.
  MR. ASQUITH: I quite agree that the right hon. Gentleman left me £3,500,000, for which I was very grateful to him, but it is not included.
  MR. AUSTEN CHAMBERLAIN: The sum, being the realised surplus of 1905–6, therefore would be included in the Year 1906–7. There remains about £10,000,000 in all of his own realised surpluses, which are sums which have gone, according to old-established principle and statute, to the reduction of Debt, but which it was not the intention of the right hon. Gentleman to devote to that purpose. He has been enabled to devote them to the reduction of Debt by the fact that he under-estimated his revenue and over-estimated his expenditure, and that he had these balances over at the end of the year. Of the use which the right hon. Gentleman proposes to make of the surplus of this year I have no criticism to make, as far as concerns the small change which he announced in regard to marine policies of insurance. Indeed, I welcome that change greatly. I believe it will be a great boon to those concerned, and will relieve them of some injustice and unfairness which the tax has hitherto imposed upon them. I confess that I am more doubtful about the wisdom of the right hon. Gentleman, who last year most prudently and most skilfully began to collect a nest-egg for his own old-age pension scheme, in this year spending all his available money up to the hilt. It is not as if the old-age pension scheme were the only new expenditure which we can contemplate in the near future. It is perfectly clear that we must have largely-increased expenditure on the Navy. I do not believe that anybody competent to speak on the matter believes that we could compensate it by reductions on the Army. We must have large expenditure on these matters. We have growing expenditure in all other directions—throughout the Civil Service Estimates. All these matters tend to come upon us with increasing force and with added growth year by year. In

  489
  these circumstances, when the Chancellor of the Exchequer is starting a pension scheme admittedly incomplete and experimental, it is unwise for him to spend his surplus up to the hilt in the present year and to leave nothing as a nest-egg for next year.
  Let me say a word upon what has happened in this respect since the present Government came into office. Upon no subject, I should think, were the right hon. Gentlemen opposite, and the Prime Minister in particular, more accustomed to enlarge in the country than on the extravagant expenditure of the Unionist Government. One expectation that they held out to the country was that they would reduce expenditure. Well, have they done it? [A MINISTERIAL MEMBER: They have reduced the Debt.] I said, have they reduced expenditure? It really is not an answer to tell me that they have reduced Debt. The issues for the Supply services in 1905–6 were £109,700,000 odd; the issues for last year are given as £109,185,000; but the Estimates for the current year are £111,934,000. That shows—what we have all along contended—that to a certain extent, according to your opinion of what is important and what is not, you may cut something off here or something there in the Estimates, but you cannot make a material reduction on the whole, because of the new claims which are constantly pressing upon you. And, although there may be some difference as to what may be chosen, in the main there is very little difference between the two sides of the House on that point, because those new claims absorb, and more than absorb, any reductions that you can make. I confess that in those circumstances I am not altogether happy at the resolution which the right hon. Gentleman has come to to balance his Budget with only a surplus of £250,000, and to leave liabilities of several millions unprovided for for next year, except by additional taxation which may then be imposed, or by a reduction in the provision which is at present made for reducing the National Debt. No doubt that figure is fixed at a very high sum at the present time—a very much higher sum than was thought necessary by Mr. Goschen at
  490
  the time that the dead-weight Debt stood at practically the same figure as at present. But I think the experience of the years which intervened—the experience of the South African War and all that has followed upon it—should lead us to be very slow to come back to such a provision as was made and thought sufficient by Mr. Goschen and other authorities at that time. I myself feel that until we have carried the Debt to a considerably lower figure we ought not to make any material reduction, at any rate in the Fixed Debt Charge. The right hon. Gentleman announced that instead of borrowing for the completion of the public buildings he was going to raid the old Sinking Fund to the extent of £500,000 or £600,000 for their completion. I heartily approve of the action which he has taken. I think it is sensible, reasonable, and wise finance. I make no criticism of it, but I beg him to read the speeches in which a Liberal predecessor, Sir William Harcourt, denounced similar action when taken by us.
  MR. ASQUITHwas understood to say that he had read those speeches.
  MR. AUSTEN CHAMBERLAIN: Of course, I have had no opportunity of refreshing my memory. I can only say that I have vivid recollections of fierce denunciations in connection with exactly similar proceedings when the surplus which Sir M. Hicks Beach did not wish to devote to the reduction of Debt was applied to the creation of new obligations on account of capital works for the Army and Navy, which is a similar matter. I assume that the right hon. Gentleman will not attempt to proceed far with his Resolutions to-night, but, as usual, will reserve the income-tax or some big Resolution of that kind, on which we shall be allowed to discuss, not merely the subjects immediately raised by the Resolution, but the whole scope of the Budget and of the fiscal system of the country. With that understanding I shall postpone any further observations.
  MR. ASQUITH: What we propose to do is to reserve the income-tax and

  491
  have a general discussion upon that on some future day. But we must have the other Resolutions to-night. There are very few of them.
  MR. AUSTEN CHAMBERLAIN: Is it necessary to take the sugar duties?
  MR. ASQUITH: Yes, it is necessary to take the sugar duties, but the income-tax raises everything.
  MR. RICHARDSONexpressed his gratitude to the Prime Minister for the message of hope which his Budget would be to those who had been looking forward to old-age pensions. They would realise that this Budget brought within their grasp some of the elements that would help to make for them a little heaven on earth. He was delighted to hear from the Prime Minister that the people were indulging less in strong drink, and that the right hon. Gentleman was able to wipe off a big slice of the National Debt. The present Government would be known in the future as a Business Government. The peaceful settlement of a great industrial war by the late President of the Board of Trade, and the introduction by the right hon. Gentleman of the Patents Bill, added to the present Budget, proved that the Government understood that this nation was not merely a fighting nation, but was also a commercial nation. When last year's Budget was introduced, he voted against the reduction of the sugar tax, believing the working classes would prefer to keep the tax at the rate at which it then stood, because it would then be possible to start old-age pensions. His conduct had been largely criticised in his constituency. He had explained his views to the Trades Council, and they had passed a resolution exonerating him from any blame. He had recently had another interview with them, and without a single dissentient they came to the conclusion that he should vote for old-age pensions, even with the retention of the sugar tax. It therefore gave him intense satisfaction to find from the present Budget that not only were they to have old-age pensions, but half the sugar tax taken off. In the name of 40,000 trade unionists he thanked the Government for their proposal.
  SIR F. CHANNINGsaid that as one who had identified himself with the repeal of the sugar tax for many years, and had made many appeals to previous Chancellors of the Exchequer on this subject he warmly thanked his right hon. friend for the concession he had made in the remission of half the duty. He had also identified himself with old-age pensions for many years past, and he wished to congratulate his right hon. friend for not having parted with his control over the Exchequer before he had carried out the pledge of last year by launching this important reform, and associating it for ever with his name. The right hon. Gentleman the Member for East Worcestershire had argued that the Liberal Government had not sufficiently reduced the expenditure of the country to meet the expectation of their followers or to redeem their own pledges before the election. That was not a matter on which he should attempt to enter. He had a strong feeling that the expenditure of this country might be and ought to be still further reduced, but he thought that the very fact that they had the late Chancellor of the Exchequer there to-day insisting as he had insisted that the Government had not half fulfilled their pledges to reduce expenditure, and that this grand Budget could accomplish so many things without any such sweeping reduction of expenditure, was the most vivid demonstration of the limitless resources of this country. These mighty social reforms would be accomplished in the near future without, as the right hon. Gentleman had said, cutting down the expenditure of this country to anything like the level his own supporters had expected. The Budget statement was a magnificent demonstration of the triumph of free trade, and a grand record of the purity and soundness of the principles upon which the commerce of this country was based. What was the record of the Government? In three years they had struck off one-twelfth of the total deadweight Debt of the country, and they had reduced the annual charge for the payment of interest upon the Debt by one-nineteenth. This magnificent achievement had been effected by a great Free Trade Government. Last year his right hon. friend had been able to accomplish a reform with which he (Sir Francis Channing) identified himself twenty years

  493
  previously, when he first became a candidate for this House, namely, the relief of precarious earned incomes. That great and solid reform achieved and carried out by his right hon. friend was shown by the statement to which the Committee had just listened to have been a splendid reform in more ways than one. This year half of the sugar duty had been repealed, greatly to the benefit of the great sugar-using industries of the country, and repealed in exactly the way and at the time that would best meet the interests of those great industries, and while carefully securing to the consumer the whole benefit of the remission it had enabled those engaged in the manufacture of sugar products to get rid of their present stocks at current rates and without loss. He wished to point out the benefit to the consumer from the remission of the sugar duty. It was a matter which really required a good deal of close consideration. He had examined very carefully the incidence of this duty upon various incomes for many years past, and he was in a position to tell his right hon. friend what was the precise measure of the benefit which he had given. Taking the figures as given by the Board of Trade, the agricultural labourer with an income of 18s. 6d. a week on the average, by this remission would receive, reckoning it as income tax, what was equivalent to a reduction of l½d. in the £., while the artisan with 30s. a week, according to his calculations, would receive very nearly five farthings in the £. All this was due to the skilful manipulation of the right hon. Gentleman in dealing with the matter. These were very great and solid benefits, and he congratulated his right hon. friend on the consummate skill, boldness and wisdom which marked their embodiment in the Budget. The other subject with which he had been identified in that House for many years was the question of old-age pensions. The Prime Minister almost complained of the over-zeal of the collectors of Inland Revenue, who had so swept up the arrears of income tax that £750,000 had been passed into the old Sinking Fund and was lost in the magnificent series of achievements which led to the reduction of the Debt, and was, therefore, not available for the old age pensions scheme at the present time. There they had another proof of the splendid triumph of Free Trade principles. [An ironical
  494
  cheer from Sir F. BANBURY.] Yes; the Member for the City mocked at that, but he should wish to know how the hon. Gentleman regarded the enormous deficits in Germany and the United States as compared with the magnificent record of this Budget, the commencement which was being made by his right hon. friend with old-age pensions, and at the same time this grand reform of the sugar tax—a good pair of horses—which his hon. friend opposite knew so much about—which were being driven at fullspeed through the financial gates of that prosperity which was consequent upon Free Trade. They had £1,200,000 set aside, to begin with, for old-age pensions for half a million of people. He must say at once that he thought the Prime Minister was extremely wise in setting his old-age pension scheme free from many restrictions and limitations and getting rid of the Poor Law tests, the difficulties of which had been pointed out and debated for years past, and which were unworkable and impossible of application. His right hon. friend was right in saying that people who were not actually in prison at the present time should have every chance of enjoying this great boon, but he deeply regretted that he had not assented to the benefit being given to those who were 65 years of age. During the subsequent course of the Budget he should contend very strongly in favour of that age, and he thought very good reasons might be adduced showing the financial possibility and practicability of such a proposal in connection with the Budget scheme laid before the House by the right hon. Gentleman. He believed they could combine a pension scheme for aged persons of from 65 years with the relief from the sugar duty, which was such a magnificent contribution in the present Budget. He was quite sure that hon. Members on both sides of the House were aware that rumours had been current that the proposals for old-age pensions could not be carried out without a considerable addition to and a graduation of the income-tax, additional death duties, or things of that kind, yet here they had the income-tax payers let off with generosity. [OPPOSITION cries of "Oh."] Yes; that was the great feature of this Budget, that they had no graduation, and that they had not increased the death duties. Having listened to many Budgets, he thought the present Budget was one

  495
  of the most merciful and generous Budgets to the wealthier classes that had been advanced for a long time. There were plenty of resources which might have been very easily tapped in order to secure the enormous benefit to the poorer classes of filling up the gap between 65 and 70 years of age. He knew numbers of poor old people of the most deserving kind in the community; he had sat with them in their cottages, and he knew how great a disappointment it would be that the age had not been reduced to 65 in the present Budget. He contended that the country had vast accumulations of wealth which, in his opinion, might be subjected to a further extension of the death duties, and they would find also in the subjects which they had been discussing during the past week an ample range of financial resources which were within the reach of the Chancellor of the Exchequer, and which might have been used to fill up the gap between 70 and 65 years of age. He would just allude to the question which had been before the House for some days by one illustration. It seemed to him that it would be perfectly open to the right hon. Gentleman, it would be logical, moral, and honest, to impose higher licence duties. The whole of the licensed houses of London and the great towns and urban districts were now paying less than £1,300,000 a year, but if they were taxed on the scale which obtained in New York, they would be paying 15½ millions in the year to the Exchequer. That would mean an addition to the revenue at the disposal of the Exchequer of no less than 14½ millions sterling, which would be more than ample to cover the margin between the ages of sixty-five and seventy. That was a point which they would have to argue later. This Budget was opening the door to the mitigation of the sufferings of old age. Further, the remission of half the sugar duty enormously benefited the community and a great group of industries and would greatly increase employment, while at the same time the wealthier classes were being generously left exempt from additional taxation, which he believed many of them had expected.
  MR. CHAPLIN: I can assure the hon. Gentleman who has just sat down that I will not attempt to accept the challenge which has been offered
  496
  more than once from that side of the House on a question which he and right hon. Gentlemen opposite will insist upon calling free trade in this country. But I do desire to associate myself heartily and entirely with my right hon. friend who spoke before me in all that he said, not only with regard to this scheme and the spirit in which it will be met by Gentlemen on this side of the House, but even more, perhaps, in what he said of the character and ability of the statement in which the right hon. Gentleman explained his scheme to the House. If I may be permitted to say so, the thought occurred to my mind often while he unfolded his scheme, that I had heard no explanation of a large measure like this to the House equal to his since the days of Mr. Gladstone, of whose marvellous lucidity of exposition it greatly reminded me, and I do not think I can pay the right hon. Gentleman a greater compliment than that in regard to his two speeches on the Licensing Bill and the scheme he unfolded to-night for old-age pensions. It is to that I intend entirely to confine my own observations. The right hon. Gentleman's scheme differs very materially from the scheme of 1899, for which I have been reminded by him that I was to some extent responsible myself, although I am glad to remember my association with the right hon. Gentleman opposite who served upon the Committee with me, and I for one would have every satisfaction if we were to agree as often in the case of debates in this House as I think we did upon that occasion. I do not criticise the scheme to-night. There will be ample opportunities in future, and there will be many different points on which I and others on this side of the House will all think it our duty to offer opinions. I rise merely for the purpose of asking for some further information on two or three points. I understood the right hon. Gentleman to say he had some reason to believe that with regard to the Royal Commission which is sitting on the Poor Law it was probable that they would recommend that the care of the aged should be taken out of the Poor Law.
  MR. ASQUITH: It is not the fact that I have any knowledge whatever whether the Commission is going to do that or not. What I said was that I thought they would in some shape or other give
  ***
  497
  effect to the re-classification in different categories of the different classes of persons.
  MR. CHAPLIN: I followed the right hon. Gentleman very carefully with regard to what he said on reclassification, in which I entirely agree with him, but I thought he went further and said he thought it was not unlikely that the aged would be taken almost entirely out of the Poor Law. The next point on which I wanted to ask information is this: I understood the right hon. Gentleman to say that as between the State and the pensioners the obligation to provide the pensions must rest on the Treasury and not on the local authority. Then there was a sentence which followed immediately after that, which I did not catch quite distinctly, and which led me to feel some apprehension that possibly there was an intention on the part of the Government in the time to come to withhold subventions, if they thought desirable, from the local authorities. I do not quite know what the meaning of that sentence was.
  MR. ASQUITH: I said it was to be entirely without prejudice to the question what the relations in future were to be between the State and the local authorities in regard to Poor Law expenditure and everything connected with it.
  MR. CHAPLIN: Then there is only one other point—where the right hon. Gentleman came to the question of discrimination. I entirely agree that there must be discrimination. There were four different points, and one was the question of character. The right hon. Gentleman said that the less inquiry made on that point the better. But what is it he proposes? Is there to be no inquiry into character? For instance, I put a question that occurs to me now. Would it be intended that a confirmed, habitual drunkard should have a pension? Is there any provision in the Bill against that; is it intended or not? That is one of the points I should rather like to have cleared up, because it seems to be a very extraordinary thing, with a Licensing Bill to bring about a great diminution of drunkenness, to have habitual
  498
  drunkards treated as pensioners under the new Bill. As regards old-age pensions, I am aware on this side of the House of no hostility to the proposal in principle, and the scheme submitted to us, when we come to examine it will be fairly considered.
  MR. MCCRAEthanked the right hon. Gentleman for the sympathetic view he had taken on the question of old-age pensions. They all knew the greatwork done by the Chaplin Committee, and one of the interesting features was that although they resolved that their scheme should be confined to the deserving poor, in their estimate of the number of poor of seventy years of age of pensionable character they put the number at 387,000, and the cost at £5,800,000, against the Prime Minister's estimate of 500,000 in number at a cost of £6,000,000. These two sets of figures came very near each other, and he thought it rather a remarkable illustration of how thoroughly the Committee over which the right hon. Gentleman presided had gone into the question. The late Chancellor of the Exchequer had made two observations which he would like to emphasise. When speaking about the coal-tax he added that the political influence which the trade exercised in the House was a very serious element in considering whether that tax ought to be abolished. Might he ask the right hon. Gentleman to cast his mind a little forward, and imagine what would happen if, instead of an export duty on coal, we had a large number of import duties on a large number of articles, and each trade interested in maintaining or increasing those duties? He thought it would be found that the political pressure in the House would be rather alarming. With regard to his observation about pledges that had been made by the Government and by Members on that side of the House with regard to reduction of expenditure, he thought the right hon. Gentleman took rather too superficial a view for an ex-Chancellor of the Exchequer. He said: "What have you done with regard to expenditure?" and he compared the expenditure under the Supply services with what had taken place in a previous

  499
  year. Might he give him one figure which had perhaps escaped his observation? In the last year for which she right hon. Gentleman as Chancellor of Exchequer was responsible there was, in addition to the ordinary revenue expenditure, a charge of £6,400,000 for loan expenditure as naval and military works, while in the current year the charge for loan expenditure on that head was only £1,100,000. He agreed with the criticism of the right hon. Gentleman, so far as the surpluses were concerned, that though they had gone for a very good object, namely, the reduction of Debt, it meant that they were really taking more out of the pockets of the people than was justified by the national expenditure. It was generally agreed that, although deficits were to be avoided, from the financial point of view surpluses were almost equally detrimental. The accuracy of the forecasts had in past years been remarkable, and perhaps never more so than in the past year, with one exception. They had erred last year with regard to the forecast of income-tax, and it was pointed out in the debates on the Budget of last year that the Chancellor of the Exchequer was rather underestimating his revenue. They found that the remission of 3d. in the £ on earned incomes and the new regulations with regard to income-tax, instead of providing, as the Chancellor of the Exchequer anticipated, a deficit of £750,000, yielded an actual surplus of £1,800,000. He thought, as he said at the time, that the Chancellor of the Exchequer took far too conservative an estimate of the revenue, and that it was their duty to try and make the revenue and expenditure balance as near as possible. In the last two years they had taken £5,000,000 a year out of the pocket of the taxpayer in addition to what was necessary for the ordinary expenditure of the country. Though the surplus went to a very good object; the provision for the Debt ought to be deliberate and not accidental. With regard to the increased produce of the income-tax, the Chancellor of the Exchequer had pointed out that the income coming under the review of the Inland Revenue authorities had increased during the year by £37,000,000, and he attributed that in a large degree
  500
  to the reduction of 3d. on earned incomes. He humbly begged to disagree with that. If a larger view were taken of that part of the national income, they would find that this £37,000,000 was really no more than the average increase in that income previous to the war in South Africa. He had occasion the other day to go into the figures, and the amazing result was that eleven years ago the income coming under the review of the Inland Revenue authorities amounted to £705,000,000. According to the Prime Minister it was £943,000,000 last year, and this year it amounted to £980,000,000. If they compared those figures they would find that in those eleven years that part of the national income had increased by £275,000,000. It was a most remarkable result. He merely pointed it out to emphasise the fact that though during the years of the war the increase in this part of the national income was very small, and as the Prime Minister pointed out last year only amounted to £14,000,000, this year it had come back to more like its normal figure. He would like to put in a caveat, which he had always done, with regard to the expedition of collection of income-tax in England. According to a Return presented to Parliament the other day, at the end of February of this year, in Scotland they had collected 94 per cent. of the whole income-tax. In England they had only collected 63 per cent. That meant that England had only collected two thirds as against what Scotland had done in the same period. On the other hand, he must admit that the Inland Revenue authorities had made considerable progress in the matter, because in 1901, when he raised the question first of all, the collection in England at the end of February was only 53 per cent., so that they had really made an advance of 10 per cent. Still, he thought the progress was rather slow. One very gratifying feature of the Budget statement was that it showed the great elasticity of the revenue. In 1906 the revenue, including the local taxation charges, amounted to £153,800,000, and the estimate for the present year was £157,700,000. The net remission of taxation already made amounted to £3,500,000. Thus they had practically

  501
  a revenue of £160,000,000 raised on the same basis as three years ago as compared with £153,800,000 in 1906. He was sure the House was very much indebted to the Prime Minister for his statement with regard to the remission of the sugar duty. It had often been said that that was a war tax, but Sir Michael Hicks Beach said he meant it not as a war tax but as a permanent addition to the National Revenue. The very year in which the sugar tax was imposed the increase in the ordinary expenditure swallowed up all the new taxes, so that the sugar-duty was not really a war tax but was put on in order to provide for peace expenditure. They were all grateful that the Prime Minister had seen his way to make this change and no doubt he had left it to his successor to take off the other half of the duty next year and had thus left something for him to do. The Prime Minister had not dealt with new taxation or with new sources of revenue, and apparently he had left that also for his successor to deal with. The Chancellor of the Exchequer would next year, he hoped, not only take off the balance of the sugar-duty but make the pensionable age sixty-five instead of seventy. They were much struck with the simplicity of the scheme submitted by the Prime Minister for old-age pensions. Hitherto the schemes of foreign countries and those formulated by Royal Commissions and committees had been rather intricate in their machinery, but the scheme formulated by the Prime Minister was very simple in that respect. He wished to point out that those who represented labour in the House, and others representing labour constituencies, who had taken an interest, in the question, desired a scheme of old-age pensions which would insure that the pension should not be given as a charity but as a right. There was nothing finer in any Act of Parliament than the preamble of the New Zealand Act which laid down that it was equitable that deserving Colonials, who during the term of their lives had helped to bear the burdens of the Colony by paying taxes and developing its resources by their labour and skill, should look to a pension in their old age. He did not think anyone expected that a
  502
  complete or comprehensive scheme could or would be submitted at the present time. He was very much struck with the able speech of the hon. Member for Blackburn upon the Licensing Bill. When discussing local veto the hon. Member said that although it was limited it was better that a new thing should begin in a small way rather than in a more extended form. After that declaration he thought they would have the support of the Labour Party in the proposals which had been submitted for starting an old-age pension scheme at the age of seventy. The present was perhaps an occasion when a bolder and more comprehensive view might have been taken of the question of taxation and something done to get additional revenue in order to provide that an old-age pension scheme should start at the age of sixty-five, but the Prime Minister had refrained from doing anything in regard to increasing taxation or looking out for new sources of revenue. He thought the old-age pension scheme was being started on the right lines and it was capable of expansion. The late Chancellor of the Exchequer said there had been a great increase in ordinary expenditure under various heads and of what he should call beneficial expenditure such as that of education. He thought the spirit of the time was in favour of spending rather more than less money upon education. He thought the present Government had reduced their expenditure in the right quarters. They had charged to revenue what formerly had been charged to loan, and that had tended to increase ordinary expenditure. If they took the year 1905–6, the last year for which the right hon. Gentleman opposite was responsible, they found in comparing the Estimates of the current year that there had been a reduction on Army expenditure of £3,500,000, and on Navy expenditure of £5,200,000, or in all a reduction on those two services alone of £8,700,000. Right hon. Gentlemen opposite would find that at least on armaments a considerable reduction had been made. Not only had they elasticity of revenue, but the total revenue raised compared very favourably with Continental countries. Only last Thursday the

  503
  German Budget Committee were discussing how to meet the financial crisis in which that country was at present placed with regard to its expenditure. The Imperial Secretary to the Treasury made a statement, and he should have thought that in Germany he would have had a simple remedy. If it were true that tariffs were paid by the foreigner, all the German Secretary to the Treasury had to do was to increase their tariff or else add new tariffs. But he was not surprised to find that the Imperial Secretary to the Treasury in Germany said that there was only one way of meeting the difficulty, and that was by a reduction of expenditure. That was what in this country they had attempted to do, and while in England they were reducing their Debt in the proportions indicated by the Prime Minister, Germany had increased her National Debt by £200,000,000 upon ordinary expenditure, and during the next five years she would have to borrow £10,000,000 a year to meet ordinary expenditure. So that five years hence Germany would have added £250,000,000 to her National Debt in a period during which this country was providing from £13,000,000 to £15,000,000 a year to the reduction of Debt. There was only one way for them to economise, and that was on the Army and Navy. He was aware they must keep up the Navy to a proper standard of superiority, but that ought not to prevent its economy. He had endeavoured to point out that extravagance begot inefficiency, and that economy produced efficiency, but whilst they looked upon the expenditure upon the Army and Navy as a national insurance he wished to ask who ought to pay for it. If the commercial classes were to be protected against the financial disasters of war, then it was only right that property as well as incomes should bear its proper share of the burden. He thought a very considerable part of that insurance ought to be derived from an increase on the income-tax on higher incomes. That would be proposing what was quite legitimate, and what was fully justified by the needs of the nation. He congratulated the Prime Minister on the excellent statement which he had laid before the House, but regretted
  504
  that with regard to old-age pensions the age limit was not fixed at sixty-five.
  MR. LAURENCE HARDYsaid they would all agree with the last speaker in his statement that the Prime Minister had left the Chancellor of the Exchequer something to do next year. He did not think any Budget possessed more remarkable features than the one just introduced. In the first place, it gave the lines of the new Budget next year which were generally kept secret, and it also left unlimited liabilities to be fulfilled without any income to meet them. They had heard from the right hon. Gentleman the Member for Worcestershire something as to what the needs of next year were likely to be. With regard to old-age pensions a balance of nearly £5,000,000 was to be found this year, but no nest egg was left on this occasion. They knew that the system of loans had been given up, and that involved larger expenditure. Next year in regard to Rosyth they would certainly have to anticipate a Considerable sum of money being required to carry forward that improvement. Every item of expenditure showed an increase, and there was no provision made for that. They had heard that the cost of the advantages given to Post Office servants would come on future years. Incidentally it was most interesting to discover things in regard to which it was not always easy to get information by the process of Question and Answer. They now knew that for some considerable time the House was not going to be asked for large additional expenditure in connection with the Education Bill of this Year. If that Bill were to be pursued, there would be an expenditure of £1,400,000 under it, and provision would have to be made for the money as some portion of the expenditure would fall at the end, if not at the beginning, of the present financial year. He presumed, therefore, that the Education Bill was not to be proceeded with. The hon. Baronet the Member for East Northamptonshire had referred to the effect which the reduction of the sugar tax would have on the domestic budgets of artisans and agricultural labourers, but if he went to his constituents and pointed

  505
  out what they were receiving in that direction, he should ask them how much they got in connection with the abolition of the coal-tax. He did not think that the remission of the coal-tax resulted in any reduction of the budgets of artisans and agricultural labourers. He himself opposed the reduction of the corn tax and the remission of the coal tax. He did not think experience would show that the reduction of the coal tax would justify the Chancellor of the Exchequer in bringing it up as a precedent when dealing with the remaining taxes. With regard to old-age pensions he was Chairman some years ago of one of the strongest Committees he could remember which inquired into this question. The Unionist Members took a great deal of interest in the question. There was no object which he more desired to see carried out than a just and fair scheme of old-age pensions for the deserving poor of the country. He agreed with the preamble of the New Zealand scheme which had just been read. It decisively provided for a discriminatory scheme; it distinctly said that they desired to give the pension for services well rendered to the State. That was the particular line which he and his friends desired to see followed in reference to any scheme of old-age pensions. They wanted in any such scheme to ensure that the pension should be a kind of reward for services well rendered. In that case it must be discriminatory to a considerable degree. He was glad that the Prime Minister had made the scheme so far discriminatory. He wished to know whether the scheme was to be dealt with in the clauses of the Finance Bill, or embodied in a separate Bill. It was surely a question which should be dealt with by a separate Bill, even if the funds were to be found in connection with the Finance Bill. In regard to the status of foreigners, he wished to know what was the decision of the Government as to the length of residence that would be required before they would be able to participate in the scheme. The Prime Minister said it might be ten or twenty years, but did not tell the House what was the actual number of years decided upon. He thought the limit of 5s. was one which, on the whole, met the case in the rural
  506
  districts, but the fact that the scheme had been framed in a manner which made it very difficult to enlarge it raised in his mind a question as to how far it really would be suitable for London and the other large towns of the country. These were matters which could not be entered into until they saw the scheme itself. He hoped they would be able to pass some scheme on substantial lines which would not lend itself to desires on the part of others to go one better. When they had dealt with it they ought to consider the question finally settled. Although this must to some extent be tentative, it ought to be the duty of the House to see that it was laid on lines which did not admit of constant bargaining. With reference to the Budget as a whole, he regretted that the Government had not made that due provision for the future which they ought to have done in bringing forward such a large scheme. It might have been better if the Government had waited for the Report of the Poor Law Commission before committing themselves to such a scheme. If they had done so, it might have been possible to start on better and firmer lines. He congratulated the Prime Minister on making such a large remission of taxation. The right hon. Gentleman had in that way put it out of the power of hon. Members below the gangway or elsewhere to make demands for the enlargement of the scheme during its passage through theCommittee Stage.
  SIR WILLIAM HOLLANDcongratulated the Prime Minister, the Government, and the country on the very favourable circumstances under which the Budget had been introduced. They had been enjoying for several years past an exceptional degree of prosperity and the Prime Minister was in clover, but it was by no means certain that the Chancellor of the Exchequer would twelve months hence find himself in such favourable circumstances as they were in that day. He agreed that, while they had been enjoying an exceptional degree of prosperity, it had been a wise course for the Chancellor of the Exchequer to do his utmost to make liberal reductions in the indebtedness of

  507
  the country. He congratulated him on the reduction he had announced in the stamp duty on voyage policies. That charge had been grossly unfair and utterly indefensible, and he only wondered that so great an injustice had been tolerated so long. The Prime Minister had made interesting revelations in regard to the income-tax, and last year's experience had proved that the lower the tax the higher the proportionate yield. It was a very important discovery to have made, and he thought the explanation given was very intelligible. The success which had been achieved by the policy of differentiation must be very gratifying to those members of the Income-Tax Committee who made themselves responsible for that recommendation. He was glad the Prime Minister had been able to announce a reduction in the sugar tax. If nothing had been done in that direction a great many people would have been smarting under a sense of injustice. He imagined that the right hon. Gentleman would have been very glad if he could have entirely removed the tax. Amongst all the claims made for remission of taxation he thought the right hon. Gentleman had made a very wise choice. The right hon. Member for East Worcestershire thought the removal of the coal tax had been a mistake and that its removal had not brought any advantages. He was sure that Members connected with the coal trade could point to foreign contracts for coal for large amounts which could never had been accepted but for the removal of the tax, and the securing of the contracts must have been a benefit to those engaged in the trade in this country. That day would be historic and memorable as marking the beginning of a system of old-age pensions. That was a subject which many people had been talking about for a great many years, but now the House of Commons had happily begun to take practical steps towards its realisation. It must have been very gratifying to the House to hear that one of the conditions under which provision was to be made for old-age pensions was that it should be entirely outside the Poor Law. It was also gratifying to hear that the experiments tried and the experience gained in other countries had
  508
  proved to be very valuable to the Prime Minister, and that they were able to learn something from their young and vigorous Colonies. It was clear, from the speech of the Prime Minister, that the Cabinet had given the most thorough and careful investigation to all the schemes and suggestions and difficulties that had been put forward in regard to old-age pensions. Of course it would have been easy for the Prime Minister to have won greater applause and roused greater enthusiasm if he had produced a very much larger scheme, lowering the age and increasing the provision. But they must all, or nearly all, be agreed that it was very much wiser to proceed in the first instance comparatively slowly on this subject until they could learn in the school of experience and then future steps might be taken with much greater confidence.
  SIR EDWARD SASSOONsaid that he was glad that his hon. friend took a more sober and chastened view of the possibility of British finance than the hon. Member for East Edinburgh, who seemed to exalt in what he considered the great elasticity of our revenue, while omitting from the purview of his reflections the fact that most of our present taxation still stood upon the old level while large reductions had been made on the Army, and they knew that considerable appropriations would have to be taken in regard to the Navy but had been postponed to a future period. The Prime Minister had expounded his Budget with that distinction and power which he had accustomed the House to associate with all his efforts. He would, as a humble Member of the Unionist Party, offer his congratulations to the right hon. Gentleman on having imperishably attached his name to an urgently needed social reform, but, at the same time, one which would place an eventual obligation on the State of certainly not less than £12,000,000 a year. It was perfectly evident that the age-limit proposed would have to be reduced. The question they had to ask themselves was whether the commerce and enterprise of this country, great as was their power of endurance, would bear the weight and strain of this future tremendous pressure. He had no doubt

  509
  the Prime Minister was right in discarding the contributory basis for his pension scheme. He had very properly pointed out that it would involve the postponement of the concession of pensions to a great many people who had already arrived at the age of sixty-five or seventy. At the same time it was matter of common knowledge that most of the friendly societies in the country were opposed to any scheme of pensions from which a contributory basis was absent; they considered that such a scheme would act in the direction of weakening the sense of thrift, which was, he feared, not very strongly implanted in the British breast, and that it would offer a certain premium to the spendthrift and others. He was sorry that the Prime Minister had not taken the opportunity of making some sort of provision for the increased strain that would be placed on the finances of the country. Again, though the Chancellor of the Exchequer had had three years of abounding surpluses, what was the amount of reduction of Debt that he had brought about? He believed that no more than £2,000,000 had been redeemed from the Debt of the country, for the Committee should remember that the other reductions and redemptions had taken place under the normal operation of the Sinking Fund, and further by the automatic and compulsory application of the realised surpluses each year. He did not know whether his right hon. friend agreed with that view, but so far as he had been able to examine the accounts the real reduction brought about by the Government did not amount to more than £2,000,000. The Prime Minister, he was glad to say, had been able to make a substantial reduction in the tax upon sugar, but he had done nothing for tea. There was no tax of a more cruel nature than that on tea or which showed itself more hideously and repulsively. A tax of 93 per cent. of its value was placed on an article produced by our fellow subjects in India and Ceylon. To keep that tax on tea went to undoing the enterprise of people who were ekeing out a precarious existence, while our own people had to be sweated to enable their small incomes to go as far as possible. Although the Prime Minister had made
  510
  a most reasonable alleviation in regard to the burden of the indirect taxpayer, he had done nothing for the payer of direct taxation; and it would be found that there would be a sensible departure from the proportion between direct and indirect taxation which every eminent and sagacious financier, from Sir George Cornewall Lewis down to Mr. Gladstone and Sir William Harcourt, considered should be maintained if the equilibrium and stability of our finances were to be preserved. He thought the Committee ought to be thankful that the present First Lord of the Admiralty was not the Chancellor of the Exchequer now, for he distinctly remembered a speech by that right hon. Gentleman last year in which he boldly preached the doctrine that every single penny necessary for the expenditure of the country should be borne by direct taxation. Was it possible for any financial authority to say that the whole or most of the expenditure of the country should be paid by one category of His Majesty's subjects, while the other category—numbering seven-eights of the population of England—went scot free? He would like to call attention to one phenomenon which had been going on and which, according to a Return given to him by the Chancellor of the Exchequer, continued in unabated strength. That was the rate and volume at which British capital was being driven abroad. Even allowing for the theories of the Chancellor of the Exchequer on the point, they were, in the view of disinterested and impartial people who scrutinised these accounts, face to face with a substantial margin of capital which owing to its non-employment here was being driven out of this country by the centrifugal tendencies of our commercial system. Explain the matter as they might, they had to recognise the hard, gaunt fact that there was not remunerative employment for capital in this country, and that, to use the expressive phrase of the President of the Local Government Board, they were unable to "decasualise" labour on that account. In the two years to which he referred,1905–6 and 1906–7, the amount received from profits earned abroad amounted to no less than £15,000,000, over and above the amount normally shown in the

  511
  accounts of previous years. If they took only half of that sum they had left £7,500,000, which, capitalised at twenty-five years purchase, gave a total of £180,000,000, which must in some form or another have left this, country in order to irrigate and fertilise the centres and sources of foreign enterprises to the disadvantage of our own workmen and the reduction of employment at home. But a Daniel had recently come to judgment in the person of a venerable sage, not in point of age, but in the point of commercial experience. The right hon. Baronet the Member for Northwich had recently besought his Party to bestir themselves and do something for trade, and he used the colloquial term something that would "dish" their political opponents. But the Prime Minister was far too great a stalwart to pay any attention to such an invitation. He said that he remained the guardian of the citadel of free trade, and adhered to the time-worn and strenuously rejected doctrines of that fiscal system. North-west Manchester was the cradle and the nursery of Cobdenism. It was true that the shrine was still there, but the fire was dead. That constituency had spoken in no uncertain tones, and they had had electoral manifestations in several other typical constituencies in the country. He happened to be the candid friend of the Party opposite, and he would tell them that if they wished to place the finances of the country in a proper and sound financial position, if they desired to obtain better and more stable conditions of employment for our workmen at home, they would do better to take the advice of the right hon. Baronet the Member for Northwich, to heart. That was the only way in which right hon. and hon. Gentlemen opposite could prevent their depleted resources in the bank of public opinion being exhausted and themselves landed in political and financial ruin.
  MR. STUARTsaid he would not be led away from the few remarks he desired to make on the Budget itself by what had fallen from the hon. Gentleman who had just spoken, except to say that the fear of foreign investments on the part of tariff reformers seemed to arise from the fact that they
  512
  thought that the success of other countries was inimical to our success, whereas there was nothing we should more hope for than the welfare of those with whom we were dealing. There had been a tendency for tariff reform to push its head out of the water at every turn like the head of King Charles the First in Mr. Dick's experiences in Dicken's book. It had to do double duty. Frequently it was in the form of a duty to keep out foreign goods, and that night it was put forward as a means of securing income. First, they had the one leg stood upon by tariff reformers, and then the other, but it did not seem to him that it was possible for them to use both arguments at one time. They were used alternatively; however, and did duty one at one time and one at another. But he did not desire to be led aside from the Budget by tariff reform intrusion. One of the things he was glad to see was the reduction of the tax upon sugar, and he wanted particularly to emphasise his satisfaction that that reduction had taken place concomitantly with old-age pensions, because otherwise there would have been many persons who would have felt that the sugar tax was being kept on to provide those pensions, an arrangement for providing them from which he would absolutely dissent. But he would like in passing to say one word of commendation on the businesslike way in which the Prime Minister had dealt with the sugar tax by taking off the farthing in such a way that the whole remission would reach the consumer. It was a very wise and sensible position to have taken up, and showed the care with which this very important matter had been dealt with. But the main point of the Budget, of course, was the provision or the first time in this country for old-age pensions. It had been pointed out that we could learn from foreign countries, and we could learn a little but not very much; we could learn something from our Colonies, perhaps more, and there had been at least in one of the speeches an indication that our Colonies had done very much better than we had in this matter. But there were not very many thanks due to them. They were relieved absolutely and entirely from the great pressure of

  513
  taxation which was cast upon this country; that was to say, we had not only to defend ourselves but to pay for their defence, and that was a very important contribution from which they were free. Not only that, but we were burdened by the cost of the defence of the Empire in the past and they were not so burdened, and as to the collection of money they showed not the slightest hesitation in putting on any amount of taxes on our goods. He did not say that they made us pay those taxes, but they had ruthlessly taxed our goods while we were paying for their defence. He did not think, therefore, that they were deserving of any very great credit, but he felt that this country and those who were taking up the burden of providing old-age pensions did deserve a very considerable amount of credit for the step, because it was a large sum of money and would be a very much larger sum. It was his lot at the conclusion of last session to make a complaint of the action of the Chancellor of the Exchequer as he then was and of the Government with respect to their financial action. He complained that they had relieved the rich rather than the poor, and that they had not done anything for old-age pensions; he said that it was hard upon people like himself who were very much interested in an old-age pension scheme, and upon social reformers; that they could only wait, and that he would not take any action to censure the Government until the present session had passed. But now he thought the Prime Minister had responded very reasonably indeed to the requirements of old-age pensions and had started them upon a fairly reasonable basis. He would really challenge anyone in the House to say how he could start old-age pensions partially, and start them differently from the way in which the Prime Minister had done it. It was absolutely essential, in his opinion, and he spoke with considerable knowledge on the subject—it was absolutely essential in connection with a satisfactory system of old-age pensions in this country that they should have a non-contributory system. Had the Prime Minister endeavoured to extend the operation of his scheme by introducing a contributory system he would have done evil and not good. He would
  514
  rather see the right hon. Gentleman restrict his operation without a contributory system than widen it with a contributory system. He was also of opinion that the question of character should not come into the question of old-age pensions more than in extreme cases, and he was glad to see that the Chancellor of the Exchequer had adopted a reasonable line in connection with that. There were other parts of the scheme upon which the House was so largely agreed that he need not enter upon them, but absolute separation from the Poor Law was one of the essentials of a system of old-age pensions and the Prime Minister had secured that. Surely there were no other points left to work upon except the exclusion of people whose income was sufficient, the limitation of the amount of pension, and the age at which the pensions were to be taken. As to all these limitations he regretted them. He knew from experience that the age must be made sixty-five. They might begin at seventy, but in the end it must be sixty-five, and they might go lower down than that in some cases. Sixty-five was the age at which the workman began to fail, and they did not want to wait until he was completely done but to give him a little bit of the autumn of life to enjoy. He regretted the limitation of age to seventy, and he particularly regretted the limitation of 5s. a week, as his experience was that that was not sufficient. But having begun at 5s. a week, they might go further. He thought, however, the right hon. Gentleman had begun upon the right lines, but the most objectionable feature was that in the case of certain persons it was to be held that they had saved enough. He thought the pension ought to be universal whatever the savings of a person might be. He did not believe that old-age pensions would do any injury to thrift. He had watched many cases, and so far from pensions having any influence in the way of hindering thrift, they had rather the contrary effect and induced people to make a provision for their old age. What did the richer classes do? They all attempted to provide for themselves and their families in their old age, but that did not prevent them from practising thrift.

  515
  One of the greatest stimuluses to thrift was the desire to add something to that which had been already put by. While he regretted the limitations in the scheme and believed that they would and must give place to a better and more reasonable state of things, he did not find fault with his right hon. friend. On the contrary, he thought the Prime Minister had gone as far as wisdom and prudence would allow him to go in initiating the system. More particularly did he say that, because he thought his right hon. friend had initiated it on the right lines. Under these circumstances he would be glad to withdraw the censure, if such a word could be applied to the words in which he characterised the action of the Government last session. He did not regard the present proposals as anything but an instalment, as a first step in the right direction, a momentous and brilliant step. Hon. Gentlemen opposite said that the right hon. Gentleman did not provide any funds for future development. That might be so, but he indicated the sources from which they might come. The three years during which the right hon. Gentleman had been responsible for the Exchequer would be always brilliant and memorable because of the reduction of the Debt by which the poor as well as the rich benefited. It was an immense advantage to borrow money cheaply. Some years ago £100 was obtained instead of £80, and housing schemes were able to be proceeded with far more cheaply than at present. His right hon. friend had reduced the Debt to the amount at which it stood twenty years ago by far larger instalments than were considered necessary by such great financiers as Mr. Gladstone and Mr. Goschen, and out of the sum allocated for the reduction of Debt might come a portion of money sufficient to deal with this great system. There were other sources also: for instance, higher taxation of the larger incomes. Hon. Members opposite said it was hard to place on the manufacturers and commercial people of the country such a burden as the provision of old-age pensions, but he submitted that it was the duty of the manufacturers, tradesmen, and commercial classes to provide for the comfort
  516
  in their age of those who had served them all their working life, and if it had to be done through the State instead of through personal action, a large amount must be provided by those classes. Many could be provided for, no doubt, by personal action, but there were large numbers of people, not casual labourers, but people who passed from one employer to another, who could not be provided for adequately by private action—independently of which, in the private action of an employer there was always a certain danger of his appearing to hold an unfair advantage over the workman. That could be avoided absolutely by care as to the system employed, but he was desirous of seeing old - age pensions on a broad basis, and of removing the working classes from the shadow of the workhouse that now hung over them; and, while this scheme was not complete and was only a beginning, he thanked the Prime Minister for having introduced it and congratulated him upon its introduction contemporaneously with the reduction of the tax upon sugar.
  MR. TIMOTHY DAVIEScongratulated the Prime Minister on the Budget he had introduced, although from the observations of the hon. Member for Hythe one would have imagined that no provision had been made during the last three years for the reduction of debt or the limitation of taxation. The hon. Member had attempted to prove that the reduction of debt to the extent of £2,000,000 only was due to the right hon. Gentleman's action. He could only say that during the time the Prime Minister had been in office a good many taxes had been limited which right hon. Gentlemen opposite might have limited before they went out of office. The House were told that the sugar-tax was a war tax, but the war was over four years before the late Government left office, and the tax remained. During the last three years the tea and coal taxes had been repealed, and the income-tax reduced from 1s. to 9d., on earned incomes under £2,000, and in the same period the debt of the country had been reduced by nearly £50,000,000, Whilst

  517
  during the three years from 1903 to 1906, the last years of the late Government, the reduction was less than £27,000,000. The Prime Minister therefore had done far better than his predecessor. The right hon. Gentleman deserved and would receive the thanks of all who represented great industrial constituencies. The reduction of the sugar-tax was most important. Sugar was not only a food but also a raw material of many industries, and the class of people employed in the sugar-consuming industries were not at the best of times people who could afford to give anything away. In his constituency there were many employed in those industries, and when sugar was cheap it was possible for the employers to keep them on both winter and summer, but when sugar was at a high price many hundreds of them were thrown out of work, the employers finding it impossible to employ them even at halftime. The reduction of 2s. 4d. per cwt. would help those industries greatly, and a large benefit would accrue to the people employed in them and to the poor generally. The establishment of old-age pensions would also greatly benefit those whom he represented, and the same, no doubt, might be said of all large industrial constituencies. He was glad, therefore, that the Prime Minister had laid the foundation. They knew perfectly well that the present proposal was not a finality, but a commencement, and that year by year the age would be reduced and possibly the amount per week increased, as was suggested by the hon. Member who had just sat down, as the money was found for the purpose. By laying the foundation to-day for old-age pensions the right hon. Gentleman had provided for the happiness of 500,000 people next year, people who had done their duty in the past, and into whose lives a little sunshine would now be brought. He would have liked to have seen the pension for old married people living together increased. It ought to be more than 3s. 9d. each; if 5s. was given to a single person, 10s. should be given to an old couple living together, but if 10s. could not be given they should at least have 8s. or 9s., which would enable them to live happily for the few
  518
  years that remained to them. The right hon. Gentleman had indicated the sources from which some of the money would come next year, but he himself thought a further reduction might be made in the cost of the army, that £1,000,000 or £2,000,000 might be obtained from that source, and so enable the qualifying age to be reduced to sixty-five. He looked forward to the time when the Chancellor of the Exchequer, whose duty it would be to introduce the Budget next year, would be able at any rate to find some means—he had up to the present time been successful in finding his way out of difficulties fairly well—of placing the aged poor in a better position than that in which they were put even by the present Budget.
  MR. NICHOLLSsaid that on behalf of a large number of agricultural labourers in the country he would like to congratulate the Prime Minister on the step he had taken, a step not as long as some of them could have wished, but still a step in the right direction. The question of old-age pensions had now got off the platform and out of the papers, where it had remained for years, and where it had been so long that many poor labourers felt that it would never be anywhere else. It had been almost impossible to convince the labourers in the rural districts that a pension scheme of any kind would ever come. He was sure that the speech of the Prime Minister would produce a note of hope in many homes of the poor and in many of our rural villages. They had heard a good deal from hon. Members who were not favourable to old-age pensions, about thrift, and they seemed inclined to think that this scheme would not help thrift. They would never be able to make some of the agricultural labourers more thrifty than they were. It was impossible to do it. He was down in Norfolk last week, where the farmers, without fiscal reform; had experienced a better year than they had had for eight years, both as to crops and prices; yet he found in some quarters of Norfolk that it was impossible to get the wages of labourers raised above 12s. a week. He visited

  519
  last Friday three large farmers who were holding out, saying that they would not give more than 12s. They pleaded poverty, and said they could not do any more, and when the case was put so clearly to them that they could not stand against the force of facts, their last resource was to say: "Well, if we are forced to give them 13s., then we shall discharge three men to make it up"; and the notices were given last Friday night and the men who had received notices expected to finish on Saturday of this week. How were they going to make men thrifty who had to pay rent, and feed and clothe their children, on 12s. a week, except for the few weeks in hay time and harvest time when they got a little extra? When they became older they had nothing, because when there was an abundance of labour and it was felt that the old men could be done without, then they had to go. The people who lived in these rural villages dreaded the workhouse; they hated the very name of it; they would almost starve before they would even move to let anyone know the state they were in. It was to these thrifty, hard-working, careful people, who knew that if they went to the relieving officer they would be forced into the workhouse, that the 7s. 6d. or the 5s. would be a great benefit, and though everybody knew that was not enough, yet it was as much as could possibly be done in this Budget. That was pretty well clear to some of them. He was anxious to go the whole distance, but he could not himself see how they were going to get any further at present, but he hoped with others to get further before very long. But one question had been puzzling him since the Prime Minister's speech. What was the position of the person who, unable to work any longer, was receiving half-a-crown a week from the parish? In several instances the relief was extended to 3s. a week, but the guardians in some cases found out that the recipient had perhaps two sons who were labourers. Their sons had also families to keep on 12s., yet the guardians called upon each to pay 1s. out of the 12s. towards the 3s. allowed the old parent. He was not quite clear whether such persons who had been helped by the guardians were to be con-
  520
  sidered paupers. Were these persons to be debarred from receiving the pension because they received 3s. a week from the guardians, 2s. of which was contributed by members of the family? It must be remembered that 3s. did not keep a cottage going, and often a married daughter had to squeeze a sixpence out of her small resources in order to help her aged parents who had helped her in her early days. Was the receipt of half-a-crown or 3s. a week to be a bar to the pension? He would like to get some answer to that. He wished to say a word about the reduction of the sugar duty. That also would be of great benefit in the poorer villages. Not only would the aged poor be helped, but the cottage home would be relieved in regard to one of the prime necessities. Sugar formed some part of almost everything consumed in a cottage home; it was one of the real necessities, especially where there was a large family. He knew what it meant often to have bread and sugar instead of bread and meat. He believed a good many children in the villages knew more about sugar than about meat. They had looked after the aged poor and helped to keep them from the relieving officer and the workhouse, and now the Government had also reduced the burden on this necessity—sugar. Although he would have liked to have gone further, he was bound to say that he congratulated the Prime Minister. He was delighted to be in a Parliament that had been able to remove this pension ideal from book, platform, and paper, to the region of practicability, where it took the form of a scheme to be set working. Some complaint had been made that there were liabilities for the future, and that no provision had been made against them, but there were a great many sources of taxation already to hand and which might be tapped as soon as needed. He wanted to say a word or two with reference to the comment on the speech of the right hon. Member for Northwich. An hon. Member on the other side of the House seemed to think that the hint about the Government helping trade was helping them forward with their fiscal idea. He wondered whether they noticed that the explanation given two days afterwards by the same hon. Member

  521
  showed quite clearly that what was in his mind was that the one and real way of helping the trade of this country was to nationalise the railways. He wanted to know if they advocated the same principle. He also wanted to say a word or two with reference to continental countries. Reference had been made to the fact that continental countries in granting pensions considered services well rendered to the State. He thought the Government also were considering them. People who had stuck to the villages and had brought up their children, sending in to the towns the best servants, had, he considered, well rendered service to the State and were a class of people whom they ought to consider and to be ready to help. He was delighted that this step had been taken. He had hoped it would have been a longer step, but he was proud to know that this year they had made this step.
  MR. MCARTHURsaid his object in rising was to say a word of thanks to the Government for their announcement that the marine insurance duty was to be reduced. He was not an underwriter, so he had no direct interest in the matter, but he had been associated with marine insurance business all his life, and therefore he knew, from practical experience, how very badly this tax had pressed upon underwriters. It had tended to drive business abroad where there was either no duty or a duty much lower than in this country. They were thankful for the reduction, though the Government were not giving them what they asked for or what they had hoped for. In every case of insurance except marine insurance any amount might be insured and the duty was only 1d. They might insure £1,000,000 on a fire policy and 1d. covered it. In the case of marine insurance the duty had been 3d. per cent. on voyage policies and 3d. per cent, on time policies under six months, and 6d. per cent. over six months. It had been urged that the duty on fire and marine insurances should be made uniform, but instead of that the Prime Minister had announced that the 3d. per cent. duty on voyage policies would be reduced to 1d. per cent. There was a great deal of difference between 1d. per cent. and 1d.
  522
  Nevertheless, they must be thankful for this partial reduction. He wished to ask whether any reduction was to be made in the duty on time policies. He suggested that it should be made uniform with voyage policies or, if not, instead of having 3d. for under six months and 6d. over six months it should be made uniform at 3d. He could not forbear to say one word on the great boon of old-age pensions. He was heartily glad the Government had been able to take this step. He did not think it was a party matter. The reception which had been given to the Government proposal on, both sides of the House showed that they were equally glad with hon. Gentlemen opposite that this great question had been removed from the area of theory into the area of practice. He represented a great industrial constituency, composed almost entirely of working men, and he was convinced that the Budget would bring a gleam of hope to many a dull home and would irradiate many a cheerless heart with a prospect of better times to come. He had come from a contested election not many months ago, and his principal opponent was not Liberalism but Socialism, and hon. Members below the gangway who expressed themselves so moderately in that House and so often led them almost, if not quite, to adopt their opinion, went down to that constituency not singly but in battalions and preached undiluted Socialism. He felt that if they were to fight Socialism, which was undoubtedly making considerable advance among the working population, they must fight it with social reform, and one of the great weapons of social reform was the introduction of a scheme of old-age pensions. He was glad the proposal had been made, in his judgment. on sound lines, and that they had a small beginning, because they could never take a step back, and he believed they would go on. The proposal had been framed on such sound lines that as the competency of the country increased to deal with the matter, so they would be able to make the provision more complete and more generous He was also very glad indeed that the sugar-duty had been reduced. That should be a great, benefit to consumers and manufacturers. Many people would regret that there was

  523
  no reduction in the income-tax which, except as regarded the favoured class, was still to be on a war footing. But he hoped direct taxation would be relieved next year.
  SIR F. CAWLEYthought attention ought to be paid to the Prime Minister's observation that income-tax was talked of as if it were 1s., whereas it was nothing of the sort. The great majority of people paid only 9½d. He joined in the great joy with which the old-age pension scheme would be welcomed in the agricultural districts. As regarded those who had Poor Law relief he would be glad to know for a certainty whether they were going to receive the pension instead. He did not feel any apprehension in the matter, because he thought that everybody who now received 2s. 6d. in poor relief would be allowed to come within the scheme. Any other conclusion would be absurd. The only criticism he had to make on the Budget was that he would like to see the whole of the sugar duty taken off, not only because it was a necessary of life, but because it was the raw material of a very large trade. The confectionery trade had suffered enormously ever since the Sugar Convention and since the duty was put on. In the last two or three years there had been more people thrown out of employment and more failures in the confectionery trade than perhaps in any other trade in England, and, sugar being a raw material of that trade, the duty interfered very much in our competition with foreign countries. Even at the expense of not reducing the Debt of the country so rapidly, although he was very much in favour of reducing Debt, looking at it as a business proposition he would prefer to have had the remaining duty taken off sugar. It would be not only a right down good business transaction, but the means of finding employment for a great many people, which was one of the things they most wished for. He would be very pleased indeed if they could get the Chancellor of the Exchequer to consider the question at a later stage. The hon. Baronet had made a good deal of play in regard to the recent speech of his right hon. friend the Member for Northwich. Hon. Members opposite and the Press
  524
  seemed to think that because his right hon. friend said something about doing more for trade that he was going in for protection. Anyone who knew him knew that it was nothing of the sort. What he really meant was that the trade of the country could be really looked after more by those in charge, and when they considered that the Chancellor of the Exchequer had passed the Patents Act and was responsible for the London Docks Bill they would see that the matter was left in very safe hands. He thought his right hon. friend had the matter of railways and canals in his mind. Any idea of tariff reform was absolutely absent from it. It showed a great dearth of any kind of imagination for hon. Members immediately to jump at the conclusion that because he said something about increasing trade he meant tariff reform. The hon. Member for Hythe seemed also to deplore the fact that money was going out to foreign countries. The reason was the great extension of railway enterprise in new countries, and better interest could be got on capital. What was the real criterion of the prosperity of a country or a firm? It was its credit. The Prime Minister had shown that our credit was infinitely higher than that of any other country in the world, and that was instanced some little while ago when the London County Council offered a loan at 3½ per cent., and it was subscribed some hundreds of times over; while Germany offered a national loan for 4 per cent. at a discount, and it was only half applied for. When he heard Members opposite trying to make capital out of the Government's not introducing tariff reform he thought the fact that our credit was in a superior condition to that of any other country in the world was an absolute answer.
  MR. EVERETTheartily congratulated the Prime Minister on being in a position to have the handling of a very considerable surplus. It was pleasant to think that during the past three years each year had shown a substantial surplus, and the general condition of the industries and the agriculture of the country had been more prosperous than for a long time past. He fully hoped and believed that as long as this Government continued in power so long

  525
  would surpluses continue to roll into the national exchequer. He congratulated the Prime Minister almost more for the use which he had made of the considerable surplus of which he had had the disposal. This was a people's Budget. It was the most popular Budget that had been introduced in his life time. It would gladden the hearts of the people in every street of every town and in every lane of every village. To hear that the long talked-of old-age pensions were in the position of being realised would rejoice their hearts. He was also glad to hear that they were to have half of the sugar duty taken off, because that was one of the most iniquitous taxes ever imposed on the country. He might say that the Liberal Party Meant to have the whole of that tax off if this Parliament went on to its full period. At any rats, they were thankful to have half of it swept off during the present year. Every time the poor man or woman looked at the sugar basin they would think with gratitude of what the Government had done to undo some of the evil which the late Government did to them. To make a real beginning with old-age pensions was a thing he had longed to see, and he thanked God that he had been spared to see an actual financial proposal made by a responsible Government. He was glad that the pensions were to be upon a noncontributory basis, and on such lines that they could be easily extended to a universal old-age pension scheme. The Government had made a beginning, but it was only a beginning, and they were so grateful that a definite beginning had been made and on sound lines that they were not at all disposed to quarrel with minor details. It was a bold thing to bring forward such a proposal, and they would now be able to go to their constituents and meet them with the greatest delight to inform them that this comfort for their declining days was promised and would be a reality if they were spared until next Year. He hoped they would be able to do away with the provision which stated that when the husband and wife were both spared to the age of seventy, the pension would be a smaller one. The proposal now made to give pension to the aged poor was the greatest boon that any Government had ever bestowed upon the people of this
  526
  country since the repeal of the Corn Laws, and its benefits would be felt throughout every village and town in the country. Not only would the recipients be pleased, but all their relatives and friends would rejoice with them. With all his heart he thanked the Government for bringing, forward these proposals. He was thankful that he had lived to see that day, and to see a Liberal Government bestowing on the people of the United Kingdom such blessings as were undoubtedly contained in the present Budget.
  MR. ARTHUR HENDERSONsaid that, as one who had listened attentively to the Prime Minister unfolding his financial, plans for another year, he almost felt-sorry that the right hon. Gentleman was putting forth his last Budget statement. During the three years he had occupied the position of Chancellor of the Exchequer he had managed to demonstrate to the country something of the financial possibilities which they possessed as a people. Having regard to, the many great schemes of social reform which the right hon. Gentleman and his colleagues had laid before the country at one time and another, it was well that they should begin to see that the country had those financial resources which it was possible to tap for the purposes of advancing the schemes to which the Government were pledged. It must be to all sections of the House a matter of great congratulation that the Government had succeeded in the past three, years in making such a substantial inroad into the National Debt. They all realised that until that bad been done, it constituted a powerful argument against either the present or any other Government launching into schemes of social reform involving great financial cost. He congratulated the Government upon the use to which they had put the major portion of this year's surplus—he referred to the £3,000,000 they had devoted to the remission of the sugar tax and the amount to be utilised for old-age pensions. He had voted for an Amendment condemining the sugar tax each year since it was imposed, and he felt very strongly on the point. Those who took

  527
  a deep interest in the life of the working classes knew that there was no taxable article which entered more into the life of the poorest of the people than this commodity which the Prime Minister had seen fit to relieve of taxation. He assured the Committee that he would have rejoiced greatly if the Prime Minister had seen his way clear not only to take off part of the sugar tax, but to abolish it entirely. The Prime Minister had very properly reminded them that not only was it a tax on the food of the people, but a tax on raw material used in many industries, which had been seriously affected since the tax was imposed for war purposes. He was afraid that the remainder of his remarks would not be of quite so harmonious a character. He was delighted that at last the Government had seen its way clear to make a beginning with regard to the great and important social problem of making some provision for the aged poor. There were one or two features in connection with the scheme unfolded by the Prime Minister with which he was in the most cordial agreement. He was delighted that the Government had been sufficiently bold to initiate the scheme on a non-contributory basis. It would have been one of the most offensive suggestions that could be made in regard to any scheme of old-age pensions that they should put a tax upon the economic necessities of the great mass of the people who were to be the recipients of such pensions. He was delighted to think that the Government had kept the scheme entirely free from that most objectionable proposal. He was also glad that the Government had determined that whatever scheme was ultimately put into operation it should have no connection whatever with the Poor Law. He was sure that such a proposal would have been very objectionable to the great mass of the people. He was also pleased that the charge for old-age pensions was to be national rather than local, for that was making a beginning in the right direction. Having said that, he would now proceed to make one or two criticisms in connection with other parts of the scheme. His first criticism was that the scheme was not quite what they had been led to
  528
  expect. The question of old-age pensions had been before the country for something like thirty years, and most of the leaders of the Liberal Party at one time or another in the country and in the House had made speeches which justified him in saying that the scheme now proposed was not what they had been led to expect. He would make one quotation to show that he was justified in expressing the disappointment of his colleagues and himself that the scheme did not go further. He had before him a quotation from a speech delivered to a deputation which waited upon the late Prime Minister and his colleague the then Chancellor of the Exchequer, who was now Prime Minister, on 20th November, 1906. He remembered that it was a very large deputation, the majority of whom were supporters of the present Government. The deputation also included a number of Labour Members and trade unionist representatives. What was the reply of the Prime Minister, after the case had been fully stated by the Member for Morpeth and the Member for the Blackfriars Division of Glasgow? The late Prime Minister replied that—
  "He agreed that the only satisfactory method of dealing with the question was by a universal plan by which a pension should be paid to everyone who applied for it, with, of course, certain well understood exceptions."
  Those exceptions were criminals and lunatics. In the same speech the Prime Minister also said that he was against contributory schemes because they involved inquisitorial machinery, and he further stated that far from a pension sapping independence or undermining thrift, it would have the opposite effect, and he again asserted that any scheme must be universal in its application. The Committee would notice that in the short extract he had read it was definitely laid down, both at the beginning and at the end of the extract, that the scheme of old-age pensions whenever it was adopted must be universal in its application. Having regard to that declaration, he was justified in saying that the scheme did not come up to that standard, and therefore it was not what they had been led to expect. There were two serious objections to the scheme. In the first place, the qualifying age was too high. Those who had studied friendly society and

  529
  trade union statistics knew that few men who had been engaged in hard toil throughout the whole of their lives would be any better off for a scheme of old-age pensions at the age of seventy. It seemed to him a great pity that such a high limit had been fixed, for this reason. He thought that most of the representatives of the working classes in the House would admit that it had been clearly demonstrated during the last few years that working men were being discarded at an earlier age than ever before. They did not talk about a man being too old now at sixty-five to seventy. Hundreds and even thousands of men who had reached the age of fifty or fifty-five were, as they knew too well, being refused employment if they showed any tendency to stoop or had grey hairs. Therefore, it must be seen that there was very little chance of a man who was thrown out of work at the age of fifty-five, or even sixty, getting a pension, because he would have nothing with which to keep body and soul together for another ten years; and therefore he would get no benefit at all. It seemed to him that there was little justification for placing the age limit at seventy. It was true that the age was placed at sixty-five when the agitation began thirty years ago, but industrial life was then entirely different from what it was to-day. He believed that if the agitation had been but beginning, having regard to the changed circumstances in industrial life, no such high limit as sixty-five would have been suggested, but probably the age limit would have been five or ten years earlier. Moreover, it seemed to him that the whole argument of the Prime Minister went to show that this country possessed magnificent financial resources to which future Chancellors of the Exchequer might resort. Statistics went to prove that during the last thirty or forty years the finances of the country had been growing by leaps and bounds. In the great agitation in connection with free trade, in which the Labour Party had joined with the Liberal Party, one great argument used in defence of free trade was that we were getting on exceedingly well, that exports and imports and national income went to show what magnificent resources this country had. If that was so, could there be any reason why sixty-five years should not have
  530
  been substituted for seventy years? Reference was frequently made by the Prime Minister to what was being done in other countries. He himself might be wrong, but, having looked fully into the question, he did not find a single scheme either in Belgium or in any part of the Colonies where the age-limit was fixed so high as in the scheme unfolded to the Committee that afternoon. [An HON. MEMBER: What about Germany?] He was not going to refer to the German scheme at all; it went on entirely different lines from the schemes in operation in Belgium and in the Colonies, and he did not think anyone would dare to get up in the House—at any rate he would not be able to hope for a great deal of success in the country—and propose the German scheme for the wage earners here. He wanted to offer a second criticism in regard to the income-limit which was to prove a disqualification for the pension. That was to his mind—and he thought he had every Member of the Labour Party with him—the greatest defect in the whole scheme. What was going to be the effect of this income limit on the very best of the working classes? They were, it would be admitted, to be found among those who had been best disciplined in connection with the trade unions and friendly societies. He would give one or two illustrations. First of all, there was the magnificent organisation which his hon. friend the Member for the Black-friars Division of Glasgow so ably represented. The Amalgamated Engineers, whose organisation embraced 110,000 members, entitled members paying subscriptions for forty years to a pension of 10s. a week. The printers' organisation, with 32,000 members, paid 10s. a week after forty years. The boiler-makers and the steam-engine makers had similar rules. These were only a few cases, and others could be named. [An HON. MEMBER: The boiler-makers get 11s.] That was so. What was going to be the result of the proposal made in connection with the scheme unfolded by the Prime Minister? The members of those organisations during a long course of years paid subscriptions up to the point of sacrifice. The President of the Local Government Board would agree with him on this point. The workers, even in the

  531
  trades to which he had been referring, earned 34s., and in some cases 32s., a week, and they paid probably into both their trade union and a friendly society, they endeavoured to live respectable lives, and in the circumstances, the elimination from their wages week by week of their contributions to these organisations involved a sacrifice. Yet under this plan, notwithstanding their willingness to make some preparation for the day of feebleness and old age, they would receive no old-age pension, because they had, as the reward of their own sacrifice for forty years, got 10s. a week from their trade union. He asked his right hon. friend the President of the Local Government Board whether he thought it desirable that such a premium should be placed on thriftlessness, for that was what it meant. The thriftless, who had never joined a friendly society or trade union, could at the end of seventy years, if they had then any life left, come upon the pension fund of the State, and the other men would be denied that privilege.
  THE PRESIDENT OF THE LOCAL GOVERNMENT BOARD (Mr. JOHN BURNS, Battersea): No, no. I am sorry to interrupt the hon. Member, but he has assumed that 6,000 members of the Amalgamated Society of Engineers, whose superannuation ranges from 7s. to 10s. per week, would be disentitled to a 5s. pension under this scheme. He is entirely mistaken. The whole of the 6,000 men will be entitled to what this pension scheme confers. It is over 10s. and not up to 10s. that is the mark.
  MR. ARTHUR HENDERSONthanked his right hon. friend for that interruption; but was he not aware that there were in the rules of the engineers arrangements whereby the men could rise to a maximum superannuation allowance of 10s. a week.
  MR. JOHN BURNS: Under this scheme every man entitled to that maximum of 10s. superannuation would be able to receive the 5s.
  MR. ARTHUR HENDERSONwas delighted to hear that. It seemed to
  532
  him to be going further than what he gathered from the speech of the Prime Minister. His remarks had been made on the speech of the Prime Minister, from rough notes taken while the-right hon. Gentleman was speaking. Taking for granted that the fact was as his right hon. friend said, what about the boiler-makers with their maximum superannuation of 11s.? Merely because they paid for a shilling more they would be disqualified. He thought he was right in that case. Supposing that a man took 10s. a week from the Engineers' Society; he ventured to say that that man might have made such arrangements as put him in the position of getting 2s. or 3s. per week from some other source—say from his friendly society. In that case he would get nothing from the State. He wanted to show that the more disciplined and the more thrifty a man had been the worse he would come off, because he got nothing in the shape of 5s. a week from the State. That seemed to him to be putting a premium on thriftlessness, and refusing to recognise the sacrifices made by the great majority of the organised workers of the country. He hoped the Government were not wedded to these two points, especially the latter. He was bold enough to say that if he had to choose between a concession on this point, and the reduction of the age-limit to sixty-five, he would perfer the former, which would secure some alteration being made in the income rate. He hoped that between now and the introduction of the actual Bill providing for old-age pensions, the Government would look into these aspects of the case and bring them into harmony with Colonial practice.
  MR. FELLsaid that this might be called a fair weather Budget, presented in a year of most unexampled prosperity—a year, as the Prime Minister had said, when the imports and exports were the largest ever enjoyed by this or any other country. But, as the Prime Minister himself had pointed out, there were signs that those years of abounding prosperity were coming to an end; that the returns for the first three months of this year had convinced him of that April showed

  533
  a very heavy drop indeed—£9,000,000 in imports and £4,000,000 in exports. He knew that Easter had intervened, but, notwithstanding that, the drop was so great that they should speak cautiously in regard to next year and the years to come. So that in congratulating the Prime Minister on the Budget he had brought in, they could not congratulate the Chancellor of the Exchequer on the prospect of an equally abounding Budget next year, because next year they would have to face the great expenditure on the Navy which had been foreshadowed, and which must cause much anxiety if combined with a considerable drop in the exports and imports. In referring to the income-tax, the Prime Minister had made one slight omission. He described how he had reduced the tax on earned incomes under £2,000 to 9d. in the £, but the right hon. Gentleman did not refer to the fact that he had gained £750,000 by no longer allowing the return of tax on falling businesses. That was a very substantial quid pro quo. In regard to the pension scheme, in which most of them heartily concurred—[OPPOSITION cries of "No."] Well, the majority; he knew that on all accounts it might not conduce to the prosperity of the country. He did not think that any allowance had been made in this year's accounts for the expense which would be entailed by the preparations necessary to be made for the payment of the pensions at the beginning of next year. He admitted that in New Zealand, as the Prime Minister had said, the pensions were administered very cheaply. He granted that nearly all the work connected with the pensions was done voluntarily, but he did not believe that it would be done voluntarily here. In New Zealand the magistrates made all the inquiries—and he had some knowledge of the scheme in that Colony—into the payment of the pension and he could assure the Chancellor of the Exchequer that there would be many great difficulties in regard to the proof of claims. It was a fact that many people in England went by two names; they saw that by the police reports. Very frequently a man was known in one part of the country by one name, and by a different
  534
  name in another part of the country. It was easy for him to get neighbours to testify that he was So-and-so here, and So-and-so there. In fact in each district they might find neighbours to swear affidavits as to their bona fides. There would be, therefore, great difficulty and expense in proving their claims on the part of many poor people who would not be able to bear the expense themselves. The claims would have to be prepared by lawyers, who would have to obtain evidence of identity and proof of age by the production of birth certificates. All that would have to be done by the State, and would entail very considerable expense on the country. Not a day, therefore, should be lost in commencing preparations. He also pointed out that it would be very hard that, while two sisters living together would each receive the full pension or 10s., a husband and wife in the next cottage would have their pension cut down to 7s. 6d.
  MR. CHIOZZA-MONEYsaid that a friendly critic of the Prime Minister's proposals felt himself under a very considerable difficulty because the Budget before them was not complete. The chief point in the Budget, and that on which the attention of the country would be rivetted, was the scheme of old-age pensions; but it was a remarkable thing that while they had such a scheme set forth they had not likewise set forth the means of paying for it. It was said that the scheme would cost £6,000,000 a year, but they were only providing in this Budget a sum of £1,200,000. That was to say, there was a sum of nearly £5,000,000 which was not budgetted for, but provision for which would have to be made by the Chancellor of the Exchequer in the succeeding Budget. Therefore, they had not a complete Budget before them. That consideration should have more weight when it was remembered that the Estimates of revenue for the current year on which this proposal was based, seemed to be higher than the circumstances warranted. He did not know whether his right hon. friend had seen that day's trade returns. In the first three months of this year, the imports of the raw materials of industry had

  535
  decreased by £20,000,000. That meant a falling off at the rate of £60,000,000 per annum, compared with last year. This diminution, again, meant a loss in wages to the workmen of this country of fully £100,000,000. Therefore, he feared that the estimated revenue from Customs of £32,600,000, and from Excise of £35,500,000 had been exaggerated. He passed to this further consideration, and put it to the Committee, who it was, on the approach of bad times, chiefly suffered? They knew who it was chiefly. It was not the drawer of dividends or of rent. The man who chiefly suffered was the man who earned weekly wages, and they knew at the present time that in this, or in succeeding weeks, batches of men would be dismissed from their employment, and that a number of men would suffer shortly by being asked to work short time, as for example, in the Lancashire cotton industry. Therefore they had the more reason to direct their attention to the distribution of the wealth of the country, as an outcome of its trade, and the more reason to adjust their taxation so that it fell upon the right shoulders. He had listened with interest to the Prime Minister's lengthy exordium, in which he put before them the financial strength of the country, after it had been tried very sorely indeed. The right hon. Gentleman told them that in twenty years they had done this remarkable thing. They had almost cleared off the payments for a war which cost fully £225,000,000 of money. The right hon. Gentleman had demonstrated conclusively that the financial strength of this country was very extraordinary. But what followed? It seemed to him that while the exordium demonstrated the wealth of the country, the proposals which followed it had little regard to that wealth and prosperity. The sugar-tax had been referred to, but after the Prime Minister had been reminding them of the millions in which the wealth of the country was expressed, they found him discussing whether it was wise to take a farthing or a part of a farthing off the sugar-tax; That seemed to him to be in singular contrast with the exordium which had relation to the extreme wealth of the
  536
  people of the United Kingdom. He would like to call attention to the increase of the income-tax in the last ten years. In 1897 the aggregate income of the income-taxpayer was £705,000,000, and in 1907 it had increased to £935,000,000 or by 33⅓ per cent., as nearly as possible. That was an increase of £230,000,000 of money on the incomes of the payers of the tax, or £23,000,000 a year; so that one year's increase would more than suffice to give old-age pensions of 5s. per week to every old man and woman in the country. Those were the facts to which they must have regard in reference to these proposals, and although the Prime Minister demonstrated the national wealth he thought his proposals did not. He was inclined to agree with the Labour Party as to the limitations which had been attached to the pension scheme. If those limitations were imposed they deliberately shut out many men for whom they ought to have as much regard as for those who were included. It was perfectly true that many thousands of men who drew trade union pensions were also men who obtained money in other directions. These were superannuated members who ran a little shop, and had a small income of over 10s. say running up to 11s., 13s., or 15s. a week. He did not think these forms of thrift should be discouraged by the payment of a pension only to such men as had not been thrifty. He did not believe in a system of penalising thrift, and he hoped the Government would reconsider that particular point, as well as the fixing of the age at seventy, which, after all, was a very advanced age indeed, the number of people who lived to it in this country being exceedingly small. The hope which the scheme held out to the working classes was really a very small hope, and the Government certainly had the means at their disposal to be more generous. Referring to the means of raising the money to carry out the social reforms to which the Government were pledged, the hon. Member went on to deal with the assessment for the income-tax, and said that the Government had, in view of the number of incomes of £5,000 and upwards, the means to their hand if they cared to

  537
  apply them of being more just and generous in this particular matter. There was no doubt whatever in his mind that those whose incomes exceeded £5,000 a year had an aggregate taxable income of over £200,000,000 a year. There was also this consideration, that whether we were spending much money or little, whether our national expenditure was £50,000,000 or £200,000,000, it still ought to be raised equitably with due regard to the people who paid the money, and he thought there was cause for regret that the Government in the Budget had still left alone the question of graduation of the income-tax. It was true that they had the rough graduated steps formed by the abatement system upon which had been grafted differentiation up to £2,000 a year between earned and unearned incomes. In what position did that leave the income-tax? It left it in so complicated a position that it was necessary for the Prime Minister to remind the Committee that the great majority of the people of this country did not pay a "shilling" or even a "ninepenny" income-tax. A very grave injustice was done under this system. A man with £2,000 a year paid £75 tax on earned income, whereas a man with £2,200 paid £110, or £35 more, although his income was only £200 more, through the drastic methods of the present system. He appealed to the Chancellor of the Exchequer to sweep away the present system of abatement and differentiation and to substitute a graduated scale which would do justice to the middle classes, and at the same time yield a larger sum, if necessary, to the Exchequer. The Liberal Party had a great responsibility. If they did not democratise the finances of the country and show that under a free trade system they could finance social reform—and he did not think anyone on either side could say that he was satisfied with such a system of old-age pensions as was set forth in the Budget—they would open the door to those who represented that another fiscal system was necessary in order to raise the necessary funds. The hon. Member for Northwich had pleaded with the Government to adopt a liberal trade policy, if it wished to retain the confidence of the trading classes. He desired to add the plea, that if they
  538
  wished to retain the confidence of the working classes, they should throw off the policy of laissez faire, create a positive policy, and take measures to democratise our finance and place the financial burdens of the country on the right shoulders. Let the Chancellor of the Exchequer do for the income-tax what the late Sir William Harcourt did for the death duties in the celebrated Budget of 1894.
  SIR F. BANBURYthought he could not do better than take up the challenge of the Prime Minister, who said in the course of his speech that if he were criticising his own speech from the Opposition side he would say that he made little provision for the present, it was all for the future. His sympathy was with the Chancellor of the Exchequer, who next year, if he still occupied the same position, would have a very difficult task to perform. The Prime Minister had confessed that he could not tell what this old-age pensions scheme would cost, but he thought £6,000,000; that there was no foundation upon which an accurate estimate of the cost could be based. If that was so, the Committee was taking a leap in the dark. As he could not say what it would cost, the only provision the right hon. Gentleman took in this Budget was £1,250,000. It would be admitted by everybody, including the right hon. Gentleman, that next year there would have to be a large increase provided for the Navy, in addition to which the Chancellor of the Exchequer would have to provide a further £5,000,000 for old-age pensions. No indication had been given by the Prime Minister of how that was to be provided, except that there was the new Sinking Fund which might possibly be reduced. When the late Government was in power, and the question of reducing the new Sinking Fund was broached hon. and right hon. Gentlemen opposite assailed that proposition with criticisms. But when that reduction was made it was made for two very important reasons: the first being to increase the Navy which was not sufficiently strong, and the second the South African War. Those were two extremely important reasons for which it was necessary that a certain sacrifice should be made.

  539
  He did not think the instance given by the right hon. Gentleman could be taken as a parallel. What was that instance? The Prime Minister took 1889, twenty years ago, and said the dead weight of the National Debt then was £960,000,000. At the present moment it was also £960,000,000, and because the debt now was reduced to what it was then it was legitimate to reduce the new Sinking Fund in a year's time. If the right hon. Gentleman had taken 1899, ten years ago, he would have found the dead weight of the debt was £620,000,000 and not £690,000,000. The right hon. Gentleman told the country at the time of the elections that the first thing they had to do was to place the finance of the country in the position it was before the war. Therefore, if the right hon. Gentleman wished to be consistent, he should have taken 1899, and not 1889, in which case the Chancellor of the Exchequer could not afford to reduce the fixed charge on the debt until the debt was reduced to £620,000,000, and not £690,000,000, as it would be in a year's time. The right hon. Gentleman had also left out a very important factor. They had no Irish Loan at that time. The Irish Loan was eventually to be £120,000,000; it was now £30,000,000, and the right hon. Gentleman had left out of consideration both the £30,000,000 and the £120,000,000.
  MR. ASQUITH: That is not part of the National Debt.
  SIR F. BANBURYsaid they were liable for both principle and interest, and it was charged on the Consolidated Fund, and there was no difference between the two things. Therefore, the Chancellor of the Exchequer must not regard the dead-weight debt as £690,000,000, but must add to it the amount of the Irish Loan. In that case the argument of the Prime Minister fell to the ground as to the reduction of the fixed charge for the reduction of debt, in order to provide funds for old-age pensions. A great deal had been said about the abounding prosperity and great wealth of the country. Was it not a fact that Consols could be bought to pay £2 l0s., the highest rate of interest they
  540
  had yielded for many years? In 1896 the return they gave was £2 6s. Was this the time to talk of abounding prosperity? Consols were lower now than they had been for twenty years. All the gilt-edged securities were in such a state that it was almost impossible to realise money upon them. Only that day he had received a letter from a well-known stockbroker saying that the giltedge security market was in a parlous condition. The finances of the country were in a by no means satisfactory condition, and they would be in a no more satisfactory condition if the Government added to the burden of the nation without giving compensating advantages to the ratepayers. The old-age pension scheme had been received by those in favour of it with the proviso that it was very good as far as it went, but it did not go far enough. It had not been placed before the country half- an-hour before hon. Members lose from all sides of the House, and said seventy was too old, 5s. not enough; that the 10s. must be abolished and restrictions must be removed—that was the way in which the scheme had been received. The right hon. Gentleman had said it was possible that somebody might say that the days of ancient Rome had come back; that the daily dole had come. The amusements had not yet come. In Rome they came together, we had not got them but they would come. The right hon. Gentleman had also said that no doubt some old-fashioned people would say that in this reform we were travelling down an inclined plane, but, said the right hon. Gentleman, no reform was ever carried without such prognostications being made. He read the other day a statement rather apposite, he thought, to this matter—a statement made by a very high legal light, Lord Halsbury, the late Lord Chancellor, who said—
  "For instance they might say, and the sentiment was more than 2,000 years old, that democracy sometimes led to a position of things in which public men both spoke and acted as if they were acting not for the good of the State but to please the popular mind at the moment."
  He had no wish to emphasise that, but to the old-fashioned mind, which according to some hon. Gentlemen ought now

  541
  to be in a museum, it appeared that that criticism might be applied to all the Members of the House who advocated an old-age pension scheme at the present moment. Was it correct that a person earning 10s. a week was to be included in this scheme, or was he to be disqualified by reason of his earnings?
  MR. ASQUITH: The income must not be over 10s. a week.
  SIR F. BANBURYsaid he understood, therefore, that an income of 10s. a week would be included and the person with an income of 10s. 6d. a week would be excluded. But how about the paupers? How was that going to work? Would a man whose friends took him out of the workhouse to-day be qualified for a pension in a month's time? He understood that criminals were not to have pensions when they were sentenced, but were they to have them when their sentence had expired and they came out of prison? These were important points, and the people who would have to pay wanted to know something about them. Perhaps the Prime Minister or the Chancellor of the Exchequer would answer these questions when he came to reply. The right hon. Gentleman had said that the cost of the Post Office was going to be £450,000 a year more, and that that would result in a settlement of the Post Office grievances. He did not know where the right hon. Gentleman got that impression, because he received letters every day from postmen saying they were not only dissatisfied but that they were going to raise the question of further increases and had memorialised the London Members to receive a deputation. He hoped the right hon. Gentleman would reply to the various points he had raised.
  MR. THEODORE TAYLORsaid there was surely no more profitable form of national expenditure than giving a little money to some old people. The hon. Baronet had said that the country would not prosper so long as they spent money and the ratepayers got no benefit from it. He did not know any better kind of benefit
  542
  that the ratepayers ever could get than to provide pensions for the poor old people. When the hon. Baronet was speaking, he could not help contrasting this expenditure with the wasteful expenditure on war contracts in South Africa when money went in millions like water. He thought that was a bad form of expenditure, and he could not find a better form of expenditure than on old-age pensions. He gave Members who voted for the proposal every credit for voting for it not to curry favour with the electors, but because they believed it was a sound principle to give old-age pensions. The hon. Member for North Paddington had uttered that evening one of the most astounding fallacies that he had heard in his life. He was a plain business man, and in his own industry of woollen cloth manufacture they had been suffering from the high price of raw material, and he knew the cotton trade was the same. The hon. Member for North Paddington, in warning the Prime Minister, asked if he had noticed that in the first four months of the year the importation of raw material had fallen by £20,000,000. He multiplied that by three and assumed that the importation of raw material would go down by £60,000,000 this year, and he said from that that they would have a less expenditure in labour of £100,000,000. As if a reduction in the money value of raw materials imported necessarily meant less volume and therefore less employment! He had never heard such an impractical view put forward in his life. He ventured to say that the reduction in the price of cotton and wool which had taken place would tend to increase the amount of labour employed. He was delighted with the Budget though it did not do all—not half—of what he would like to see. He would like to see old-age pensions for everybody at sixty and the sugar tax swept away all at once; but they were not children and could not expect impossibilities. He believed the Labour Party knew very well—as they all knew—that in this Budget two very important things were established. Just by cutting off a farthing of the sugar tax that tax was doomed. The Prime Minister had indicated plainly that the remainder of

  543
  the tax must go before long. And in the next place they had got the thin end of the wedge of old-age pensions. He was glad that the Government was committed and the country was committed. He was certain the country was committed because he was perfectly sure that the party which had been inspired by the right hon. Gentleman the Member for West Birmingham to take up the cry of old-age pensions that were now being begun by his side would never go back upon it. The country as a whole was pledged to it, and it was a happy day for him that he was a Member of the House when this idea was first made a practical question. No doubt the lessening of the sugar tax and its ultimate abolition would be somewhat inconvenient to those who had it in their heart to exchange it for corn and meat taxes later on. The sugar tax was as hateful to him as old-age pensions were desirable, because it was in effect a poll tax. He believed the consumption of sugar would be increased by the reduction of the tax by over one-half. He was sure its increased consumption would be still greater when the tax was entirely swept away. By the tax they did not merely take money out of people's pockets as in the ease of a tax on luxuries, such as motorcars, where the people could afford to pay, but they compelled the people to consume less of useful commodities. This kind of expenditure promoted the people's well-being. Sugar was a raw material, and as the representative of a constituency which had several industries in which sugar was a raw material, he begged most heartily to thank the Government for reducing the tax. It would promote the trade of the country and the welfare of the poor. He had studied the question as an employer with the practical purpose of trying to give to working people old-age pensions, and had reluctantly had to come to the conclusion that it was practically impossible for employers in most industries to do it. He was glad, therefore, the Government had taken it up. It was possible for railway companies, banks, and permanent institutions to give pensions, but the average employer of labour in manufacturing and mercantile industries had no permanence and in many cases could
  544
  not afford to do so. He thanked the Government on every ground. He wished once more to commend to the Chancellor of the Exchequer an expedient for bringing before the people of the country the nature of our national income and expenditure. If they printed a summary of the Budget for the current year upon the income-tax demand papers, the payers of the income-tax who were not an uninfluential section of the community, would be likely to take more interest in future in the expenditure of the country. When they grumbled they would be able to see what they were paying for; and, if they were such patriots that they wanted a large Army and Navy, perhaps their spirits would be quieted. If they were economists, it would stimulate their interest in public expenditure, and, he thought, promote economy in the rightful direction.
  MR. HELMEsaid the Budget would be received by the country with feelings of deep and genuine satisfaction, because in it they had further evidence of the great skill and courage with which the right hon. Gentleman the Prime Minister, was prepared to develop the policy of the party which he led, upon sound finance. If there was one thing above another that would assist the commercial development of the country, it was the reduction of Debt and the wise application of the money raised in taxes and so it was that they, the Members of the Liberal Party, hailed with satisfaction a Budget in which two features were the establishment of a system of old-age pensions and the reduction of taxation upon the food of the people. With regard to the spirit in which the establishment of old-age pensions would be received they had the satisfaction of feeling that there was a general acknowledgment that it was but the beginning of a system, and he thought the fears and criticisms of the hon. Member for Barnard Castle might be considerably discounted, because of the fact that, although 10s. was the limit of to-day, it was possible and intended to arrange that in future, when they knew the cost and they had an increased income they should be able to proceed in directions which would put

  545
  a premium upon thrift, and the regulations under which this system would be administered would not in any degree put a premium on thriftlessness. He thought the workers throughout the country who supported the Liberal Party at the general election would feel that they had now good evidence that in the responsibility of office the Government had given effect to the principles they then professed, and that in continuing their confidence in the Liberal Party they had the best guarantee that their desires would be fully carried out. So it was that he begged, as one of the rank and file of the Party, to express the satisfaction which he believed his constituents would feel in the two principles that had been established on a free trade basis, and in looking forward to the development of the industries connected with the sugar trade, he was sure they would have an opportunity for increased employment, and at the same time the weekly house bill of the cottager would be relieved in a way that would bring contentment and satisfaction to the people.
  MR. COURTHOPEexpressed satisfaction that the right hon. Gentleman had seen his way to make a start with old-age pensions. He, for one, had always wanted them, and was glad that a start had been made. He would not go into the details of the pension scheme, but he wanted earnestly to call the right hon. Gentleman's attention to one point which he had omitted in his Budget, and which was admitted on all sides to call for redress. He thought some relief should have been given to local taxation in respect of national services. The burden of national services on local taxation had become heavier and heavier each year, and was now almost intolerable, and great injustices and many anomalies arose from the fact that the bases of local taxation and Imperial taxation were so extremely different. The Prime Minister, replying to a deputation a few weeks ago, said he thought the people who raised the question of local taxation, and tried to get something done for the ratepayer, lost sight of the fact that the ratepayer and the taxpayer were very
  546
  often the same person. He had not lost sight of that fact. He was well aware that in relieving the local rates, to some extent, of the burden which they now bore for national services the whole relief would not be felt by them, but injustice would be removed, and the burden of national services would be spread over a much wider area than at present. The Royal Commission which considered the whole question of local taxation had reported that the following five services were of a national character—police, lunatics and asylums, education, roads and bridges and poor relief, but that 82 per cent. of the cost of those services was borne by the rates. It would be possible to go into elaborate detail, showing the injustice of the system even in urban areas, but for the moment he was only concerned with rural areas. It was the tenant farmer who suffered most severely under the present system, in spite of the fact that under the Agricultural Rates Act he was only assessed at half the rateable value. The relief given by that Act was quite insufficient. To begin with, the agricultural rates grant no longer filled the gap it was intended to fill when the Act was passed. It was less than half what it should be if it carried out the original intention of that Act. But that was not all. In spite of the relief of the Agricultural Rates Act it would be found that the rates which the farmer had to pay, regarded in relation to the profits which he derived from his business, were enormously in excess of the rates paid by the owner or occupier of any other form of property. He was rated not only on property but on the raw material of his business, his stock in trade, and these remarks did not apply to any other class at all, though, of course, to a minor degree comparisons of a similar kind might be made between the shopkeeper and the banker and other classes of that kind. But it was the farmer who suffered most, and he still hoped the right hon. Gentleman would see his way to carry out to some extent the recommendation of the Royal Commission, and give some relief to local taxation. If one looked for a moment at these services one realised how extremely unjust the

  547
  burden was. Eighty-six per cent. of the cost of the main roads and bridges fell on the local rates, although the greater part of the wear and tear of the roads did not arise at all from the locality. In these days of rapid locomotion, motor cars, and so on, the wear of the road in a particular spot had very little bearing upon the use by the people living in the neighbourhood. It had often been said that all these matters must await a Valuation Bill. But a Valuation Bill was not in the least necessary. An allowance could be made on the surface area of the road to be maintained and in respect of the police and lunatics per head. In the case of education there could be an increased grant per head, and the same with poor relief, and he could not really see how any one of these matters was dependent at all on valuation. The Royal Commission found that £40,000,000 out of the total of £56,000,000 which these services cost fell upon the rates. In the state of prosperity which the right hon. Gentleman was able to show he thought some means might be found of changing that proportion. If the right hon. Gentleman could do anything of that kind it would give great satisfaction to a far larger number of people than perhaps he realised. Possibly he was not aware what a strong feeling there was in all the rural districts of the country on the matter. He urged him to give it his kindly consideration and to do something if he could.
  MR. AUSTEN CHAMBERLAIN: There are two questions I should like to put to the right hon. Gentleman which I ought to have put when I spoke earlier in the evening, but they escaped my memory. The first is as to legislative procedure in regard to old-age pensions. I rather assume that there will have to be a separate measure for the administrative provisions and that they will not be included in the Finance Bill. Perhaps the right hon. Gentleman will tell us whether that is so. The other is a question I should have liked to put to the Prime Minister when he was speaking
  548
  but for the inconvenience of any interruption. He drew our attention to the fact that the issues last year from the Exchequer were £2,000,000 less than the Estimates and Supplementary Estimates combined, and in passing, he spoke of that money having been saved. What I wanted to know was what proportion of it was due to the expenditure having actually been less than was required, and what proportion was due, if I may use a technical expression which the right hon. Gentleman will understand, to over issues over previous years?
  MR. ASQUITH: I cannot tell at the moment. If the right hon. Gentleman will put it in the form of a Question, or, still better, reserve it, I will look into it.
  THE CHANCELLOR OF THE EXCHEQUER (Mr. LLOYD- CEORGE,): I rise to ask the House if they can see their way now to give us the Resolution. There are five or six, and we are now taking the first, on tea. When it is realised that, after all, full discussion will be possible on the Income-tax Resolution, I think the House might see their way to accede to the request. With regard to the first question of the right hon. Gentleman, old-age pensions will not be dealt with in the Budget but in a separate Bill, and there will be opportunities for discussing all the points of detail which have been raised. On the whole, it is perfectly obvious that this is not an opportunity for entering into all those details. The Bill will be introduced and tabled in course of time. No doubt there are a great many details which we ourselves will have to consider. My right hon. friend just outlined the scheme, but the Bill will be introduced at an early opportunity, and the House will have a full chance of discussing all the details, especially the important points put by the hon. Baronet. We fully realise how important they are. The questions which have been raised have been very suggestive and will be useful to the Government when they come to draft the Bill. I trust the House will now see its way to allow us to

  549
  get the Resolutions. There will be a full opportunity of discussing them when the Finance Bill is introduced.
  MR. MORTONdid not want to stop the Government getting their Resolutions at once, but he wanted a distinct understanding that he should have the same opportunity that he would have if he choose to go on. He had been waiting to bring forward matters in which his constituents were concerned, and in which he had a right to be heard as much as anyone else. As he understood that he would have a full opportunity he would give way to the Government.
  Question put, and agreed to

  SUGAR.
  Motion made, and Question proposed, "That the Customs duties imposed and the drawbacks allowed under section two of The Finance Act, 1901 (being duties and drawbacks in respect of sugar, molasses, glucose, and saccharin), and the excise duties imposed and the drawbacks allowed on glucose and saccharin under section five of the same Act, and the allowance in respect of molasses used for food for stock under sub-section two of section one of The Revenue Act, 1903, be reduced in each case by fifty-six per cent., or as near thereto as the Treasury may determine, the reduction to take effect on and after the eighteenth day of May, nineteen hundred and eight. Provided that, as respects the duty charged on manufactured or prepared goods under section seven of The Finance Act, 1901, and the drawback allowed on any such goods in respect of which it is shown to the satisfaction of the Commissioners of Customs that the duty was paid on the sugar, molasses, glucose, or saccharin used in the manufacture or preparation at the rates now charged, the reduction shall not take effect until the first day
  550
  of July, nineteen hundred and eight."—(Mr. Asquith.)
  MR. AUSTEN CHAMBERLAIN: I asked the Prime Minister at an earlier stage whether it was necessary to take this Resolution to-night. Of course, if he assures me it really is necessary I cannot press him, but it is a very complicated Resolution, and it raises sundry questions of principle as well as minor questions of detail which perhaps might be dealt with later. I press him in no unfriendly spirit, and he will not complain of the spirit in which he has been met to-night in any quarter of the House. Unless it is absolutely necessary to take it to-night I would press him to postpone this Resolution to a later day.
  MR. ASQUITH: I would gladly accede to the request, but it is necessary for the purpose of the drawback. Full opportunity will be afforded for the discussions of general principles on the debate on the Income-tax Resolution.
  MR. CHARLES MCARTHURsaid he had been asked to put a very pressing question to the Chancellor of the Exchequer with regard to sugar. It had been brought to his knowledge that a large quantity of sugar had arrived in the country in the last few days or weeks, and they had not been able to obtain bond accommodation. Accordingly the duty had had to be paid for the sugar, and it was now in the warehouses awaiting sale, and it would be impossible if the Resolution was passed to sell the sugar without allowing the amount of the reduction in duty which loss they would consequently have to bear themselves unless some provision was made for it in the Finance Act. He asked whether provision would be made to indemnify the owners.
  MR. ASQUITH: These are incidents which always occur when there is a

  551
  sudden change in the duty. I can assure the hon. Member that I will consider it in consultation with the Chancellor of the Exchequer and that we will do our best.
  Question put, and agreed to.

  IRISH TOBACCO.
  Motion made, and Question proposed, "That there shall be charged on and after the first day of January, nineteen hundred and nine, on tobacco grown in Ireland, the following excise duties, namely—

  Upon tobacco, manufactured, namely—

  s.

  d.

  Cavendish or negro head manufactured in bond the 1b.

  3

  10

  Upon tobacco, unmanufactured, namely—

  Tobacco containing 10 lbs. or more of moisture in every 100 1bs. weight thereof the 1b.

  2

  10

  Tobacco containing less than 10 1bs. of moisture in every 100 1bs. weight thereof the 1b.

  3

  2

  and there shall be charged, on and after the same date, on a licence to be taken out annually by every person growing, cultivating, or curing tobacco in Ireland, an excise duty of five shillings."—(Mr. Asquith.)
  MR. MORTONasked whether the duty was to apply to tobacco grown in Scotland.
  MR. AUSTEN CHAMBERLAIN: I was going to ask the same question, because the Government has agreed to the passage of a Bill which enables Scotland to grow tobacco as well as Ireland. Why England has been omitted I do not quite know. I suppose it wants energy on the part of some agricultural Member in England. But what are these duties? Are they
  552
  calculated on the exact equivalent of the customs duties?
  MR. ASQUITH: The reason why Scotland is not included is because the Scottish Bill is not yet passed into law. When it is passed a similar provision will be made.
  MR. MORTON: So we have to wait twelve months.
  MR. ASQUITH: Till the Bill passes. Tobacco cannot be grown in Ireland until an excise is set up.
  MR. MORTON: If the Bill is passed in July will the Government then set up an excise for Scotland as well as for Ireland?
  MR. ASQUITH: No, I think we must wait till next session.
  MR. MORTONasked the Prime Minister, as representing a Scottish constituency, whether it was fair to Scotland that tobacco could not be grown there while it could in Ireland.
  MR. ASQUITH: The Irish Members were a little more active in getting their Bill through a year earlier and Scotland must wait.
  Question put, and agreed to.

AMENDMENT OF LAW.
4. Resolved, "That it is expedient to amend the law relating to the National Debt, Customs, and Inland Revenue.—(Mr. Asquith.)
Resolutions to be reported upon Monday next; Committee to sit again upon Monday next.
Adjourned at twelve minutes after Eleven o'clock.