HC Deb 03 November 1909 vol 12 cc1823-946

Order read for resuming Adjourned Debate on Amendment to Question [2nd November], "That the Bill be now read the third time,"

Which Amendment was to leave out the word "now," and at the end of the Question to add the words "upon this day three months.—[Mr. Austen Chamberlain.]

Question again proposed "That the word 'now' stand part of the Question." Debate resumed.


We are now approaching rapidly the conclusion of the long debates which have taken place on this Finance Bill, and I do not think it is to be wondered at that, at this stage of our discussions, there should be evidence in the House of that fatigue which is the consequence of the great strain that has been placed upon it during the last few months. But, so far as we are concerned—although it has been suggested, I think without very solid foundation, that there are not so many members on this side of the House ready to express their opinion as has been anticipated—the objections that we entertain to this measure, and the reasons for them, remain unchanged; indeed, as regards the reasons for them, the Debates in this House, and the discussions which have taken place in the country, on the platform and in the Press, have confirmed us in the view that the reasons which led us in the first place to object to this measure, are sound, and, if possible, stronger to-day than when we began. What are those main objections? The first of them, the strongest, the one upon which we rest the greater part of our case, is that this Bill is in the main based upon Socialistic principles. We hold that if it be passed into law, and if it be followed by those developments to which reference has been made in almost every speech delivered by representatives of the Socialist party, and in the articles which they have written, it must be destructive of capital, and therefore of the prosperity of the country, and consequently injurious to every class of the country. Especially do we hold that this particular measure must be injurious to the greatest of our sources of national capital, namely, the land. I for my part shall endeavour to show before I sit down that the contention of the Government and their supporters that they have altogether excluded agricultural land from the purview of this Bill is unsound and without foundation, and that in some degree—I believe a very large degree—the general effect of this measure upon land, not merely the effect of the particular tax but the general effect of this measure, must be to depreciate the value and security of land in this country, to injure the position of those dependent upon it, and to strike a severe blow to capital and the confidence in capital. Another objection that we have heard, and to which very little answer has been offered, is that this is not merely a Finance Bill. The Government on a previous occasion sought to deal with one question—namely, the Licensing question. They failed on that occasion to secure the passing into law of their proposals, and they have incorporated in this Measure what is virtually a Licensing Bill and also a Land Bill. We object, on the second ground, that it is not merely a Finance Bill, but that it incorporates other proposals which, if the previous practice of this House had been followed, would have been the subject of separate legislation, and ought to have been dealt with quite apart from any financial proposals.

Then we hold that the measure is in itself unfair and unsound—that it is unfair in its distribution of taxation as between the different classes of taxpayers, and that it is unsound because in two material re- spects it proposes to raise revenue by attacking two classes of property—the land and the licensed interest—which already shows that it is quite unable to bear any additional burden. How has this measure, which hon. Gentlemen opposite are so proud of, which they tell us initiates a new and great departure, a new era in financial legislation, been defended? Not by dealing with the merits of the measure itself, not by pointing to it as being so good and so great that it would rest upon the solid foundation of its own merits, but, in the early part of the proceedings in this House and outside of it, attacks were made of the most violent character upon property and upon certain owners of property. For some extraordinary reason Gentlemen opposite thought it right, the Chancellor of the Exchequer at the head of them, to make their first attack upon the dukes. We had all sorts of statements made about them, and charges were levelled against them. We do not hear quite so much about those charges now. We do not hear quite so much about those extraordinary cases that have arisen from time to time in connection with property owned by dukes or others. But even if that part of the case in support of this measure were to be maintained, still I ask with some confidence what is there in this measure, which could deal with the difficulty which the Chancellor of the Exchequer, in the speech he made at Limehouse, alleged existed? What is that difficulty? It was alleged that the ownership of land, owned as it is now, resulted in very great hardships, which, in their turn, placed great barriers to the development of land, trade, and industry. What does this Bill do to put an end to that condition of things? What the Chancellor of the Exchequer virtually said in that speech was that those owners used their property in an improper manner, in a manner which was unjust to the community, and that they made out of it great profits, to which they were not entitled. Those charges were construed by others, not, I think, unnaturally, into charges of robbery and spoliation against those people. But what is the answer which the Government and the Chancellor of the Exchequer make to those who demand that this condition of things ought to be altered? Do they say, "We do nothing to prevent you from making those great profits, but what we demand is that if you rob the people of these large sums you shall divide the profits of your improper proceedings with us"? If the profits be so great, if the advantages acquired by these great owners are so enormous as you allege them to be, are you going to stop it by merely saying, as you contend you are saying, that you will take only a small portion out of their profits for the benefit of the State? I think it was very soon apparent that that kind of argument would not do. And now we have a different line of argument. Now we are told in statements which vary somewhat from day to day, that we are not to relie upon these attacks, but that, if this great Bill passes, enormous advantages will be conferred upon the people. The Chancellor of the Exchequer has been a very hard-worked Minister, and we all congratulate him on the conclusion of his labours. Although I heartily disagree with him, and I think his measure unjust, harsh and unsound—I have always said so, and I say so here—yet this does not prevent my congratulating him upon the courtesy and goodwill with which he has conducted these Debates.

The Chancellor of the Exchequer has himself found time not only to conduct these great Debates here but to write one or two letters and articles, and, in an article which he communicated to the "Nation" newspaper, he indicated that one of the results of the Budget would be immense advantages in the future. That is what I desire to draw the attention of the House to in this connection, that it is not so much to the present position as to the developments of the future, and the changes in the future, to which the Government attach importance in making their recommendations to the country and pressing the Finance Bill on the country. What are those suggestions, and what do they amount to? They are appeals made to the cupidity of the people, based, first of all, upon statements in regard to the existing owners of property, many of which have no foundation whatever, many of which can be shown to be gross misstatements of facts, and which aroused against them a feeling of animosity, and, in some quarters, even of hatred. Even accepting the statements as correct, then upon them is built up the further theory that having once begun your attack on them you are going in the future to get so large a revenue that you will be able to do wonderful things. But at the same time that that argument is made full use of, at the same time that the newspapers are full of articles pointing out how great will be the future provision for the people in this direction or in that, hon. Gentlemen opposite never tire of finding fault with those who complain of this Budget, and say to them, "You have no right to complain of the Budget, as the charge we are laying upon you is infinitesimal." Surely it is not straining my argument too much to say that those two statements are absolutely inconsistent. If it be true that those who object to this measure have no right to do so because the charge made upon them is so small, then surely you are either asking them to be blind to the future, blind to the inevitable consequences of this measure, or else you have no right to say that the value of this measure is to be found not in its present possibilities, but in the developments when it comes to be altered, as you say it will in time to come.

We have had one day's Debate on this stage of the Bill. We have had some very interesting speeches. I listened to the greater part of the Debate yesterday. We had speeches from two Ministers, we had a speech from the hon. Member for Blackburn (Mr. Snowden) and the hon. Member for Preston (Mr. Cox), and a speech from my hon. and learned Friend the Member for Edinburgh (Mr. Clyde), I venture to say one of the most brilliant speeches that has been delivered in the whole long course of these Debates, For my part, I do not wonder that the right hon. Gentleman the Secretary to the Treasury was not in a position to answer that speech, because I do not think anybody, and I doubt if even the Prime Minister himself or the Chancellor of the Exchequer would have been prepared to deal with it off-hand, so full was it of argument and of matter. I venture to say it was a speech which, whether you agreed with it or not, must have impressed those who heard it. The speeches of the Ministers were interesting. The Attorney-General, whom I do not see in his place to-day, devoted the whole of his argument to trying to prove that there is no Socialism in that measure, and not only that there is no Socialism, but that this measure is in itself the most powerful opponent of Socialism, and that if anybody wants to oppose and stop Socialism the best thing they can do is to vote for this Bill. [HON. MEMBERS: "Hear, hear."] I hear a faint cheer or two in support of that view, but I listened very carefully to the speech when it was made, and I noticed there were very few cheers coming from hon. Gentlemen opposite whilst it was made by the hon. and learned Gentleman. I do not wonder. What was the remarkable conclusion to which the hon. and learned Gentleman came? He said, "You call this a Socialist measure, but if you want to oppose and beat Socialism, this is the way to do it." Then he went on to make this most astounding statement. He said: "You must view the Government policy as a whole. You must not be content merely with this one measure. Let me remind you that we are also bringing in a Land Bill." I think he claimed more for that Bill than he is entitled to claim, because he talked as if it was a proposal for the first time to establish small ownership in land in Ireland. My own belief about that Bill is, if I may say so incidentally, that instead of going to create small ownership in Ireland it is much more likely to destroy it. But supposing his theory is correct, let the House mark the extraordinary conclusion at which he arrived. He said, "Here you have in this Land Bill a proposal to establish small ownership of land in small quantities in Ireland, and therefore we cannot be a Socialistic Government." Why, one of the general arguments against the Government is that in their policy not only in this matter, but in other matters, they are absolutely inconsistent, and doing with one hand that which destroys the work they are doing with the other. In this particular case I must say I was amazed, as I think were all those who heard, to hear the Attorney-General for England say that the answer to the contention about Socialism is to be found in the way they are dealing with Irish land.

Then we had the speech of the hon. Member for Preston. The hon. Member for Preston has spent the great part of the six months that we have been engaged in discussing this Bill, in criticising and condemning many parts of it. I do not know that the Government have had a more powerful or more eloquent critic in any quarter of the House than they have had in the hon. Member for Preston, and last night he succeeded in undoing in a few minutes the work that he had done through many hours of brilliant labour in the House by announcing to us that it was his intention to support this Bill. And why—not because he approves of many parts of it, not because he thinks it is right in itself, but because he, probably one of the most powerful advocates of Free Trade in this House or out of it, is unable to see any other remedy for the situation except either in the policy of the Government or in the policy of the Opposition in the form of Tariff Reform. I do not believe that in all the Debates we have had in or out of the House, and in behalf of Tariff Reform, that any more powerful argument has been addressed to this House or to the country in its support than the admission by the hon. Gentleman that as he could not secure what he himself believes in—namely, all round and strict economy—that there is no choice except those two policies, and therefore he is compelled to vote for a measure the great part of which he dislikes, and of which no man has been a more eloquent or powerful opponent, because he cannot see any alternative except the one he is not prepared himself to take.

We had also a speech by the hon. Member for Blackburn, about which I will say a word in a moment, and then we had the further defence of the Government from the right hon. Gentleman the Secretary to the Treasury. I confess I listened to a great part of that speech with great astonishment. I do not pretend to be an authority on high finance, but I confess when I heard the right hon. Gentleman say with great insistence to the House, "When you say that capital is going abroad, I, on behalf of the Treasury, dispute it. I say it is not going abroad more than it has in previous times, and, if it is going abroad, what happens? You send your money to America, for instance, and you will be met there by Customs officers, by Income Tax," and so on, that Income Tax has been indicated in a declaration made by the President of the United States—I thought, when I heard that, that my ignorance of finance must have made it impossible for me to understand how the existence of a Custom House in America would affect your capital if you sent a hundred thousand pounds, or ten thousand pounds, or five thousand pounds to be invested in America. I made it my business this morning to get the best information I could in the City of London, where I was told that they were just as surprised as I was at the statement of the right hon. Gentleman, and that, whatever may be the truth as to capital going abroad, it is absurd to say that if anyone in this country thinks it best to invest his capital abroad, the fact that America is a protected country in any way affects the investment of that capital. Then what does this statement mean as an answer to the charge, which I repeat, that capital is going abroad in excess of the normal amount, and largely in consequence of this Budget? When the right hon. Gentleman said that because the President of the United States had referred to the question of Income Tax, therefore capital would meet with Income Tax there, he was carrying the right of a Minister to dispose of the arguments of his opponents too far. He ignores the fact that Income Tax is impossible within the limits of the American Constitution, and that on two occasions the suggestion has been negatived by the Supreme Court. Therefore the answer of the Secretary to the Treasury on this point will not hold good. Then as to the amount. I have no means of testing these statements other than those that are open to every Member of the House. I have inquired of those who are familiar with what is going on in the investment world, and I am assured on the best authority—obviously the names cannot be given, but the House will take it from me that I would not make the statement if I did not believe it to be true and to come from quarters which are in every sense of the word to be relied upon—that not only is the right hon. Gentleman wrong, but that within the last few weeks seven or eight millions of money have gone abroad, and that great purchases of American bonds, to the amount of many millions, have been made by English investors.


I expressly said that as a matter of fact capital was leaving this country in a greater amount than in previous years, but not in a greater percentage relative to the savings.


I do not think I have mis-stated the right hon. Gentleman. What I have said is that, according to my information, capital is going abroad out of all proportion to previous years, and that is because of this Budget. That is a statement which hon. Members can verify for themselves. I was further astonished when the right hon. Gentleman went on to deal with the effect of the Budget on land. He knows the land question as well as anybody in the House. We have fought this question ever since I have been in Parliament, but we always fight it at some little disadvantage, because there must always be the difficulty that land is held in many cases in large quantities, and is in itself a supposed evidence of wealth. The right hon. Gentleman took two estates, of £900 and £10,000 a year respectively, and said that the extra burdens would be very small. In regard to the £900 estate, he said that the deduction under the 25 per cent. concession would amount to a certain sum. On what authority did the right hon. Gentleman make that statement The concession was based on the land-owner being able to show that he had done certain things, and only in the cases where that is shown will the deduction be made. Does the Secretary to the Treasury intend to carry the concession further than was originally promised? There is certainly no such provision in the Bill. But we know that the deduction is to be made only on certain conditions. What right, then, has anybody, above all, any Minister, in answering the case on land, to say that in every case where the income is derived from land, the 25 per cent. deduction will be made with the result described? That, however, is a detail. I pass to a greater fallacy of the illustration. I take it that the incomes mentioned were gross. The right hon. Gentleman knows as well as I do that, in dealing with income arising from land, you must not take the income as comparable with income arising from other sources. He says: "Here is an income of £900, from which you have to deduct only so much for Income Tax and insurance against Death Duties." But it is not an income of £900; it is, at most, an income of £450. And in the case of the £10,000 estate, where he said the extra charges amounted to £450, it is a charge of £450 not upon £10,000, but upon, at most, £4,000 or £5,000.

We have recently had a Return—not a Parliamentary Return—showing the expenditure on a large number—I think 200 or 300—of estates all over the country, from which it appears that under the heading of repairs alone the charges amount to 32 per cent. or 33 per cent., while other charges bring the expenditure up to 50, 55, or 60 per cent. These deductions must be made before you say that a man has an income of £10,000, upon which you levy an additional charge of £450. Although you may still justify your charge, and say that a man with £5,000 a year ought to be called upon to pay an extra £450, it is an ingenuous statement to come from the Front Bench that you are charging a man with £10,000 a year only £450, and it is no answer to the repeated allegation that you are treating land unfairly. The right hon. Gentleman went on to talk about insurance, and for some reason—I do not know what it was—he took the age of 35 as being that at which as a rule people succeed. I do not know what is his authority for that. But I do not want to attach any undue importance to the point. I want to point out this: that the right hon. Gentleman failed again to answer our indictment. For this reason: That his answer about the age of 35 and the consequent cost of insurance would be sound if we were in this particular Bill respecting what I call existing contracts. What the right hon. Gentleman entirely ignores is that these insurances are to meet these extra demands that you are making on the land, and have to be met, not by the man of 35, but by the men in possession, many of whom are a long way over the age of 35, and are 50 or 60. When the right hon. Gentleman says with so much confidence that insurances will meet the case of all these difficulties how is he supported? Nobody can have read without interest, and the feeling that it is deserving of careful consideration, an article on "The Death Duties" written by Sir Felix Schuster in the "Nineteenth Century and After" for July. Sir Felix makes it perfectly clear that he thinks:— That the cumulative effects of this Budget will be extremely serious to owners and (in regard to the particular question of the scale of Death Duties) I cannot but come to the conclusion that if the proposed scale of Death Duties is carried through it will lead to a gradual and steady diminution of capital, and consequently a constant loss of revenue from this source. If we are to have personal opinions to back up such figures as the Secretary to the Treasury gave us yesterday, the opinions of Sir Felix Schuster, who speaks with exceptional knowledge and experience in the City, and out of it, will be treated with the respect that they are entitled to, and may be put against the opinions of the right hon. Gentleman and those who advised him to make his defence of yesterday.

But we base our main objection, not on these side issues to which I have referred—they are entitled to be considered by the House—we base our case upon the general contention that we have made, that the foundation of these Land Clauses, and of the greater part of this Budget, is in itself Socialistic. We heard yesterday a speech from the hon. Gentleman the Member for Blackburn (Mr. Philip Snowden), who speaks with full authority and unmistakable clearness upon this subject. When he told us that we had been passing legisla- tion that was Socialistic, and embraced in that term such Acts of Parliament as the Public Health Acts, the Acts affecting children, etc., I do not think that there is anybody on either side of the House who would follow him in that line, because we have all of us been doing our best to see Acts of Parliament of that kind carried—when we have been responsible for the Government of the country—whereby suffering could be relieved or the difficulties of the people lessened. I am certain that there would be no opposition on this side of the House to that; and I do not think that it can fairly be said that these measures are what most people would understand as Socialism. We draw a very wide distinction between social legislation that has for its object the amelioration of the condition of the people and that kind of Socialism that proposes to get the taxation of this country in a particular way. The hon. Member for Blackburn was perfectly clear yesterday. He said that he had some sympathy with those who found fault with the Government because they had limited their proposals to one class of property. He said that for his part—as we all know—he would be prepared to apply the same principles to other classes of property. Yes, but it was not in that respect that the hon. Gentleman made this statement. He said: We support the land taxation proposals, not because we think they do everything or go far enough—we support them because they are as much as we can get at present. He went on to refer to the Super-tax, which he regarded as being the most Socialistic proposal in the Budget…and I believe there are great possibilities in it. He went on to make it perfectly clear that he supports the Budget, not because it goes all the distance that he wishes it to go, but because it is the first step in the direction which he wishes Parliament and the people to take.


Not the first step!


Well, an important step. But it is not only in the speech yesterday that we find the hon. Gentleman putting forward these views. We have had a pamphlet circulated during the course of the year in which the hon. Gentleman makes it perfectly clear what the views of the party he belongs to are. He says (page 5):— The Labour Conference resolution suggests four ways of raising new taxation: the Super-tax, Taxation of Monopolies, Increased Death Duties, and Land values Taxation. It is very remarkable, if there is nothing Socialistic in this Budget—and we are told that we have no foundation for our fears, that there is no justification for the views that we hold—it is very curious to find that the main proposals of this Budget, the main details and methods which the Government propose to adopt entire to get their taxation, find their place in a pamphlet which the hon. Member for Blackburn issued, and which there sets out what he thinks ought to be, not the full accomplishment of his aims and wishes, but the first step which ought to be taken towards their accomplishment. We have had from Members of the Government similar sentiments. The Home Secretary, speaking at Cinderford on the 24th instant, said:— I do not see at all why at some future time when more money is wanted that the principle of unearned increment should not be applied if it be found practicable—to other forms of property as well as property in land. 4.0 P.M.

If those sentiments are admitted—they are cheered by hon. Gentlemen opposite—and if this intention is forthcoming, as it undoubtedly is, what right or title has anyone to get up and dispute our contention that the basis of this Budget, in regard to a very large part of it, is Socialistic? That is a step in the direction in which we decline to go, and which we believe, if adopted by the country, will result not merely in injury to capital, but in the long run that it will result in destroying the source from which the people of this country get their wages. That at all events is our view. It is because we hold it, and hold it strongly, that we shall oppose with all our power the proposals, which we submit with confidence here and elsewhere—[HON. MEMBERS: "Hear, hear."]—As a matter of fact all I had in my mind was that I had made many speeches in the country against the Budget, and what I say inside the House I am prepared to say outside it. All I meant to say, I can assure the House, was that as far as we were concerned we would oppose this Bill in the House and on the platform, because we believe it is a very serious step in the direction which leads, in our judgment, to the destruction of capital, to destruction of confidence, and consequently the destruction of the best interest of the wage-earning classes of the country. It is remarkable that the hon. Member for Preston (Mr. Harold Cox) and the hon. Member for Blackburn (Mr. Snowden) are going to be found when this Division takes place in the same Lobby in support of a measure, and that one that of these Gentlemen is prepared to vote for it, not because he likes it but because he dislikes something else more, and the other because he sees in it an advance in the direction on which he wants to go, and because he believes it leads to the establishment of the tenets of that policy which he himself advocates.

One word about the effect of this Bill upon agricultural land. I suggested at the commencement of my remarks that I was prepared to contend that the Government had not succeeded in exempting agricultural land. In the early stages of this Bill we had a good deal of Debate upon this question in Committee, and I ventured to say whatever you choose to do in the way of definition or in the way of exemption you would find it practically impossible to keep agricultural land free of the burdens which this Bill imposes. I shall try and make that good. With regard to the general policy, what is it going to do? I noticed yesterday the right hon. Baronet the Member for Northwick (Sir John Brunner) welcomed these land taxes for one reason amongst others, that he believed they must be followed by an alteration in our rating scheme. I venture to say with some confidence, and I have frequently taken part in many Debates upon rating in this House, and I have more than once taken part in connection with Bills either proposed by right hon. Gentlemen opposite or drafted by myself, and I venture to say nothing has ever been done more calculated to make it impossible to deal with the rating question in a satisfactory way more than what the Government are doing now. You are putting a special taxation upon land on the ground that land in certain cases acquires an increased value through the action of the community. That means that in 99 cases out of 100 it is proposed to deal with land in the neighbourhood of towns, which, owing to the growth of the town or the springing up of new industries, acquires additional value. If that argument is sound surely it is only just that the money, if you take it, ought to go to the community that created the increased value; but you are taking it away from the town and you are putting it into the common purse, and now the Government are taking credit for the fact that a portion of this revenue is to go to the local exchequer. That was not the proposal in the Bill as first introduced, but it was accepted in an Amendment moved from below the Gangway, and when it was accepted the Government announced that they were putting a portion of this money into the local purses, but as time went on they found all the difference in the world between talking about dividing this money between the local purses and doing the thing in fact. Nothing has since been done, and the money is in suspense, and we are in ignorance of how it is going to be applied. I said then that to talk about taking a sum of £300,000 or £500,000 a year and applying it to the relief in any sensible way of local taxation was to talk about something which the people who did so had not studied, or was to make suggestions incapable of fulfilment.

What is the real grievance? The real grievance is, and always has been, the difference between realty and personalty. You are ignoring that, and putting an additional tax upon realty because it is realty, and taking a portion of that in order to spread it over the whole country in the relief of rates. I believe something might be done, but the great difficulty we have to contend with in regard to the increased value of land is this. What we want is that in rates or taxes each person shall pay according to his ability, and then the burden will be made such as the different shoulders can bear, and where land gets a particular value near a town it should continue to bear its fair share of the rates of the town. Personalty is still liable, and an effort might have been made to arrest the passage of personalty into realty in order to make it still bear its fair share of the revenue. But this is nothing of the kind. This says you will still go on selling your land; we will take a portion of it. The people who advocate this in the country think something is to be done by this Bill to arrest the operation and stop what is going on, but no, it is intended to take portion of it and to apply it partly towards Imperial taxation, and in some other way which we do not know. I venture to say this is not progressive but reactionary, and the right hon. Gentleman, when he says that one reason that made him support this Budget is his belief that local rates will get relief, is cherishing a hope that never will be realised under the proposals of the Government.

We believe that these proposals are not going to create work for the working classes. We are told that they are going to bring land into the market for building purposes, that they will add to the building of the country, and consequently add to employment. It is a remarkable fact that there is no foundation at all for that statement. On all sides we have the evidence of men of practical experience in the building trade, and what does it amount to? The difficulty that retards building is not the want of land—they say we can get land in sufficient amounts—but the difficulty is want of confidence, want of spending power on the part of the people; and I venture to say that this taxation in regard to land is going to do nothing to facilitate the acquisition of land for building purposes or to increase employment consequent upon the extension of building work.

Right hon. Gentlemen opposite, in the course of yesterday's Debate, devoted a great part of their time, not to defending the Budget, but to attacking the alternative proposals of the Opposition. They tried to find their way out of their difficulty by attacking us and our policy. That seemed to me to be very indifferent support to give to the policy and the proposals of the Government. We attack the Budget itself, we say that in regard to your Land Taxes you are getting only a fraction of money at an enormous cost, and I believe my hon. and learned Friend the Member for Edinburgh (Mr. Clyde) said quite truly last night that a heavy cost will be thrown upon small owners in connection with your valuation. I can only say that the most experienced valuers in this country have pointed out to me that that is true in more ways than one, but especially is it true in the case of the small owners, because a great many of them have only their own private maps and plans of their estates, and these will be quite insufficient for the purpose. No provision in the Bill is made for the preparation of these necessary plans, etc., and I believe you are throwing an enormous cost mainly upon the poorer classes in regard to this part of your Bill. You are therefore getting a very small amount of revenue at an enormous cost, and you are undoubtedly laying the foundations of a policy in the future which will be ruinous and disastrous. What is there in this Budget, we have asked time and again, which is likely to arrest unemployment in the country, and to remove the difficulties which are in the way of those who would like to provide work for those who are out of work? As far as I know there is nothing, and I believe if this Bill were shorn of the partly attractive idea that it is an attack upon the rich you would find there were very few supporters to be found for it amongst those who generally support the party opposite. We contend that the basis of this Budget is unsound, and that if it is adopted its principles must sooner or later apply to other classes of property, and that there is no single sort of property, be it large or small, that it will not ultimately reach with the result that is bound to be injurious to the country.

We maintain you are undoubtedly burdening that class of people who own land, and who are already burdened sufficiently. Innumerable cases have been cited and put before the House illustrating these contentions. In addition to that you are adopting a policy which is unsound. When you pass from land you then come on to the licensed trade. The other day when this matter was debated in Committee I ventured to point out that you were imposing new taxation upon an industry which had not the power to bear it. We were told our figures were unsound. I believe them to be sound for this reason, that you make no allowance for the changes that have taken place in regard to that trade, and you are laying your taxation upon one part of it, whereas if you found it necessary to get taxes out of that trade these taxes should be got by laying them on a different basis and form. We believe this taxation to be unsound and unjust, and for these reasons we shall oppose this Bill as we have done. We hold that the Government have not established their case or justified the line they have adopted throughout, and they certainly have been unable to provide any answer to the charges that have been brought against them. They have adopted in part the policy and principles of hon. Gentlemen below the Gangway, and, if they persist in this policy, as time goes on they will be compelled to adopt that policy as a whole.

The FIRST LORD of the ADMIRALTY (Mr. McKenna)

The courage and sincerity with which the right hon. Gentleman speaks, whether in this House or out of it, are as fully recognised and appreciated upon this side of the House as upon that upon which he sits. He has on the present occasion covered the whole scope of the present Budget, and he has laid down under three heads his objections to this measure. I confess to a certain amount of disappointment when he came to consider the first ground of his objection. He told us that the Budget was based upon Socialistic principles, and that that was his primary objection to it. I listened with the greatest interest to hear from the right hon. Gentleman what I never yet have been able to understand, namely, what is meant when it is said that the Budget is based upon Socialistic principles. It appeared in the course of the right hon. Gentleman's speech that all he had to say upon that matter was that my hen. Friend the Member for Blackburn (Mr. Snowden) approved of the Budget, and that, therefore, it was bad. With regard to the Socialistic principle, he did not say one word as to what there is in this Budget which he objects to on that ground. May I beg the right hon. Gentleman to approach this Budget from a somewhat different point of view? May I put to him that he should, in the first instance, ask himself this question, "How much have I got to raise?" Then he should ask, "Who am I to tax?" You have £16,000,000 to find. The nation has got to expend £16,000,000 more this year than it spent last year. Therefore you have got to make some people in this country poorer to the extent of that amount of money in order to make the nation richer. Who are you going to make poorer? Who has to pay these extra taxes? You have a great variety of choice in this country as to the persons from whom you will take the money. You have got every variety and degree of wealth and poverty. Are you going to take £13,000,000 or the £16,000,000 which you have to find from the very rich, the less rich, the comfortably off, the moderately poor, or the very poor? Which class is to be taxed? That is the question you have to ask yourselves. According to the right hon. Gentleman, although he will not agree with my view of his theories, if he and his friends and those for whom he speaks are taxed it is Socialism, but if those for whom he does not speak are taxed then the foreigner will bear his part. I know of no other means of getting this money except from the people of this country, and the question this House has got to decide, is who has to pay?

The right hon. Gentleman went on in his second objection to this Bill to state that it is not merely a Finance Bill, but it has other objects in view. I am utterly unable to understand why the Chancellor of the Exchequer is to be the only person in this country who is not allowed to have other objects in view. The right hon. Gentleman, in his peroration, made it a reproach to us on this side of the House that although the question had constantly been asked they had never received any answer to the question: What is there in this Budget to arrest unemployment? If my right hon. Friend had given him the answer, he would have said, "That is a case of 'tacking.'" I do not think the right hon. Gentleman's objection on that ground will bear investigation. It is perfectly true that every Finance Bill is always framed with other objects in view besides the getting of revenue, the other object being, so far as you can, not to injure more than you can help the people whom you call upon to pay the taxes. But when you begin to talk of "tacking" you have to go beyond motives, and you have to look at the actual proposals of the Government. You have to show that they are such as should not properly be included in the Finance Bill. The last summarised objection of the right hon. Gentleman was that this Budget is unfair in its distribution of taxation, especially inasmuch as it attacks two classes of property. He referred, of course, to the owners of land and to the owners of licences. In a very interesting speech the other day the Leader of the Opposition, I think it was upon an Amendment dealing with the Super-tax, said that he had not the same objection to the Super-tax that he had to other parts of the Budget, because at any rate it was not tainted with that immorality which he attached to the taxes in respect of land and licences. The case of the Leader of the Opposition and of the right hon. Gentleman who has just spoken with regard to these taxes on land and licences is, and always has been, that in imposing them the Government have not charged people according to their ability to pay or according to their means, but have charged them according to the particular kind of property which they own. The right hon. Gentleman asked why should a person who owns £20,000 worth of land or has an income from land pay more under this Budget than the man who owns any other kind of property worth £20,000, or has an income drawn from any other source? He went on to say that a tax which did not conform to this proposition, and which did not fall upon other persons with equal means in the same way, was immoral.


I do not remember the speech to which the right hon. Gentleman is referring, but so far he does not misrepresent me. I think I have always stated what is a fact, that you can never get a perfectly ideal system of taxation. That I agree is impossible. I stated that to mark out distinctly in a Bill of this kind a particular class of people for taxation is immoral.


About eight years ago this House will remember that the Chancellor of the Exchequer of the day found himself in need of money to meet the expenses of the South African War. Sir Michael Hicks-Beach, as he then was, proposed to this House an export duty upon coal. I am not going into the arguments for or against that duty except upon this particular point. In the course of the Chancellor of the Exchequer's justification of that tax, a justification which was supported by the Leader of the Opposition, and I believe by all the right hon. Gentlemen whom I see opposite, the great ground urged in favour of that duty was that the coal-owners had made exceptional profits, that they had had a windfall, and that they might justly be called upon specially to contribute. Not only was that argument used, but a Parliamentary Return was actually issued setting out in detail the extra profits which the coal-owners had made. I do not suppose the then Leader of the House wishes to dissociate himself from the Budget of that day. If he does not associate himself with that argument, at any rate he cannot dissociate himself from the Budget, and he cannot dissociate himself from the Parliamentary Paper which was issued setting forth in detail the special windfall which the coal-owners had received. The right hon. Gentleman will find what I am stating in the Parliamentary Paper which was issued in the year 1901. But mark this difference. Here was an admitted windfall which the coal-owners had received and enjoyed. That windfall was by the right hon. Gentleman made the occasion of an annual tax which they were to go on paying for all time, whether they received windfalls in the future or not. Under the land proposals of the Government the Increment Tax is imposed at the time when the increment value is received, and it is an increment which, under no circumstances, is or can be attributable to anything which the owner of the land has done. It is a tax which is to be proportioned to the actual increment value which the owner receives. It is a tax easily collected, definite in amount, easily ascertainable, and it conforms to all the principles of the Coal Tax, and to all the principles on which every sound taxation has been based, and yet the right hon. Gentleman now declares that that tax is immoral. So much for the gross attack made upon the Government for placing a tax upon people who have received a windfall, for which they have done nothing, to the extent of one-fifth of its value. With regard to the Undeveloped Land Tax of ½d. in the £. Here again I think the right hon. Gentleman who spoke last has forgotten some of the experience he acquired when he was President of the Local Government Board. He was then thoroughly familiar with our national system of rating and valuation. The House knows that under our present system of valuation the owner of land pays Income Tax under Schedule A only in respect of annual value of the land, measuring that annual value by the amount which a willing tenant would pay. Under the proposed tax upon undeveloped land a tax equivalent to the Income Tax under Schedule A will be paid by the owner not upon the annual value as measured by what a willing tenant would pay, but measured by 4 per cent. on the capital value. What justification is there for any such system of valuation? We have in this country a greatly developed railway system. It will be no news to the right hon. Gentleman who has just spoken to be told that in valuing our railways we use quite a different method of valuation from that laid down by the law as being what a tenant would pay. In the case of railway lines we have regard to the profits. It is not what a tenant would pay, but what the railway company earns, and when it was a question of relieving the rates in a rural parish the public had no difficulty in making railway companies pay on an entirely new principle. But when we come to railway stations the case is even more remarkable, because it will be found that in valuing a railway station there is no consideration of what a tenant would pay for it, but you actually take the value of the site of the land apart from the buildings, charge 4 per cent. on its capital value, charge 5 per cent. on the capital value of the buildings, and you call the result annual value. The moment we get rid of this supposed sacred principle that the only way of determining annual value is to take what a tenant will pay year by year—and we have got rid of it in the case of railways—the Undeveloped Land Tax is the most obvious measure of equity in charging people to the Income Tax according to what they ought to pay that can be possibly be devised. All that we can be told against the Land Taxes which have been the subject of Debate in this House for months by the right hon. Gentleman, than whom there is no one more competent to speak on this subject on that side of the House, is that the hon. Member for Blackburn (Mr. Snowden) is in favour of them.

Let me turn now to the other class of persons who, according to the right hon. Gentleman, have been most unfairly laid under contribution—the owners of licences. Nobody, and least of all anybody on this side of the House, is going to dispute that, as a general principle, people ought to contribute to taxation according to their ability to pay. Licences have always been the subject of special taxation. The owners of licences have always had to pay a duty. There is, therefore, no question of principle here; it is only a question of amount. This monopoly, represented by the licence granted by the State to an individual, is properly made the subject of payment by the person who receives the licence. That has been admitted by the right hon. Gentleman (Mr. Balfour) in his Bill of 1904, when, in regard to new licences, he was the first to recognise that the person who receives this licence ought to be made to pay for it, and ought to give up to the State some part or the whole of the monopoly value. That is the principle underlying the Act of 1904 with regard to new licences. With regard to old licences, the Liberal party and the law have always been of one mind on the subject, and there is no true distinction to be drawn between them. The State is morally entitled to take for itself some part, and some share in the monopoly value which it has given for nothing for one year and one year only. The right hon. Gentleman will readily admit that in these matters you always have to have regard to the practical convenience. Therefore, it is very difficult to draw the line in Statecraft between morality and convenience. [Laughter.] Those hon. Gentlemen who laugh will forgive me if I say that their laughter is a little shallow. Although a moral principle might entitle you to exact to the last farthing, as in Statecraft it would not be convenient, it almost becomes immoral to do so. That is why I say that in Statecraft morality and convenience very often run into each other. In this case we submit, as a matter of equity and of reason, that we are taking under these Licence Duties no more for the State than we are entitled to. At any rate, if we are wrong in that, it cannot be a question of morality; it is merely a question of mistaken judgment. For my part, I think we are taking only what we are entitled to take, and what we always declared to be cur policy to take, and what I believe the trade in the long run will be very well able to bear.

I said I should be prepared in a moment to give a reason why we on this side of the House lay very great stress on the principle that persons should be only taxed in accordance with their ability to pay. I was very interested when the Leader of the Opposition, speaking the other day, expressed the view so strongly that the Land Taxes and the Licence Duties were not moral because they had no regard to the ability of the persons to pay, and immediately afterwards complained that it had shut itself off from that great source of revenue which was to be obtained by the taxation of imports. The right hon. Gentleman has never committed himself to the view that import duties are paid by the foreigner, and he has carefully dissociated himself to-day from the statement made by one of his colleages who was Chancellor of the Exchequer in 1901. I hope he will also dissociate himself now from the statement made by his last Chancellor of the Exchequer, who declared that the foreigner would have to bear his part.


I may have been mistaken, but I thought the right hon. Gentleman only five minutes ago said the Coal Tax fell upon the coal proprietor in England. After all, I now understand the foreigner pays.


One is an export duty and the other an import duty. Although the ingenuity of the right hon. Gentleman enables him to make the retort, it does not enable him to answer my question. I shall be only too ready to give way to the right hon. Gentleman if he wishes to express his agreement or disagreement with the late Chancellor of the Exchequer in the opinion that the foreigner will bear his part in import duties.


I was not aware that a single economist in the whole world ever doubted that the foreigner would bear some share of the duty. Certainly Professor Marshall, whose Paper was laid on the Table the other day by the Government, says so.


If the right hon. Gentleman is going no further than Professor Marshall, I, for one, am quite satisfied, but I think his late Chancellor of the Exchequer went a great deal further. Is it seriously contended that we are going to have in the schedule of the sources of revenue in future Budgets introduced by right hon. Gentlemen opposite, as the first line of all, "the foreigner so many millions, Customs so many millions, and Income Tax so many millions?" The right hon. Gentleman knows as well as I do that when we buy from abroad the importer has to pay the tax, and he recoups himself by putting on the price.


Not a single economist agrees with you.


All economists upon that subject take this point: They all take exceptional cases and state that there are certain articles, never articles of general consumption, never one of the articles of the staple trades of this country, but very particular articles in which there is a very limited trade and almost a monopoly, which the foreign exporter—in order to keep his market—will sometimes sell at a lower price. Consequently, in that case the consumer will not pay the whole amount of the tax. That is sometimes said, but it is never used by any accredited writer upon the subject. It is only said in respect of very particular articles, and never of articles of general consumption, and certainly not of articles in respect of which any large revenue could be raised. Our case in regard to these import duties is that you charge the poor, not according to their means but according to their needs. You will make them pay on their clothes, on their food, on their houses, and on building materials—on what their children use, require, eat, drink, and wear—and you will impose upon them burdens which they cannot bear in order to relieve those who, under this Budget, if they are taxed heavily, are at any rate able to meet it. That is why we support this Budget, and that is why my hon. Friend the Member for Preston (Mr. Harold Cox) supports it against those who in its place would substitute protective taxes on manufactures and on food. Our case, standing where it stands, I submit, is a strong case. We have got to find a large revenue. That is admitted on all hands. Nobody deplores the fact that he has to find that revenue more surely, I am convinced, than my right hon. Friend the Chancellor of the Exchequer. He has had to meet a considerable charge for the Navy and for old age pensions. He has met that charge, and he has gone out of his way, most rightly and properly, to lay down a system of taxation which will be productive not only for this year, but which will enable us next year to meet the inevitable burdens which will confront us. Speaking for myself, as representing the Admiralty, I am grateful to my right hon. Friend, not only for having found the means of meeting the great cost of that Department this year, but for having shown us the way by which the necessary increase to which he has already alluded in his Budget statement next year can be provided. I challenge hon. Gentlemen opposite to expose any scheme or to lay down any scheme of taxation which will give us anything like the same prospect of revenue that this Budget does and to give us that revenue with anything like the small comparative inconvenience the public are suffering in consequence of this Budget.


So far as the Debate has proceeded on the third reading of this Bill, it seems to me to have consisted partly of general justification without argument, partly of a destructive attack without constructive suggestions, partly of an interesting but utterly futile discussion of the tenets of Socialism, and partly of a somewhat melancholy procession of repentant Liberals. I wish to approach this Budget in the light of an ordinary business man and to ask myself, before recording my vote for or against it, whether it is the best method available to His Majesty's Government for dealing with the financial requirements of the country. I do not start from the common ground which is taken up by everybody in this discussion. We all seem to assume that because there is a deficit of 16 millions on the year's finances we must take that as a sacred fact behind which we must make no inquiry. Then, as the right hon. Gentleman who has just spoken says, the duty is thrown upon the House of saying how you are going to raise those 16 millions. The first question I ask myself is whether there should have been a deficit of 16 millions. I am not going to take the mere fact of the Chancellor of the Exchequer coming to the House with it as incontrovertible evidence that it need have arisen. I am aware that everyone wants old age pensions, I am aware that everybody wants a strong and efficient Navy, but I am not aware that everybody agrees that there is not another side to our national account. In addition to that, when I find that our Civil Service expenditure is going up enormously, when I find that over 30 millions a year is spent on the bookkeeping Department of the nation, when I find the Public Accounts Committee utterly powerless to do anything to check expenditure or to visit public Departments and to inquire how far their expenditure can be reduced, I ask whether it is necessary that there should be a deficit? I think a little business investigation into the expenditure of the nation on business principles, if applied to the conduct of our public offices last year, might have resulted in this deficit being of an infinitely smaller amount. Therefore I do not take it for granted that the deficit need have arisen. We are told we can look with no hope for economy in the permanent services of the country, and, as far as the Navy is concerned, we have been reminded that we are making a relatively small contribution this year, and that we may have enormous demands upon us in future years. Without outraging the sentiments of the House I would, when looking at this from a purely financial point of view, venture to express a hope that, with a strong Government in power, the time has almost arrived when we might ask some other nations for a friendly explanation why we are to be engaged in this eternal race for supremacy. I do suggest, when we are told we have to face an ever-increasing naval expenditure, that it is almost time our Foreign Secretary made friendly representations to other great nations and inquired what justification there is for these additions of "Dreadnoughts" and super-"Dreadnoughts" to their fleets. I hope it is not to be taken for granted that we are going to quietly acquiesce in the theory that, so long as any nation, without justification, goes on increasing its navy we must go on incurring double expense in order to maintain that supremacy which is our natural right at sea.

I listened very attentively indeed to the justification offered by the Attorney-General for the Bill as it stands. He said the Government, in providing for the deficit, had had to choose between three sources of revenue: it had to tax either property, trade or labour, and he vouchsafed the information that it had made its choice under the first head. The right hon. Gentleman suggested that under the proposals of the Bill trade and labour are escaping. May I ask, Is the licensing trade an illegitimate trade? Is the distilling trade of Ireland and Scotland an illegitimate trade? Is the interchange of marketable securities which are taxed an illegitimate process? I say it is not a just claim to make for this Budget that it has put its finger exclusively on property and allowed trade and labour to escape. I want to submit to the House that in a country like this, with all its resources, it is our duty so to revise our Budget as to liberate labour and trade from many of the impositions at present placed upon them. Let me say a word about the land question. When the second reading of this Bill was being debated by the House I had the privilege of stating myself to be in hearty accord with the principle of these taxes, and, taking the well-known characteristics of property in land, and taking it for granted that by the growth of the State, especially in large towns, a certain increment was always accruing, I said it seemed to me that, where it can be shown that the accrued increment is exclusively the work of the social community, it is fair and right to the social community that we should have not one-fifth of that accrued increment, but that, logically, you are bound to take the whole of it. I cannot quite realise the logic of the position taken up by the Government when it says, as the Chancellor of the Exchequer has said outside this House, that the present land system is one of robbery, blackmail, and immorality. I do not like the idea that the Government, of which I am supposed to be a supporter, will do nothing to provide an alternative so long as we have a finger in the pie and get a portion of the proceeds. I suggest that, in so far as it can be shown that something has accrued, the class of property which has a peculiar monopoly, exclusive of energy, industry, or enterprise on the part of the owner, if you say the State is entitled to take cognisance, I say you are bound to admit that the State must take the lot. I was rather amused at the childlike complacency of the hon. Member for Blackburn (Mr. Snowden) when he swallowed this Increment Tax as a substantial contribution to those doctrines of which he is a great apostle. If there is any unearned increment in the land it will pay an Increment Tax. According to this Bill it is quite possible the present land system may go on for all time, so that the hon. Member for Blackburn may find himself many years hence, or his successors may find themselves, in the same position as obtains to-day. My objection to the Bill is that you are apply ing general principles under it to something to which general principles are not applicable. If there are cases or localities in which, by public expenditure, land receives an artificial accretion to its value, it may be quite right to tax it, but to insist on a general system of valuation, which will cost more millions than the Government has yet realised, and which must, as business men know, involve a cost many times more than the figures which have been given, there can be only one result, and that will be to throw upon the community the cost of checking that valuation, which will lead to endless litigation; hence the only result, as I see at present of the peculiar form of these land proposals, will be another rich harvest in store for legal Members of this House and for members of the profession outside. If it is wrong for people to keep land out of development, why allow it to be done on payment of a tax of a halfpenny in the pound? I would like to see some legislation passed preventing the withholding of land from development.

That brings me to this, that we are introducing into this Finance Bill much which could be dealt with more conveniently by substantive legislation. I do not adopt the dictum of my right hon. Friend that you are entitled in a Finance Bill to take cognisance of political, moral, or any other considerations except these: how best can you raise the money which the national services require. If it be the fact that for a long time to come the working of these Land Clauses will lead to more litigation and little revenue, I wonder whether it is not possible to incorporate in some great comprehensive measure principles confined exclusively to fiscal and immediately productive fiscal proposals? Being in favour of the land proposals, I do not propose to criticise them any further, but I would in passing, make this observation, that when people say they do not realise the difference between unearned increment in land and unearned increment in other property they should bear in mind this distinction, that all other forms of property may vary in the circumstances surrounding them in a way which does not apply to land. Remember, that if the country wants more money Consols may be increased ad infinitum, and if the Government think that Consols receive too much interest they can, and they have been known to, reduce that interest.

5.0 P.M.

Leaving the land question, I should like to say a word about the next portion of the Bill which the right hon. Gentleman dealt with in a short but somewhat comprehensive reference—I refer to the licensing proposals. Nothing is further from my wish than to establish for myself the rôle of champion, in any sense, of the licensing trade. I have nothing to say against it more than against any other trade. I regard it as necessary. I look upon it as a trade conducted in a highly law-abiding and respectable manner. But when I find an unsuccessful attack upon it is being reproduced almost in toto under the guise of a Finance Bill, I am bound to ask whether that is a fair and just proposal in regard to that or any other trade? The right hon. Gentleman said that the line between statecraft and convenience was often a very fine line indeed, and he applied that epigram to this particular trade. I wonder what name he would give to the line which divides statecraft from convenience? I should think the line might be right of the citizen to carry on his trade free from molestation and persecution. I confess I do not find that line followed in these proposals. The right hon. Gentleman, speaking of these additional duties on the trade, said the burdens were such that, in time, the trade would be able to bear them. If that phrase has any meaning it must mean that at the present moment the trade may not be able to bear them, but that with an increasing and improving trade they may in the course of time be able to bear them. But the right hon. Gentleman forgets that this is a dwindling trade. He forgets that only the other night the Chancellor of the Exchequer shed tears of joy that one of his principal sources of revenue was dwindling away altogether, and that he spoke about the lessened consumption of whisky making many a workman's home happier and brighter. I wondered at the time whether the right hon. Gentleman the Chancellor of the Exchequer knows very much of the drinking habits of the working classes. I do not think that they drink much whisky, and I have not heard that there has been any improvement in the habits or conditions of the homes of the people since this Budget came into force. Whisky is not the drink of the working classes, and, in my judgment, the decrease in consumption is due solely to the irritation on the part of the people at this tax, and it has led them to change their methods of drinking, and instead of whisky to drink expensive wines and other things which are left untouched by this Budget. The right hon. Gentleman also forgets entirely that this trade at this moment is utterly unable to bear these taxes, and it is not fair to his own position or to the House, or to a dwindling trade of that kind, to say that heavy as the burdens may be to-day, they will be in time able to bear them. That was an admission by the right hon. Gentleman that the trade cannot bear these taxes at the present time. I say no more on that part of the Budget except that I deeply regret its introduction. Whatever is good in the Budget will be undone by the Licensing Clauses, and the people throughout the land are all more or less interested in this question, and there is a strong feeling which nothing can get over that this is another form of the Licensing Bill in accordance with the distinct threat of Members of the Government that if that Bill were defeated its provisions would be re-introduced in the shape of financial proposals.

So far as the other proposals of the Bill are concerned I suppose we must now take it for granted that they are so time-honoured in their antiquity that we must submit and look forward to them in every Finance Bill. Income Tax we must look forward to irrespective of whether it is a time of peace or war. I know that there has been some graduation in the shape of a Super-tax and some other ways in the Bill, but the fact remains that the Income Tax is retained with all its anomalies. Single men without any responsibilities pay exactly the same Income Tax as married men with families, and in order to increase the inequality you actually add the married man's income to that of his wife in order that the burden may be the greater upon him—a monstrous state of things, which no Chancellor of the Exchequer seems disposed to take in hand. Of course, you base your Super-tax as you base your Land Tax, upon the theory which has been uttered so often in the course of the Debate that you must tax everyone according to his ability to pay. That is a dangerous doctrine, and it wants explaining. If once you admit that the basis of taxation is the quantity of a man's wealth you are opening the door very gently, but very surely, to a dangerous doctrine, to the effect that if you tax a man according to his stake in the country that man is entitled to a political basis in the government according to that stake. I do not subscribe to that theory. But the Chancellor of the Exchequer has thrown over his great namesake Henry George; the hon. Member for Preston (Mr. Cox) has thrown over John Stuart Mill, and I do not hesitate to take the responsibility of throwing over Adam Smith with regard to that iniquitous assertion. You must put the taxes on in such a way that the citizen can most comfortably bear them, and I am far from asserting that the system of direct taxation which the Free Trader worships is altogether ideal. I am not at all sure that it is not better to tax a man without letting him know that he is paying the tax—human nature being what it is. I am certain it is the most economical and effective way of collecting the tax—I am certain of that—and I am quite certain that it does not necessarily in its incidence fall upon the working classes or add anything to the hardship of the proposed tax.


Does the hon. Member say that indirect taxes cost less to collect than direct?


I am not going into the cost of collection, but if my hon. Friend wishes to know, I would say that many indirect taxes can be collected for next to nothing, but that is a wide question which would lead us into a debate more suitable for a young men's debating forum than the House of Commons. I want to say a word about another aspect of the Budget, one which to my mind has not been commented upon sufficiently, and that is the interference with what is called the Sinking Fund. I want to utter another financial heresy in regard to that matter. I am one of those who is an unswerving believer in making posterity pay as much as ever you can. I think that is a self-evidently sound proposition, and it requires very little argument in support of it If you could devise a system of taxation which puts the bulk of the burden on posterity and left them to get out of it when the time arrives you have found an ideal Budget, and when you begin to argue as to the morality of it you have only to test it by one question: Is the expenditure such in its nature that it will be for the benefit of posterity as well as for the present time? As to naval expenditure, I venture to express a hope that we are not going on for ever building navies in competition with foreign countries. Every penny of this naval expenditure, to my mind, is a matter for posterity. We are not going to war with Germany, or any other great nation, in our time, and if posterity is, so much the worse for posterity, either in this or any other country. But why are we taking all the burden upon ourselves? We have a fixed charge upon the Sinking Fund, fixed under different conditions to those which prevail to-day, and £28,000,000 a year until now has been the sum found every year until to-day, which goes partly in interest and partly in reduction in debt.

The only question to consider as a business matter about our National Debt is, is it well within our borrowing powers, well within the securities we have to offers If so, and if the bulk of it is permanent expenditure for the benefit of posterity, why should we go on reducing debt when we have need of money for current necessities? Hon. Gentlemen say you must not tamper with the Sinking Fund. Why not? I am one of those who is not impressed by the platitudes which are uttered in this House or in our Press at present. I once owned a financial paper, and I remember one evening my sub-editor, who would not have been a supporter of the Licensing Bill, came to me for an advance on his salary. I had paid him one or two in the course of the week and I refused, and he went away saying, "This is the rummiest world you can think of. I have just been writing an article on the fact that money is cheapening, and I cannot borrow a half-crown on my salary." That is a fair sample of what you read in the Press on this subject, and I do submit that the time has come when we might look into our Sinking Fund. If you take our new Sinking Fund it amounts to £25,000,000 a year, in regard to which we receive no beneficial interest. But if I were to talk to hon. Members in a Committee-room about this, I think I could convince them in a few minutes that £10,000,000 would be better spent on an extension of the old age pensions scheme or on unemployment than in paying off the National Debt for the benefit of posterity, which for all we know may never arrive, and when it does will take very little interest in us and have very little gratitude for the sacrifices we have made for it. Therefore I do say the Sinking Funds ought to be revised. If you will not touch the new Sinking Fund, what about the other? The Chancellor of the Exchequer was wound up almost to the point of abolishing the old Sinking Fund, and under the first edition of this Budget we were to have no old Sinking Fund, and money which was saved on the year's expenditure was to be used, as it should be used, for the benefit of the country instead of going in further reduction of the National Debt, which is smaller in this country than it is in some other countries, which is infinitely more secured and which nobody wants to reduce—nobody but that mysterious posterity which every one of us is always thinking about in these matters.

That being so, I say that the old Sinking Fund at any rate might be abolished without injury to our credit in any way, and that what we save on the year's expenditure, amounting to £4,000,000 or £5,000,000, should go into a common purse for the benefit of the community at the present time. I will not enlarge upon that theme at the present moment, but I throw the suggestion out for the benefit of the coming Chancellor of the Exchequer, who has listened without by his facial expression betraying approval to the remarks I have been making. As regards the other provisions of the Budget I say no more, but I did say at the beginning of my observations, and I want to come back to this, that when a person criticises the Budget it is his bounden duty if he objects to it to say that there is something better. I re-echo, of course, the challenge which has gone forth from this side of the House, not because it is from this side of the House and from the official Opposition, that the Government should not let this Debate close without giving some of us who are in a little doubt as to whether this is the best Budget a little more guidance than we have at present. I want some terms defined, but without going into the wide field of fiscal reform, which can be boiled down to a very little one, if we once recognise that nothing in this world is infallible or sacrosanct so far as political principles go—I ask myself whether or not under our present fiscal system the Chancellor of the Exchequer might not have produced some millions more without injury to anybody, even if he could not have reduced expenditure. It would be out of order to go into the merits of alternative proposals beyond stating their character and proving their effect. I have had the privilege and the honour more than once of making certain suggestions to the Chancellor of the Exchequer, to which I have had no satisfactory reply. I want to know why, in connection with this Budget, he has allowed such a source of revenue to pass through his hands and not called into the Treasury the vast sums of unclaimed money and securities lying in banks in the United Kingdom at the present time. I have had two answers, and two only. The first was that the amount was so insignificant that it was not worth troubling about, and the second was that the proposal was so far-reaching that it would shake to the foundations the banking institutions of this country if it was adopted. I leave the Chancellor of the Exchequer to reconcile them, but I make the statement again, and I shall go on making it as long as I have the right in this place, that there are at the hands of the Chancellor of the Exchequer, and in a way which violates no principle, vast sums, amounting to at least 50 millions of money, which will go into the Treasury by the mere stroke of the Chancellor's pen, the interest on which will be available for national expenditure and the capital of which will be available for all purposes. That is one suggestion that the Chancellor will not touch at present.

The Chancellor of the Exchequer has introduced a system of stamps in this Budget. He has revised the stamps at present put upon Stock Exchange contracts. I have told him, in the presence of Members and high authorities of the Stock Exchange, and the statements have not been denied, that 75 per cent. of the Stock Exchange transactions in this country are gambling transactions, and I have begged him to insist that the same stamp which goes upon a bonâ fide investment transaction should go upon a gambling transaction, and I have said that must mean at least 20 millions a year. The Chancellor of the Exchequer gets up, and says: "Would that not stop business?"—a Member of the Government which introduced the Street Betting Bill saying: "Would not this stop gambling in stocks and shares?" ! A penny in the pound is the present tax on investment transactions. I suggest that we should put a penny in the pound on gambling transactions. When I suggest taxing the gambling instincts of the people, I do not refer simply to the comparatively harmless, though ridiculously stupid, system of betting and transactions of that kind, although they ought to be brought into view as well. You tax the drinking habits of the people. You draw a revenue to-day from playing-cards, which does not legalise baccarat any more than the drink tax legalises drunkenness. Yet you will not touch this other source at your hands, as to which there is no answer. The only answer is that the Chancellor shrugs his shoulders, and says: "I suppose this is some of the hon. Member for South Hackney's nonsense, extravagant language and wild ideas of finance." I am the soundest financier on this side of the House. I am for taking all the money which is at our hands and spending all the money we get, and leaving posterity to look after itself, and that is sound and invulnerable finance. We are constantly referred to other countries when it suits the book of the Chancellor of the Exchequer—France, Germany, and America. These countries derive millions a year from taxing advertisements and high-price amusement tickets. Do they bear harshly on the community? They cost nothing worth mentioning.

One other proposal I again mention because it is far-reaching, and it is absolutely magic in its operation. Why should not every share certificate in a joint stock company bear a small tax? At present they escape entirely, yet we were warned yesterday by the hon. Member (Mr. Ridsdale) that many of the provisions of the Budget will be evaded by forming joint stock companies, and issuing warrants to bearer and things of that kind. I could go on until 12 o'clock at night enumerating sources of revenue open to the Chancellor of the Exchequer within the limits of our present fiscal system, but he will not touch them, because he has not received the permission of the permanent officials of the Treasury. I pray for the day when we may have a Chancellor independent of all permanent officials when he sees sources of revenue at his hands so obviously available as these are. Putting all these observations together they come to this, that in my opinion, by the application of business principles to the Government of this country, the deficit need not have arisen, but, given the deficit, it could be wiped off very easily without any of this experimental sort of taxation which admittedly will take years to fructify, and that being the case we are not at the moment called upon to consider in detail the merits of any alternative fiscal system which may be hinted at in the course of this discussion. But since that is the only official alternative I plead very earnestly with the responsible spokesmen of the official Opposition to tell me, before I record my vote, exactly what it is that we are going to get when in January next if such be the fates, they should change sides in this House. Let us be a little more definite. There are a good many of us open to be converted to the idea that our much talked of system of Free Trade is not a sacred thing on which the finger of legislation or common-sense cannot be placed.

So far as Socialism goes, the word does not frighten me at all in regard to this Budget. I do not agree with the hon. Member (Mr. Snowden) that all the legislation of the 19th century or any legislation of this century was Socialistic in its character. I should almost be audacious enough to say that the hon. Member is a little faulty in his logic when he talks about Socialism. He is one of that noble band of leaders of men we see frequently arising whose hearts are bigger than their brains. I do not think he has that necessary knowledge of the practical, mundane, sordid affairs of life which is necessary in order to see the real effect of your arguments. The general theory of Socialism as applied to this Budget in the whole of the Debate is that there is some magic in changing the ownership of land and capital from individuals to the State. My view is that the personal ownership of property matters nothing. It is the management, the development, the intelligent handling of capital, and that alone, which gives value to it. It will make no difference to the welfare of this country whether a man pays his rent to the blackmailing landlord of whom we hear to-day, but who is usually somewhat sympathetic when the tenant asks for a little time to pay, or whether he pays it to a uniformed State official, who will turn a very deaf ear to his application for consideration. The ownership of capital does not matter. It is the application and the management of it, and inasmuch as no legislation of the nineteenth century or this century, and no proposal in this Budget proposes to tamper one iota with the principle of private ownership of property, the hon. Member is hugging a huge delusion when he thinks that some concession is being made to his school of thought by this Finance Bill. Socialism can only proceed upon the assumption that something called a State, whatever it may be, shall hold all the means of production, and shall distribute the proceeds irrespective of all the lessons of history and all the doctrines of civilisation, and that anarchy shall take the place of law, and this Bill does not proceed upon that basis. All that any Member can ask in connection with this or any other Budget is that there shall be equality of opportunity—that is, just law and just Government for every member of the community, leaving his industry, his enterprise, and his ability alone to fortify him in the struggle of life, and trusting to other sources and courses altogether when he falls in that struggle. The State may make generous provision out of the surplus products of labour and capital for the sustenance of the old, the weak, the infirm, and the unfortunate. Socialism can never alter the fact that the best and only form of Government in a civilised country is that which gives equality of opportunity to every citizen.

My own view of the Bill is that it is lamentably neglectful of many opportunities, and it is based upon the theory that we cannot go outside the old beaten track of official Government finance, but that, so far as it endeavours to open the door to a system of land valuation which hereinafter shall enable the State on just and equitable lines to deal with the land of the State, wherever it is necessary to benefit the State, it introduces a great principle. It is blurred and blotted and irretrievably spoilt by the vindictive reintroduction of the attack upon the licensing trade. That introduction will justify any man on any side of the House in saying that as long as it remains he can be no party to it. But I am hesitating whether to follow the hon. Members (Mr. Cox, Mr. Ridsdale, and Mr. Belloc) and others into the same illogical condition of mind which makes one say, whilst I think the Bill is blurred by a gross, unjust innovation, I shall vote for it, and I am in this dilemma. Recognising that the time when I shall have any voice, in deciding the taxation of the country is too remote to enter into my immediate considerations on this particular measure, and recognising that the official Opposition is the only party we can look to at present for an alternative to this Budget, I shall suspend my own judgment as to whether or not I shall vote for it until I hear from responsible speakers of the official Opposition what it is that they are going to put in place of these proposals, and then, if there is nothing better, I can only, I suppose, either walk out of the House, for which I shall have high precedent on awkward occasions, or else I must take the good and the bad together, and strike a debtor and creditor account, and then justify myself to my constituents on the ground that I made the best of a bad job, and enabled the Government of the country to proceed, though I have swallowed something I do not like, and compromise my conscience as best I can.


The question put from the Chair to-morrow will be the third reading of this great Finance Bill. After all, although it is a great Bill, the question we have to consider and vote upon is very simple. A large number of millions have to be raised, and the question is simply whether that money shall be raised in the main by the taxation of superfluities or the necessities of life. We are voting on principles, and not on details. The right hon. Gentlemen who opened the Debate last night threw out a challenge to us. He pointed to the very great increase in expenditure during the last four years, and said that to a certain extent it was unprecedented. The right hon. Gentleman did not challenge us without, I suppose, having some reason for doing so. He could not use that expression merely as a taunt. He could not throw across the floor the charge, "You have belied all your principles," without having in his mind some reason for doing so. He must have in his mind surely some idea as to why the 166 millions ought not to have been spent. I think he did not give us the slightest indication.


May I be allowed to say that at the time of the last election I did not hold out to my constituents or to the public any hope that expenditure could be reduced? On the contrary, I said that it could not, and that it must continue to grow. That has been my view all along. What I pointed out was that the then Opposition, led by Members of the present Government, endeavoured to make it appear that our expenditure had been extravagant, and that it would be their duty to reduce it. They have not only not redeemed these pledges, but they have increased the national expenditure.


I understand that the right hon. Gentleman does not complain of the amount of the expenditure. I hope the House and the country will note what the right hon. Gentleman now says, namely, that if a change of Government were to take place the present expenditure would be vastly exceeded. There is no doubt about that. This is one of the most remarkable Bills I can remember being brought into the House. I made a remark when we listened at the end of April to the prolonged speech made by the Chancellor of the Exchequer in introducing the Budget that it would be the middle of October before the House could get to the end of the Bill, and that prediction has turned out to be pretty accurate. When this Bill was brought into the House of Commons I thought very much less time had been spent upon its preparation than ought to have been. It had in it certain elements of crudity. I remember very well when I went first through the Bill my heart sank within me as to some of its provisions. I am not going over them all now, but I will give one illustration. There was the provision about the Mineral Bights Duty. Well, anyone who understood anything about minerals would say that that was a perfectly ludicrous proposition to put in the Bill. There was, however, some reason for the crudity of the measure, because at the time when the great Departmental officials and the Cabinet Committees ought to have been occupied preparing the Finance Bill at the end of last year, they were labouring hard on the Licensing Bill. That being so, they could not frame the Finance Bill with all the care which ought to have been bestowed upon it. If I am asked whether I would have chosen, on the one hand, that the Finance Bill should have been delayed in order to be better prepared, or, on the other hand, whether I would have it in the crude state in which it was presented, I would say that I would rather have it in the inchoate condition in which it reached us. That, of course, had its consequences. It was perfectly impossible for the House to get through the Bill in anything like the ordinary period. I think it was Sir Robert Walpole who said in 1733 that he would not impose taxation with the aid of force, because it would probably lead to bloodshed. Nothing would induce him to do that. I have always said that you cannot impose taxation by guillotine Closure in the House of Commons. It is perfectly impossible. You must give the representatives of the people, on whatever side they sit, full and free opportunity of considering the proposals you make in regard to taxation. I would say that the House has had full and free opportunity of considering this Bill. I do not know whether any of my hon. Friends have done what I have done. I have gone through the Bill clause by clause, line by line, word by word, in order to ascertain the difference between the measure as first introduced and as it now stands. I find a very remarkable result. As regards Part I. of the Bill, the change has been enormous, as indicated by the figures. When first introduced Part I. contained 7,191 words. No less than 1,013 words were dropped out, and 7,373 words were added, so that it contains now 13,554 words. More than half of the words, therefore, are absolutely new. That is an indication of the manner in which the Bill has been remodelled in this House. It is the first time in which any Finance Bill or Customs and Excise Duties Bill has been so entirely remodelled in the House of Commons, and that, I believe, is due to the reason which I have already stated.

I have first of all to express my thanks to the Chancellor of the Exchequer, as the representative of the taxpayers, for his readiness and willingness to listen to every single complaint whether taken to him privately, as many have been, or stated in this House. The result has been that the Bill is now one which can be, in my opinion, warmly supported without any hesitation whatever. The Death Duties, the Licence Duties, and the Land Duties are the parts that have attracted most attention and provoked most discussion. In regard to the Death Duties, those of us who sat in the House in 1894 recalled in our thoughts the great Bill which the late Sir W. Harcourt introduced. We had then all the objections and prognostications which we have heard again in respect of the Death Duties. The prognostications which were made in 1894 have turned out to be absolutely worthless. No prophecy made then in regard to the Death Duties has been fulfilled. Now I welcome the new Death Duties warmly. After all, what do the Death Duties rest upon? They rest upon the principle that a man has no absolute right of property apart from the will of the community. The late Sir William Harcourt pointed out that we brought nothing into the world. A man may make a will in regard to the disposition of his estate, but it can be altered, modified, or limited in any way the State likes. Therefore, the whole power of transmitting our possessions is one which is granted by the members of the community in which we live, and which may be altered at their discretion. I do not believe for a single moment that anyone will be harmed by these Death Duties. I rather regret that the Prime Minister, when Chancellor of the Exchequer, did not stiffen up the Death Duties to a greater extent. He did to a certain extent stiffen them with the result that he obtained £800,000 more revenue. I am really surprised at what fell from the right hon. Gentleman opposite. He seems to think that we are laying something in the nature of a sacrilegious hand on the sacred ark if we increase the Death Duties.

As to the licensing proposals I would say that the whole thing rests upon the monopoly value which has been allowed to accrue. We are taking into consideration the enormous change which has taken place in that particular trade by the driving out of the old public-houses, the free houses, and the grasping of licences by the capitalists and brewery companies. The situation has now reached a point when the State is not only entitled to take action, but when it would be a dereliction of duty not to do so much as is done by the Bill. As regards the 20 per cent. fall in the consumption of whisky, one would think from the speeches that are made that this means wonderful interference with the spirit trade. I am one of those who say that if the proposals in the Finance Bill result in a diminution of 20 per cent. in the consumption of that particular kind of intoxicating liquor, I am very glad that that is to be the result. I have always acknowledged that the social and economic effects of the Finance Bill will be considerable. I confess that we ought always to be guided by justice as regards the holders of licences. I have received a good many communications from a number of these gentlemen pointing out this, that, and the other matter, and in many respects I believe that the Government have met all reasonable complaint. As regards the land, which really has been the storm centre of this Budget, the right hon. Gentleman (Mr. Long), who opened the Debate this afternoon, said that the object of his remarks would be to show that the proposals in this Finance Bill will affect agricultural land injuriously. I cannot believe that that will be the effect. I have always taken a very strong view in this House as regards the importance of the financial welfare of what is, after all, the greatest industry in this country—that is, agriculture, and if I thought that it was going to interfere injuriously with agriculture I would not agree to anything which would have that effect. But I do not believe for a single moment that it will. The right hon. Gentleman made no attempt to make good his statement. He never came to that part of his subject. I am satisfied from practical experience with regard to land for many years that the proposals in the Finance Bill will not affect injuriously the avocation of the farmer or any interests in land either of owners occupying tenants, or those who till the land. Taking into account the operation of Schedule A—I will not call it a concession; it is only an act of justice which should have been done years ago—I am satisfied that agriculture will, after this Budget has been placed on the Statute Book, be in a better and not a worse position than it has been in before.

I come now to what, after all, is the real bogey, and that is the use of the word "Socialism." It does not frighten me. What is so called Socialism to-day is accepted to-morrow. I am entirely opposed to theories that are adopted about the nationalisation of this, that, and the other thing. I do not understand what they mean. They are absolutely unworkable. I am all for private property; for a man going home at the end of the week, earning his 30s., saving his 5s., and being able to do what he likes with it. After all, Socialism very often in the minds of common-sense people means simply raising the social status, and in that view we are all Socialists. I do not think that there is anybody who does not feel in his sober moments that what really oppresses one and pains one is the fact that so many thousands and tens of thousands of our fellow human beings live lives of such hardness, poverty, and grinding misery that it goes to our hearts quite irrespective of our position to witness it; and we are anxious to diminish or in any way we can to alleviate that sad state of affairs. It is because this Bill will tend in that direction that it will receive my warmest support. We are told that there is a more excellent way. I do hope that when the Leader of the Opposition (Mr. Balfour) comes to address the House to-morrow night he will indicate to us, as I think he is almost bound in honour to do, more clearly the alternative which he proposes to put before what is in this Bill. He should certainly answer some of the questions that have been put to him by the present Prime Minister. He should certainly take the House into his confidence, he having taken the most formidable step that an Opposition can take, i.e., moving the rejection of this Bill. Because what does that involve from the Parliamentary point of view? You may make a proposal in this House sometimes knowing that it will not be successful, but no one would decide to make such a Motion without having weighed the consequences of its being successful, and certainly not the Leader of the Opposition. He is bound to tell the House, not what precise proposals he is going to advance, but what are the main principles which he would substitute for the policy that he is inviting this House—I will not speak about another place—to reject.

We have had this thing masquerading for the last 30 or 40 years under various names. At one time it was Fair Trade; then it was Reciprocity; and now it is Tariff Reform, which has arisen from Birmingham within the last few years. Of course, we all know that there is only one basis for it all, namely, that the poor will suffer, that everything they eat, the clothes they wear, and everything they require shall be raised in price. [Cries of "No."] There is no use in saying No. It is so. I am quite aware of what hon. Gentlemen add, that of course people will have more money to pay for it, and that there will be higher earnings. That is all hypothetical. The one solid fact is that everything consumed is to be raised in price. This is a Free Trade Finance Bill. This is put forward by a Free Trade Government; and that is the simple issue we will have before us to-morrow. This will be supported, of course, by the overwhelming majority of this House. As it leaves this House, so it must go on the Statute Book. No compromise is possible on this matter. It is because I believe that the Bill is founded upon justice, that as it emerged from Committee the errors and omissions and blots have been rectified, and further that it contains within it promises of potency of some alleviation of the poor and some elevation of our people in their social habits that I shall vote warmly to-morrow in support of the Bill.


We are now, fortunately, nearly at the end of this Debate, and I do not think that any Member on either side of the House will be sorry When you put the Question from the Chair to-morrow night. I feel myself in a certain amount of agreement with the hon. Gentleman opposite when he said he considered that an adequate amount of time had been given by the House to the discussion of this measure. There is hardly any ground of complaint on that score, though in the earlier portion of the Committee stage resort was had to the Closure, and some of the most important provisions, involving issues of an entirely novel character, were relegated for discussion to the early hours of the morning; but on the whole I think it can be fairly claimed by the Government that the discussion has been of a comprehensive character. I listened with great interest to the remarks of the First Lord of the Admiralty (Mr. McKenna). He made one admission which was very interesting. I think his words were that there was very little difference between morality and convenience. If he had given us that statement a little earlier we should have known exactly what was in the minds of the Government, because we have said all through this discussion that this was what was in the minds of the Government, but they repudiated it to the utmost of their ability. The right hon. Gentleman, with the dexterity which I think belongs to him, skated over the thin ice of Socialism and in effect he made the assertion that because the hon. Member for Blackburn was in favour of the Budget that was the reason why we condemned it. Well, I think that is a very good reason for condemning it. The hon. Member for Blackburn has entered this House as an avowed Socialist, and I think we should be paying a very small compliment to the intellect of the hon. Gentleman if we said that he is entirely wrong in his views about this Budget, and that the views which he puts forward that it is a step in the direction of Socialism are not correct. I do not think he is wrong in any respect. I think he is right, and I know perfectly well that all the hon. Gentlemen below the Gangway who support his Socialistic principles, and a great many of the hon. Gentlemen opposite, know pretty well that that is a step in the direction of that policy which we on this side are determined to withstand to the utmost of our ability.

Certainly the Government owe the Opposition a debt of gratitude, because I suppose no more crude or more unworkable measure has ever been introduced into the House of Commons, and though on that score the measure is still open to considerable criticism, still it is impossible to deny that it has been considerably improved, and with regard to the so-called concessions, there was literally no other course for the Government to adopt. At this stage it naturally occurs to everyone to ask whether this is a Finance Bill at all; we say that it is not a Finance Bill. It is a Bill containing other measures which have been rejected, and which the people, I believe, when they have an opportunity of deciding, will also reject. We are told in this House that this is a Finance Bill. The Chancellor of the Exchequer regrets to us that it is impossible for him to make further concessions, because the only consideration that comes before him is that it will affect the money question, and he will not be able to afford it. But on public platforms, and also in the periodicals to which the right hon. Gentleman contributes, we find an entirely different view, and we find that the aspect of this Bill as a Finance Bill is quite one of the minor considerations of the Chancellor of the Exchequer, but that it is to be a great engine of the so-called social reform of which we have heard so much.

6.0 P.M.

This is not the occasion for discussing, the details of this measure by going into minor points that have been settled. This is an occasion on which we are called on to give our votes on the broad issues involved. I think the real questions coming before the House at the present moment are three in number. The first one is whether or not these financial methods are the best methods which we can devise for raising the money which is required by the State. The second question is whether the burden of taxation is equally divided in proportion among all the members of the community for the protection which they require from the State and also for the share of the services which they expect from the State. The third question is whether this increased taxation will injure and so reduce the yield of the recognised sources of revenue. Of course our whole system of taxation, and also of rating, bristles with anomalies, but this Bill, instead of removing some of those which already exist, has added to the number, and the Chancellor can hardly be said to have acted up to the saying of one of the most illustrious (though certainly one of the most unscrupulous) statesmen of France, that the art of taxation consists in so plucking the goose as to procure the greatest quantity of feathers with the least amount of hissing. With regard to whether these are the best methods of raising the required revenue, I need hardly say that that view is certainly not mine. I could, perhaps, suggest more alternatives than one, and alternatives which I hope would neither be characterised by impracticability nor by injustice, which appear to me to be the chief characteristics of this measure; but this is hardly the time for suggesting alternatives, and in the short time at my disposal I will endeavour to deal with the two other questions which I have ventured to put forward, and to which no satisfactory answer is given by the financial proposals. The first of these two other questions is whether the burden of taxation is equally divided, or rather divided proportionately according to the ability of each individual to pay? I hardly think the Chancellor can claim to have accomplished this object, or even to have desired to accomplish it. The Budget is obviously a penalising Budget, and by imposing additional taxation on revenue, which is the case in the licensing proposals, the Chancellor has shown only too clearly that his object has not been solely the raising of revenue, because there were other ways of doing that, but his object has been to destroy by this measure a section of the community, politically, perhaps opposed to himself, who escaped from the vindictive spirit which actuated the Government last year.

The licensing proposals are obviously unfair, and it is sheer hypocrisy on the part of the Government or their supporters to endeavour to formulate the suggestion that the proposals have been introduced either from the point of view of revenue or the point of view of temperance. I object entirely to the promotion of so-called social reform by means of a Finance Bill. It is entirely a new departure, and has never been resorted to by those who are considered high authorities on finance. A Finance Bill should deal solely with the raising of the money required, and the main object of a Chancellor of the Exchequer should be to raise that money with the least possible disturbance and the minimum of injury. The burden of taxation is not equally divided. The investor in land—I do not care whether he is a rich man or a poor man—is to be additionally taxed because he is a landowner, whereas the investor in Consols is allowed to escape because the latter, until the National Debt is repudiated, is outside the vindictive policy of the Chancellor of the Exchequer. The investor in royalties is singled out, while the railway shareholder is allowed to escape free. There is no method in the revenue-producing plans of the Chancellor beyond an endeavour to penalise success, to discourage thrift, and, by the setting up of class antagonism, to provide subject-matter for his lurid speeches in the country. To produce a revenue, and to produce it with the minimum of injustice and injury, appears to be the very last consideration of the Chancellor.

My third question as to whether the increased taxation will injure and so reduce the yield of the recognised sources of taxation is, to my mind, one of the most important considerations. With regard to the Death Duties there must be a point at which the yield will increase in proportion to the increased wealth of the country, but go beyond that point and the yield from this tax in successive generations must necessarily be diminished. I believe the first point has been passed, and that the proposals with regard to Death Duties are fraught with the gravest possible danger, first of all to the revenue-producing capacity of this tax, and secondly to the national capital. The employment of this source of revenue as income is another proposal to which I personally have always taken exception. There are very few taxes embodied in this Bill which are not open to criticism on the ground of their being burdens on capital, and burdens on capital strike at the very roots of our commercial prosperity. It is true that our national expenditure is very large; it is of necessity very large indeed, but our additional liabilities are open to question, I admit, especially when retrenchment was the electioneering card of the party opposite, a card which I do not think they will dare to play again. There are hon. Gentlemen on the other side who perhaps have ingenuity enough to turn it to account; but I fail to see why, to raise the required money, it should be necessary to maintain as tyrannical and inquisitorial a method as it is possible for the brain of man to devise, or why, to raise it, we should become a nation governed by a bureaucracy—a system severely condemned by the Chancellor when a Member of the Opposition—but which apparently is now a system entirely after his own heart.

There have been ample and varied methods employed both for recommending the Budget to the country, and also for proving that the Budget is injurious, and I do not propose to deal with them beyond saying this: On the side of recommendation, I deprecate the class prejudice which it has been thought necessary to stir up, and the appeal to the passions of those electors who belong to the poorest classes of the community, by holding up the wealthy as fit objects to be unduly plucked, regardless of equity and justice. On the other hand, the difference in expenditure of a few rich men is not a matter of very great importance except to the comparatively few whom a reduction in their expenditure may affect; but what we have to discover is the effect for good or for evil which it will have on the country as a whole, and I say most emphatically that is is injurious, that it will have an impoverishing effect, and that it undoubtedly is a step in the direction of that policy which is advocated by those who are known by the name of Socialists, a policy which I cannot believe is calculated to increase the prosperity of this country. A great many supporters of this Bill can, I believe, be numbered amongst those who may nominally be termed anti-Socialists, and who at the same time fail to see the Socialistic abyss into which they are plunging the country. I should have thought that a comparison of this Bill with the Socialist Budget would have opened their eyes, but, failing that, the approbation of certain hon. Gentlemen who sit below the Gangway should have convinced them of its sinister undertone. I suppose, however, that party considerations are very strong, and I believe also that an idea is abroad that to go half-way with the Socialists is to take the wind out of their sails. A greater fallacy never existed, and the sooner the real objects of the Socialist party are explained the better for every section of the community. Whatever may be the merits or the demerits of this Bill, no one can deny that its presentation has created an unprecedented disturbance. Is that an advantage in the world of finance? It has never been considered so, and I see no reason why all previous Chancellors of the Exchequer of all parties should be wrong, and the present Chancellor of the Exchequer should be the only one that is right.

I do not think anyone can deny that the right hon. Gentleman, by his proposals, has been responsible for the migration of capital out of this country. With regard to the question of the migration of capital to foreign countries and to our Colonies, I know it is argued that it returns in the form of cheap food and other cheap commodities. That is perfectly right to a certain extent, but I can only say that this migration of capital must have been carried to a far greater extent and to an injurious extent, because if we look up the statistics of unemployment we find that this year there are 7.7 of skilled trade unionists unemployed. We require that the money should be invested in this country, and I think that the Chancellor of the Exchequer is deserving of the gravest censure if, by his proposals or his extravagant language, he drives capital out of the country. Figures must carry a certain amount of weight, and surely it must be realised that it is indeed a sinister revelation that simultaneously with this great amount of unemployment out of invested capital, totalling £203,000,000, some £148,000,000 have been invested abroad. I go so far as to say that a great deal more of that £203,000,000 would have been invested abroad were it not for what I may call the conservative idea of the investor, who is always loth to cut his loss and invest what remains in some other stock. I do not know if the Chancellor of the Exchequer, and I wish he were here now, is still of the opinion he expressed to a cheering audience at Newcastle, that there was a slump in no kind of stock. I believe there are a great many individuals who would be only too willing to have the opportunity of undeceiving him on that subject.

With regard to the arrangement of the Sinking Fund which has been alluded to, I think that is a proposal of a very dangerous character. It shows the straits to which a so-called Free Trade Government are put when it comes to a necessity of this kind. It also shows the straits to which they are put with their policy of sanctimonious hypocrisy, which is the only definition of their so-called policy of social reform, and which results not in pecuniary benefit but in a general disturbance of a Socialistic character amongst all sections of the community. This Finance Bill is now in its last stage, and I shall look with interest to see what attitude is adopted by hon. Gentlemen who sit on the other side. I know a great many of them said that they only supported the second reading because they felt that the Committee stage would bring the Bill into the shape in which it ought to be. I do not think any hon. Gentleman will rise in his place and say that the Bill has been materially improved or materially altered in principle. I need hardly say that when you put the Question from the Chair it will be with the greatest pleasure I shall record my vote in favour of the Amendment that the Bill be read three months hence.


Hon. Members to my right seem to take a melancholy pleasure in making our flesh creep. They are always arguing about unemployment, about capital going out of the country, and foretelling all kinds of disaster. It would almost seem from them as if our own country was the only country in which there was any real ratio of unemployment. I wonder if hon. Members know of what is the case in the most protected country in the world, because Protection on their lines is supposed to be the remedy, and, according to them, Tariff Reform means lower Income Tax and work for all. I wonder if they have paid any attention to the figures in New York State of the proportion of unemployment among the skilled trades of New York. If they did, and if they made a comparison, I think we should hear a good deal less of these melancholy remarks. If it were true, or if there was even a decent chance of it becoming true, that this Budget would have the effect of driving capital out of the country and of increasing unemployment, it would be a very serious matter indeed for the Labour Members. We of all other people at least have a direct interest, and an interest which even our bitterest opponents do not deny, in maintaining employment and in promoting by every means in our power the methods whereby employment can be increased.

Let us see really what are the main objections that have been raised by opponents of the Budget and the main objections on which they base their arguments that unemployment will increase. They say you are taxing capital, you are placing a greater burden upon landowners, and one particular case has been quoted—the case of the lessor of mines, the man who owns royalty rent—and it is said there is a great burden already placed upon the mines, and that you are increasing this burden, and that therefore you will increase unemployment. Upon whom does the Budget propose to increase the burden? Upon the man who at present does not bear any of the burden. An hon Gentleman on my right says it will go to the bottom. It has been admitted during the Debates on the Committee stage that during the continuance of existing leases, at least, the present leaseholders will be freed from the tax. What is the duration of existing leases in mines, and I am speaking now of coalmines only? I have taken the trouble to get out the figures, and I find that the average duration of existing leases is 40 years. Many leases go up to 63 years, many go as far as 99, practically the lowest figure is 21, but the average duration of leases throughout the mining counties of the United Kingdom is 40 years. The present leaseholders are therefore very secure with an average duration of 40 years. Are we really to concern ourselves with what is to take place on the leaseholders of 40 years hence? A new generation will have arisen. They will have problems of their own, and it is not for us to trouble ourselves very much as to what will take place in a generation 40 years to come. It is quite incorrect to say that the minimum Royalty Tax will fall upon either the present leaseholder or the present workman.

Compliments were paid yesterday, and I listened to them with some amount of pleasure, as to the very fine way, the very gentlemanly way in which the rich men of the country Bad agreed with the principle of the Super-tax. Really I can hardly subscribe to the compliments that were being paid, I wish I could, but I remember one extremely rich man not very long ago, because we were speaking of the necessity and of the absolute justice of the imposition of the Super-tax, one very rich man occupying a very exalted position, hoped that every labour man in the country could be gagged for an indefinite period. [An HON. MEMBER: "Who was it?"] Is that a very gentlemanly way of expressing their concurrence with the principle of the Super-tax. Lord Rosebery not very long ago at a great meeting, in which he was understood at least to give light and leading to the nation, stated that the gravest part of all this Budget was the Super-tax. Of course, he has since been thrown over with very considerable effect by the right hon. Gentleman the Leader of the Opposition, who says that as compared with other taxes he thinks it is much fairer than the generality of the taxes comprising the Budget, and that for the people upon whom it is imposed he neither has expressed any sympathy nor does he feel any. An hon. Member representing a Division of the City of Liverpool was courteous enough to suggest that the reason why the Super-tax only came into operation at the £5,000 limit was because many of the leading Cabinet Ministers found that that figure coincided with their own salaries. I really cannot take any part at all in the honeyed compliments which were paid to the rich men of this nation for the way in which they are agreeing with the principle of the Super-tax. I think it is admitted after all that if taxation is to be imposed we do not need to trouble about the economists, but that it can only be borne by the people able to pay it. Is anybody in this House or out of it prepared to say that a man who has an income of £1,000 a week cannot bear some little additional tax when he gets over £60 per week. It is because there is too little realisation of the actual condition of the poor people of this nation that there has been such lamentation and great mourning about the sorrows of the rich man.

Taxation of capital has been suggested. What is the capital of the poor man except his health and strength? Have you not overtaxed the poor man in the past? It is because this Budget, in my honest opinion is paying a little more attention to the needs of the poor man that it is receiving our support. I have been going into some figures, and the taxation of the poor man has been going on to such a degree—the excessive taxation to speak of the last decade alone—that while from the Income Tax-paying classes the incomes brought under review during the last ten years have risen from £678,000,000 to over a thousand millions in this particular year there has been no increase in the wages of the working people at all. I have been going into the figures very carefully, and I speak of the working classes as a whole. Certain sections of the working classes, particularly coal miners, may have received some slight advance, but speaking of the whole body of the working people, for whom the returns in the "Labour Gazette" are made, they have received no advance during the last ten years, and the price of living has increased very much indeed. I sat as an interested stranger in the Gallery of this House twelve years ago, when the right hon. Gentleman, whose absence we all deplore whatever our politics may be, the hon. Member for West Birmingham (Mr. Joseph Chamberlain) was supporting with great force and skill the Workmen's Compensation Bill of that year. The Workmen's Compensation Bill of that year was confined almost entirely to the dangerous and skilled trades of the nation. The average wages then of the working people in the dangerous trades of the nation, and in the skilled trades of the nation were 26s. per week upon the right hon. Gentleman's own statement. Wages have not risen and the cost of living has greatly increased. You have, therefore, during the last ten years, been making an ever-increasing demand upon that which is, after all, the real capital of the nation, namely, the health and strength of its working population. Tariff reform is suggested. We are open to conviction if hon. Gentlemen will bring out any arguments. I remember in how many disguises this thing has appeared. I remember the Fair Trade agitation of 1885. I remember the later agitation when the question was discussed under the name "Reciprocity." I remember when an attempt was made to befool the people by the plea of bimetallism. I remember the whole course of this thing. Charlatanism takes many shapes, but it remains the same thing. The cry of the quack, after all, has varied, but the cause of his action and his desire have remained the same throughout the ages. I do not know why, during the discussion of the last half-dozen years, we have not been told that Tariff Reform would cure an aching tooth, a scolding wife, or a smoking chimney. Will any hon. Member in this House, or any exponent of Tariff Reform outside, tell us what they really mean? The most powerful exponent of Tariff Reform did tell us that he wanted to tax food, but he is now repudiated. He told us that he intended to limit his particular figure to 2s. on foreign corn; but present exponents speak of no such limit. Wherever you go, in every town in the country, you hear different expositions of the same thing. If hon. Members, either in this House or outside, will tell us what they mean they may get a much better following in the country from us who do at least claim to represent organised labour. We are not indifferent to the state of our people. If it be true that Tariff Reform will provide for us a greater quantity of labour, and better-paid labour, then its advocates may depend upon a strict backing in the country. But does it do this in the countries where it exists? I have in my possession a letter from a friend of mine in the anthracite mines of Pennsylvania. This, be it remembered, is the most highly protected country in the world. My friend tells me that during the month of September the anthracite miners in that particular district worked two and a half days of eight hours each—20 hours in the whole month. The condition of unemployment in the United States to-day is as keen, probably keener than ever before, with possibly the single exception of the early part of 1908. In Germany the cost of living has gone up immensely, while wages have gone down very greatly.


No, no.


I say, yes, yes. We are in a position to know. Year by year we hold international miners' congresses, the delegates to which are accredited representatives, and they tell us their hours of labour, the wages they earn, and the price of their food. I say distinctly that it is beyond contradiction that week by week and month by month the miner in Germany—the nation we are always told to fear—is receiving less wages and the cost of his living is going up. These are the conditions in protected countries, as can be amply proved. It is because of these reasons that we refuse to be drawn into this propaganda until Tariff Reformers tell us what they really mean. They remind me of a story told by Sam Weller to Mr. Pickwick. He had a friend, a pieman, who kept a quantity of cats. One day, in the summer season, Sam said to him, "You must be very fond of these noble animals." "Yes, I am," was the reply. "Why so?" asked Sam. Pointing to a number of pies arranged on a shelf, the pieman said, "They are all made out of them noble animals. I can change them from beef steak into kidney, or from kidney into veal, or from both into mutton, just as markets change and appetites vary." That is exactly what Tariff Reformers are doing. The whole process is a dissolving view. When they go to Manchester it is cotton trade that is in danger; when they go to Worcester the cry is that cement is in danger; when they go to the home counties, hops are in a bad way; when they go to South Wales, the tin trade industry is threatened; when they go to Birmingham, the noble industry of pearl buttons is in danger of extinction; and in Bermondsey, there is nothing like leather. Socialism may be wrong. We are not in this House to plead Socialism. We are here as a Labour party. Socialism may be wrong, but it does at least embody the idea of the State, whereas Tariff Reform is setting every town in the country against every other. It is a debasement of the national idea altogether—disintegration in its vilest form. Not merely is one nation set against another, but towns in the same nation are set against each other. It is industrial and commercial war. It is because we believe that this Budget has effectually prevented the possibility of that gospel ever being accepted that we support it.

There is another reason why I believe in the Budget. The central principle that commends it to me is the principle of the valuation of land. For myself, I do not wish to take an inch of land from the landowners. I do not care to inquire into their past; it is nothing to me. They have gained by prescriptive right and under the custom and usage of the country the land that they possess. They are entitled to it, but surely we are entitled to say that they, as citizens, shall be brought within the general range of taxation. There ought to be no higher ideal in life than the same common citizenship which animates us all. Can they set up any plea to be exempted in respect of their land from the general burden of taxation to which all decent citizens ought to contribute? It is because they have not done that in the past, and because there is no valuation by which they can contribute in the present or in the future, that we are glad that this valuation occupies a central place in the Finance Bill of the Session. There will be a further result, which can only work for good to the whole nation, namely, that when the community for any purpose of national or communal life desires land, there will be a valuation—a fair valuation, set up by the State and paid for by the State, which is only proper—to which both the owner of the land and the community can appeal, saying, "There is a proper valuation; that is the amount to be paid for any land that is taken." There are many other points with which I will not detain the House.

We are not here for the purpose of spoliation. We are not supporting the Budget because it is "red ruin and the breaking up of laws." We are here because we believe that the highest national ideals are embodied, even in a small way, in the Bill now before us. We believe that no harm will be done to present owners of property. We believe, indeed, that when the landowners see a smiling peasantry growing up around them, and the capitalists and rich men in urban communities see poverty being gradually extirpated, and disease going away because of brighter and more enlightened conditions, they themselves will have full compensation for the evils which seem to afflict them in this Budget. It is because of the one small step which is a necessary step in all great reforms; because we believe that private ownership should after all be subordinate to the public welfare, and because the public welfare is embodied as the high ideal of this Budget, that we on these benches are giving the Bill our cordial support.

Mr. G. R. THORNE (Wolverhampton, East)

In addressing the House for the first time, I am sure I may rely on its indulgence. I am glad that the occasion is one on which I find myself in absolute accord with the proposals before the House. That being so, I observed with some surprise a few days ago that the Government were told that they might always rely upon their mechanical majority. I imagine that never was such a charge less appropriate than at present. With the great bulk of the Liberal party the difficulty has not been to find arguments in support of the Budget. The difficulty with many of us and with many of our constituents has been a feeling lest too many concessions might be made, and the Budget thereby robbed of many of its advantages. But we believe that in those concessions the Chancellor of the Exchequer has shown a wise discretion, and we are grateful to him for the magnificent way in which he has carried the Budget through its various stages. We have been the freer, therefore, to examine for ourselves, as fairly and as impartially as possible, the various arguments adduced against the Budget by hon. Members opposite. Those arguments seem to me to come so largely from a sectional and individual standpoint that they bear a characteristic which is somewhat awkward in regard to their effect. They are intended to be missiles levelled at our devoted heads, but in a number of instances it appears to me that they have the characteristics of the boomerang, that the reflex action is stronger than the direct action, and that many of those arguments hurt us very much less than they hurt the men who use them.

It would be an interesting study to examine the various arguments adduced in that respect. Perhaps I may be permitted to glance at two or three. I pass by at once the argument used by the Noble Lord opposite (Viscount Castlereagh), who comprised apparently the whole of our attitude in his expression "sanctimonious hypocrisy." It seems to me a pitiable method of conducting a great controversy. I, for one, mean to avoid all such personal suggestions, and to try to realise that we are facing great national problems, and that those problems ought to be faced in a national spirit. Among the arguments adduced by the right hon. Gentleman (Mr. Long) who spoke this afternoon we have had it stated during this Debate and in the country as well—was that this so-called Budget is in reality not a Finance Bill, because it comprises so many ulterior aims. In our view it is a Finance Bill in all its essentials, and the fact that it does comprise those ulterior aims is that which gives it importance in our eyes. The hon. Gentleman who spoke a moment ago said that this Budget had created unprecedented disturbance. My experience is that this Budget has created unprecedented enthusiasm. It has been suggested that this Budget, by involving ulterior consequences, is not a Finance Bill. The way that this has been suggested will involve the right hon. Gentleman who formerly was Chancellor of the Exchequer, and who evidently desires, and naturally so, to be Chancellor of the Exchequer again, in some difficulty when he comes to frame his own financial proposals into a Budget, because, as I understand what is misleadingly called Tariff Reform, the great object and aim of it is not in the revenue to be created, but in the ulterior consequences to be effected. Consequently, if that is a fatal objection to the Budget we are presenting, it will be still more fatal to the one which he will himself desire to present to the House. We have also had it put to us to-day—after all the crimes which have been charged against us with reference to these proposals—that the real crime is after all that it is a tax and not a rate. And we have gentlemen now going down into the various localities and telling our constituents that they are being robbed of that which should be exclusively given to them. It seems a new argument from the Tory party. We have been told all the while that we have been too exclusive and not sufficiently expansive. Now, apparently, we are too expansive and not sufficiently exclusive. It seems to me, therefore that, after all, these Unionists are themselves nothing but parochial Separatists. Another attempt has been made, and to my mind a very important one, to show that the result of this Budget is a menace to capital, and therefore a menace to labour. If I thought it were either—and if it were either it would be both—I should certainly regard with some anxiety the proposals of the Government. But it seems to be that it is nothing of the kind. On the contrary, it tends in the direction of providing employment rather than of decreasing it. Hon. Gentlemen opposite seemed to me in the course of their arguments to—unfortunately for them—have been adducing points to show distinctly where the real menace to capital lies, and to show that it lies, not in the national public tax, but in the private tax, which can, under unrestricted rights, levy royalties on minerals. Therefore, I have listened with considerable interest to such arguments which go to show that their view of this tax with regard to mining royalties is that, as they cannot even pretend to throw it in this case upon the foreigner, they will take the opportunity as soon as they can after the lease has run out to throw it upon the worker. That is, however, evidence itself of the danger of unrestricted rights of monopoly, and will necessitate a little later on that taxation of ungotten minerals which will bring other minerals into the market to prevent this result to which we object. There are many directions in which it seems to me that the effect I have been trying to show should be brought home. What I would like to address myself more especially to is what the right hon. Gentleman who addressed us from the Front Opposition Bench told us. He told us distinctly that the real difficulty in the matter was the fight with Socialism—that we are tending in a Socialistic direction. I should like to ask when Tories themselves ceased to be Socialists? I would ask them while they are killing all their Free Traders at the same time have they got rid of their Tory democrats? I would ask them whether they have turned their backs altogether upon the policy involved in giving free education to the nation? Their attitude it seems to me is not anti-Socialistic, but is rather anti-social. That creates a danger which we are trying to overcome. The hon. Member for Blackburn yesterday delivered a speech which the Tory party and the Leaders of the Tory party might well recognise the force of. He indicated that we by means of this Budget are relieving dangers for the future rather than increasing them. We have a right to appeal not only to the Tory party here, but to that party which is so largely represented in the House of Lords, to stay their hand before they take the dangerous step which may land this country in chaos and confusion. The course the Tory party is taking at the present moment is that they are interfering with the natural and reasonable progress which is making for the welfare of the people. They seem to have the desire of trying to convert into grim reality the culminating joke of a popular play, for they simply desire "to dam the flowing tide." But they fail to realise that what may be comedy in a play will be tragedy in real life, and that the flowing tide, stemmed, will become an overflowing tide, and what might have been a stream, a beneficent stream, fructifying and beautifying its banks, will become later on a devastating torrent carrying away in its course all the ancient landmarks. It is because we desire to prevent revolution, and to promote social reform, that we are anxious therefore that this Budget shall be passed, and passed without delay.

We are told again—and that seems to me a pitiful method of addressing oneself to this great question—that we are guilty of vindictiveness and revenge in what we are attempting. I think some hon. Gentlemen must have learned their politics in different schools from some of us. It has been the fortune of hon. Gentlemen opposite to be taught their politics by studying dialectics in the universities of learning. Some of us have studied ours by facing actualities in the university of life. We have striven in the East End of our towns to understand something of social problems, and, face to face with the victims of our social system, have realised something of the difficulties we have got to overcome. It is with no feeling of vindictiveness, with no feeling of revenge, but with a great and sincere desire, as far as possible, to provide larger opportunities for the people, and to give the children of our land a better chance that we are here in hearty and enthusiastic support of the Budget which the Government has presented. One thing I desire to say further, and it is this: During the short time I have been a Member of this House one thing has impressed itself upon my mind more than all others, and that is the value and importance of the old adage that tells us that, "The price of liberty is eternal vigilance." Our fathers have failed us in two vital ways, and have brought about great social chaos in some quarters which we have to face to-day. In the rise of commercialism they have failed to realise the position of the land system. So the land system comes down to us to-day with rights claimed on every hand—and exaggerated rights at that—without at the same time the ancient responsibilities which previously attached to it. In a later generation, in the licensing system which was originally intended to protect the public and restrict the publican, they have failed, it seems to me, by negligence. The thing has got twisted round, and now restricts the public and protects the brewer. Because to some extent I feel that the remedying of this is the direction that this Budget seems to be aiming at, and that I feel the importance of thus dealing with the condition of the, people, that I am here very heartily to give it support. I support it, too, because in two other directions our forefathers have shown that prescient vigilance which we are here only too glad to recognise. We should be recreant, indeed, if we did not follow in their footsteps. Three hundred years ago they secured for us that the Commons should control the finances of the country. In a later generation they secured for us that the people should control their trade. It is because in these two directions that this Government, by its Budget, are carrying on the great principles and traditions of the past, and I am here to give it my hearty support. Therefore, Sir, to-morrow night, when the final stage has been reached of this great measure, it will be a joy and privilege to me, with full conviction, to record my vote on its behalf.

7.0 P.M.


Like the last speaker, I have a vote to explain and to justify. My present intention is to vote against the third reading of the Government Bill. I believe I have an excuse for the action which I contemplate, in that I believe I am the only Member on this side of the House who definitely and clearly stated in his election address—for I put it in a prominent place unsolicited, without any pressure whatever—that I was opposed to, and should vote against, any proposals to tax land values. The vote against the whole Budget, I agree, constitutes an advance upon that position, but when one remembers that the Land Clauses of this Budget have been made—some speaker this afternoon described them as the whole centre of the fight between the contending parties in the Committee—and since on every Budget League platform the propaganda to the electors, and the real allurement to them in this Budget has been the Land Clauses, which, it is said, constitute the real vitalising power within it—I do not think there is much between those who may not agree with me and myself when I say that a vote against the Budget is, after all, in the main a vote against the Land Clauses. What has been said with regard to these taxes is that they constitute the real defence of our Free Trade system. One right hon. Gentleman this afternoon referred to the hon. Member for Preston as having shared the view that has been given officially to the country that there is no alternative between this Budget, the Land Taxes, and Tariff Reform. I listened to the hon. Gentleman's speech yesterday, and there was no word of it that lent colour to that suggestion. He is one of those, and I am another, who believe that a Free Trade Chancellor of the Exchequer has hundreds of expedients to which he can resort without these Land Taxes, and to my mind the greatest disservice which has been rendered to the cause of Free Trade—which is a cause the dearest to me in the world—has been the suggestion which is now put forward as a somewhat cardinal point of belief, that there is no alternative between the present Budget with its Land Taxes and Tariff Reform. It is against that suggestion, which originated I think as a mere debating point, that I want to enter my protest. It is not true, and if it were true, it would constitute the strongest indictment which you could frame against our present Free Trade. The hon. Gentleman who spoke last emphasised one point in this controversy on which I venture to lay great stress. His speech was the speech of a Gentleman who has in mind on this question not so much finance as reform, and I call to mind a speech of the right hon. Gentleman the Prime Minister, in which he said that while the primary purposes of these Land Taxes was fiscal, they were valuable inasmuch as they brought in their train attendant social consequences of the most beneficent kind. It seems to me the inversion of that statement would have been nearer the truth, because we now know the fiscal consequences of these Land Taxes are nil. In the preparatory exordium to this Bill it is stated that the Bill is to grant certain duties and to make other provisions for the financial arrangements of the year—the year which ends on 5th April next. It seems to me, therefore, that it will be more accurate to say that the purposes and intentions of these taxes are to promote certain social consequences and not to provide the necessary revenue for the maintenance and conduct of the business of the country. I have spoken to a great many of my hon. Friends on this side of the House, whose views and mine on this subject do not agree, but nearly everyone of them said to me: "Never mind about the taxes, I have been a land reformer all my life."

Land reform may be a very proper matter to demand Parliamentary attention. I have no doubt it is so, but the question I have asked myself is: Why a Bill for land reform should have any place in a Finance Bill? I venture respectfully to suggest that to include it in a Finance Bill is abnormal and novel, and that in itself, in my opinion, would justify a vote against the third reading of the Bill. There are other points of the Bill in regard to which I personally feel great dissatisfaction. I only want to draw attention to one of them because it is a matter not seriously discussed in Committee—I mean the rates of Estate Duties in the Second Schedule of the Bill, which went through, I think, without a word of discussion. I am not here to complain of the rates of duty, I do not know that I have a word of complaint to make against the steepening of the rate payable upon death, but what I do want to protest against, and where I do find ground to quarrel with the Chancellor of the Exchequer, is on the bad workmanship which we see in these rates of Estate Duties. It is not the amount; it is the brutal and arbitrary division which has the effect of inflicting a fine upon a man or upon his heirs because he happened to be £15 or £20 or £30 richer than a certain fixed limit.

In Sir William Harcourt's Budget of 1894, with the scale of Estate Duty thereby imposed, these fines, if I may call them so, were quite apparent. They have been quite apparent since, but they were in degree far less than the fines to be inflicted now. They ranged from £125 to £5,000. The mere accident that a man died owning property just beyond a certain limit meant that he came within these categories applies to that extent, but it does seem to me that the Chancellor in increasing those duties ought not to have accentuated or exaggerated that wholly preposterous state of things. But instead of that the fines in his table range from £200 to £10,000. I cannot imagine if you could have a worse form of taxation, or that you could more deliberately offer to the accountable parties after death the strongest possible temptation to underestimate the value of the estate on which duty has to be paid.

With regard to the Super-tax, I do not think anybody has any reason to complain, and, indeed, I do not know that many people have, in fact, complained of it, but I do think it ought to be chargeable only upon beneficial interest. It is quite absurd to say that you are accurately fitting the burden upon the shoulders best adapted to bear it when you are treating for the purposes of Super-tax a man with the free spendable income of £10,000 exactly in the same way as you treat another man whose £10,000 is merely nominal and subject to charges which he cannot escape, and which reduces his spendable income to £3,000. These are the anomalies of the Bill that would make me reluctant to vote for it apart even from the question of the Land Taxes. But it is because of the inclusion in this Bill of taxes that yield no revenue and can yield no revenue for a year or two hence, but may affect some social purpose, that I shall vote against the Government on this occasion. I do not believe, in spite of what fell from the First Lord of the Admiralty this afternoon, that there has ever been an occasion when a tax has been deliberately suggested to the House of Commons by the Chancellor of the Exchequer with the full knowledge that the yield from the tax in the current financial year will be nothing. The right hon. Gentleman said that Finance Bills always have other objects in view. I do not believe any Finance Bills always have other objects in view. I do not believe any Finance Bill, or any proposal of any Finance Minister, has ever been made to Parliament before this where, while having other objects in view, the imposition of the tax will have no fiscal result.


My hon. Friend who has just sat down will pardon me if I do not follow him in the interesting speech which he has just delivered to the House. My attempt will be to deal with the broad principles of the Bill rather than with what I may term its minute details. A great deal has been said upon Socialism in the course of this discussion. Certain it is that for the first time in this House the subject of Socialism has been dealt with in every speech upon what I may call its merits. We had a most interesting speech from the hon. Member for Blackburn (Mr. Snowden), and we had also an exceedingly interesting speech from the hon. Member for West Edinburgh (Mr. Clyde), on the other side of the House, and while I entirely differed from him as an opponent, and disagreed with what he said, he did what is rarely done, he treated Socialism as a subject worthy of discussion, and not merely as an epithet to be aimed about in Parliament from one party to another as though it did not stand for a number of doctrines which in themselves are entirely respectable, entirely worthy, entirely honourable, with which everybody agrees in some degree, and which surely at this time of day should receive at our hands something more than a vocabulary of abuse. I should like to say in the first place I do not agree that Socialistic taxes are necessarily Socialism or that any of the taxes of this Budget are necessarily Socialistic. There are very few of the taxes imposed in this Budget that might not be imposed by a statesman of the most individualistic views. Richard I. when he desired to extract money from someone went to people who had the wealth. He did not inquire into the arrangements of wealth. He inquired where it was, and by a process not unconnected with molars he got the money from those who had it. It might be supposed that such a man as that had some Socialistic conceptions, but as a matter of fact he only desired to get money for particular purposes, and as my hon. Friend the Member for Blackburn said, whilst some of the purposes for which this money is raised might be assumed to be Socialistic, it cannot be said that these taxes of themselves are Socialistic.

Indeed, I venture to point out to the House if the Government of our country is in need of taxes at this moment it is because this country has been so devoted in the past to the principle of laissez faire. It is that which left the British State almost a propertyless State. The British State is peculiar in this respect, that while the British nation is one of the wealthiest in the world, coming in that respect second only to the United States of America, the British State is one of the poorest in the world. The British State is almost entirely without property or revenue-producing administration, and I do feel as we are discussing the broad principle that it is encumbent to point out the great disadvantage which this nation labours under in competition with other powers, because of its lack of property. Does the House realise that the reason why we are building "Dreadnoughts" against Germany at the present moment, the reason why we have seriously to consider the advance of that power which is not merely in the possession of the greatest army in the world, but in the possession also of a great Navy, is for this simple and illuminating reason, that the German State—I do not refer only now to the German Imperial Government, but to the Government of the German States—possess between them an enormous amount of revenue-producing property. So that if we make a proper comparison between Imperial revenue in this country, as we call it, and Imperial revenue of Germany plus the State revenue, we find that that greatness of the German State revenues very largely consists of revenue derived from State Socialism. A very extraordinary effect of it may be found in the Blue Book recently presented to the House of Commons, where it is shown that the Prussian State draws half its revenue from State enterprise, and yet in spite of that fact, in spite of the fact also that every German State has enormous revenues of that kind in more or less degree, we know that the Germans have so much less taxable capacity than we have that they find it hard to obtain the remainder of the revenue wanted. It is clear that if the German Governments did not possess these extraordinary State revenues the German Government would never be able to build the navy which is now on the stocks. If this subject is of importance now, I ask the House to reflect how much more important it will be in the time to come. Consider the effect, after another 25 years have elapsed, in view of the fact that Germany possesses all those lands, forests and mines. It is not realised that 20 per cent. of the output of the mines of Germany is a State output. Through the possession of these things the German Government will be able to obtain revenue without recourse to taxation, whilst if we pursue our present policy of laissez faire, if we neglect to nationalise our railways and the important subject of electric power, we shall find ourselves during the lifetime of many of those who are listening to me undergoing a much more severe competition with Germany than at the present time, and we shall find it exceedingly difficult to maintain our armaments against a Power so provided. Socialism does not necessarily mean taxation, because Germany is the most Socialistic country in the world in regard to the State revenues she possesses.

What is the policy advocated by hon. Gentlemen opposite? It is not a policy of laissez faire, but it may be truly described as Socialistic. They desire a greater national production, and they think it will be more suitably secured by modifying the kind of things brought to us. In this way they hope to bring about such changes in the production of this country as will redound to the general advantage of the nation. That is a Socialistic conception. It may be said truly that it is a conception which, so far as the inherent idea of protection is concerned, we all agree with. Where we differ is that we cannot see how by imposing import duties upon the smaller part of the trade in the country you can hope to secure a proper modification of the entire trade of the country. It is only necessary to think for a moment to see that this nation, as was pointed out by the Chancellor of the Exchequer not long ago, has been built up upon its mineral wealth. You hope by import duties to modify that. In so far as we lack mineral wealth hon. Gentlemen opposite, if they care to be so foolish, can stop the supplies of such minerals as we do not possess, but that is all they can do. They are issuing leaflets upon this subject and making speeches in the country, and I do ask them to think what they are doing. They are pointing out that an enormous mass of manufactured goods are placed upon the shores of this country to the detriment of our trade, which it is alleged is worsening our employment. They neglect the fact that some £20,000,000 of that consists of the very minerals to which I have referred.

Take, for example, the greatest industry of all. I wonder whether some hon. Members opposite have ever asked themselves which is the greatest industry? It is the formation of the framework of our civilisation in towns by making roads, and building, and construction. The industry of building and construction is our most important industry, and that is totally unaffected by any policy you can invent of taxing imports except that you can worsen the trade connected with the most important industry we possess. I wonder how many Protectionists there are who know what Protection means, who recognise that you can only modify part of the trade of this country? I wonder how any thinking man who looks at the Census Returns can any longer cherish the idea that by modifying a stream of the trade which is only part of the activity of the country you can modify for the better what is the greater part of the activities of the United Kingdom? I ask hon. Members to think of the waste involved. Here we have a Budget discussion in which we have not been presented with the alternative. I do not want to run the alternative policy argument too hard, but surely we are entitled to say to hon. Gentlemen opposite, "Where is your policy?" In a local parliament the other day I was asked to take part in a debate with a Tariff Reformer, and what did he do? He produced the programme of the right hon. Gentleman the Member for West Birmingham which was shadowed forth and published in great detail in the year 1903, with the modification that in deference to certain friendly criticisms he was going to tax maize and bacon. The gentleman who presented this policy referred that local parliament for an explanation to the Tariff Commission, with which the right hon. Gentleman opposite was connected. He referred them to the report of the Agricultural Committee of the Tariff Reform Commission. I felt it incumbent upon me to point out that that was not the only alteration made in the programme of 1903, and that there had been far more important alterations. I pointed out that whereas the programme of 1903 provided that Colonial food was to come in free, and be a substitution for foreign food, the Agricultural Committee of the Tariff Commission had thrown over the idea of Colonial food coming in free. I am afraid this fact has not percolated into the Colonial mind. I hope the Colonial wheat-grower will realise that the right hon. Gentleman and his committee have suggested that there shall be no free Colonial food, that it must be taxed, and that the only difference between the taxation of foreign and Colonial food is to be one shilling per quarter on Colonial corn and two shillings per quarter upon foreign corn. The preference to the Colonies has been whittled away to one shilling. How is an Empire to gain consolidation through a shilling preference? remember upon one occasion that the right hon. Gentleman the Member for West Birmingham held up two loaves, and he pointed out to an amused audience that one was a little smaller than the other, that you could not detect the difference, and he said that was the difference represented by the tax on corn. He asked the audience to distinguish between the two. Is this Empire going to be built up on the indistinguishable difference of those two loaves? That is the other side of the argument, and when the preference is whittled away to a shilling surely it becomes reduced to what has been called a matter of sentiment.

Now I come to the more solid part of the Opposition policy. I have worked out what the policy of 1903 means to the British people, and I have only amended the programme in respect of maize and bacon. I have not made the further emendation suggested by the Tariff Commission in regard to taxing Colonial food. I would like to show what it means to the Exchequer and to the British people. There was to be sixpence per hundredweight on foreign corn, and Colonial corn was to come in free. I will take as an illustration the year 1907, but any other year will do, for it would give the same result. I find that out of that Corn Duty the Treasury would receive £3,800,000, or, roughly, nearly £4,000,000. The consumer would have to pay duty not only on the foreign supply but also on the Colonial supply, and on the home-grown corn also, and it works out that the consumer would have to pay £9,000,000, whilst the Colonist, who is receding more into the distance as our Friends talk more of unemployment and less of preference, is to get £1,200,000. The Treasury gets £3,800,000, £1,200,000 goes to the Colonist, while the consumer pays £9,000,000. The assumption, of course, in that is that the consumer pays the duty. If any hon. Gentlemen opposite doubt that, I ask them to refer to the practice of the German Government. When Germany taxes food, she knows perfectly well what she is about. She does it with a frank object of raising the price of food, and the tax does raise the price of food. When the German Government imposed the food taxes, they declared frankly that it was their intention to raise the price of food, and their official memorandum proves this, and they do not in any way disguise their intention. If the right hon. Gentleman opposite did not believe it would raise the price of food, how could he commend it to the farmers of this country? I do not want to weary the House with details, but similar calculations apply to meat and dairy produce, but I will give to the House the total for the three. I have given the figures relating to corn alone, but I will now give the statistics relating to corn, meat, and dairy produce together.

The calculation comes out like this: The consumer pays nearly £20,000,000, and the Treasury gets only £7,000,000 out of it. The Colonies get £2,400,000, which works out at 4s. per Colonist. Is it reasonable to ask the British consumer to pay £20,000,000 in order to give 4s. a head to the British Colonists, when some of their most distinguished representatives have declared they do not want it? The editor of the "Toronto Globe" said it was a calumny to represent the farmers of Canada as desirous of inflicting this burden upon the British consumer in order to give them a small gain, and Mr. Fisher, the Canadian Minister of Agriculture, repudiated the idea, and said it was a calumny to say Canada would break away from the Empire. What are hon. Gentlemen opposite pledged to do? They are pledged to return that £7,000,000. I have shown that the consumer pays £20,000,000 to give the Treasury £7,000,000, but the Treasury is not going to get that £7,000,000. There was an honourable pledge given that, whatever we got out of the Corn Duty should be returned to the consumer by the cancellation of our present food duties. It is true that since then the present Government, the present Socialist Government, has taken off a bit of the Tea Duty and has taken off half of the Sugar Duty, but hon. Gentlemen opposite have still got their pledge to keep, and they must take off the remainder of the Tea Duty and the remainder of the Sugar Duty, and they must sweep away the duties on coffee, cocoa, and the rest of it. When they have done that the Treasury will not gain a farthing by their policy. What happens to the consumer? He gains £7,000,000 on the Free Trade Food Taxes, but he has to pay £20,000,000 on the new ones, so he is to be £13,000,000 out of pocket. This is the alternative to the Budget of my right hon. Friend the Chancellor of the Exchequer.

Yes, Tariff Reformers will say, but what of manufactured articles? What are the facts about manufactured articles? We imported from foreign countries—from foreign countries I ask the House to note—in 1907 £110,000,000 worth of manufactures, which are called manufactures by the Board of Trade, for the purpose of the Board of Trade Returns. The total imported is larger than that, but the balance comes from the Colonies. Hon. Gentlemen opposite have not told us whether they are going to tax Colonial manufactures or not. What will the Colonists say to them if they do? If at the next Colonial Conference hon. Gentlemen opposite explain to the Colonial Premiers that pianos and organs from Canada and all the manufactures we now receive from the Colonies, which amount to nearly £20,000,000 per annum, are to be taxed, then, I think, the tone of the Colonial Conference will not be so hearty with regard to the subject of Colonial preference as it was before. I therefore take the liberty of supposing that Colonial manufactures are to be excluded. At any rate, we are not going to worsen the position of the Colonial in our markets compared with his present position. We receive from £100,000,000 to £110,000,000 from the foreign countries. What does that consist of? I have already pointed out that £20,000,000 worth of it consists of metals almost unwrought, copper, zinc, lead, etc., which we lack. Then from £10,000,000 to £11,000,000 worth of chemicals are brought into this country. They are included in the manufactures which are counted amongst the most important of the raw materials of our industries. How can they be taxed? If you do tax them, you will inflict a severe blow, not upon one, but upon hundreds of industries throughout the country. I may sum it up in this. Of the £100,000,000 or £110,000,000 worth of manufactures, hon. Gentlemen will find the greatest difficulty to persuade Parliament in the future to tax more than £50,000,000 worth, and that will be reduced by the taxes you put upon them. I will, however, make hon. Gentlemen opposite a present of that, and suppose it is £50,000,000. An average 10 per cent. duty on that would produce £5,000,000. That is all hon. Gentlemen opposite would get out of their programme, the only alternative programme which has ever been put before us in an intelligent form. The £5,000,000, however, is subject to deduction. What about the cost of collection? Shall we say £1,000,000 for that? That leaves £4,000,000 to be got out of this programme. Hon. Gentlemen opposite will admit it is not possible to finance very much in such times as these with £4,000,000, especially in view of the fact that we have to face a position which is common both to this and other countries, and in which expenditure is rapidly rising. That £4,000,000 will be rapidly swallowed up, not in providing for the necessities of the present Budget, but merely for the increase of the future. It follows, therefore, that so far as the expenditure of the present year is concerned, hon. Gentlemen opposite have not shown us by the only alternative programme ever suggested how to raise a single farthing towards the money required.

If the House will bear with me, I would like to bring my remarks back to the subject which has occupied so much time on this third reading. Whatever may be said as to the rights of Socialism, it is true that, with regard to the present discussion, it is not Socialism but individualism which is in the dock. What has become of the individualism of even my hon. Friend the Member for Preston (Mr. Cox)? I have heard him advocating with extraordinary eloquence in this House industrial insurance. Industrial insurance is a great business, which, if there is anything in individualism, ought to be best carried on by individuals and not by the State. I cannot really understand, if there is any virtue in individualism, why individualism cannot manage industrial insurance. I ask the House to contrast industrial insurance in this country with industrial insurance in Germany, where it is a matter of State Socialism. Practically every German workman and workwoman has a right to claim as a matter of citizen right help in time of trouble. Are they sick, is there an accident, is there a death, is there invalidity? Then the German workman and workwoman, by virtue of a business which is pure Socialism, can claim from the State as a matter of citizen right, and with the absolute assurance that their claim will be met, succour in their distress. That system has been built up since the famous message which William I. sent to the German Parliament about 1878, when I was a very little boy, a message which was eloquent, which was sincere, and a message which, in view of what has been done since with the German industrial system, made not too high claims. During that century there has been built up a system which has done more to make a clean and a healthy, self-respecting individual of the German workman than anything else.


May I ask the hon. Member to which part of the Finance Bill he is now referring?


I beg pardon if I have trespassed. I had in mind the purpose which the Chancellor of the Exchequer himself outlined in his first speech on the Budget as a purpose to which the Budget would be devoted. I therefore thought it would be in order.


When that Bill comes in will be the proper time for this discusssion.


I beg pardon if I have trespassed beyond the limits of discussion, but, since Socialism was in question, I was really endeavouring to draw a comparison between a Socialist business in Germany and a business in England carried on by private enterprise to the disadvantage of the latter. The position which has to be met by individualism in this Budget is this: I have said that individualism is in the dock. The hon. Member for Blackburn (Mr. Snowden) very truly said that the evils which we all deplore, and which we are all struggling with, have arisen from a monopoly of land and capital. So far as land is concerned, I suppose I may claim the assent of the majority of those listening to me, but are the facts with regard to capital sufficiently realised? Most people are aware of the extraordinary fact that half the land of the country is owned by 2,500 people. What are the facts with regard to capital? Are they less extraordinary? Take the capital of the country as £15,000,000,000, which is a very moderate figure—and the more moderate the figure the stronger my case—and of that net more than £700,000,000 are owned by 5,000,000 people out of 45,000,000. That points to a congestion of capital in a few hands which parallels the condition which obtains in this country with regard to land. It is perfectly true there is a considerable number of small shareholders and a considerable number of small land-owners, but the fact remains that the great bulk of both land and capital is owned by a mere handful of the people of the country. What is the nature of the control of those great units of capital and land? May I direct the attention of the House to a remarkable passage in a speech by the Leader of the Opposition at Birmingham on this very Budget question. This is how he pictured it. He pointed out that the old idea that some countries were more suitable than others for certain industries was not so true as it used to be. Most countries are now suitable for most industries, and, therefore, he pointed out, the capital went more freely from one country to another to seek better returns. He then went on to say that the condition of things I have just explained matters little to the capitalist if he gets his interest. Whether he gets it by giving employment in America or in Britain or in Germany, to him it is all one. Surely that is a picture of the economic man which does not commend altogether to us the entire and unregulated private control of capital! Surely, if the capitalist is no more of a citizen than that, we cannot afford to regard with equanimity a condition of things in which practically the whole of the capital of the country is controlled by a mere handful of people! I should rather say the picture is a little bit overdrawn, but there is certainly an element of truth in it, and that element of truth should surely give us cause before we condemn too rapidly the proposals of the Socialist, or at any rate before we put them aside as unworthy of consideration and discussion. What is the condition of the United Kingdom at the present moment? Anyone who knows this country, and who travels about it and in the great industrial centres, as I do, must see everywhere the most mournful evidence of what results from that condition of things. Whether it be Glasgow, or the mining districts of South Wales, or the black country, or the potteries, or whether it be Accrington, or Bolton in the north, we know only too bitterly the enormous mass of poverty and squalor and lack of self-respect which exists in some quarters in those places. These are things which are admitted by us all. I do not claim for hon. Gentlemen on this side sole sympathy with the woes of those who suffer in our towns, but I do doubt whether the majority of those who are engaged in public affairs sufficiently realise the extraordinary monopolies from which these things arise. When we inquire what mitigation is possible, surely we are compelled to acknowledge that the greater mitigation has arisen in the past from what is very properly called the application of Socialistic legislation, by both parties in the House, to these problems. The right hon. Gentleman the Member for South Dublin (Mr. Long) expressed surprise this afternoon that there should be any brand of Socialism attached to his own party, but, quite apart from the question of Tariff Reform, may I refer him to such well-known and respected writers as Lord Morley and Professor Lecky? Let him refer to their writings and he will see that they have pointed out, in the clearest possible terms, the strides made by Individualism towards Collectivism in this country of late years. The Labour Laws of 1875, the Workmen's Compensation Act and the grant of Free Education—what are these things but purely Socialistic legislation? With regard to my own side of the House, the course of legislation has, I hope, proceeded with no less fervour in the same direction. A well-informed writer has said that the last third of the nineteenth century may well be called the beginning of the period of Collectivism. So far as concerns the fears expressed by some hon. Members, including the hon. Member for Brighton (Mr. Ridsdale), who appears to fear that individual liberty is in danger, is it necessary to point out at this time that the liberty of the citizen comes actually out of the law, that liberty emerges out of the law, and that it is only by the extension of the common law that the average citizen can increase his liberty?

I do not know that we need apprehend the difficulty in any period of transition in which we find ourselves which some people apprehend. There is not the slightest fear of the regeneration coming too quickly. On the contrary, we have rather to fear a too slow progress. We have to remember, even if our nation were alone in the world, if there were no competition around us in Europe or elsewhere, it would still be necessary for us to raise the powers of our citizens to the highest degree. But we are not alone in the world. We are exposed to the fiercest competition. When I turn to the Continent of Europe and see the German nation devoting itself very much more than we have to the consideration of the problems now before this House, I see the clearest need for a larger application of the wealth of the State to the promotion of the welfare of the citizens of the country and to raising their bodily and mental status. It is not that we need fear the raw material which we have to work upon. I will never admit that our raw material in this country is inferior to that of Continental nations. But when I was last in a German continuation school in Munich, and when I saw there exercised through the day time the discipline of education upon material not very dissimilar from our own, I was compelled to ask myself whether, after a lapse of a few more years, we could hope to hold our own if we did not devote more of our national wealth to this national object. It is with these ideas I support the Budget of the right hon. Gentleman. It may be alleged that some of the purposes to which the money is to devoted are Socialistic. But they are merely a natural evolution of politics in this country which we need not regret. It is for this reason I support the proposals of the right hon. Gentleman. It is for this reason I hope that by them and through them this country may rise to heights which may overshadow its own great glorious past.


If the views and theories which the hon. Gentleman who last spoke have enunciated are correct I wonder why we find ourselves in the condition in which we are at the present time—in a state of great want of prosperity, in a state of great unemployment; in other words, in a most unsatisfactory position. Perhaps the hon. Gentleman will be able to answer that question? I should like to put another question to him. In his speech he said that a duty of 2s. per quarter on wheat would produce £9,000,000, and that a tax of 10 per cent. on our total food imports would produce £20,000,000. With regard to the Wheat Tax I would like to ask him how he makes out that a duty of 2s. will produce £9,000,000?


The figures did not merely concern the taxation of wheat. They concerned the taxation of all corn, but maize has been thrown overboard by the Tariff Commission, and that accounts for some difference.

8.0 P.M.


The total amount of wheat that comes into this country is about 24,000,000 quarters, and a 2s. duty per quarter upon that would produce exactly £2,400,000, and no more. If the whole of the wheat imported into this country were taxed 2s. per quarter that would be the result, but as only part of it, comes from foreign countries the result would be very much less so far as wheat is concerned. The hon. Member also referred to the part played by foreign goods in the trade and commerce of this country. I made it my business to inquire at a dry goods store in Birmingham as to the amount of foreign goods there stocked, and I was informed that no less than 60 per cent. of the goods in stock were of foreign manufacture. I believe that that is not an uncommon state of things in regard to the large stores to be found in all parts of this country. I went into another shop in one of our large towns where they sell tools of all kinds, and I asked what proportion of American tools was included in the stock? The reply I got was that, at that moment, 70 per cent. of the tools stocked were of American manufacture! That altogether upsets the idea of the hon. Gentleman that there is so very small a percentage of goods coming into this country that it does not materially affect the trade. I do not know if he is aware of the fact that a 10 per cent. variation in the amount of trade in this country makes all the difference between prosperity and adversity. Anyone who knows the amount of foreign goods coming into this country will say at once that any suggestion that it represents only about 10 per cent. of the trade is very wide of the mark, and I think if the hon. Member will only make further inquiries on this point he will find that the imports are sufficient in quantity to make all the difference between prosperity and adversity here. The hon. Member for Ince put a very interesting question. He said if anyone could prove to him that the condition of the working classes in protected countries was better than that of the working classes in this country, it might affect his views on the Budget. He instanced New York State, in which, he said, there was a large amount of unemployment. I do not know to what period he was referring. If he was referring to the last year or eighteen months, I quite agree that there has been a dislocation of trade in the United States owing to the collapse of the banking system of that country. But that does not represent the normal state of affairs. It is an absolutely abnormal condition of things. What I venture to assert is that the extent of unemployment in New York State has only been of a temporary character. The employment of the country and the output of the country which has been so severely affected by the collapse of the last year or two is rapidly regaining its old condition, and, although at the present moment it may not have re-established itself it is well on the way towards it. There is another point in connection with the amount of unemployment in New York. Is it a matter of surprise that with a great mass of people coming into New York State, which is the point of debarkation, many should fail to find employment at once? As a matter of fact, they merely distribute themselves from that point all over the country as opportunity offers. There are about one million people who enter America every year and swell the number of those who are unemployed. Would it not increase unemployment in this country if we had a similar number of people landing on our shores in a like manner? It naturally takes time for them to distribute themselves over the country. We should not take New York State alone. We should look at the condition of the whole country, and if we take any normal period during the last ten years it will be found that there has been very much less unemployment in the United States as a whole than in this country. Not only so, but I may say that the working classes of the United States are in favour of Protection. To a certain extent they may disagree with the amount of that Protection, but they are to a man, I might say, figuratively speaking, taking the parties as a whole, whether Democratic or Republican, in favour of a Protective system. I challenge any hon. Member to deny that. These men vote for the Protective system, and they do so because they have seen the horrors and inconveniences of the Free Trade system, and they prefer Protection. I had a letter some time ago from the son of a working man who had gone to America, and who was formerly employed here. I knew him very well in this country, and he said that he was a Free Trader when he was here; they had tried Free Trade in America, and found it would not do, and now he said, speaking collectively, that every workman throughout the country was in favour of Protection, and would not go back to Free Trade. I want to put another test to the hon. Gentleman. Why is it that men go from this country to a Protective country? Why is it that they leave here and that they get more money in those countries than they do here at the present time? That is a fact which I will challenge anyone in this House to disprove.

The working men in America are far better housed and clothed and get far better money than they do here. I do not refer to the people who go to the country only for a short time, but to the working men who go to America, and I say they are far better off than the working men in England. If the hon. Member likes, I can give him an illustration which I only came across the other day. A man who in England was getting 30s. a week as a moulder, what do you think he is getting in the United States at the present time? £4 a week. Why is it unless there is some attraction in those Protected countries that they go to them, and why is it that they go in such great numbers from this country? Because they know that they will benefit. If the hon. Gentleman were to take a tour in the United States or Canada he would find that his conversion to some form of Protection would be complete before he came back. That is my reply to the hon. Member with regard to the condition of things in America and Protective countries. All I can say is that this question which is before us at the present time is an exceedingly grave one, and really ought not to be a matter of one side or the other in politics. It is a grave national question, and we have to look into it. We are in this country approaching, as I consider, a crisis in our commercial history, and it is my belief that sooner or later something must be done to put matters right. I was very much amused with the speech of the hon. Member for Preston (Mr. Cox), in which he disagreed in almost every particular with the Budget, and yet said he was prepared to vote for it. I cannot understand such a position as that. He can understand it himself, but it does seem to me that for a man who disagrees with almost every single item of the Budget to vote for it is a condition of mental gymnastics which I cannot understand.

You can easily destroy the foundations of property in this country. Tax the rich man if you like, tax those who are able to pay; I believe in that system, but undue taxation excessive taxation will lead to national bankruptcy. What are the principles upon which limited liability or other companies go with respect to the expenses of their management? They allow so much for the expenses of the management of their business, and does not the same argument apply to the Government? There must be a certain proportion taken for the management of the country. Below a certain point it means prosperity to the community, and beyond a certain point it means disaster to the people of the country. We are in this country approaching the border line beyond which the expenditure of this country should go, and if we go beyond a certain amount then, I think, we shall bring disaster upon the country. A favourite position of a great many people in this House is that you must not only tax land but other capital, but is not the way in which we are going that of unduly taxing capital, which is the foundation of industry, and is it not possible to tax that capital out of existence altogether? If you go upon that principle, where are your Death Duties to come from? In a short space of time, in the case of landed property where several deaths come in a few years, you may tax it out of existence. At present you get 15 or 16 millions a year out of the Death Duties. Do you suppose that you will have this capital if you succeed in passing this Bill? No; then when you have taxed it out of existence you will have to tax the small man in some form or another.

The Government says you must have money, but when you have wrung the capitalist dry and done with him you will have to come upon some other class. There are various panaceas mentioned by hon. Members in this House with regard to the remedy for the state of things existing in this country. We shall all agree that the disease is a very serious one at the present time, and we must find a remedy. The hon. Member for Preston says Free Trade, but we have tried it for a certain number of years, and we have found that it has ignominiously failed to bring prosperity to this country. I do not think anybody will dispute that. [HON. MEMBERS: "Oh."] If hon. Gentlemen think that with 11 or 12 millions of people on the verge of starvation this country is prosperous, I do not understand what prosperity is, and I venture to say that there is no country in the world, or at least not any principal country in the world, which can show such an amount of chronic and permanent poverty as we can. That is my opinion, and I believe it to be borne out by the facts.

The other panacea recommended by the hon. Member for Blackburn (Mr. Snowden) was Socialism. Socialism is a very different thing to social reform. We have been social reformers in this country for many years. We are going on the principle of social reform, and I believe that every Government that comes into power will have to go upon that principle. The difference between social reform and Socialism is as the difference between light and darkness. Socialism means actual negation of the individual principle in this country. It means the collective system and management by the State. We all agree that that is not likely to come about. We have had many examples of the collective system both in regard to individuals and Governments, and we have found in every case that Socialism and the extinction of the individual right has failed. If you could get a perfect state of society, where every man was sober and honest, and respected the rights of other people, then you might talk about Socialism, but I think to apply it in this country will only result in absolute disaster from a business point of view. I should like to give my opinion as a business man, and I do not think there are many business men in the House of Commons who have spoken upon this matter. There have been many theorists who have put theories of their own, but really when it comes down to the bedrock it is really a matter for the experience of those who conduct the business of the country. There was an hon. Member who spoke from the benches opposite a short time ago who said he was prepared to vote aganst the Government on this question. He may be the solitary individual on that side of the House, but I am perfectly certain that he is not solitary amongst the Liberal business men of the country at the present time, because I know their feelings. I have received letters from business men who have been Liberals all their lives, and they say they are not prepared to accept the Budget or to go forward on these principles.

I have found up and down the country wherever I go not only a spirit of hesitation but of nervousness in regard to this Budget, and I will give an illustration. In the district near which I live there is an association of manufacturers consisting of Liberals, Unionists, and Conservatives who have pledged themselves to do all they can to oppose the Budget. What is it that makes these men feel like that? It is not a question of party with them, but simply because they think that the principles of this Budget will help to destroy the trade of the country. One of the most important necessities for the development and expansion of the country is confidence in the minds of the business people of the country, and if you interfere with that confidence you strike at the root of one of the great foundations of the prosperity of the country. I say that that confidence is severely shaken in the minds of the people. We had an Eight Hours Bill a short time ago, and we were told that it was only defensive, but it is legislation like that which is giving rise to a great deal of feeling in the minds of the people.

There is a great deal of talk about trade unions in this country, which simply exist to protect the trade of the country. That is all very well so far as it goes, but if you are to have protection in one way you must have it in another, and what I want to know is this: If we are to have these Acts of Parliament which raise the cost of production and hamper the trade of the country in addition to the trade unions, which I do not object to but support if properly conducted, and then if you are to have these taxes hampering the trade of the country, as they do, because I think it will be admitted that every tax hampers trade—if we are to have these burdens increasing and foreign tariffs increasing and trade unions for the protection of the working man increasing, are we not to have protection for the, British manufacturers also? The British manufacturer is told, however, notwithstanding all these imposts, he is to manufacture his products as cheaply as ever, and compete with foreign producers as well as he can while we are really at the mercy of the dumping of goods into this country from foreign countries. All that is not fair at all, and he ought also to be protected. I will give an illustration of what I say. A short time ago a large railway contract was allotted to this country amounting to £20,000. One of our manufacturers tried to get that contract, and he even went so far as to quote a price which would lose him a few shillings a ton in order to keep his works going. He found that a manufacturer abroad took the contract at 10s. below his price. That was 15s. below cost of production. Did the foreign manufacturer lose the money? No. An association in his country gave him £1 a ton—£20,000—so that he might become possessed of the order. I want to know whether we can expect to compete against that? We have the imposts and burdens of commerce increasing in every direction, and there must come an end to this state of things. You cannot increase the imposts from one side, leaving the manufacturer open to the inroads of foreign production. I believe a crisis will come. The hon. Member (Mr. Snowden) said yesterday that it meant this Budget or revolution. That is a very strong thing to say. I do not know exactly what he means by revolution. I do not think this country is prone to revolution. I believe the feeling of the country, and especially of the working classes, is against those great outbursts of revolutionary feeling which we find in other countries, but I believe there will have to come a revolution of some kind. We cannot go on indefinitely in the way that we are going on at present. It is absolutely impossible. This Budget may be a temporary bridging over for the time being, but it is no remedy, and the legislation that may possibly come forth in the future is no remedy for the state of things we find at present. Who can say where the rates and taxes will end? Is there any finality to rates and taxes? None whatever. If there is no finality and no Free Trade all round you put the manufacturer in such a corner that it makes it impossible for him in future to get out of the entanglement in which he finds himself. There will have to come a revolution, but not a revolution of bloodshed. There are vast numbers of the working classes who do not actually entertain the opinions with regard to Tariff Reform which are held by members of the Labour party, and I should like to see the time when there is some expression of the opinion of the working men on that side of the question in this House.


I intervene in this Debate to call attention to two facts, satisfactory from my point of view, which have emerged from the discussions upon this measure, and which, I think, have not received the attention which their importance entitles them to. With regard to the Land Taxes, the increment which comes to a man and accrues without expenditure on his part or risk to him in its growth is a fair subject upon which to lay the burden of some of the extra taxation required by the State. I suppose in the last half-century, if we take the different classes of the community, while in the case of the very rich their riches are not very much greater nowadays than they were 50 years ago, at the other end of the scale there can be no doubt that the lot of the average member of the poorer classes, taking into considration the actual remuneration which his labour earns and the purchasing power of the wage which he receives, has improved. But it is to the great mass that lies between these two extremes that we have to look for the bulk of the largely increased material wealth upon which burdens in the nature of taxation may fairly be placed. It is the class in this country which has more uniformly progressed in wealth during the last 40 or 50 years. Where in the case of any class, or any profession or calling, you have a case where capital invested in land or any other form of investment actually brings to its owner an added wealth derived without risk or effort by him, I entirely agree that that is a proper subject for the imposition of necessary burdens of extra taxation. But, while I agree to the principle, it is to the application of it in this particular Bill that I take exception, on the same lines as have been argued by the hon. Member (Sir J. Dickson-Poynder).

But my purpose is not to complain of this portion of the Budget nor to urge objections to it, but to place on record the first of the two points to which, I think, the attention of the House and the country may well be drawn. On the second reading of this Bill it was pointed out by the hon. and gallant Gentleman (Mr. Pretyman) that there was an essential injustice and iniquity in the system under which a man whose capital was invested in trade or commerce was taxed for the purpose of Income Tax on his net income, while the man whose capital was invested in land was taxed for the same purpose under a different schedule and taxed in the main upon his gross income, and the hon. and gallant Gentleman appealed to the Chancellor of the Exchequer to remedy that iniquity by placing the land-owner for the purpose of Income Tax under the same Schedule as everyone else whose capital is invested in commercial or productive business. The Chancellor of the Exchequer in reply entirely agreed as to the injustice which our present system entails on the landlord. He said:— I really do not see what there is to be said against it. If I could find any way of adjusting it, which would not be absolutely disastrous to the revenue. I should certainly do so. I quite admit there is a great deal to be said for the contention that the present Government penalises the good landlord and, what is equally bad in my judgment, not merely penalises the good landlord, but gives a bonus to the bad landlord, and I can assure hon. and right hon. Gentlemen opposite that the Government—I am speaking for myself and my colleagues—are sincerely anxious to do what is right and fair in this matter. I maintain that that is a promise on the part of the Chancellor of the Exchequer to rectify the injustice at present created by placing land-owners under Schedule A and not under Schedule D. I agree that there was a condition attached to the promise, namely, that he was to inquire whether it was possible in view of the financial conditions of the Treasury, but if we go a few months further on in the history of this Bill I find that on, I think, 15th July the Chancellor of the Exchequer received a deputation of a body who call themselves the British Constitutional Association. At any rate, they are a body of gentlemen who are interested in land, in agriculture, and in the management of agricultural property. They got a pretty severe snubbing at the hands of the Chancellor of the Exchequer. It is quite true that the right hon. Gentleman had been sitting up all night and was, perhaps, less disposed than he usually is to listen patiently to long and perhaps rambling discussions. At any rate, he hauled the deputation pretty severely over the coals, and, among other things, he upbraided them for not being sufficiently grateful. He said they dismissed without any sign of gratitude what he described as the boon which the Government had promised to agriculture, namely, a readjustment of Schedules A and D. That, coming from the Chancellor of the Exchequer two months after the original promise, seems to me to indicate without any shadow of doubt that, after due consideration, and after reviewing the financial aspects of the question, he, on behalf of the Government, admitted that the present system of assessing owners of land for Income Tax under Schedule A was an unjust one, and that the Government were pledged to remedy it. I am not complaining that the full remedy has not been granted. I know that we must be grateful for mercies, however small they be, and I gladly recognise that in the concession the Government have already made on this point, they have gone some way to produce an earnest of their good intentions, and have, to a certain extent, met the complaint with regard to Schedules A and D. For what has been done the grateful thanks of agriculturists should be offered, but it is not equal to what was promised. It is not adequate to the promise, and my object here to-night is to place on record for all time that the Radical Government now in power have recognised the injustice of the present system and have promised that some day in the future they will rectify and remedy it.

I pass from land to licences. I suppose—especially in regard to the class of land dealt with in the Land Clauses—value may be fairly said to be maintaining itself, if not rising. The bulk of wealth subject to Income Tax is undoubtedly mounting higher and higher as years go on. I think I may safely say that the value of licensed property is equally steadily declining in value. If land has a heavy burden laid upon it under the Budget, what am I to say about licensed property? The Prime Minister, in one of his speeches, took great credit to himself, and laid great emphasis on the fact, that in taxing land he was not taxing present value. He said: "We leave present value where it is, all we do is to tax future increment." That increment is to be unearned by any effort of the owner. It is to be confined to increment due to what is called the social development of the neighbourhood, and, finally, the Land Tax is to be one-fifth of the value. How does that compare with the tax laid on licensed property? So far from restricting themselves to future increment, the basis on which it is to be calculated is the full existing value to-day. So far from that value being unearned, it is the fact that in almost every case, certainly in the majority of cases, the licences have been paid for in cash, and not only so, but at prices which we are constantly hearing are excessive. Lastly, the tax instead of being one-fifth is to be one-half. Why is this particular form of property—though I agree it must bear its share of the burden—to be dealt with in a harsher and more burdensome way than another? It certainly is not, I think, on any sound financial principle, because if there is one financial canon more universally held than another, it is that it is unsound and unwise to place further taxation upon a trade which is declining. Therefore, I think it cannot be on financial principles, and I am sorry to say I have been driven, by listening to the Debates and reading the speeches of Members of the Government and their supporters in the country, to the conclusion that there is another principle besides the strictly financial principle which inspires and animates this portion of the Budget. I maintain that it is obviously and admittedly revenge for the rejection of the Licensing Bill of last year. Licensing Bills have not on the whole been profitable to the Liberal party. I was in this House when two Licensing Bills were brought in by the late Sir William Harcourt. Neither of these Bills ever got so far as a second reading. Then we had the Bill of last year, which led a somewhat truculant life in this House, and finally passed away from among us in the sure and certain hope that it would not inherit any future existence whatever. This Bill is the second barrel of the Licensing Bill of last year. The first barrel overshot the mark, and failed to bring down the game. The second barrel, as is often the case in modern weapons, carries further and hits harder, and my impression as to the underlying motive and principle of this Bill is further confirmed by the curious expressions of anger and resentment indulged in by Members of the Government at the fact that the London trade have found themselves obliged to raise the price of beer within the County of London. What business is it of the Chancellor of the Exchequer or anyone else what price the producer of a commodity asks for the commodity which he produces, whether it is beer or anything else?

The London trade has been under the provisions of this Bill exceptionally hardly dealt with. A tax, even a heavy tax, ought to be evenly distributed over the shoulders of those who have to bear it, but these proposals, by reason of the details of the machinery, press more hardly upon one portion of the trade taxed than upon another portion. But why should the London trade, when they have endeavoured to keep themselves above water by asking more for their article, be singled out and called swindlers and blackmailers? One of the first Acts of the present Government after they came into office was to pass a measure which set up an important body, the Metropolitan Water Board, to control the water supply of the Metropolis. That Water Board is adorned as to its presidency by the presence of my hon. Friend the Member for Kidderminster (Mr. Barnard). One of the first reuslts of the passing of that Act was to raise the price of water to consumers in London. Hon. Members will not quarrel with me when I say that water, even more than beer, is a prime necessity of life. The Metropolitan Water Board have raised the price of water to London consumers, yet nobody goes about the country denouncing my hon. Friend the Member for Kidderminster as a swindler and a blackmailer. And if no exception is taken to their action it is still more difficult to understand the grounds on which hon. Members like my hon. Friend the Member for Lincoln (Mr. Charles Roberts) take exception to the action of the trade in London. I think I remember the hon. Gentleman raising his voice in this House in protest against the action of the London brewer for raising the price of beer to the consumer. Surely he must recognise as one of the permanent teetotallers of this House, that the higher the price a man has to pay for his beer the less beer he will drink, and I should have thought that the raising of the price would have been to the hon. Gentleman a matter of congratulation and satisfaction. The plain fact of the matter is the London trade raised the price of the article to the consumer for a very simple reason. It was because they had to.

Any old apple-woman who keeps a stall can tell the Chancellor of the Exchequer if she makes a profit of say 15s. a week out of her business and he puts upon her a tax of 20s. that she must either make more money out of her apples or chuck up the job. I do not bring again before the notice of the House facts and figures in regard to particular firms and companies, but it is a fact that the new taxation proposed in this Bill in regard to most of the London trades will more than swallow up the total amount that was available in the previous year or two for distribution in the way of ordinary dividends. The House knows that before the ordinary shareholder can touch a penny of the dividend there are certain fixed charges to be satisfied, and there is the taxation to be paid. In the case of one firm with whose figures I am acquainted, the amounts of the money paid first in taxation to the Government, second the amount of the fixed charge required to satisfy the debenture holders and preference shareholders, and thirdly the remaining sum available for ordinary dividends, are, roughly speaking, in the proportion of the figues 5, 2, and 1. That is to say, cut of every £8 profit made by the company £5 goes first to the Government, then £2 to the debenture holders and preference shareholders, and £1 is left for ordinary shareholder dividends. Under the proposals of this Bill the proportions, instead of being 5, 2, and 1, will be practically 6, 2, and nothing at all. It is obvious that if the business is to be carried on, and to satisfy those two previous demands, it is absolutely necessary in some way or another, to make a larger profit on the business in order that the ordinary shareholders may be able to live.

I am not at this moment urging my objections to or complaining of the scheme of the Budget so much as desiring to call attention to the second of my two facts, namely, the fundamental change which the disappearance of last year's Licensing Bill has imposed upon Liberal strategy and the Liberal programme. The general proposal of the Licensing Bill of last year was the imposition of a time limit, so that at the end of a term of years any licence could have been made terminable without compensation. If the time limit had been made the law of the land, it would have been possible when it expired to face what is called some large constructive solution of the liquor question unhampered by the fact that the publican has a sort of property in the licence. That is now changed. The new plan is something quite different. It is now recognised that the licence, subject to certain conditions, is a property. It is a property for which the publicans pay a fair price by way of taxation. But once this plan is adopted I am quoting here from a leading article from one of the principal Liberal papers of London— there can be no return to the policy of the time limit. The trade could have borne the burden of insurance against extinction at the end of the time limit. It can also bear the new Licence Duties, but it will not be asked to bear both together. The two policies are alternative. If in future the question of the municipalising the sale of liquor should arise, the present licences would have to be extinguished by way of compensation. That is the important fact which develops itself out of this Bill, and that is the second of the two points to which I wish to call the attention of the House, namely, that the old policy of the time limit and of denying property in a licence is gone never to return, and that when, as you do by this Bill, you proceed to tax a man's property you cannot in the same breath deny the existence of that property at all. The property is now recognised, and can only be taken away in future for any State purpose with adequate and sufficient compensation. I wish to say one word about my own vote. I voted in support of the Government on the occasion of the second reading of this Bill. I recognised that a large sum of money had to be raised. I saw at that time no adequate alternative propounded by any other party in this House, and, although there was much in the clauses of the Bill to which I took exception, there was the Committee stage before us, during which it was possible to remedy those faults, and I felt bound to support my leaders by voting for the second reading of the Bill. I am bound to say that on this occasion I intend to take a different course. In the past 25 years I have taken a more or less active part in every General Election, and, with the exception of the last contest, I think that in every one of these General Elections I had to endure the opposition of the licensed trade. They made demands in those days on candidates which I looked upon as unreasonable and as dangerous. I refused to subscribe to them. I declined to comply with their demands, and I had to forfeit their votes and endure their opposition. By this measure a large class of persons who are engaged in a trade, which the Prime Minister a few years ago described as a lawful and legitimate trade, and one entitled to the protection of the law—a large number of persons who gain their livelihood by this trade are unfairly and unjustly treated. When I find a class of persons unjustly treated by a measure my instinct is at once to vote against it and oppose it. I find myself confronted by two parties in the political State. One party appears to me to have for its sole object the taxation of almost every trade in the country with a view to Protection. The other party seems to be bent upon the taxation of one trade, essentially a revenue-producing trade, with the object of extinction and destruction. Under these circumstances, although I am a Free Trader, and have been so all my life, I feel bound to ask myself whether, after all, there is not something to be said for what is called the broadening of the basis of taxation. At any rate, I decline to vote for the Bill, which appears to me to push a plausible principle in respect of land taxation to extreme and dangerous limits, and which seems to me to derive its motive force and inspiration, in regard to another important section of taxation, from a vindictive party policy, which appears to me to be simply shabby.

Captain W. WARING

I wish to speak to-night as one who is interestd in agriculture, and also in the capacity of a representative of an agricultural district, a farmer, and a landowner. I was one of those who, when this Finance Bill was first introduced, entertained great fears as to the result of certain of the land taxation proposals of the Government. I may be forgiven if for a very few minutes I detain the House in explaining why I think those fears have been wholly allayed. Unless some extraordinary and wholly unexpected method of assessing the halfpenny tax is introduced I cannot see that agricultural land can possibly suffer any increased burden from the fresh taxation. I am bound to say, as a rural landowner, that I regard with equanimity the transference of a portion of the increment of the more fortunate landowners into the pockets of the agricultural interest. The 25 per cent. con- cession on improvements is one which no one, in my position, can regard without gratification. It is true that the Chancellor of the Exchequer perhaps did hold out a promise of a larger concession, but when we consider that the sum of money which that concession will cost is exactly the same as the amount derived from the new taxation on land, I must say that I cannot agree with my hon. Friend who has just resumed his seat that the conduct of the Chancellor of the Exchequer or of the Government is at all shabby. We have a definite promise that in the near future further relief will be given in this particular respect. Although it is perfectly just, and certainly it is long overdue, yet it has remained for a Liberal Chancellor of the Exchequer to take the first step, and, though we have had to wait a long time, it is a step which is none the less satisfactory. There is another concession which to my mind is most valuable, and of almost national importance, namely, the provision which exempts from Death Duties all woodlands until such time as the timber has matured; or indeed until it is actually harvested. I do not think there has ever been a proposal so important to landowners and landlords. It is somewhat difficult to estimate the actual value of the concession at present, but it must be an enormous relief to landowners in Scotland, and it is one which will become more valuable as time goes on, owing to the popularity of afforestation throughout the country. Another point is as to the assistance which has been promised in the Development Bill for the creation of small holdings. That will be exceedingly welcome in Scotland, where, owing to the failure of a reasonable Land Bill being passed into law, it is practically impossible to meet the demand which undoubtedly exists for farming on a smaller scale than at the present time. The only regret I have to express is that the right hon. Gentleman did not see his way to graduate the Whisky Tax. I admit at once the difficulty of doing that, and that the division of opinion amongst Scotch distillers made it doubly hard to hit upon a satisfactory solution. At the same time, the graduation of the Whisky Tax would have been an immense relief to poor Highland distillers in the north of Scotland, and it would not have in any way depreciated the value of the tax. I regret very much that nothing has been done in that particular direction. My object in rising this evening was to speak merely as a representative of an agricultural district, and, while I candidly admit that I did entertain fears and that I was seriously alarmed about the land taxation proposals of the Government when they were first introduced, I admit now that those fears have been wholly allayed. I believe that the position of agricultural land has been fairly and generously recognised, and I believe that is the policy of the Liberal party for the future, and it is, therefore, with pleasure that I propose to support the third reading of this measure.

Mr. W. H. LEVER (Cheshire, Wirral)

I rise with great diffidence to-night, and would not have done so if a speaker on the Opposition side had not made some remarks with reference to the speech of the hon. Member for Ince (Mr. S. Walsh). The hon. Member for Ince stated that if it could be shown that Protection would make for more employment, it would go a long way to remove his objections. He was told by a Member on the Conservative side to make a journey through the United States, and that he would see an object lesson of what Protection had done for the working man. May I be allowed, as one who has works in the United States and works in Germany, and also works in many other countries, to say that I can unhesitatingly state as to wages and their purchasing power in the respective countries, the United States, Canada, Australia, Germany, or the United Kingdom, the workman of the United Kingdom is infinitely better off than in any of these countries, and may I be allowed to submit a very rough proof of that. When we send workmen to the United States and to other countries, we do not find that they are willing to remain in those countries on the same wages that they receive in England. Even at higher wages, and higher than the wages in those countries, they still desire to return to this country. I venture to say that so far from Protection making for more employment in our own particular industry the three largest firms in the laundry trade would certainly, under a system of Tariff Reform, have to cease work on Thursday nights—that is, they would only be able to work for four days in the week, and in the toilet soap trade I should say that the largest firms would not find work without their export trade for more than half the week.

I venture to support that by the statement of a deputation of German soap manufacturers to this country to inquire how it was that the United Kingdom had such a very much larger export trade in soap than any other nation in the world. I may say this, that England's export trade in soap is larger than all the other countries put together. We had no export trade prior to 1851, when Mr. Gladstone took off the Soap Duty. The deputation of German soap manufacturers, having gone through the various works in this country, made this statement:— Enjoying Free Trade as you do in this country we can sec clearly that we cannot compete with you in the markets of the world We hare to pay duty on our timber to make our cases, on the paper in which we wrap the soap, on everything in connection with it, on the very nails we use in the boxes, and we are going home seeing clearly that we must leave this enormous trade to you in this country, and that we cannot compete with you at all. 9.0 P.M.

May I mention another fact we could not from our works in Germany send a single ton of soap to any other country other than for consumption in Germany, nor is Germany able to send a single ton of soap to this or any other country of any consequence, nor in the United States can you manufacture soap for shipment to any other country. If you compare the business of the United States you find it is ludicrously small as compared with the soap exports in this country.

I believe the conditions that prevail in our own trade prevail in all the others, and that so far from Tariff Reform bringing about more employment it would result in a great many industries having work for not more than four days per week for their present employés. Of course there is this to be said, that in all those countries, especially the United States, the taxes are small, because per head of the population the expenditure is small. We in this country have to carry a burden of expenditure which is quite double per head of the population what has to be carried in the United States. We have to take this money and use it in expenditure, wasteful expenditure, on armaments and so on, and we are handicapped, and seriously handicapped, to that extent. But if we have to carry that burden we have also to consider who is the best able to carry it. I venture to say without hesitation that just as we do expect young men to bear the burden of war when in the Army, so we have a right to expect those who have made money, and who have arrived at a period when they can no longer serve their country in war, that they shall contribute out of their money to maintain the position of this country with regard to its armaments. I have never understood myself why the very class of this country who have always been fore- most in defending, even at the cost of their lives, its shores, that is the aristocracy, and we have always had in all our wars some of our best fighting material from our upper classes, but I have never understood why, when it comes to a question of payment they should act in this way, and try to push the burden on to weaker men. It is ignoble, and it is pitiable, and it would scarcely be credible if we did not know that the very same men who will lay down their lives for their country will not put their hands into their pockets and pay their fair share. They will not escape if they attempt to put the burden on other people's shoulders.

There is only one way, and the simplest way possible, we can carry on the enormous expenditure we have to bear, and I believe it will be greater in the future, and that is on the lines laid down in this Budget. With perfect fairness and with perfect justice it does not call on the rich men to pay a greater proportion than he can bear, or to pay a share or proportion which will cripple him and his industry, or investments. It will do a great deal to enable us to get a cheap supply of food for the workers. The burden of those who work with their hands, and the toil they have to give is a serious one. For that the payment they receive is not too great. There are two ways in which it might be increased, either increased wages, or reduced cost of living. In this country we have done both. We have been enabled in the last 20 or 30 years, and certainly since Free Trade, enormously to increase the wages, and at the same time we have been able to lower the cost of living. It is true that during the last ten years wages have not advanced, and that the continuous advance that has been going on received a check. The causes of that are well known to all of us. We entered into a costly war, we expended our money in that direction, and consequently we were in the position of people who, having wasted their resources, had no money to expend on the development and extension of our trade. That is gradually passing away, and I feel that in supporting this Budget we are laying the foundations of a fairer and juster system of taxation than we have ever before enjoyed—a system that can never under any conceivable circumstances be a hardship to the rich man or cripple him many way whatever, and one which will provide us with the means to carry on our work of social reform. I do not believe for a moment the language which is used with reference to the Budget and Socialism. It cannot be an act of Socialism to educate freely children under 14 years of age; and, if we educate them, it cannot be an act of Socialism to keep them in such a physical condition that the education can be received by them. What does a child ask when it receives a meal as to the source from which the meal comes or as to who pays for it? The child only feels hungry, and whether the meal is paid for under one system or another, directly by its parents or indirectly through the resources of the nation, he never stops to ask. Therefore, in dealing with children up to 14 or 16 years of age by such means to make them stronger and better citizens, we are not inculcating into them Socialism or any other doctrine which might lead them from the best paths later on. Equally when people are past the age of 70, whatever we do for them, whatever pension we allow them, they have passed the age when we can affect them injuriously. In providing money, as this Budget does, to look after the young when they are unable to look after themselves, and to look after the old when they have passed the period of life at which they can provide for themselves, we are doing justice to ourselves and our country, and we are helping to build up a stronger and greater Empire, knit more closely together than it could be by any system of Tariff Reform. Tariff Reform can only pit one section of the country against another. It can only make us narrow and jealous of each other. The Budget proceeds on sound, broad lines, and whether it is dealing with land, licences, Super-tax, or the smaller taxes on tobacco and whisky, it is laying the burden equally on all classes of the community in proportion to their ability to bear it. For these and many other reasons with which I will not trouble the House I have the greatest pleasure in supporting the Budget.


The hon. Member who has just spoken has told us that the purchasing power of the working man in the United Kingdom is greater than it is in any other country. As he has been in America he must know that working men there get about double the wages paid in this country.


That is not correct.


In the ordinary way the wages in America are double what they are in this country, and in some instances they are three times as great. It is nonsense to pretend that wages in America are not double what they are here. The hon. Member gave what I understood to be his own experience. I have had recently come to see me a very nice old gentleman who about 40 years ago worked for my father at 15s. a week. He thought the wages in this country were not good enough, and went to America, where he did pretty well. He has had 30 years' experience in America; and I had a long chat with him. He told me that he could not imagine how the working classes here could be such "boiled owls" as to stick to this curiously-named Free Trade country. In Indianopolis, where he lived, he said that so good is the employment and so good are the wages, that carpenters and bricklayers get on the average from 18s. to £1 a day, and many of them are so well off that they own their own houses. Not only that, but so good is the employment that you cannot get a white man or a white woman as a servant for either love or money. Several other people have told me the same, namely, that there is no difficulty about employment, and that wages are far better than in this country. Hon. Members should go into this subject with open minds. The hon. Member opposite (Mr. W. H. Lever) told us that he had soap works in Germany. Why did he put ay soap works in Germany? I suppose he was compelled to do so because he could not get over the German tariff, and in spite of being handicapped in the matter of raw materials in Germany it still pays him to have works there. He also told us a good deal about the increase of wages and the decrease in the cost of living in this country. The real reason why wages increased when Free Trade started was the making of the railways. The labourers went to the railways because they pot better pay, and the farmers had to give better wages in consequence. As far as bread is concerned, for about 30 years after the Corn Laws were abolished the price remained practically the same; sometimes it was considerably dearer than before. I cannot really help thinking that this Budget is a gigantic muddle and a gigantic blunder. It is frightfully long, and nobody really understands it, I am sure. We are told by Liberals of various sorts—and there are a good many sorts of Liberals—that the Budget has nothing to do with Socialism. The hon. Gentleman the Member for Blackburn has told us that it is not quite Socialism, but is Socialistic. I suppose Socialistic means Leaning toward Socialism. I hope moderate Liberals on the other side of the House who are going to vote for this Bill will remember this. Personally, I have very considerable respect after all for the hon. Member for Blackburn. He and his friends pursues Socialism as a policy which they think will cure unemployment and the frightful misery that we have in this country after 60 years of Free Trade. You cannot say it is not so. The right hon. Gentleman the President of the Board of Trade told us only quite lately that millions of our people were more miserable than the people of any other country of the world. [HON. MEMBERS: "No, no."] I cut the report out of "The Times," and I looked at the reports in other newspapers, and they were just the same. He said that they were struggling under conditions that were worse than barbarism. What he forgot to add that that was after 60 years of all the blessing that hon. Gentlemen on the other side of the House say we get from what they are pleased to call Free Trade. Moreover, another great authority, now Lord Morley, told us at Manchester in 1903 that it was a matter of life and death to us to persuade the other nations to rally to the Free Trade flag, and come round to the "open door." Now if Free Trade, as it is called, is such an enormous benefit to us, what in the world does it matter whether other nations come around to us or not? Is there any answer to that? [An HON. MEMBER: "No."] No, there is not. It gives the whole show away, and that is exactly what the Free Trade leaders have always been doing. The Attorney-General told us yesterday that the Government had exempted the poor man from taxation, and had also exempted both industry and enterprise. I think that is a most extraordinary statement to make, and one that cannot possibly be proved. What about the £6,000,000 to £8,000,000 extra taxation put on beer, whisky, and tobacco, of which the working men and the poor pay by far the greater part? Where does the exemption come there? What about industry, and what about agriculture and mining? Are they not taxed under this Budget? [An HON. MEMBER: "Not agriculture."] Is it not? What about the Death Duties? Is not that a tax? What about the Income Tax. The Prime Minister said that:— the Income Tax was a tax not only on industry but on wages. The extraordinary thing about this Budget is that we are told that it is such a tremendous benefit to the working classes. There is not one halfpenny relief under it to any single man, woman, or child of the working classes. It is not only that their taxation is increased, but that on the wines of the rich not one halfpenny of extra import duty have been placed.


Then what are they grumbling at?


Personally I never grumbled in that sort of way at all, except to say how extremely silly and stupid the Budget was. That is how I grumbled—and that the Chancellor of the Exchequer should have put this Budget forward supposing it to be a democratic measure! It is a curious Budget from the working class point of view when the working man's tobacco, which everybody knows he cannot do without, is put up 600 per cent., whilst there is so very little extra put on that of the rich man. The hon. Member for Blackburn has put the taxation on the working classes, including excise and import taxes, at £53,000,000 a year, and it is all on food, drink, and tobacco. They are taxed very heavily all their lives, from the cradle to the grave, and this includes taxation now towards old age pensions, from which few of them get any benefit at all; for very few live to be 70. Even before the Budget passed we paid about £300,000,000 a year in local and Imperial taxation, and I think I am right in saying that that means about £10 to £15 out of every £100 worth that we produce in this country. I believe this is the most difficult argument that Free Traders have to deal with. Therefore, under our present Free Trade system for the upkeep of our country and her market, we have to pay from £10 to £15 on every £100 worth of agricultural produce and manufactured goods, while the foreigners send their goods into our market without paying a halfpenny. You are giving the foreigner an advantage with his competing goods that he sends in here of from 10 to 15 per cent., and you call that fair play for the British working man. I suppose someone will get up on the other side and say the foreigner has to pay rates and taxes in his own country. That is perfectly true, but he only pays for his own country, and he does not pay one halfpenny towards ours. Look at it the other way about, when we send goods to be sold in foreign markets. The foreigner takes very good care that we have to pay far more in import duties than the foreign producers have to pay. [HON. MEMBERS: "No, no."] We have to pay import duties towards his rates and taxes. Anybody can see that that is true. The consequence is that we in this country in all our dealings with Protective nations have to pay for two markets—the foreigner's market, and our own. You cannot get out of that. There is no doubt about it but that the present Government has got into a most infernal mess. This is the Budget which is going to prove that Free Trade can supply all the money that is wanted for the upkeep of this country. How do they do it? By putting 100 per cent. extra on the workman's tobacco, rather more than 100 per cent. extra on his whisky, and by increasing the taxation on his beer. [An HON. MEMBER: "He is willing to pay."] The workman is a good fellow; he may be willing to pay, but I do not think he is very wise if he allows himself to be treated in this way, and I do not think he will allow this tremendous taxation to be put upon him while all the many luxuries of the rich except alcohol and tobacco come in here free. I think if we are to have an alteration of this heavy taxation on the poor as it exists now, Tariff Reform is certainly absolutely necessary. At the last General Election the Liberals made great promises about retrenched expenditure. I think it has increased by about £15,000,000 since they came in. We heard a great deal about cheap food; but, as I understand, food has become considerably dearer, and there is nothing extra big about the loaf except its price.

It appears that the "Daily News" and "The Nation," the "Morning Leader," "The Star," and the "Sheffield Independent" are all run by the millionaire manufacturers of protected cocoa. I might say they were cocoa bred and cocoa fed. Yet, in spite of that, the cocoa leaders and their papers call Tariff Reformers food taxers, although on cocoa there is a double food tax, according to their own account; and yet they keep on telling their people that protection, which they themselves enjoy, would injure us by interfering with foreign competition, and means the starvation of the worker. For years we have had the Messrs. Cadbury boasting that in their industry it is British men they employ, and that they employ them under the very best conditions. Then we have the chairman of the "Westminster Gazette" Company, the hon. Gentleman the Member for Chester (Mr. Mond), who has got protection of a sort in his newspaper and in his industry. The cocoa millionaires who control a large number of the Free Trade Press are them- selves food taxers, and, therefore, I am afraid I must say that their campaign of Free Trade is neither more nor less than organised hypocrisy. I have got a Free Trade leaflet in my pocket at the present moment used at the Bermondsey Election. [HON. MEMBERS: "Read it."] Yes, I will. The last words of it are:— Stick to Free Trade and buy what you want free from taxation. These are monstrous assertions when it is remembered that we pay more in import taxation in this country per head of the population than any other nation of the world on food, drink, and tobacco. Really and truly the only argument the Government have in favour of the Free Trade system of raising money is that Tariff Reform and Imperial Preference would be so good for us and so bad for foreign countries that it would make war more likely. If we are so weak that our domestic policy is to be dictated to us by foreign nations, then all I can say is that 60 years of Free Trade has brought about our ruin. The German writers tell us quite plainly that Tariff Reform and Imperial Preference would interfere with their bread and butter, and, of course, they speak pretty plainly, that if once the British Empire was committed to Tariff Reform, Germany would no longer be able to compete succesfully with us in building war-ships, and her chance of dominating Europe would be gone. That is the reason she is building in such tremendous haste. She hopes we may stick long enough to Cobden's fatal theory to give her a chance of knocking us out. The Chancellor of the Exchequer told us the other day that we were approaching a great struggle, and I think he is right. I think the next Election will be a moderately warm affair. The right hon. Gentleman said we had to consider the great question between Free Trade and Protection, and he asked: Should taxation be used as a means of artificially raising prices so as to enrich a few at the expense of the rest of the population? Or should taxation be put upon those who can best afford to bear it or those who can least afford to pay? Our present system of Free Trade puts a great deal more upon the working classes of this country than their fair share, and a great deal more than they ought to bear. That, at all events, is my opinion. I may also point out that all our import taxation is put on food, drink, and tobacco, upon which the working classes pay by far the largest part. Then you talk about Protection, but there can be no protection until you get to a point in regard to import duties which will make the foreigner pay more than our producers pay themselves. When you get to that point you will have equalisation of taxation. It is perfectly absurd to say until you reach that point you can get any sort of protection. Our present system is one of simply subsidising all the competing goods which foreigners like to send to us, As for calling it Free Trade, that is all humbug. If we really had Free Trade we should be free to buy and sell where we like, and can anybody get up here and say that at present, we are free to do either? What humbug and rot it all is. If the working classes understood the fiscal question they would not stand the present Government for a month. The Chancellor of the Exchequer told us that £2,000,000 were wasted under the Agricultural Rates Act because it went into the pockets of the landlords, but that is certainly not the ease. We have been told by the German Emperor that it was our Fleet that saved us during the South African War, and I really should have thought that the Chancellor of the Exchequer, instead of making the reference he did to the South African War, would have left it alone.


This subject seems decidedly remote from this year's Budget, and I hope the hon. Member will confine himself to the measure before the House.


May I point out, Mr. Emmott, that the question of the South African War was certainly mentioned by the Chancellor of the Exchequer, but, of course, if you rule me out I will not refer to it. We import into this country £140,000,000 worth of manufactured goods, most of which we can make ourselves. Supposing we put on a sufficient duty. [HON. MEMBERS: "How much?"] Well, the tariff has been made cut with great care. [An HON. MEMBER: "Who by?"] By people who thoroughly understand the subject. Such things as motor-cars, because they employ much labour, would have a high tariff, and in the case of pig iron, which has a low labour value, the tariff would be low. This would afford protection and assistance to the labour of the people of this country. If we were only able by these tariffs to produce at home half of those goods instead of buying them abroad it would mean that at least 35 million sovereigns would be paid in wages to the people of this country which are now being paid in wages to the foreigner. We should regulate our industries under Tariff Reform just like all other nations do. We should then make more manufactured goods at home and compel other nations to send us more raw material. There is no doubt this would have an enormous effect in remedying our want of employment. The Government do not understand the tremendous difference between home and foreign commerce. I have got a pamphlet in my pocket from the Budget League, whose point is exactly the same, that home commerce is doubly profitable. The Budget League says "That old age pensions, most of them amounting to £13 a year, are spent by the old people in their own districts, so bringing trade to the shops of the neighbourhood. On the one hand rates are saved, and on the other hand, tradesmen have more business out of which to pay their rates." The hon. Member for East Denbighshire (Mr. E. G. Hemmerde) put the matter very well in a paper called the "Oswestry Advertiser." He complained that the result of the bye-election in the Oswestry Division had been to hurt the Oswestry tradesmen, and he said that one tradesman alone had lost about £100 because the Tories were so angry that they transferred their custom to London and bought their goods there instead of buying them at Oswestry.


I am quite sure I never said anything of the sort.


I am sorry to differ with the hon. Gentleman. It is hardly likely I should invent it. The conclusion I drew from that is if it makes a difference whether you buy your goods in your local town, or whether you buy them in London, it makes a difference to the people of this country whether they buy their goods from New York and Paris, or whether they buy them in this country, and employ our own people in the making of them. I will just say something about the Land question. I agree we must get our people back to the land if we are to survive. The Government policy is to get the land into the hands of the county council, and let it out to small holders, making them pay not only the rent, but enough extra to enable the county councils to acquire the land at the end of so many years. Thus the small holder has to pay for his land and then has it taken away from him. That is not the principle of hon. Members on this side of the House. We believe small ownership is the best cure for what is called Socialism. In Germany under a system of scientific tariffs and the protection of her industries and working people, agriculture and manufactures flourish side by side, whilst in this country, admittedly, agriculture is decaying and manufactures are declining. We import more and more of our food. Surely that is wrong, when you have millions of acres of good land lying almost useless in this country at the present time. I can show you land in the South of England untouched by the plough which would grow good crops of grain. We import into this country over £18,000,000 worth of agricultural produce. We could very well grow a great deal of it ourselves. The Chancellor of the Exchequer puts it down to the monopoly in land, but the reason is we are doing just what Rome did. We are allowing agricultural produce to come into this country at a price at which we cannot grow it ourselves. It was that which destroyed the Roman Empire, and there is the danger of the same happening in this country Something must be done to get the people back on to the land and to get the land well cultivated. Unless we do that you may depend upon it we shall be rubbed out.


The fact that I stand at this Table to-night I welcome with deep gratitude as evidence of the conviction of my colleagues on this bench that I am not unworthy to continue to hold office and to remain a Member of this House, and that my advocacy of this Bill has not been characterised by the use of any arguments calculated to bring disgrace on my upbringing, my profession, my office, or my native country. If I may, without transgressing in the slightest degree the Rules of Debate, and without trespassing beyond the bounds of strict relevancy, I think I shall be able to satisfy this House that I have not been guilty of the very serious charges which have been brought against my personal honour. I have seen and heard as much as most men—perhaps more than most men—of the prolonged and eager controversy which is now drawing to a close. I have mingled much in the fray, and what has struck me above all else has been the method of attack adopted by the opponents of the Bill and their apparent unwillingness to discuss the worthiness of the objects to which the money is going to be devoted, or to discuss possible alternative methods of raising that money. No comment has been passed and no judgment has been pronounced on the wisdom or possibility of endeavouring to remove those deep-seated evils which have grown up around our vast complex and disorganised industrial system. It must be admitted that but for the existence of those evils this Budget might never have been produced.

10.0 P.M.

What have been the lines of attack directed against the Budget? It has been challenged on the ground that it spells Socialism and does not spell employment. This raises a very sharp controversy between the two sides of the House. We contend it does not spell Socialism, but that it spells Social Reform, and in our view every purpose to which the Chancellor of the Exchequer proposes to apply the money will give useful, productive employment to British citizens on British soil. In a controversy like this you must necessarily rule out any consideration of the taxes, for after all taxation is the imposition of money—it is a demand for money upon a man, and the very existence of a tax implies absence of Socialism in the sense in which I understand it, because if a man has no private property he has no money in his purse, he has no money to his credit at the bank, and he is in sore plight to face the visit of the tax collector. Therefore I should say the existence of taxes necessarily implies the non-existence of Socialism in the sense in which I understand it. May I offer an illustration? Suppose, for example, that all the money to be raised by my right hon. Friend were to be devoted exclusively to strengthening the Navy, as well it might be if some hon. Members had their way. Suppose that money were to be raised by these very taxes, no one would ever think of calling the Budget Socialistic or of terming it a revolutionary Budget. It would, on the contrary, be a patriotic Budget. Therefore if there is Socialism in this Budget we must look for it elsewhere; we must look for it in the object and purposes to which our money is going to be devoted. I have never for my own part found it very easy to approach this question without knowing in my own mind what is Socialism, an operation which I assume the assailants of the Budget have never undertaken, because they assume that those to whom they are speaking are familiar with the idea, an assumption which is entirely groundless, or it may be because they feel that their attack would be more powerful if the idea of Socialism were kept sufficiently clouded. I myself have always carried about with me a definition of Socialism which satisfies me, and which I am perfectly certain will satisfy hon. and right hon. Gentlemen opposite. It is a definition of Socialism which is very familiar to this House, because it comes from none other than the Leader of the Opposition, and it is a definition which I frankly say I do not think can be improved upon. That definition is that Socialism implies the handing over of all means of production to the State and an end of private property and private enterprise. That is a definition which I accept, and that is the criterion which I am applying to the purposes of the Budget in order to find out whether there is Socialism in it or not. It does not appear to me that the objects aimed at by the Budget, including expenditure upon the development of the natural resources of our own country, imply the extinction of private property and private enterprise, or the handing over of everything to the State. Really one need not dwell upon this topic. If hon. and right hon. Gentlemen opposite have given their assent and approval, reluctant or otherwise, to the purposes and objects to which the Chancellor of the Exchequer proposes to devote this money, then I say that to talk of Socialism in the Budget seems to me nothing more or less than unutterable nonsense.

I think we come on much stronger ground when we turn to the Budget itself. Every object to which my right hon. Friend proposes to devote the additional taxation gives useful employment to our own countrymen and our own people. The construction of "Dreadnoughts" and their equipment gives employment to hundreds of thousands of the highest and best skilled artisans in the world. The pensions which pass into the hands of the aged poor before the week is out are transferred to the tills of the shopkeepers and traders throughout the country, and I rather think people who can only afford to purchase the necessaries of life and not the luxuries give the more useful employment. The development of the natural resources of our own country certainly gives productive and useful employment to our own people. No doubt labour exchanges and labour bureaux do not directly give employment, but they are essential preliminary steps for securing employment to men who are in search of employment or women who are compelled to seek for work. I say without hesitation that there is no Budget within living memory under which money will be so usefully and productively employed as this Budget of the right hon. Gentleman when it is finally settled and passed by the House. It is just here or hereabouts that you meet the best answer to the argument that the method adopted by my right hon. Friend of raising money is such as to deplete the wages fund and deprive respectable people of employment. That argument seems to me to rest upon two assumptions, both of which I think ill-founded. The first assumption is that in the case of persons to whom my right hon. Friend goes for money, it would, if he did not secure the capital, be otherwise employed in giving useful and productive employment to their fellow citizens, and the maximum of useful employment. I do not think that argument is well founded. The other assumption is that the money to be secured by my right hon. Friend and raised by the Budget would be devoted to such purposes as would give the minimum of productive employment and useful employment to British citizens. That assumption, I think, is equally ill-founded. The truth is that if this argument be carried to its extreme limit, then the Chancellor of the Exchequer should turn away from the large incomes and large estates, and should turn exclusively for his revenue to the pockets of humble and the labouring classes. That I think apart from all other reasons would be an uneconomic and unsound method, because the chances are more than even that the money in the hands of the middle and lower classes will be devoted to giving more useful and productive employment to the working classes of this country than an equal sum in the hands of the higher and richer classes. That is the argument which we have heard from the bankers and financiers and the great financial experts of the city and from none more than Lord Rosebery in that great indictment of the Budget which he delivered at Glasgow on 17th September last. The argument is this: That the rich and well to do are tax-proof because, by taxing them, you instantly tax the wages of the poor and deprive the poor people of their wages. Then it would be far better and more merciful to tax the poor people at once than to tax them in this way, because, in the long run, it would be found that the humble and labouring classes would suffer more. It will be found, I think, that the poor people will be quite content to take their chance of the long run. On the whole, I think they are right. I should do that myself.

Certainly when we pass to the taxes of the Budget, we find that they are for the most part old and familiar friends, and the principle which lies at the root of them all is by no means a new principle in itself, discovered for the first time by my right hon. Friend. They have been with us for generations. You quote the Licence Duty, but when you come to that, the same principle which applies to the Licence Tax lies at the root of the Land Tax, and it is neither novel nor disreputable, and its origin and lineage are highly respectable. Not many weeks ago I turned to Adam Smith, and found his justification for a Land Tax was the very one which I, in my humble way, have put forward. Adam Smith, who has never been accused of revolutionary methods, said that nothing can be more reasonable than that a land value which owes its existence peculiarly to the good government of the State should be taxed peculiarly. I hope the House will note that "peculiarly." In passing down the generations of men, not very many years ago the late Leader of the Liberal party, who has now severed his connection with the party, was producing his constructive programme at Glasgow, and I sat by his side and heard him say, speaking of what he called the justice of the principle of taxing these values, that they were called into being by the citizens themselves and not by the land-owners. There is the principle under which we invite a contribution from those who find themselves in a position of wealth which came to them from the needs and efforts of the community, and which they themselves have done nothing and spent nothing to bring into existence. The only controversialist who has challenged this principle during this controversy is none other than Lord Rosebery himself. He says it is absolutely untrue to assert that the whole value of the land in its natural condition is due to nothing that the owner does or spends, but the value is due to what the owner does or spends. I was puzzled when I read that, and I did my best to advance some argument to controvert it, and in the course of my argument I adduced some instances for the purpose of showing that the value of the land in its natural condition came from nothing which the owner did or spent, it came from the presence, the activity, and the energy of the community. I produced instances to establish the market value of the land.

I observe that some of them were quoted in the Tory newspapers as shocking examples of terribly inflated prices. I never used them for that purpose, or represented that any landlord acted with rapacity or made exorbitant or extravagant demands. I never charged any man with extracting the last penny from a buyer. I have spoken of nothing from the beginning except true market value. In every instance I gave the buyer was well able to look after himself, and I am perfectly certain did not pay a penny more than he required to pay for the property. All the instances which I gave were instances of true market value. In no instance was there rapacity or exorbitancy of demand against anybody. I have often heard hon. and right hon. Gentlemen on the other side and some on this side of the House expressing approval or disapproval of these transactions. I express neither approval nor disapproval. I have no right to have any opinion on the subject. They are all fair market transactions. In many of them the value was determined by an impartial and competent arbitrator. In the course of giving instances of fair market value I fell into error in one case, and in one case only. I said that in one case there had been a transaction of purchase and sale of property at a large price, though at fair market value. I discovered afterwards that there was no sale of the property itself, but that there was only a sale of a portion of the value of the property, a value derived from a great natural waterway lying immediately adjacent to the property. Instantly I discovered that I had fallen into that error, I corrected it and I expressed regret for having fallen into it. Comment has been made upon the fact that I offered no apology. If I had offered an apology that would have been an admission that I was charging rapacity. There was nothing further from my intention. Hon. Gentlemen opposite will surely do me the justice that if I am not honest I am sane. The right hon. Gentleman (Mr. Long) observed recently with justice that the case was a familiar one and that I, as a lawyer, ought to have been familiar with the details of it. He was quite justified in saying that. I was at one time familiar with the details of the case. I was trying to recollect how far back it was when I read those details. The nearest I can come to it is 18 or 20 years back. My memory is fair, but memory sometimes plays strange tricks, and it had passed entirely from my recollection. If I had been adducing instances of exorbitancy and rapacity and cases where a man was securing the last penny out of his property, I should have apologised handsomely to any owner for any misstatement I had made. But I never charged any man with rapacity. All my instances have been adduced for the purpose of proving fair market value. That was the beginning and the end. A charge has been laid at my door which I have felt deeply, and I think if hon. Gentlemen look back they will see that it is fully unjustified.

Now I turn to the other question, the alternative method, the other and better way which the Prime Minister challenged them six months ago to produce, of raising this money. I have never denied that there was an alternative. You may with ease secure all your money by levying a substantial tax upon foodstuffs and all the necessities of life, on everything that men need and use. I have carefully observed that no responsible politician on the other side has ever put forward that method of raising the money. I have watched narrowly and keenly through the whole of these controversies for the methods suggested by hon. and right hon. Gentlemen opposite by which this large sum of money could be raised by different processes from those proposed by the Chancellor of the Exchequer, and it was in the course of speculation on these alternative methods that I made some speeches and advanced certain arguments which are, I am afraid, very familiar by this time. I was singularly fortunate in having at my side on every occasion on which these speeches were made Members of this House who will be able to testify to the truth of all I am now about to say. I have said that if this Budget were passed toy, and if this Government were overthrown, I doubted the ability of the party opposite to raise the money necessary to pay pensions to the aged poor by the one and only method they had ever suggested that money could be raised. That is a scrupulously accurate statement of the argument.

I observe that the right hon. Gentleman the Member for South Dublin, in the letter to "The Times," to which I formerly alluded, challenged me for selecting this particular item of expenditure, to wit, pensions to the aged poor, as an illustration of the futility and inefficacy of Tariff Reform to raise the necessary money. The question was a fair one. I shall answer it with ease. It was because the party opposite always chose the expenditure necessary to provide for old age pensions as the striking and single illustration of the complete breakdown of Free Trade finance. The party opposite have never challenged Free Trade finance as an instrument necessary to raise the ordinary humdrum expenditure of the nation. It was when old age pensions came before them that we were told that we had reached the end of our taxable capacity, and then they said Tariff Reform is the one and only way in which the money could be raised. Before the Old Age Pensions Bill was introduced, when the Bill was introduced, when the Bill was passing through the House, and after the Bill had become law, there resounded from hundreds of platforms in this country, and there was published in thousands of leaflets, a statement to the effect that this was all for show and shop-dressing, and that we were promising pensions which we never could provide. "Free Trade is done! Free Trade is frail and crippled! Tariff Reform is the only way!" That was the argument which resounded everywhere, and it was by no means confined to the rank and file of the party opposite and to irresponsible persons outside of this House. It was the argument which was adopted by eminent persons in very high places.

On 7th May, 1908, my right hon. Friend the Prime Minister introduced the financial statement, and told us that he had built up safely and securely the foundations of finance, and that he was now about to begin to rear the structure. In minute and elaborate detail he explained his scheme of old age pensions, which was to be embodied in a Bill to be introduced within the next few days. A week later there took place a very notable bye-election in North Shropshire, and there appeared in the columns of "The Times" of the 14th May, 1908, a telegram in these terms:— Those who have hitherto doubted the value of our fiscal policy must now be converted to its wisdom, for though the Radicals have promised old age pensions, only the Unionist party can provide for their payment. [HON. MEMBERS: "Name."] That telegram came from none other than the Leader of the Opposition.


A cold and calculated lie.


I cannot allow an expression of that sort.


Sir, I withdraw it, but I only followed the example of the right hon. Gentleman. I apologise and withdraw.


I accept the withdrawal of the hon. Member, but he did not make it better by what he added.


I withdraw and apologise, and I hope that the right hon. Gentleman will follow suit.


The hon. Member knows very well that certain expressions are permissible outside this House——


This is the place to make them.


But are not permissible within this House.


I apologise and withdraw.


I suppose that the right hon. Gentleman intended that his telegram should reach the aged voters in North Shropshire, and should convey to them a message that their chances of obtaining a pension in their old age was contingent upon the chops and changes of party warfare.

I suppose that the message was intended to raise doubts and apprehensions in those old folks' minds as to whether or not the Prime Minister of England would keep his promise. If those doubts were raised, and those old folks entertained those doubts, and if the right hon. Gentleman shared those doubts, would he not have the courage to go on a public platform and say he shared those doubts of the aged poor in North Shropshire about the ability of my right hon. Friend to provide the pensions? Is that a "licensed calumny"? Is that a "double crime"? Is that a "cold and calculated lie"? Did the man who said that bring disgrace upon his upbringing, on his high position, and upon his native country? I should not have said so. I should have thought that was perfectly fair controversy. If I believed that old age pensions could only be financed by Tariff Reform, I should have thought myself perfectly justified in saying so, and challenging the ability of any man to pay the pensions if he was relying exclusively on Free Trade Finance. My right hon. Friend the Chancellor of the Exchequer did not "take to scolding like a very drab," but he bided his time and produced his scheme like a man. That is my answer to the right hon. Gentleman the Member for South Dublin (Mr. Walter Long). I think his challenge is fair, but I think he will admit that on both sides we have specially selected the expenditure on old age pensions, and naturally so, as the test of the efficacy of our respective methods of finance. The House will naturally ask why I only suggested a doubt about the ability of right hon. Gentlemen opposite to finance the pensions. I will explain my reasons for that after I have given the reasons for the doubt which I said I entertained. I said the Opposition were not bound in challenging this Budget to produce any alternative. They were well entitled to attack the Budget without showing a better way, but they have deliberately chosen another path. They have deliberately chosen to take as an alternative to the Budget Tariff Reform as the one and only alternative. I well remember the speech of the right hon. Gentleman the Member for East Worcestershire (Mr. Austen Chamberlain), who moved the rejection of the Bill on the second reading, using these remarkable words:— The alternative which we have in view is as well-known to this House as it is to the country—Tariff Reform. And then he fell to and abused up hill and down dale every tax in the Budget, and he wound up an impassioned harangue with this sentence:— If this be the highest effort of Free Trade finance in dealing with a fiscal emergency, then the sooner we take our two alternatives to the country the better. The party opposite has taken as their one and only alternative method of raising this money Tariff Reform. And I inquired naturally how could we raise the money by means of Tariff Reform, what direction should we turn? I answered my own question by turning in the direction in which I was bidden to turn by many hon. and right hon. Gentlemen opposite, to an average all-round 10 per cent. duty on manufactured articles which reached our shores from across the seas. Why 10 per cent. I never could find out. After all, if the foreigner pays the bill why not lay it on? But you must take these doctrines as they are laid down. I inquired how much an all-round 10 per cent. duty upon manufactured articles from abroad would yield, and adverting to the answer given by my right hon. Friend the President of the Board of Trade to the Member for Barnstaple (Mr. Soares) at the end of September last, I answered my own question thus—£9,175,000—and I explained in detail that that figure was reached thus: £143,000,000 was the total of manufactured and partly-manufactured articles, which reached our shores last year. From that figure there had to be deducted the value of re-exports, such as cotton, timber, silk, indigo, skins, stone, granite, etc., all raw material which reduced the figure to £91,750,000. Ten per cent. upon that was £9,175,000, but then I added that we must make a very considerable reduction on account of diminished imports on account of the tax. Of course you must, if you are to satisfy the demand for work for all. You cannot get work for all and get the articles in as well.

I observe that Tariff Reform orators, and candidates for seats in Parliament especially, place the diminished imports at one-half. I thought that to be somewhat exaggerated, and I fixed it at one-fourth, which would reduce the yield of the tax to £6,888,000. Then there was the cost of the collection. I observe that Tariff Reformers always leave that out of account, and I have always to remind them of it. When you recollect our coast line, with its numerous creeks and bays and harbours and the powerful smuggling instinct, there must be a substantial allowance for cost of collection. I put that at £2,000,000. I have often seen it put at double that figure by more competent judges. If you take that £2,000,000 from the £6,888,000 you come down well under five millions, which is manifestly a sum far short of what is necessary to meet the voracious demands of my right hon. Friend the Chancellor of the Exchequer. The conclusion I came to was that Tariff Reform, as I understood it—and I explained in great detail what I understood—would never come near reaching the yield of money necessary for the purpose of paying these pensions to the aged poor.

I went a step further. I assumed that we resolved to-day upon a system of Tariff Reform, and I asked the question, What length of time would elapse before you were in a position to collect the duties? Let the House remember that that is a very material consideration. Here I must state how I reached the figures which I gave. The House will see in a moment how important this is in connection with the charge against my personal honour. I assumed Tariff Reform to be instantly resolved upon. The first step would be the summoning of the Colonial Premiers, who would arrive here in the month of June next. If all went well, and matters were arranged to mutual satisfaction—that is not perhaps a large assumption; at all events, I assumed it—our experts would be ready to commence their work on the new tariff in the autumn of the year 1910. Let hon. and right hon. Gentlemen remember that this is no slap-dash 10 per cent. all round. It is to be a scientific tariff, where the duties have been carefully and scientifically adjusted, as I understand, according to the amount of labour bestowed upon each article. The conclusion I reached was that our experts would take a year to frame a tariff. I based that conclusion upon the fact that at the last revision of the tariff the German experts took exactly a year to arrange their tariff, and I was under the impression that our experts would require an equally long time. That took you down to the autumn of the year 1911. The Tariff Reform Budget would at last make its appearance in the month of April, 1912, and then there would be wigs on the green. I allowed a year to get the tariff through the House of Commons, for you would have to fight not only all the Free Traders in the House and in the country, but all the trades affected, whether beneficially or the reverse, in the adjustment of the tariff best described as "Every man for himself, and the de'il tak' the hindmost." That took us down to the month of December, 1912. The tariff having been duly passed, the next stage is to adjust your commercial treaties with foreign countries. That took Germany two years, and I doubt if we could perform the operation any faster.

We have now come to the year 1915. I ventured very humbly to inquire what about old age pensions? The House will gather that that very interesting chain of reasoning was entirely suppressed. I was represented as having said that if my political opponents came into office that they would repudiate the obligation to pay old age pensions; that they would repeal the Act; that the aged pensioners would be deprived of their money of set purpose by hon. Gentlemen opposite. Sir, I never said anything of the kind. I have told the House faithfully and truly—I am afraid with too much elaboration—all that I said on these occasions. I have only to say, further, in order that there might be no mistake, and that I might not be challenged by my political opponents as having used any unfair arguments against them—because I am sure they will acquit me of any desire to press unduly any of them—I said that I did not question their good faith; I did not question their honesty and sincerity of purpose. And I quoted the very words used by the right hon. Gentleman the Leader of the Opposition in his letter published some time ago. I said he recognised the national obligation. I said I did not challenge his good faith, sincerity, or honesty of purpose. What I did challenge was his ability to find the money in the only way that it was suggested that it could be found. I ask is it treating me fairly and honestly? I am making no complaint against the Press. There was—I will frankly own—some suppression, and one false misleading statement. I observed in certain newspapers the morning after I spoke at Acton that I was made to ask this question: "Why did my political opponents not renew their promise of old age pensions?" I admit that that question was open to legitimate objection on the part of hon. and right hon. Gentlemen opposite, because it obviously suggested that they would go back upon their word unless they could be compelled to plight their troth once more. It obviously suggested bad faith on their part, and that they had no intention of continuing the pensions if they came into office.

I never asked the question. I really think if the context had been reported, if the very next sentence had been reported, it would have been quite plain that that was a misreport. The question I asked was "Why had the party opposite not fulfilled their obligation?" A very different question, applying to a period anterior to our taking office, because I answered my own question in the words used by Lord St. Aldwyn in the second reading debate of the Old Age Pensions Bill, when he said, as Chancellor of the Exchequer—and let the House remember that this was anterior to the war—that "he was unable to enter upon a scheme to place before his colleagues because it involved such an enormous charge." My point was that the party opposite had not fulfilled their promise, not because of any lack of good intentions, but because they could not find the money. Pensions were too dear. May I further remind the House that that was at the period when they were a Free Trade Government, and when all the avenues of Free Trade finance were open to them. And that emphasises my point that it was because they had committed themselves to the policy of Tariff Reform that they could not find the pensions. They are in a worse position to-day than they were when they had all the advantages of a Free Trade finance policy open to them.

I hope the House will not think, or believe, I have lost all sense of respect. I freely recognise that subordinate Ministers can never expect to enjoy the luxury, or shall I rather phrase it, to endure the horror, of seeing verbatim reports of their speeches next morning. That is a disadvantage which, of course, we must accept, and our critics, I am afraid, must accept it too. All I am pleading for is that men in a subordinate position like myself should not be judged by an abbreviated report, but should be judged fairly. I am told all would have been well if I had only added at the conclusion of my speech that hon. and right hon. Gentlemen opposite would ultimately be driven, in order to pay their pensions, to adopt the Budget. I ask my opponents if it would have cured what they believed to be the defect in my speech if I had finished by saying, "And the result of all this is that hon. and right hon. Gentlemen, in spite of their condemnation, will be ultimately driven to accept this Budget, which means financing old age pensions"? How could I make such a suggestion when they had offered no indication whatever of their intention to accept our Budget? That, indeed, would have been "licensed calumny"; that would have been an example of "mendacious imagination." Yet I am told it would have cured all. Here is a Budget of which they had moved the rejection on second reading, of which they are moving the rejection on third reading—a most unusual thing, although not unprecedented—here is a Budget which they have been saying up and down the country spells revolution, which they say leads to a path that means the end of faith and family and property and Sovereignty and Empire, and the end of all things; here is a Budget that is driving capital out of the country, that is injuring trade; here is a Budget which marks the final and the complete breakdown of Free Trade, and leaves Free Trade lying upon the scrap-heap, and it is said that I ought to have attributed to the party opposite the covert, base and sinister design of taking our taxes to raise their money. That, Sir, is the rock of my faith.

11.0 P.M.

Let me summarise seriatim the statement upon which the charge is made that I have been guilty of a dereliction of duty in regard to my office. I said that this Budget had been challenged by the party opposite upon grounds which pointed straight to the Budget leading us on to national disaster. I pointed out that this Budget had been challenged upon a ground which was entirely incompatible as a means of raising revenue. I asserted that this Budget had been pointed to as a signal example of the breakdown of Free Trade finance, and that is true. Is that a libel? I said that one method, and one only, had been pointed out by right hon. Gentlemen opposite by which the money could be raised. Is that licensed calumny, or is it true? I said that food taxes as a means of raising revenue were barred. Is that an extraordinary exercise of mendacious imagination? I said that raw material had been barred as a means of raising revenue. Is that also a libel? I said that if you deduct the cost of collection and allow for the diminished imports you would secure a yield of less than £5,000,000. When I said that was I guilty of a double crime? When, in conclusion, I said I was driven to this: that it was doubtful, and that I doubted the ability—not the goodwill—of hon. and right hon. Gentlemen opposite to raise the necessary millions to finance old age pensions, does the House really say that I was guilty of a double crime, of licensed calumny—that I was bringing disgrace on my office and on my country? [An HON. MEMBER: "Shame."] These are questions which, I think, the right hon. Gentlemen opposite ought to answer. I do not say that I expect an answer—["Why not?"]—because many of the crucial questions have been asked often and often before by friends and supporters of the right hon. Gentleman, and as they have been unable to elicit a response it is not very likely that the oracle will open its mouth at the call of a stranger and enemy at the gate. How easy it would have been for the right hon. Gentleman to have dispelled all doubt and made a complete answer to me at all events. Surely he has not perilled his attack upon this Budget by giving as an alternative, and the one and only alternative, Tariff Reform, without having given some thought to the method by which he would raise the money. Will he tell us now how he proposes to raise it? I have told him how it cannot be raised, and I have given my reasons why I came to the conclusion that he was unable to raise the money. Will he tell me where my figures are wrong? Will he say that he would desire a revision of the classification of manufactured and partly manufactured goods? Will he say to me that I was wrong when I inferred from his statement at Birmingham on 14th February, 1907, that he would not alter the proportion of the burden of taxation to be borne by the working classes? Will the right hon. Gentleman say I was wrong when I inferred from that statement that food taxes were barred as a means of raising revenue? That is the inference I do draw. I ask the right hon. Gentleman if I was wrong? Will he say whether I was wrong when I said raw materials were barred as a means of raising revenue? And will he say whether or no he thinks, if Tariff Reform were adopted, he sees his way to secure the money at an earlier period than the year 1915? If, for strategical reasons, the right hon. Gentleman refuses to answer these questions, as I dare say he will, if he finds it is perilous to be indecently lucid in the present distracted condition of his own followers on this question, if he thinks it is necessary to run away from anxious and awkward inquiry, will he explain to the House why it was he found it necessary to stoop to level at me the meanest and the shabbiest charges, which affect so deeply and so closely my personal honour?

I hate to have made such a speech as I have inflicted on this House so full of the first person pronoun; but the House, to which I now apologise most humbly for having detained it so long, will, I think, recognise that in the present circumstances I was compelled, because, if charges such as those which have been preferred against me, had a vestige of foundation, then my continuance in my profession, in my office, and in my place in this House would be plainly impossible. Accusations such as these, couched in language such as this, happily find no parallel in the history of this country since the days when it was open to a man to defend an attack upon his honour with his own right arm.


I had hoped in the ordinary course to be able to-morrow night to conclude for my Friends on this side of the House the general Debate on the third reading of the Finance Bill, which has occupied the attention of the House and of the country these many months. That hope I must forego. I must leave it to others to conclude the general Debate, because the right hon. and learned Gentleman who has just sat down has made a speech which I think the House will feel it is incumbent on me to deal with at once. I hope the House will recognise that in rising at once to deal with it——


You could not do anything else.


That is exactly what I said. I felt, whether hon. Members may think I was right or wrong in the speech which has called forth the animadversions, naturally enough, of the right hon. and learned Gentleman—I felt, and I think that every man in the House will feel, that the speech just delivered is one that, being in the House, I could not leave undealt with. If, therefore, I am unable to treat of those larger national issues raised by the Debate to-morrow, the House will, I hope, understand that it is not because I am reluctant to deal with these topics, but because I shall have lost my right of speech. [HON. MEMBERS: "No, no!" and "By the indulgence of the House."] Of course, if that is the general view of the House——

I quite admit that the subject which has formed the text of the right hon. and learned Gentleman's attack tonight—[HON. MEMBERS: "Defence"]—well, defence—but the right hon. Gentleman, attacked me, naturally enough. I quite agree that my original speech was couched in language of very great strength. I think the House will admit that I do not love strong language. It is not my habit or my pleasure to attack individuals, and in these many years during which I have taken part in the controversies of this House I hope—I do not say I never have—but I hope I have rarely gone beyond, not merely the limits of Parliamentary Debate, but that I have rarely made a personal attack on an individual, either in or out of this House—at any rate that is not my practice. It is not a practice that I admire in others or wish to cultivate for myself. And though I did speak in language of very great strength of a series of statements made by the right hon. and learned Gentleman, the House will understand that, if I abandoned my ordinary practice, it was because I thought there was extraordinary provocation for it.

The learned Member has not at all understood or appreciated what that provocation was. He has quoted the language of a telegram of mine, sent last year or the year before, in which I stated that in my opinion the seven or eight millions for old age pensions showed that we should finally have to alter our system of taxation, and that what is called Free Trade finance had broken down. [HON. MEMBERS: "No," and "Read the telegram again."] I will do so— Those who have hitherto doubted the value of our fiscal policy must now be converted by its wisdom. Although the Radicals have promised old age pensions only the Unionist Party can find the money. Let the House consider precisely what was the nature of the provocation, and I think not only Gentlemen sitting on this side of the House, but all Members of this House, whatever side they sit on in dealing with political controversy, will understand my point. If the learned Gentleman had confined himself to saying, "I am perfectly certain that the Unionist party, who talk so loudly about the money which Tariff Reform is about to bring in, will find themselves in the end driven to the taxes proposed by the Chancellor of the Exchequer. [HON. MEMBERS: "Oh!"] That is exactly the point. [HON. MEMBERS: "No."] That is exactly the point. If he had said, "The obligations for defence, for debt, and the payment of pensioners, whether old age pensioners or other pensioners, cannot be met out of any scheme of fiscal reform," that would have been a matter of fair comment as to which I never have said a word about at all as regards the illegitimacy of his methods. I should, of course, have answered to the best of my ability his arguments. I should have shown that in my judgment he was entirely wrong; but that is not the impression the learned Gentleman gave, certainly to many readers of his speeches, and there is a much more important question to be asked—Is that the impression which he did convey or intended to convey to those who heard him? Every man, I hope and believe, on this side of the House, is firmly convinced that when Parliament enters into an obligation to pay old age pensions, it is like any other obligation into which Parliament enters, and it would be as irrational, as grossly unfair, as monstrous, to say that because fiscal reform, in the opinion of the speaker, did not provide adequate funds for national purposes, therefore we were going to repudiate the National Debt. The right hon. Gentleman never suggested that we were not going to pay the National Debt. He selected of all the obligations of the country—and there are many—one obligation alone. [An HON. MEMBER: "And so did you."]


I must point out to the House that the Lord Advocate was listened to in absolute silence, and the ordinary sense of fair play suggests that we should allow the Leader of the Opposition to say what he has to say.


The Lord Advocate was, in my opinion, perfectly justified in saying that under our fiscal system we should have found in practice that the needs of the country would have been imperfectly met, and that fiscal reform would have to supplement them. That is a perfectly fair statement. I made precisely the same statement long before old age pensions came on. I made the same statement three years ago at Birmingham, when I said I was perfectly certain that, whatever people thought of fiscal reform from other points of view, they would be driven to it by financial necessities, and, if the Lord Advocate had contented himself with saying whatever criticism we have passed on the present Budget, we should find ourselves driven to adopt the methods of the present Budget, I might have doubted his financial wisdom, but I never should have used the language of which he complains to-day. But the Lord Advocate was not content with complaining of the inadequacy, as he believes it to be, of fiscal reform. He said the result of its inadequacy would be that national obligations would not be fulfilled, and among all national obligations the one he chose as being that which would not be fulfilled was Old Age Pensions. This, I understand, is a quotation from the "Newbury Gazette":— Their Unionist friends promised old age pensions, but they never meant to fulfil their promise. [Cheers and booing.] Does that seem a hard statement? The aged poor were nervous and apprehensive lest they should lose their pensions if there is a change of Government. I think their fears are justified. I am speaking to an assembly every Member of which is familiarly acquainted with the effects of platform oratory and the practice of that oratory. Every Member I am addressing knows the sort of effect which a speaker who uses these words intends to produce, and so practised a speaker as the learned Gentleman must know what effect they will produce.


Will the right hon. Gentleman allow me——


I hope the House will give the right hon. Gentleman fair play. These constant interruptions are not fair play.

Mr. MACKARNESS again rose amid cries of "Order."


Does the hon. Member rise to a point of order?




What is it?


I want to ask, as I was present when the Lord Advocate made the speech——


I must really ask the hon. Member to allow the right hon. Gentleman to proceed. I have already pointed out that the Lord Advocate had a perfectly quiet hearing. It really seems to me a very unfair thing to treat the Leader of the Opposition in this way.


I read out just now from the "Newbury Gazette," a local paper, not, I think, hostile to the learned Gentleman, a quotation which I understand he does not repudiate.


The words which have been quoted occurred in a passage where I was referring to a speech made by Lord Lansdowne, in which he spoke of our reckless expenditure. [HON. MEMBERS: "Speak up."] I said that the old age pensions expenditure was called by Lord Lansdowne "reckless expenditure," and therefore expenditure which no Administration of which he was a Member would ever allow.


May I ask the House quite respectfully what bearing that addition to the quotation I have read has on the case I am making? Lord Lansdowne may have observed, as many people at the time observed, that a burden was thrown on the finances of the country when no provision was made to meet the burden. But that is not the point. The point is this: Did the learned Gentleman believe then, or does he believe now, that any of the obligations of this country are going to be repudiated by any party in the State? Despite all the criticisms which have been passed at various times as to the causes by which our National Debt has been accumulated, there has been no suggestion that the Debt should be repudiated.

Think, were any of these statesmen who said that reckless expenditure had been the cause of increasing the National Debt open to the accusation that when they came into office they were going to repudiate the National Debt? What folly is this! Everybody knows that whatever differences may separate Gentlemen on that side of the House and Gentlemen on this side—and the differences are deep enough—at all events there is one point on which all are agreed, namely that national obligations should be sacred. I say that the only meaning, whatever was in the mind of the learned Gentleman, his audience could put on that speech was that there were certain obligations which were not sacred in the eyes of his political opponents, and that those obligations were in danger of repudiation if his political opponents came into office. That is the only meaning. [HON. MEMBERS: No.] Well, it is the obvious meaning which any audience would put upon those words, and I believe it was the meaning which many of his audience did put upon them. If the learned Gentleman had gone into my Constituency, and had told the citizens of London that he thought that Unionist finance was inadequate to meet the obligations of the National Debt, he would have said a thing which in terms no doubt is as bad as the extract I have just read from his Newbury speech; but it would have been met with universal derision, because everybody in the City of London knows that every Government, whether drawn from the extremist Members of the party opposite, or whether drawn from my Friends behind me, every party regards the national obligations as binding on the national honour. And if the learned Gentleman had used that kind of argument with such an audience—that they were not going to have a fleet, that this Unionist party that talks so loudly about naval defence will not be able to keep up their fleet or their army, or pay their debt—you might have thought that very absurd, but it would not be open to the second criticism I make upon that speech. I say in the first place that the extract I have just read, which is only one, I understand, of many, could only have been interpretated by his audience as meaning that old age pensions were in danger; and he said it to an audience among which there were many persons not sufficiently acquainted with the history of politics in this country to know that the charge was perfectly absurd, and that rather than abandon any political obligations of that kind we would even pass the Land Taxes, which are to give us £50,000 a year towards the nine millions that are required for old age pensions.

I am bound to say that I think the Lord Advocate in this matter is absolutely without excuse. He says—and I am sure he says truly—that he has followed most closely our Debates in this House. What have I said over and over again about the taxes which are really going to bring money out of this Budget—the Super-tax, the additional Income Tax, and the additional Death Duties? [An HON. MEMBER: "We do not know."] The hon. Member may not know, but the Lord Advocate knows perfectly well. I have said that there are taxes to which there may be great objection in point of expediency, but taxes for which there might be absolute necessity in case of emergency; and simply because we object to a tax which brings in, I think, £50,000, or some relatively small sum, and because we object to the Licence Duties, and say they are unjust in their character, is it credible that any responsible politician should go about the country saying that rather than pay old age pensions we are not going to adhere to any of the taxes of the Government? I listened to the most able speech which preceded my own. I speak here as a Member of a very small minority in this House. Speaking to my fellow Members, with whom I have lived, through years of controversy, in amity and on terms of friendship, I tell them solemnly on my word of honour that I have no personal feeling, and never had any personal feeling, against the Lord Advocate. [HON. MEMBERS: "Oh, oh!"] Never—never—never. But I honestly admit that I was moved, and am moved, with indignation, when I think that gifts of oratory—gifts of oratory as great as his—are used throughout the country, in this place and in that place, to raise fears and terrors among the poor and ignorant, which neither he nor any other man whom I am now addressing believes have the smallest foundation. Criticism however violent and however unfounded it may be, in my judgment, against the financial policy of myself and my friends—why, I meet that to the best of my ability, with fair argument, without invective and without personal attack in this House and on the platform; but I admit that I am moved beyond what I hope and believe are the ordinary bounds of moderation, in which I keep myself in dealing with these Budget controversies, when I think that great abilities are used to raise perfectly groundless fears, and that commentary upon the financial policy of opponents is ingeniously turned in such a way as to charge, in the first place by implication, a great party with want of faith to a national obligation, and to arouse the fears and terrors of the most helpless portion of the community.

The PRIME MINISTER (Mr. Asquith)

I confess I hoped when the right hon. Gentleman rose, he was going to fulfil what I believe was the almost universal expectation in every quarter of the House, after the dignified, simple, convincing statement of the Lord Advocate of his case, to express his regret that in a moment of heat and unusual excitement he was betrayed into making charges which it was absolutely impossible to substantiate. That expectation was, I believe, almost universally entertained in this House. [An HON. MEMBER: "No." Another HON. MEMBER: "It should be."] It ought to have been, and unhappily it has been disappointed. Sir, this is not a question, as the right hon. Gentleman seems to imagine, of good manners, still less is it a question of dialectical soundness and correctness. What was the charge that the Leader of the Opposition made against my right hon. Friend? He charged that he had deliberately put forward A frigid and calculated lie.


Every man in the country does.


Is that charge persisted in?




By whom? The right hon. Gentleman went on to say, and I must call attention to the language: A lie carefully thought out, deliberately coined, and then put in illegitimate circulation. There is not much applause to that. If it is true it is a disgrace to the public life of this country. In view of what the right hon. Gentleman has said, let me see how much remains of that allegation. My right hon. and learned Friend the Lord Advocate pointed out that only a year ago in regard to this very question of old age pensions the right hon. Gentleman permitted himself, in a telegram, to say that the Radicals have promised pensions, but only the Unionists can perform them—can pay them. What did he mean to convey by that?


I simply never for a moment meant to convey that if that party or any party gave old age pensions, it would repudiate them.


Nor did the Lord Advocate. I quite acquit the right hon. Gentleman of any such intention. What he meant was this, and what my right hon. Friend meant was the same thing, that you might promise old age pensions, but unless you could show some funds, some national resources from which you could meet the expenditure, the pro- mise was an unavailing promise, and liable not to be performed. That is a perfectly legitimate argument, both on one side and the other. I differ from the right hon. Gentleman in the fact, and we have shown in the Budget that we can provide for all our promises. My right hon. and learned Friend, taking the Budget of the present year as if it were rejected by the House of Commons and the country; taking the Food Taxes as ruled out; taking raw material as ruled out; reducing, as he has reduced, the taxation on imported goods to its proper proportions, expressed the opinion, and I think a very well-founded opinion, that Tariff Reform would not meet the expenditure for old age pensions. These are contentions which may be right or wrong; but they are dialectical, they are reasonable, they are capable of being put forward by honourable and sensible men. The gist and gravamen of the charge brought by the right hon. Gentleman against my right hon. and learned Friend was that he had deliberately lied as to a matter of fact and as to a matter which was a subject of argument. What was the misstatement of fact which my right hon. Friend made? What "frigid and calculated lie" can be attributed to his account? Language of that kind proceeding from a gentleman in the position of the right hon. Gentleman was not only a departure from all the best traditions of British public life, but, in view of the high esteem and regard in which my right hon. and learned Friend is held by his colleagues in and out of the House, by his own fellow countrymen, and by, I believe, the great mass of the people of this country I do not hesitate to say an outrage on our public life

The right hon. Gentleman has spoken about the sanctity of public obligations, and of keeping faith with the creditors of the nation. I do not suppose there is a more discreditable chapter in the whole history of British politics than that which records the dealing of the Unionist party with old age pensions. Let us bring these austere moralists down from their pulpit, who with bell, book, and candle seek to excommunicate my right hon. Friend from the congregation, and not only from the society of honourable politicians, but even from that of lawyers and Scotsmen—let us bring them to the test of fact. I say deliberately that for ten years this promise of Old Age Pensions was dangled before the people. It was used to catch votes; it was used to win elections, and during the ten years when hon. and right hon. Gentlemen opposite, sat where we now sit, with a docile majority in both Houses of Parliament, they never raised one finger to give effect to the pledges they had offered to the Constituencies. When we came into power, after carefully laying the ground by two years of financial preparation, we brought forward our measure. What was their attitude to it? How many of them voted for it? It went to another place, and is it not the fact that the Leader of the Tory party in that House declared that it was a disastrous experiment for which they would not make themselves responsible, and even went so far as to insert an Amendment, without prejudice, I agree, to existing pensions, which would have brought the whole thing to an end in 1915. That is the record of the party. It is an insult to their honour and conscience to suggest that they could possibly bring to a conclusion a system of non-contributory Old Age Pensions! I do not share the apprehensions—if they are entertained anywhere—of the willingness, or even of the personal ability of the Tory party opposite, to take away these pensions. I know the Tory party much too well for that. In 1894 exactly the same thing was said about the Death Duties. They were denounced, if not as the end of all things, at any rate as the beginning of revolution. If you go back to 1846, precisely the same thing was said about the repeal of the Corn Laws. When they came into power, when they had majorities in both Houses at their command, did they raise a finger to modify or set them aside? I think the old age pensioner may sleep peacefully in his bed. But that does not in the least degree affect the point which has been raised in this Debate to-night. My right hon. Friend in his speech—which will live in our annals as one of the finest and most dignified vindications of personal honour and political consistency—my right hon. Friend has repudiated, disproved, and discredited the outrageous suggestions which have been made against his personal honour and character. I venture to say to him, and to say it in the name of the vast majority of this House to-night, that he leaves its precincts with the honour and confidence of his colleagues and fellow men. [HON. MEMBERS: "Withdraw, withdraw," and "Balfour."]

Debate adjourned; to be resumed to-morrow (Thursday).