FINANCE BILL.

HC Deb 04 November 1909 vol 12 cc2007-127

Order lead 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.

Mr. F. E. SMITH

As I have myself made in the country some observations on the subject which was debated in this House last night, I ask the indulgence of the House before I address myself to the more general reply, to make some short reply to the strictures which have been passed upon my right hon. Friend—[HON. MEMBERS: "Question."]—by political opponents. Some six months ago an apprehension was raised in the country with regard to the political use that might be made of the old age pensions question; and I remember that the Chancellor of the Exchequer caused great satisfaction in all quarters of the House by stating, in answer to a complaint, that he hoped that the existence or continuance of old age pensions would not be made a subject of party capital. About eight months ago reports from every part of the country reached my hon. Friends who represent agricultural constituencies that by subtle and subterranean methods pensioners were being alarmed with the prospect of losing their pensions if the Tories returned to office. It is quite true to say that no responsible person said so. But every county Member on our side of the House heard of the campaign, and began to take steps to deal with it. The representation was perfectly explicit as reported: that if we came in we should probably repeal the Old Age Pensions Act. I do not know that after the Debate of last night that anyone will dispute this conclusion: that the suggestion that if we were returned to power these people would lose their pensions was a grossly unfair one. [An HON. MEMBER: "Who made it?"] An hon. Gentleman asks me who made it? I am about to answer that question. I said at the outset that it was only made by irresponsible persons. But at the East Denbighshire by-election, in March of this year, it was made, so far as I am aware, for the first time, by a responsible person, and by a Member of this House. The hon. Member for East Denbighshire, in his election address, used these words:— Further, I desire to call the attention of old age pensioners to the fact that every vote given to the Tory endangers their pension. In the last three months there is hardly a country seat in which this argument has not been used, with the result that the party managers on our side—I speak with perfect plainness—began to regard it as a grave and grossly dishonest menace to our party prospects at the next election. Many Conservative candidates, as is known, have been driven to employ canvassers to wait at post offices and to disabuse pensioners. I know, because I have seen reports from Somerset, Yorkshire, Lincolnshire, Shropshire, and Scotland, setting forth what is the knowledge of persons representing the interests of the Unionist candidates as to what is actually going on, and has been going on, in all the constituencies in all those parts of the country.

Early in October an hon. Friend of mine who sits on this side of the House discovered that these reports were everywhere rife in Shropshire, and particularly the constituency which he represented, and he wrote a letter to my right hon. Friend and asked his views on this slander and invited a contradiction of it, and my right hon. Friend, in a letter which I think has probably been read by most men in this House, replied that the statement was an election lie and that the obligation would be regarded as equally sacred by the Tory party to pay old age pensions. How did the Liberal Press receive this official statement, amounting, as I submit to the House, to this, that whatever stringency of taxation might be involved, the payment of old age pensions is planted by the Unionist party on the same unassailable bedrock as the interest upon the National Debt? How did the Liberal Press treat this answer? Did they talk about the intricacy of Tariff Reform? Did they complain of the excessiveness of my right hon. Friend's invective? They went on, with one voice, to deny that such representations had been made. They admitted, some impliedly and others expressly, that if such statements were made, my right hon. Friend's language was not one whit too strong. Just let me remind the House of what they said. The "Daily News" made this statement:— The correspondence we published between Mr. Balfour and Sir. Stanier seems well inspired— They did not believe it was a genuine complaint. It would be interesting to know its origin and the name of the person who raised the question so opportunely. Mr. Balfour's indignation is well assumed. Of course the Tories will not dare to abolish old age pensions, the Government that did not would not live a day. The "Daily Chronicle" of the same day described my right hon. Friend's letter as stage thunder, and added this:— No Government could violate old age pensions if they would. It is a National obligation and there is no truth in the statement that if the Unionists were returned to office they would discontinue the payment of old age pensions. We have no information about such statements. If anybody has made them he has said what is untrue and deserves Mr. Balfour's censure.' The censure being that it was an election lie, and that no one but a degraded person could have uttered it. I will quote finally the "Westminster Gazette," which said:— Mr. Stanier, a Conservative Shropshire Member, has appealed to Mr. Balfour in these circumstances. And then the circumstances are set out. We are in entire agreement with Mr. Balfour in his strong censure of any such statement, but we must add we see little evidence of anything that could he called or compared to a campaign of mendacity. We certainly hope that there will be no untruths uttered about old age pensions, and we hope that the facts will be truthfully stated by both sides. The position then at this time was this, that we knew that irresponsible persons everywhere and the Member for Denbighshire in explicit language in his bye-election told the pensioners that they were not safe; that the whole Liberal Press agreed that these were scandals and false-hoods, and that the pensioners were safe. That was the position at this time. There is the general admission that it is cruel to deceive the old age pensioners. In these circumstances, the Lord Advocate undertook his provincial tour. I do not say that he made many speeches. He always made the same speech and in generally the same way, and I quote in order that we may see how far the indignation of a moment ago is well founded. I quote, because I desire to make a further observation about it, the speech which was quoted in the House last night by my right hon. Friend from the "Newbury Gazette." Let the House not forget for a moment the common ground we have attained in this controversy—that it is a slander to say that old age pensions were going to be taken away, that no Government dare take them away, and that no Government could take them away. That is common ground. What did the Lord Advocate say? Their Unionists friends promised old age pensions. They never meant to fulfil their promises. If the right hon. Gentleman stopped there it might be said to be legitimate comment; I am not quoting it for that passage—I am quoting it for the passage which follows, and I shall be glad to know how many Members opposite will cheer what follows:— The aged poor are nervous and apprehensive lest they lose their pensions if there is a change of Government. I think their fears are justified. [HON. MEMBERS: "Read on."] If hon. Gentlemen will allow me, I am going to read on. I am going to read the only passage which the Lord Advocate thought proper to add himself as a supplement last night.

Mr. H. MYER

Be honest! Read on.

Mr. SPEAKER

I must ask the hon. Member for the North Lambeth Division to control himself.

Mr. MYER rose.

Mr. SPEAKER

No answer is required.

Mr. F. E. SMITH

The right hon. Gentleman said, in the passage I have just read, and which I am not astonished has somewhat incensed hon. Gentlemen opposite:— The aged poor are nervous and apprehensive. I ask this question, if it be true that they were nervous and apprehensive, who made them nervous and apprehensive? What would that statement, made with the high authority of the Lord Advocate, mean to a pensioner in the audience? Would he understand what the Prime Minister told the House last night that he could sleep safely in his bed? He would go away, and every fair-minded man in this House knows he would go away, saying, "If I vote Liberal my pension is safe; if I vote Conservative the Lord Advocate says I may lose it." That, Mr. Speaker, is what he would say, that is what he was meant to say. I am asked, in fairness, to continue the quotation, and I will continue what the Lord Advocate himself interposed when my right hon. Friend was speaking last night. He said:— I added that the old age pension expenditure was called by Lord Lansdowne 'reckless expenditure,' and therefore was expenditure of which no Administration of which he was a Member would ever allow. Is that supposed to be reassurance? Would the statement that the Government of Lord Lansdowne would never allow it encourage the pensioner to think that he could "sleep quietly in his bed"? The right hon. Gentleman then went to Tring, but he did not vary the statement. I will give the House a quotation from the "Daily News" of October 20th, 1909:— They could understand how it was that the poor folks were in a state of alarm lest a change of Government might cause them to lose their pensions. He thought that alarm was well founded …. an honourable obligation from a man who did not know where to find the money was not of much use. [HON. MEMBERS: "Hear, hear."] Then hon. Gentlemen opposite do not agree with the Prime Minister that the Pensioner can sleep in his bed. I note the language in which that sentiment is conveyed. Mark the first two lines:— They could understand how it was that the poor folks were in a state of alarm. We can all understand that. It was because that alarm has been insidiously and disingenuously instilled into their minds for party purposes.

Mr. MYER

Read Mr. Balfour's telegram.

Mr. F. E. SMITH

The right hon. Gentleman next goes to Walsall, where he makes a speech on 20th October. I will read to the House a quotation from a report which appeared in the "Walsall Observer" on 22nd October:— He was told he was guilty of some great wrong because he said the other night what he was going to repeat that night, that the nervous apprehension which the old folks laboured under as to losing their pensions if there was a change in the Government was well founded. He had only said the other night what he was going to repeat that night. That can only mean and was meant to mean, "You will lose your pensions if the Conservatives come in." That has been the whole provincial case of the right hon. Gentleman. I will now take his speech at Acton as reported in the "Daily News" on 21st October:— The Leader of the Tory party in the House of Lords had said that old age pensions were profoundly demoralising. Could Lord Lansdowne, as an honourable man, pass a Bill to create a scheme which would be demoralising? He was justified in saying the old folk ran a serious danger. I cannot help observing that the Lord Advocate nods his head. I take it that his view is that the old folk run a serious danger. Controversialists opposite seem to fall into two classes—those who propose to conduct the campaign which lies in front of us all by saying that the old folk do still run a serious danger, and those who propose to say with the Prime Minister that they can "sleep in their beds." It not the same campaign. I would ask is there one hon. Gentleman and right hon. Gentleman who sits on the Front Bench, and who listened last night to the words which the Prime Minister uttered with the greatest weight and emphasis and fairness that old age pensioners are safe—is there one of his colleagues on that bench who will say he could go to the pensioners to-morrow with the terrible message that they are in a serious danger? The Lord Advocate is condemned by the silence of his colleagues far more strongly than by any words of mine. The last extract I will read to the House is one from a speech made at Holy well on 22nd October, and I should have thought that those who joined in the triumphant vindication of the Lord Advocate last night would have heard with the greatest pleasure the reading of the very authentic passages which must place it beyond the slightest controversy. What did he say at Holywell. He said:— Many aged persons, knowing their modest pensions depend upon these taxes being raised, are apprehensive they will lose their money if the Budget is thrown out and the Government beaten. I have said I share their apprehension. [Cheers.] There are still apparently one or two who share them, but not many. My doubts and fears are strengthened, I must own, when I consider the past records of these gentlemen.

Mr. MYER

Read the Shropshire telegram.

Mr. SMITH

I do not understand the relevance of that interruption.

Mr. MYER

The right hon. Gentleman's telegram. [HON. MEMBERS: "Order, Myer," and "Name."]

Mr. F. E. SMITH

I will continue the quotation:— Can the peers be expected as honourable men, to give their concurrence to a measure designed to provide the funds needful to carry into effect a scheme fraught with such deplorable consequences? What did that mean? Did it not mean that the Lord Advocate lent his high position to spread—not to spread but to create—that baseless fear that the Lords would repeal the Old Age Pensions Act? I could multiply these quotations indefinitely. The Lord Advocate spoke, as I have said, frequently, and custom never staled the infinite uniformity of his argument. Instead of passing judgment myself upon these "frigid and calculated allegations" [An HON. MEMBER: "Lies."] I will give hon. Gentlemen opposite the comments made upon them by the Liberal Press. Perhaps I may be excused for pointing out first that the Lord Advocate is finding imitators doubtless amongst those who cheered him last night, and who joined in that vindication, because many of them intend to use the same weapons themselves. The hon. Member for Stirling Burghs (Mr. Ponsonby)—I quote from the "Somerset County Gazette"—said a few nights ago:— Passing on to the statement of Mr. Ure that the Tories would stop old age pensions, he was perfectly right. There was nothing like the truth that wounds. That is the other section of the party—the section that thinks the old age pensioners cannot sleep in their beds. The Liberal candidate for the Wellington Division of Somerset, speaking of Mr. Ure's statement, said:— As to Mr. Ure's statement that the Tories would stop pensions, every word he said could be honestly proved. Now we have it that the candidates for this Division, and for every other agricultural constituency in England, are using this argument on every platform. Why, of the total of £165,000,000 of our national revenue, is £8,000,000 selected for treatment on eight occasions, and £157,000,000 left severely alone? The answer is as short as it is discreditable. It is because there is "business" in one and there is no "business" in the other. What does the respectable Liberal Press say about these tactics? The "Westminster Gazette, of October 22nd, said:— The Liberal party has an excellent case on old age pensions, and we much regret to sec it compromised by the line which Mr. Ure is taking in every speech he makes. It is a pity the Lord Advocate should use language which justifies Mr. Balfour's complaint. I remind the House again, and with infinite regret, what that complaint was: that it was a statement which was untrue and was being used by degraded persons. That is the opinion of one of the principal Liberal organs of the Press on the campaign of the Lord Advocate. The "Daily Chronicle," on October 22nd, also dealt with this matter, and said:— To tell old age pensioners that the Tories will stop their pensions is to say what in our opinion is not the least likely to be the case. It is cruel to the old people so to argue as to make them fear that their tenure of the pensions is uncertain. I may perhaps be allowed to ask for information. We may be on the eve of a battle, and I think the party of which I am a member is entitled to ask: Under which banner are the hon. Gentlemen opposite going to fight? Are they going to-fight under the banner of "Secure sleep for the Old Age Pensioner" or under the banner "You will lose your pensions if the Tories come back"? If I were one of those who believed that some germ of social right underlay the principles of this Budget; if I were a passionate supporter of the principles upon which it purports to be based, I would say more vehemently than I do from these benches non tali auxilio eget. [Cries of "Translate."] I will gladly translate. It means "The Budget, if it be an honest Budget, needs no such weapons as those which the Lord Advocate has urged." There is no one who is sitting on this side of the House who will not gladly, and for all time, if we are allowed to, leave this squalid and discreditable subject—a subject which the "Westminster Gazette" has censured in stronger language than I have just used. If we ever recur to it, it will be because it has been made necessary by the repetition of a statement which is not true.

There were other arguments not concerned with this subject used by the Lord Advocate last night which struck me with a little sense of unreality. He defended the land proposals of the Budget with this observation. He said Adam Smith had justified this peculiar taxation of land. Here, again, the Lord Advocate, when he speaks in the country, does not talk of a halfpenny in the pound on undeveloped land; he does not talk about 10 per cent. increment, but he goes to the heart of the matter. What did he say as to the real object of the Budget when he spoke at Linlithgow? The "Linlithgowshire Gazette" of 4th June says:— These modest looking taxes involve a principle capable of far-reaching application. What is this principle? That the land of the country, as distinct from the buildings erected upon it, in truth belongs to the nation. A very arguable proposition, and one, as everybody knows, which is strongly entertained below the Gangway; but no one, I think, will pretend that that is the defence which has been put forward in this House on behalf of the Budget. I notice also that the President of the Board of Trade (Mr. Churchill) has said, speaking in the country, that all the increment on land ought to be taken, and not 10 per cent. He does not bother himself in the least about the arguments of the Chancellor of the Exchequer. He says all the increment ought to be taken. That being the real objective, as disclosed, I confess I was astounded that the Lord Advocate last night, and speaking in the country previously, should have attempted to show that Lord Rosebery and the Glasgow and Liverpool school of Land Reformers were committed in some sense to the principle of the Land Taxes of this Budget. As I have seen the statement made both here and in the country that all of us who support the municipal taxes were committed to the principle of these taxes, I would ask the indulgence of the House whilst I make a very few observations on that point. The one and only proposal which has received the assent either of Glasgow Conservatives, as far as I am aware—and I have carefully read the literature on the subject—or of Liverpool Conservatives was the proposal that site values should, as a matter of the adjustment of rates, hear a share of the rates of our local authorities—in other words, to adjust the incidence of rating burdens. The proposal which was sanctioned by this House on one occasion was that the municipalities, in the words of the hon. Member for Halifax, himself a Member of the Government (Mr. J. H. Whitley), should be given power where the annual value of any kind of rateable property is totally out of proportion to its capital to take a small percentage of the capital as representing its real annual value. That, and that alone, has been the Liverpool proposal. The hon. Member for Halifax added that the site value would be based on the value at which the owner could turn the property into cash next week. The terms of the resolution of the Liverpool Corporation in 1904, on which he has insisted, were these: First, that land and its buildings should be separately assessed; secondly, that land should be assessed by the ordinary assessment committee which is to-day responsible for the assessment of land, not that there should be valuation, a magniloquent Domesday Book, for the whole country, but that each municipal community should have the power of preparing a valuation, using the machinery and officials existing at the present time. Then Lord Balfour's minority Report came, and the Urban Site Rating Bill was affirmed by this House, and, as the Chancellor of the Exchequer has dealt with some emphasis with that Bill, I may perhaps be allowed to remind the House of the speech which was made in introducing it to the attention of the House by the hon. Member for the Elland Division (Mr. C. P. Trevelyan), who now sits on the Front Bench opposite. He said:— Our proposal is that the present ratepayer shall pay the rate. Lord Balfour of Burleigh thinks that half of the future rate should be paid by the owner. I agree with him, although— I commend this passage to modern land reformers:— Although there are some Members in this House and many people in the country, whose sole idea with regard to the taxation of such values is to get at the great landlords. This is no doubt a laudable aim, especially as in the words of Squire Western 'most of these great estates be in the hands of Lords, and I hate the very name of them.' But I would remind my hon. Friends who hold that view that this great proprietor cry has been very much exaggerated and that, as a matter of fact, the greater part of these ground rents and chief rents are held by small investors and are in the same category as Consols, or corporation or railway stock. I would suggest it is a very serious thing to put a new tax upon this kind of property which is being dealt with in the money market as a fixed investment. Let me add this, as the Chancellor of the Exchequer is so enamoured of the minority Report of Lord Balfour. Let me ask who the signatories of the minority Report are? Beside Lord Balfour of Burleigh there was Sir George Murray, the Permanent Secretary of the Treasury, who is described in the ancient constitutional language as being the keeper of the Chancellor's conscience. The summary of conclusions, which I commend to the Chancellor of the Exchequer, was as follows:— 1. That misconception and exaggeration are especially prevalent on this subject. 2. That if proper regard be had to equitable considerations, the amount, capable of being raised by a special site value rate will not be large; and that the proceeds of it should go in relief of local not imperial taxation. 3. The reform might go some way towards ending the agitation for unjust and confiscatory measures. I would recommend to the Chancellor of the Exchequer the final conclusion of the Gentleman who is the custodian of his conscience:— The reform would remove the widely spread misconception which seems, to prevail even among responsible Statesmen, for, while it would be an admission that there were defects in the urban rating system, it would show that there is no large undeveloped source of taxation available for local purposes, still less for national purposes. This having been the Report of the Commission which has been repeatedly cited by the Chancellor of the Exchequer, I say in this House, speaking for those, or many of those who in Liverpool have identified themselves with this municipal land reform in the past, we do not care whether the yield of these Land Taxes is to be considerable or small, whether it is to be, as the Under-Secretary for the Colonies (Colonel Seely) has stated, many millions in a few years, or merely the copper of which the Chancellor of the Exchequer speaks, the money belongs to the municipalities, and does not belong to the National Exchequer, and the Chancellor of the Exchequer has no business to lay his hand upon it. As far as Liverpool is concerned, we found ourselves upon the Report made by Sir George Murray when he said the proceeds of these taxes, whether they were great or small, belonged to Liverpool and not to the Imperial Exchequer. It is the most feeble afterthought that can be imagined for the Chancellor of the Exchequer, when his difficulties are pointed out to him, to turn round and say, "I will give back half of the proceeds to the municipalities," and, be it observed, as I understand it, the half is going back with no relation to the amount contributed by each municipality, but they are distributing it to all the municipalities of the country. How short a time it is since the Prime Minister in his Budget speech denounced this system of grants-in-aid! He said it was retrograde finance, and he was going to sweep away, root and branch, the whole system by which assigned revenue, the proceeds of Imperial taxes, are intercepted by the Exchequer, and handed over to the local authorities. Two years ago we were told the whole principle was going to be swept away, and now we are told by the Chancellor of the Exchequer in order to defend an anomaly that the system is going to be stereotyped in our finance for all times. I make this final observation. The Chancellor of the Exchequer has been pleased, in his speech at Limehouse, to speak of the Duke of Westminster and other dukes, and he spoke of the practice and system of blackmailing. What is the position of the Chancellor of the Exchequer as far as the system of blackmailing is concerned? He says:— The Duke of Westminster profits by a system which is blackmail. We are not going to stop him; we are going to allow him to continue to blackmail, but we are going to take a share of it. All we want is to stand in the blackmail. That is the position of the Government. It is not uninstructive that the speech sold in the country by millions is the speech of Limehouse, and is not the speech which the Prime Minister delivered at Birmingham. Why is it that the Limehouse speech is sold by millions? The answer was given by the hon. Gentleman below the Gangway the Member for North-East Manchester (Mr. J. R. Clynes). He said all the items of the speech were copied from the speeches of obscure street corner talkers who have been spreading the views of the Labour party for years. The right hon. Gentleman in the speech with which he first commended these proposals to the House declared that he was inaugurating an implacable war upon poverty. The proposals he has brought forward do involve a declaration of war, but the advance is not, and never has been, against poverty, but against the poor.

Mr. J. A. SIMON

The hon. and learned Gentleman who has just spoken occupied the earlier part of his speech with some observations on a matter which was discussed here last night. I could not help feeling that it is true in this region as in some other region, where prepared matter is put forward that a dish which was intended to be served last night comes a little stale next morning. The real question discussed last night was a question, as it seems to me, in which it is not desirable for what I may call without offence Junior Members of the House, like my hon. and learned Friend and myself, to take part. It is essentially a question which concerns the chief actors. It is not in the least, as my hon. and learned Friend seems to think, a question as to whether or not a particular piece of censor was exaggerated censor, and can be justified or unjustified in the criticisms made upon the Lord Advocate. The question is why a direct imputation has been made with every circumstance of calculated publicity, not upon his judgment, not upon his critical faculties, but upon his good faith. The question is, whether an imputation has been deliberately made upon his personal honour, and the answer which gives satisfaction and carries conviction to the House and to the country can not be one given by the hon. and learned Gentleman, but can only be one given by the Gentleman concerned. I do not wish to speak in any disrespectful way of the hon. and learned Gentleman, but I do say, when that is the issue, substituted advocacy is no good. The one and only answer which could have been made to the Lord Advo- cate is a speech from the Gentleman of whose observations he complained, and it is for the House and the county to judge. I will therefore only ask the House to allow me to supplement in a small degree one quotation which the hon. and learned Gentleman thought it right to make, because I cannot believe if he had had it before him in a complete form, that he would not have wished to complete it. The imputation was made, pointedly and deliberately against the Lord Advocate—that he had deliberately misrepresented the intentions and determination of the Unionist party. One of the speeches in which he is supposed to have made that misrepresentation—the speech at Newbury—contains a sentence which I propose to read. The hon. and learned Gentleman is quite accurate when he says that the Lord Advocate referred to the prospects of Tariff Reform raising the money needed for old age pensions, but what he omitted to read was these words:— It is all very well for him "— there he quotes Mr. Balfour— To acknowledge the obligation, but the obligation of a penniless man will not bring grist to the mill." "I do not doubt"— said the Lord Advocate— The honesty of his intention When the statement is made that with calculation the Lord Advocate had suggested a want of good faith and good intention, would it not have been as well to read this sentence?— I do not doubt the honesty of his intention, but his good intention will not secure the interests for life of the aged poor. He does not know where to get the money. He could not find it if he were in office tomorrow.

Mr. F. E. SMITH

How does the hon. and learned Gentleman reconcile that statement with the Prime Minister's assurance that they can sleep in their beds?

Mr. SIMON

The hon. and learned Gentleman is an adept at the art necessary to be practised in another place—the art of confusing the issue.

Earl WINTERTON

What are you?

Mr. SIMON

The question is not whether the view which one speaker forms of the financial efficiency of a system is the same or different from the view which another forms. It is a much simpler question. It is aye or no, when the Lord Advocate stands at the Table and gives a deliberate connected and full account of the line of argument which he addressed to the meet- ing—does anybody in this House say that if that account if truly given by him it is not an account which calls for withdrawal and regret——[HON. MEMBERS: "No."]—which calls for withdrawal and regret—if, indeed, the Lord Advocate is believed when he stands at that Table? I do not propose to pursue this topic. I do not think it is a topic which it is necessary to pursue, in view of the full statement that was made last night, and in view, also, of the fact that we are now discussing the Motion for the third reading of the Finance Bill.

There is one circumstance which does emerge from the personal discussion of last night, and it is this: that when the Lord Advocate said that the Leader of the Opposition does not know where to get the money he was accurate. The right hon. Gentleman the Member for West Birmingham, in a well-known passage, declared, in answer to a correspondent, that he would not have looked at Tariff Reform unless he had thought by that means he could provide money for old age pensions. The question of importance that does arise at this stage is, do hon. Gentlemen opposite say that Tariff Reform will provide that money? Their Leader certainly does not do so. He explained to us last night, not, indeed, addressing himself, if I may venture to say so, to the real point on which intervention was called for by the. Lord Advocate's speech, but he explained to us last night, when he assured the country, and everybody accepted his assurance, that, whatever happens, old age pensions will be paid, be at any rate contemplated the possibility of paying them under his Government, not by superior scientific means, but by the Super-tax, by the Income Tax, and by the other taxes in this Budget—excepting the Land Taxes and some portion of the Licence Duties. If the right hon. Gentleman will only make that quite plain through some of the humbler members and canvassers of his party when they go around the country, and if he will apply his high standard of accurate statement to everything which they say on the subject, there will be no more heard of Tariff Reform.

I want to deal with another aspect of this matter which is, I hope, directly germane to the general subject under discussion. It is said, and it is said constantly by those who criticise the financial proposals of the right hon. Gentleman, that he has made proposals which are going to produce unemployment. It is said if you tax rich people in the way in which you propose to tax them under this Budget you will thereby cause, and cause directly, a state of unemployment which would nut otherwise arise. I want, if I may, to occupy a few minutes in examining that proposition. It seems to me to be a proposition which can only be maintained if one fails to observe the existence of more than one fallacy. The first and greatest fallacy is this. It is quite true if the tax collector takes £50 out of a rich man's pocket that man has not got the £50 to spend. But what is forgotten is that that £50 is transferred from the pocket of the individual into the coffers of the Treasury. Is it wasted or lost? Does anybody say that the purposes for which the money is collected are not productive purposes? Does anybody say that the money to be spent in building "Dreadnoughts" is not money which, at any rate, involves the employment of labour and the payment of wages? I regard, I may say in passing, that, economically speaking, as the least valuable expenditure of all, but still, that expenditure immediately and necessarily represents wages and work. I should have thought that to be beyond all question. As far as old age pensions are concerned, the moment you part with that money, the moment it is distributed to the old age pensioners, the moment the money is broken up into an allowance of 5s. per week, it circulates through the village shop and through every store in the town, giving direct and immediate employment to the butcher, the bootmaker, the baker, and, indeed, every one of our staple trades. I say the first matter that arises on this assumption that the taxation of rich persons is going to produce unemployment, depends upon this, that it seems to be supposed the moment you take from their pocket the money it is lost and wasted. But there is something more. That taxation produces a loss to the taxpayer who pays the tax for the moment. But there is this fundamental distinction between a proposal such as this and the alternative proposals which we hear of. Our proposals, at any rate, take no more from, and involve the paying of no more by, the taxpayer than is received, used, and applied by the Treasury. If there is really to be a question as to what kind of taxation is going to produce the minimum of loss with the minimum of spending power, surely it will not be contended that the alternative proposal which protects and involves higher prices, can compete with the proposal which makes the contribution of the taxpayer go in a lump sum to our industries.

The second fallacy involved in the contention that taxation under this Budget produces unemployment is this. It seems to be assumed that this £50 or £100 which is going to be taken from the pockets of the rich man under this Budget, if it is only left in his pocket, is certain to produce remunerative and economic employment. I hope I should be the last to suggest that the expenditure of the rich in various directions is not beneficial and useful to employment. Of course it is. But there is this distinction, that the rich man, when he spends his money, spends a portion of it on the things which he needs, the things he wants, eats, and uses, and that portion of his expenditure is immediately productive of work. But he spends another portion of it because he is a rich man—he spends it, in a perfectly honourable and proper manner, upon luxuries, upon pictures, diamonds, and travelling abroad—expenditure which, whatever be its merit, whatever be its application, does not produce any employment in this country at all. Therefore, the rich man has two funds out of which he may pay. It is true he may conceivably starve himself, he may cut down the number of loaves of bread he can afford. He may wear cheaper clothes. He may deprive himself of an extra pair of boots. But if he did that sort of thing he would be deemed to be a lunatic or a miser. He pays his tax out of the other fund, not out of the fund which puts money in circulation and gives employment, but out of the surplus fund which may, or may not, be spent by him, according to circumstances, in articles of luxury. If you say the rich are taxed under this Budget too much, what is the alternative? If you do not call upon the rich man to pay these duties, are you going to put them on the poor man? If you do, you shift them on to the shoulders of persons who have only one fund. The rich man has an alternative. He can pay this taxation either by depriving himself of something that he eats or wears, or he can pay it out of the surplus which ministers to his personal enjoyment. The poor man has no such alternative. He must pay his tax out of income that is devoted to nothing else than producing employment for those amongst whom the money is circulated. Therefore, I submit to the House that this analysis shows that if the question be: What kind of taxation produces employment, and what kind produces unemployment, it follows necessarily that the taxes put on the shoulders of the rich man may be discharged by that rich man without displacing his merits as an employer of labour at all, whereas it is impossible any such burden should be put on the shoulders of the poor without immediately and directly interfering with the employment that they are able to give. It seems to be assumed by this argument that the only persons who give employment are the rich. It seems to be thought that if you take £100 by means of taxation out of the rich man's pocket, you are thereby inflicting an injury upon employment in this country quite different in its character to what it would be if you took 100 separate sovereigns out of a hundred poor men's pockets. There is no distinction of that sort. The truth is, if anybody wants to know, that the person in this country who maintains the staple trades is not a rich man, but the poor man. It is true that the rich man, when he gets up in the morning, is faced with the alternative of putting on one of several suits of clothes, and he has a row of boots before him, any one pair of which he may put upon his feet. The poor man is faced by no such embarassing alternative, and that shows that it is really the demand of the poor for the necessities and the first luxuries of life, which is the promoting force of our staple trades.

Take your Bermondsey recipe, and put a 10 per cent. tax upon the leather, and then go and ask the manufacturers of Leicester and Northampton what the effect would be? Your tariff recipes used in the Bermondsey election will be admirable for Free Trade ammunition when an election comes on in Leicester and Northampton. What is the effect going to be? The effect is going to be that you put this 10 per cent. tariff on leather, which, according to the people of Bermondsey, is their finished product, and, according to the manufacturers of Leicester, their raw material, and by so doing you are going to increase the price of that raw material by this amount, or thereabouts, or, at all events, you are going to increase it, you are going to increase the cost of machinary by which they make the boots and the cost of the material out of which they build their factories, and when you have done that you have put in peril the employment of 200,000 people in this country, who are paid to make boots and shoes. Does the House realise what is the expenditure on the part of the people which is involved by the sale of those boots and shoes in this country? From the Board of Trade returns for last year it appears that approximately those 200,000 hands employed in the Midlands and elsewhere are turning out pairs of boots made in this country and sold to the people of this country to the amount of forty-three million pounds worth per annum. Let me put this to the House. If you insist on not taxing the rich man and taxing the poor man you are doing this. You are transferring the incidence of your tax from the shoulders of the people who already buy all the boots they need on to the shoulders of people who would be glad to buy more boots if they could afford it.

The rich man's purchasing power in the matter of boots and clothes is exhausted, and if some other Budget were introduced and passed the rich people of this country would not express their gratitude by buying more boots. They would not order a single suit of clothes which they want. The rich, and this is my point, have already reached the point of saturation of supply. They have already got all that they want in the way of boots and clothes, whatever the cost may be, and the demand which is made upon them by this Budget is a demand which cannot possibly result in their reducing purchases in the case of articles produced by our staple trades. But what about the poor man? Does anybody contend that the working men of this country if they had more money would not buy more pairs of boots? Does anybody contend that if you increase the price of pairs of boots by 10 or 12 per cent., 2s. 6d. in the £, you are not going to decrease the consumption of boots by the working classes? It follows necessarily that if any attempt is made to shift these taxes from the shoulders where they now are, and make them fall on persons of less income and substance, so far from thereby giving increased employment, you are thereby directly penalising the very sort of income and the expenditure which is prepared to maintain and support all kinds of employment in this country. It is easy enough for Members of another place, who are perhaps less directly in contact with the business affairs of this country than some in this House, to imagine that they are the one and only givers of employment, but it is not true.

It may or it may not be the fact that the man of wealth when he is spending £100 which he would not have if this Budget is passed would do it in some form which gives employment; but it is highly probable that he would not, because he does not now deprive himself of those things the production of which give employment. He is a, far better and more sensible fellow than he is made out to be, and whatever the effect of these taxes which are proposed may be, he will not go to the length of depriving himself of those necessary and agreeable luxuries which really are the products of the staple trades of this country. It follows, therefore, that whether you take boots, clothes, or building materials, whether you take any of the first necessities of the decent home, or anything of that nature, the idea that by any contribution from the rich man you are producing unemployment is one which is necessarily exploded the moment one considers the way in which these taxes would be spent. I do not desire to occupy an unnecessary amount of time, but I do submit that so far as these proposals are attacked on the ground that they prejudice employment and fail to produce some employment, no charge can be more utterly baseless. No charge can be less warranted by any calm examination of the facts. May I, in conclusion, call attention to a broader aspect of this matter, which I venture to put before it is too late, and which it would be well for those who are chiefly prejudiced against this Budget to consider? It is suggested that these proposals are likely to be followed by some insecurity of ownership and holding of property. It is suggested that the cause of private ownership is rendered less safe by this Budget. Is not the real truth the precise opposite? Is not the real danger—and it is one—the danger which accumulated wealth and great properties of this country run, that the democracy may begin to ask whether they are as conscious of their obligations to the community as they are of the wealth they get from it?

Is there a better way of securing what has been honestly come by, and fairly preserved and transmitted, than an attitude the direct opposite of that now being exhibited by those who oppose these taxes, and which exhibits what really is the gulf which divides the poor from the rich in this country? The President of the Local Government Board, either this year or last year, produced a Blue Book which gave statistics as to the state of the people of this country in various parts of it. I can imagine the use that might be made of that Blue Book, combined with the attitude of those who oppose this Budget, by those who are in favour of it. If you look in that Blue Book you find that half a million persons live in tenements of one room, three millions live in tenements of two rooms, another three millions in three rooms, and seven millions in four rooms. Does anyone seriously imagine that when these are the facts in this country to-day, that the argument put forward by the very rich individuals of the country against the Budget is an argument which is going to carry weight with sensible men? The sensible man argues that if a man who is rich is not prepared to sacrifice some portion of his superfluities to carry the common burden, from that moment he stands condemned, and his system stands condemned in the eyes of all those people who expect the obligations of wealth to be recognised as well as its privileges. As far as I am concerned, I hope and believe that I would have nothing to do with these proposals if I thought that they deserved some of the epithets which were thrown at them; but epithets, and very violent epithets, have become rather common in very high places, and with very little warrant, of late, and the judgment this country will pronounce, and the judgment which it is pronouncing, upon these proposals will not be decided by epithets. It will be decided by asking the question, since the Leader of the Opposition does not feel so violently opposed to the other taxes in the Budget beyond the Land Taxes and the Licensing Duties, which are the first for him to reject and the last he could bring himself to propose, can it really be that the authorities in our Constitution who speak permanently for land and permanently for licensing are going to control the action of our Legislature in determining whether these taxes should be imposed?

5.0 P.M.

Mr. JOHN REDMOND

I cannot but express my hearty admiration for hon. Members on both sides of the House who, after six months of Debate on every conceivable aspect of this question, are able to come down to this full-dress Debate and impart an appearance, at any rate, of freshness and enthusiasm to their speeches. For my part, I regard the time for argument has past, and I feel, so far as I and my colleagues are concerned, that the only thing that I can say of interest to the House is what we are going to do in the Division which is coming on. On this Budget, as on every Budget upon which I have spoken, and I have spoken, I am afraid to say, on a great many Budgets, I look at the question from the purely Irish point of view, just as, in my opinion, the Chancellors of the Exchequer, in framing their Budgets, have always looked at them from the British point of view, to the exclusion altogether of Irish interests and Irish concerns. I would ask the House to bear with me for a moment while I just remind them of the attitude which the Irish party in this House has taken on this Budget from the very first. The very night of the Budget statement, last April, I declared that in many of its most serious principles this Budget was unjust to Ireland, and in those particulars would be opposed by us. When the Budget Resolutions came under discussion we raised every point which we thought injurious to our country, and we opposed very many of the most serious parts of the Budget, and as we came to the second reading we felt that it would be impossible for us, although there were portions of the Budget that we approved of, to abstain from voting against the second reading because we did not know how far the concessions that we had asked for were likely to be made by the Government when we got into Committee. I said that there were portions of this Bill that we entirely approved of. For 30 years in this House the Irish party has been voting consistently in favour of Land Taxes similar to those which are in this Bill; in fact, we were almost the pioneers of this question in the House of Commons. We were voting in our full strength in favour of the principle of these taxes at a time when the English Members voting in the same Lobby, of any party, might be counted on the fingers of the two hands. Therefore we approach this Budget as people who are thoroughly friendly to the principle of the Land Taxes. It is true that we made two demands on the Government. One was that agricultural land should be excluded from these taxes and the other was that the money raised by these taxes should go to local authorities and not into the Imperial Treasury. We obtained concessions on both those points. Agricultural land was excluded from the operation of these Land Taxes, and, although our demands that the whole of the money should go to local authorities was not conceded, at any rate we obtained the concession that half the money should go to local authorities. Therefore, so far as the Land Taxes are concerned, and they are the chief part of the Budget, if one is to judge by the length of time spent upon them, the feeling of friendliness that we had towards them at the commencement of these discussions has increased, and I say, for the Irish party, that we are heartily in favour of them as they now stand in the Bill. We oppose as unjust and oppressive to Ireland the liquor licences provided in the Bill—unjust and oppressive by reason of the different conditions which exist in Ireland and in this country, conditions which it has been admitted have not been fully considered by the framers of this Bill, conditions which, when they were brought to the knowledge of the framers of this Bill, forced them by an irresistible process to reconsider the whole matter, and on this point I am glad to say that the Chancellor of the Exchequer and the Prime Minister made, in answer to our representation, a most important concession in principle, and a most important concession in practice. First of all, if this concession had not relieved Ireland of sixpence, I should have considered the mere fact that the Government differentiated Ireland from Great Britain in their application of a financial measure as in principle of very great importance to us and to our cause. But this concession is far more, because, according to the information and figures which have been supplied to me, something like 90 per cent. of the licence-holders in Ireland will obtain relief from the burden which will fall upon a similar class in this country, and, in point of money, the relief will amount, I am informed, to something over £50,000 a year. In a poor country, where the traders are all small, poor men, that is an enormous concession, and although it still leaves a number of the large licence-holders in Ireland unfairly hit, still, in the main, it meets the objection that we took to these Clauses, and it is regarded by us as a very considerable concession.

I am sorry to say that on other portions of the Bill we did not obtain similarly large concessions. I made a most urgent appeal to the Government more than once on behalf of the small brewers in Ireland. There are about 28 breweries in Ireland—all small, struggling concerns—and there is one great monopoly, which produces more than three times as much beer as all the rest of the Irish breweries put together, and I urged on the Government that, if these brewers' licences were maintained as they are in the Bill, it would have the effect of closing up most of the small breweries which are to-day not paying a dividend, and are barely living, but are giving employment and doing useful work, and making the monopoly of Guinness' still more complete and overwhelming. The Prime Minister and the Chancellor of the Duchy did not deny the hardship that I pointed out, but said that, inasumch as the Sugar Tax had been reduced last year, and that as sugar was so large an ingredient in the manufacture of beer, at least half of the original tax imposed upon brewers by the Budget they have already been relieved of. That is quite true of England, but it is not true of Ireland. I believe in the manufacture of black beer or porter there is no sugar used at all, and so far as the other kind of beer is concerned, brewers do not use it in Ireland. The amount of relief which the brewers of Ireland got by the reduction of the Sugar Duty last year only amounted in the aggregate to the ridiculous sum of £45, so there is a distinction therefore in the case of the brewers in England and in Ireland, and I have to express my deep regret that the different circumstances in the two countries did not induce the Government to relieve the small Irish brewers, as similar conditions induced them to relieve the small Irish licence holder. I protest with all the vehemence that I can against this tax as an unfair and oppressive one so far as Ireland is concerned.

Then I come to the Whisky Duty. The Act of Union provides that there shall be exemptions and abatements in favour of Ireland when a system of indiscriminate taxation for the two countries is set up. In this case of the Whisky Duty, not only is there no exemption or abatement in favour of Ireland, but there is a differentiation against Ireland, because the Government have actually picked out for taxation what is essentially an Irish and a Scotch industry, and which is not an English industry at all, and the tax therefore on whisky, which will hit most seriously Scotland and Ireland, will not be felt in the smallest degree by the richer partner in the firm. So far as Ireland is concerned I regard it as an unjust and a cruel tax. Irish industries were destroyed by the act of this Parliament. Two hundred years ago or more, one by one, each Irish industry was strangled by prohibitive duties of 200 per cent., 400 per cent., and sometimes 500 per cent. This is not a question for dispute; it is a question of fact. It is a matter which is admitted even by the Leader of the Opposition, who in a famous speech in Birmingham a few years ago admitted that the English Parliament by its legislation had destroyed Irish industries, and that therefore England had a certain duty to Ireland in the future. History, in this question of the Whisky Tax, is in this Budget repeating itself, because the effect of this tax will be largely to destroy this Irish industry. It is not a tax put on for the purpose of revenue. It cannot be. It is going to produce no revenue. The sanguine anticipations on this head of the Chancellor of the Exchequer have been blown to the winds by the experience that we have had. There is no money to be got out of this for the Exchequer. The only effect of the tax will be that it will largely destroy the industry. I have heard this Whisky Tax supported on the grounds that there is a diminution in the consumption of whisky, and that that is a good thing from the temperance point of view. From the point of view of temperance I really think there is serious doubt as to whether a diminution in the consumption of whisky is a good thing. If a man, instead of drinking a glass of whisky, drinks two or three quarts of porter, I am not sure that temperance is advanced, and we find that where the consumption of whisky has gone down the consumption of beer has increased in Ire land, and is increasing. Therefore, my belief is that, from the temperance point of view, this will be of no use at all; but even if it was, what right have you to put social temperance legislation into the Budget? I can understand your rejoicing if, when you put a tax on for revenue, it has the incidental effect of promoting temperance, but this is not a tax put on for revenue. It has been proved that the tax will not produce revenue, and it is not a justification for it to say that it leads to a diminution in the consumption of whisky. The whisky manufacturer in Ireland is one of the few remaining industries we have. It is an industry that employs a large amount of labour, and promotes tillage, the growing of barley, and its destruction or injury will be felt by many classes all over Ireland, and therefore we all deeply deplore that the Government have included this whisky tax in their Budget, and we take this last opportunity of entering our protest against it.

If there was nothing else in this Bill to which we objected except this deadly attack, as I believe it is, upon one of the few remaining Irish industries, it would be impossible for us by our votes to support it, but there is a much wider question which we are bound on these occasions to raise. Ever since the Report of the Royal Commission on the financial relations between the two countries the Irish party has refused to vote in favour of additional taxation for Ireland. The verdict of that Commission still holds the field. That verdict, pronounced by this Commission, with a majority of Englishmen, which took the evidence of all the greatest financial experts of the day, was that Ireland was overtaxed to the extent of £2,750,000 a year, and further that she had been so overtaxed, at least ever since the year 1853, so that there was an accumulation of arrears due to Ireland extending right back for half a century. That was your own tribunal. England set this tribunal up for herself. England selected the members of the tribunal, England made its case before that tribunal, and the verdict was against England. That verdict holds the field. There has been no appeal from it. I remember the present Leader of the Opposition, when he was in power, arguing against the Report of that Commission, and he said there were certain aspects of the question that they did not consider, for example, the extravagant expenditure on Irish Government, as if that could be set off to our claim, as if we wanted an extravagant and corrupt Government in Ireland. When he set up that claim that this question had not been considered by the Commission, he said he would appoint a fresh Commission to complete the work. Why did he not do it? He never did it, and from that day to this there has been no new tribunal appointed, and under these circumstances I say that Great Britain is bound in honour and in justice by the verdict so given. The Liberal party in this House voted again and again with us in support of the Report of the Commission, and the present Prime Minister made more than one speech, and one most emphatic speech, on the question when he said that in his judgment no one could deny the fact that Ireland was overtaxed to the extent of £2,750,000. In those circumstances, how can any reasonable man expect the Irish Nationalist representatives who maintain that claim to vote in favour of a Budget which increases the general taxation of Ireland, even though the greater portion of that taxation is in the shape of land taxes, which we approve of in principle? We are bound to decline to vote for the putting of any further taxation on Ireland, until either the Report of the Commission of 1894–5 is carried out, or until that verdict is modified by some other tribunal set up to consider the matter.

I confess I feel myself, under the peculiar circumstances of this Budget, in a position of some embarrassment. As I say, we are heartily in favour of the Land Taxes, and I recognise that it is the Land Taxes upon which the Gentlemen of the Opposition have made their fight, and on which the House of Lords is going to make its fight. Of course, they devoted a few days to discussion of other portions of the Budget, but the mere fact that from the date when the Budget was introduced, I think on 29th April, until 1st September, four whole months were occupied entirely with the discussion of these Land Taxes, is enough evidence. The fight on the Resolutions was on the Land Taxes too. I do not say they did not drop a few observations here and there on other portions of the Bill, but nobody can deny the fact that the great fight in this House against the Budget, judged even by the test of time, was on the Land Taxes. It is on the Land Taxes to-day that the campaign is going on in the country, and on the Land Taxes that this Bill is going to be mauled in another place, and, such being the case, and being in favour of these Land Taxes myself in principle and in practice, and having obtained valuable concessions, from the Irish point of view, on these Land Taxes, I find myself at the present moment in a position of considerable embarrassment. I recognise another matter. We object to this Budget because it is unjust to Ireland, and because we do not want any additional taxation placed upon Ireland. Those Gentlemen who have opposed the Budget on the Unionist Benches never gave the faintest hint or suggestion that they were in favour of differentiation in favour of Ireland, or that if they had to frame a Budget to-morrow that they would leave Ireland out of it. On the contrary, they voted against the concessions which Ireland got. They actually walked into the Lobby, and even their Irish associates, like the Member for Trinity College, with sublime unselfishness, would not take any benefit for Ireland that was withheld from England. They all walked into the Lobby against the concession on the Licence Duty which we obtained, and, therefore, we are looking at this matter from an entirely different standpoint. We are looking at it from the point of view of the interests of Ireland, and if I am asked to vote in favour of the campaign of these honourable Gentlemen and of the House of Lords in wrecking this Bill, I am compelled to ask on what basis. Is it on the basis that if they got into office, would they remit Irish taxation? I know they would do nothing of the kind. I know what would happen if they got in. They would have to provide all this money, and probably more money still. They would reject the Land Taxes, of course. The Land Taxes hurt their interests and the interests of their class. Therefore, they would reject the Land Taxes and put taxation upon the poor in Ireland. They would increase indirect taxation in Ireland, which already, let me remind hon. Members, is 78 per cent. of the whole, although it is only 50 per cent. in round numbers in this country. Their Budget, so far from being better to Ireland, would inevitably be worse for Ireland, and therefore I feel some embarrassment. I did not hear the Gentlemen of the Opposition say much about the Whisky Taxes or their effect upon Ireland. I did not hear one of them say one word from the Irish point of view on the Whisky Taxes.

But there is a larger issue at stake in this matter. We are told this Bill is going to be rejected by the House of Lords. If that fight is entered upon, many issues more than Land Taxes or Licence Taxes will be raised. If that question of the House of Lords, and the power of the House of Lords to permanently block legislation in this country, is to be raised, if that power is going to be challenged in the crisis which is before us, I am not going to be on the side of the House of Lords. Under these circumstances, and looking at this from the Irish point of view, bad and all as the Whisky Tax is for Ireland, bad and all as the increased taxes on the stamps and Death Duties are for Ireland, they would sink into insignificance and disappear if in a great constitutional crisis we were able to take sides effectively against the power of the House of Lords which permanently blocks every good measure proposed for Ireland, and which at this moment is engaged, and has been for the last few days, in tearing up what I regard as a treaty of peace for Ireland. The effect of this, if they persevere in that course, will be deliberately to plunge our country, as they have done over and over again, into a whirlpool of disorder, tumult, trouble, and suffering. In these circumstances, I am not, by reason of the fact that I am opposed to the increase of taxation, going to be cajoled into taking a course that would array me on the side of the House of Lords in the coming crisis, and therefore I and my colleagues will abstain from voting in the Division.

The CHANCELLOR of the EXCHEQUER (Mr. Lloyd-George)

I regret that I did not hear the first part of the speech of the hon. and learned Member for Waterford (Mr. J. Redmond), but I understand that he summarised once more his objections to the Budget from the Irish point of view. I quite appreciate the considerations he put before the House of Commons, and I agree that one of the difficulties every Chancellor of the Exchequer is placed in when he wants to raise money is that he must go to those parts of the country where he is most likely to get money from. It is very difficult to submit any scheme to the British Parliament in the present position which, while just to the great majority of taxpayers, may not be unfair and burdensome in its incidence so far as Ireland is concerned. Therefore, it is a very great argument in favour of the attitude which the hon. and learned Member and his Friends have taken in regard to the question of self-government for Ireland. In the meantime that is a difficulty which every Chancellor of the Exchequer is confronted with, and nothing will improve that position except a complete, radical, and fundamental change in the relations of the two countries. We have been engaged on the consideration of these financial proposals for something like six months. I do not believe there has ever been a Budget presented in this country which has been more carefully examined, both before it was introduced and after its introduction. I think I can say with sincerity that I do not believe a Chancellor of the Exchequer and his officials ever took a longer time over the preparation of a Budget before it was introduced, and I am perfectly certain that no Cabinet ever subjected one to such a protracted examination. I say that by way of answering the suggestion that, at any rate, it has not been well-considered. Whether it is a good or a bad Budget, it was thoroughly examined and criticised both before and after its introduction. I think it a matter of congratulation that so contentious a measure as this has been carried through the House of Commons without the application of the guillotine, and without very much closure. Only on eight or nine occasions the line closure was applied. That is a matter for congratulation on the part of every man who is interested in the House of Commons as an assembly for legisla- tion. Now the guillotine has become an essential part of our machinery for every contentious measure. I always regretted it. I thought it was very undesirable from the point of view of the House of Commons. We decided to make the experiment of carrying this Bill through without anything in the nature of guillotine closure, and I am very glad to think, as a Member of the House of Commons, that, although we are sitting here in the month of November, we have, at any rate, succeeded in doing that.

I said that this Bill had been subjected to very close scrutiny in this House. I am not responsible for that. The right Gentleman the Member for East Worcestershire (Mr. Austen Chamberlain), if he will allow me to say so, has criticised the measure fairly, and in no part of the House of Commons is the spirit of fairness with which he has conducted his criticisms been more admired than on this side of the House. In his speech, when moving the rejection of the Bill, the right hon. Gentleman said it had been considerably cut up. I do not think so. So far from being cut up it has rather grown. It is considerably stouter, and I think on the whole it has been considerably improved by this process of forcible feeding which has been applied to it by the right hon. Gentleman. He applied a classical illustration as to its having been cut up and boiled in a pot. The classical simile I would apply would be rather a different one. I would say that the changes which have been made in the Bill are rather in the nature of sops to Cerberus. I hope in this atmosphere of personal recrimination neither the Leader of the Opposition nor the right hon. Gentleman (Mr. Austen Chamberlain) will regard that as a personal reflection upon them. In spite of all the very numerous and substantial sops, I am still told that there is considerable doubt as to whether my poor Bill will get out of Hades. Not merely has the Bill been subjected to severe criticism in the House of Commons, but it has received severe criticism outside, and we have done our best sincerely to meet everybody's criticism, and I think the right hon. Gentleman frankly admitted it. He said he objected to the principles of the Bill, but I think he admitted that we did our very best to meet criticisms so far as we could go consistently with the principles which we had laid down.

There are just one or two observations I would like to make generally on the Bill before it leaves the House of Commons. Admittedly it is very difficult to say anything new when you have been talking about it for six months, and, therefore, anything that I say will be rather in the nature of summing up than in the nature of the introduction of fresh matter. The first observation that I would like to make is this: No one now challenges the need for raising £16,000,000 of money. On the contrary, it is admitted by all parties. In fact, any one who doubts that the other side are just as anxious as we are to raise the money runs considerable risk of being called names. I am only putting it in order to show that, at any rate, there is complete agreement established between both sides of the House as to the need of raising this sum of £16,000,000. I recollect when the Bill was first introduced there were two charges brought against the Budget as a financial proposition. One was that we underestimated our revenue; the second was that we had overestimated our expenditure. I do not think that any one now, after six months' experience, would repeat either of those two criticisms. Quite the reverse. The revenue, with the exception of the Death Duties, has run the usual course in these cases. Therefore, at the end of six months we are confronted with this fact as an accepted one, as common ground to both parties—that we have got to find £16,000,000 this year. But there is another fact which is equally important when we come to consider the character of the taxes, and that is that the £16,000,000 this year must necessarily swell into something considerably more next year. That also is common ground. What is responsible for that?

There is first of all the steady normal fall in the drink revenue which, at any rate for the moment, has to form part of the necessary calculations for every Minister responsible for the revenue. There has been a steady fall for years. That has got to be taken into account next year. Then there is the automatic increase in the "Dreadnought" account. Apart altogether from any controversy of whether we are going to have, 4 or 8, or 12, the mere fact that we have laid down four this year involves an increase in the expenditure next year. Then there is the natural growth of the old age pensions. There is the question, which both parties admit must be dealt with, of the removal of the pauper disqualification. There is the unemployment and sickness insurance, which I do not think is challenged by any political party in this House; and there is the increased grant for development. All that involves next year a very considerable increase in revenue, something that runs into millions, as I pointed out. All that is ignored when we come to consider the character of taxes. I want on this, the last opportunity which we shall have of discussing the Bill, that the House should bear that in mind, because it is very relevant to the consideration of some of the criticisms that have been passed on the taxes for their non-productivity this year. The taxes have been arranged with a view to meeting the situation, with a view to providing £16,000,000 this year, and with a view of providing the larger sum which will have to be met next year and the following year. What are the taxes, the remaining yield of which will inure to the Exchequer this year? There is the 2d. increase. That will come in this year. Then there are the licences. The whole of those will probably come in during the course of the current year. The bulk of the Estate Duties—I am referring now to Estate Duties and not to the old Death Duties—will come in this year, though they will grow next year. Tobacco and motors will come in this year. Next year and the following year the Super-tax comes in. This year we shall probably only get about one-fourth or one-fifth of the Super-tax. The Legacy and Succession Duties will produce hardly anything this year. Next year they will produce millions. Stamps this year will probably produce about £400,000 or £500,000; next year they will produce considerably over £1,000,000. Land Taxes this year on a balance will produce, I think, about £75,000; next year they will produce very much more, and that will be a growing sum year after year, until it becomes a very substantial part of the revenue. I divide these taxes into those categories because the Leader of the Opposition last night emphasised the fact more than once that we were only getting £50,000 from the Land Tax this year. I doubt very much whether we will get it.

Mr. A. J. BALFOUR

I quite agree with reference to the immediate year.

Mr. LLOYD-GEORGE

I only want to show that these taxes are not to be judged merely by what they are going to produce this year, because if the House will take Legacy and Succession Duty I doubt very much whether they will produce £75,000 this year. They will attain a big yield next year. The same thing applies to Land Taxes and to some of the other taxes. We have to raise £15,000,000 or £16,000,000 additional this year. It may be over £20,000,000 next year. What contribution have the Opposition made towards finding that sum? What contribution have they shown their readiness to make? They have opposed in their turn every tax which yielded anything. The only recommendation for a tax was that it did not produce anything. But of the taxes that would bring in the money towards meeting this £16,000,000 they would give us none.

Mr. JOHN WARD

The Income Tax passed without a division and the tobacco passed without a division.

Mr. LLOYD-GEORGE

The Income Tax was challenged; and the Super-tax was objected to because it taxed the rich. The twopenny Income Tax was objected to because it taxed the middle classes. The Tobacco Tax was objected to because it taxed the working classes. One tax was objected to because it taxed capital, and another tax was objected to because it taxed income. Spirits were objected to because the drinkers had to pay. Tea was voted against because, I suppose, teetotallers would have to contribute to it. One tax was objected to because it fell on Ireland and Scotland. The threepenny duty on beer was objected to, I suppose, because it fell on England. Where was the money to come from? Neither from rich, nor middle class, nor poor. Neither from England, Scotland, Ireland, nor Wales; neither from capital nor income; neither from teetotallers nor drinkers. We were to raise the £16,000,000, but nobody was to contribute a penny towards it. The answer, I think, is, "Well, tax the foreigner." It is rather remarkable that they kept clear of this suggestion until we came to the peroration of the speech on the Third Reading rejecting the Bill. And the only Member of the House who has elaborated his proposal who has had the courage to do so was the hon. Member for Ludlow (Mr. Rowland Hunt). Apart from him, we have only had vague suggestions. He came forward with his Budget openly and courageously. But for six months we have been examining all these proposals that were objected to in their turn, and the only suggestion made has been a vague suggestion that somehow or other, if we could not get it from any citizens in this country, we ought to get it from the foreigner. There never was a more futile and a more phantom proposal. I will only say one word about it. If we really paid the tariff of Germany and the United States, there would be something to say for it. If the prices were regulated in such a way that articles would be cheap where tariffs were high, and prices higher in countries where the tariffs were less, there would be something to say for it. For instance, if a manufacturer or merchant in this country were to charge a home consumer the full 100 per cent., and charge the Germans 75 per cent., and charge the Americans 50 per cent., of any price, there would be something to be said for it. When it comes to Russia, I do not know what would be said, because there the tariff reaches 100 per cent., and you would have to give them the article for nothing.

As a matter of fact, it is a perfectly absurd suggestion. The foreigner pays his own tariffs, and pays it twice over. He not only pays the increased cost of materials, but very often that increased cost of material keeps his manufactured goods out of neutral markets, and he has got to put on an extra price for those goods at home in order to sell to the foreigner cheaper than otherwise he would have done. It is just like the steel billets and South Wales, which are a very good case in point. Our competitors sometimes sell under cost price while charging their own people double price. This enables the tin-plate workers of South Wales to sell their tin-plate in the United States of America and get over the tariff in the United States. In the United States of America they charge their own people an extra price and Germany charges an extra price, and that enables the British tin-plate manufacturer to get in between them and reap the advantage. As a matter of fact the foreigner himself pays his own tax. Yet that is the only suggestion that has been made. I now ask what is the real criticism against the proposals of the Budget. I have noticed during the last few weeks that as far as the bulk of the taxes is concerned the criticism has weakened very considerably. I think in the speech made by the Leader of the Opposition last night there was rather a significant note when he talked about the Income Tax, the Super-tax, and the Death Duties. There was not a note of protest, but a note of assimilation, if I may venture to say so. He did not protest against them. I am not sure that he divided against them on the Report stage, and his real criticism has been directed rather to the two taxes of the Budget—the Land Tax and the Licence Duties. If the House will bear with me I would like to say a few words on those two taxes. Are those taxes really unjust?

With regard to the Licence Duties we are simply extending to the higher assessments the scale which is now in operation for the lower assessments by 50 per cent. I do not think it is too much to charge when we consider the value which is conferred by the monopoly given by the State. If we look at the very remarkable figures of the sales which took place in Newport a few days ago of licensed premises, I think we shall realise that there is not very much of a grievance so far as those premises are concerned. Houses of about £30 rateable value sold at £5,000 and £6,000. What is that value? That is not a value which is attributable to goodwill created by the holder. It is purely value created by the monopoly which is confererd by the State. I do not think, when the State is in need of money, that it is too much to ask that a contribution of this kind should be levied upon proeprty the value of which has appreciated so enormously owing to the monopoly that has been created by the State. I come, therefore, to the question of the land, which occupied most of our time. I agree there with the hon. and learned Gentleman the Member for Waterford (Mr. John Redmond). The real challenge of the Opposition is upon the land. We occupied the whole of the months practically from April up till September in discussing the land question. The Second Reading turned entirely upon the land, and most of the Debates in Committee were on the land—I mean, the Committee on the Resolution, and certainly most of the time occupied in the Committee Stage of the Bill. Is the land taxation unjust? Take, first of all, the Undeveloped Land Tax. What is that tax? It is purely a tax upon the real value of the land. At the present moment land does not contribute on its real value in urban areas, and all we do is to ascertain the real value of the land, and charge practically a shilling in the pound upon that. It is not an extra tax. It is not an additional tax, because there is a deduction now in respect of agricultural value, which contributes its 1s. or its 1s. 2d. That is deducted when you come to the rating of the land, and the halfpenny tax is upon the value which escapes taxation altogether at the present moment. I consider that to be a perfectly fair proposition, and I think there are Members of the Opposition themselves who have admitted that in the past. Take those Gentlemen who are Members of the Opposition who supported the Bill of my hon. Friend the Member for the Elland Division (Mr. Trevelyan) for the taxation of ground values. How can they say that it is spoliation and confiscation to impose a halfpenny upon land values when they themselves were prepared to vote for a Bill which imposed a much heavier tax upon land values? What did that Bill propose?

It was a much more drastic one than this, which we put in the Budget. It was a proposal to value all the land of the Kingdom. No deduction was made in respect of the value created by enterprise, as we have done in the Budget. No deduction was made in respect of land which has been fully developed, as we have done in the Budget. All land was rated at its full value. What would have been charged upon it? Not a shilling, but the full rate, would have been charged upon it—in some cases 5s., 6s., and 10s. in the £, and yet there voted for that Bill four Gentleman who were members of the Ministry at the time, two of them Whips in the late Ministry, and one of them Whip at the present moment. I have heard that he has since voted steadily against all these taxes, which are much more moderate. Several hon. Members sitting behind him voted for that Bill. How on earth can they find it in their hearts to vote against the much milder propositions submitted by the Government in this Budget? I should like to hear an explanation. The only explanation we have had is from the hon. and learned Member for the Walton Division (Mr. F. E. Smith). The hon. and learned Gentleman tried to explain how it was that he had pledged himself to support the principle of land values. He voted against it in this House. It was part of his election address. And his explanation is that he did not object to the taxation of land values, but that he only objected to the objects to which the tax is to be applied. He wanted them used, not for pensions, but for municipal purposes. As long as the money went to gas and gutters the tax appealed to him, but when it was for pensions and "Dreadnoughts" and things of that kind, he could not find it in his heart to support the Bill. That is one of the most unsatisfactory and one of the lamest excuses that has ever been given in this House for a man not carrying out his pledges. The hon. and learned Member for West Derby (Mr. Watson Rutherford), one of the protagonists of this sort of tax, supported, and told for the Bill of my hon. Friend, and he made a strong speech for it. He said it was about time that the owners of these great ground values should contribute. He gave some very striking instances then, but in regard to our proposals he has criticised he has opposed; he has used his great knowledge to thwart and embarrass us, and he has never given us the slightest support. The very first time any effort has been made by any Government to put his principle into practical operation he devotes the whole of his knowledge and ability to making it impossible. All we have done is that we have just set up the principles we advocated in Opposition and embodied them in a Bill. So much for the Undeveloped Land Tax. Let us take the other tax which, I am told, smacks of Socialism—the Increment Tax.

It is rather remarkable, if the Increment Tax be considered Socialistic, that the economist who took the most leading part in advocating it was John Stuart Mill, who was certainly not a Socialist. What is the injustice of the Increment Tax? I will just give one or two illustrations, and then invite the House to take into contemplation and express an opinion in what respect it is unfair to charge Increment Tax.

Take the city of Sheffield. In one respect the town of Sheffield, under this Bill, has what is peculiar to a great town, but by no means peculiar to a rural district. A very large part of it is built upon land which was formerly common land, but which has been enclosed. There are 63,000 acres of common land enclosed within 12 miles of the parish church of Sheffield. A good deal of that land is now valued, and the best-known streets of Sheffield are built upon that common land. There is one enclosure award, a copy of which was sent to me the other day, which gives as the reason why the land should be enclosed that it was "incapable of improvement." So it was enclosed. It was advised that the landlords should take it over, and assume the burden upon themselves. I am not going to mention names, but I need hardly say there was a duke in it. What has happened to the land since—this land which was incapable of improvement? It has been improved. There are some very notable streets in Sheffield built upon it. Who made the value? Not those who took it over. The town of Sheffield grew on the industry and enterprise and energy of its inhabitants and its manufacturers. The population of Sheffield grew, and they wanted houses; they wanted not only houses, but they wanted shops and factories, and for shops, factories, and houses you want land. Then this enclosed land, this unimprovable land, became useful. Part of the prosperity of Sheffield is due to the expenditure out of Imperial funds of money for armaments and armour plates for ships. That has a bearing on its prosperity. All the money which was poured into Sheffield for the purpose of bringing work will have gradually gone into the enclosed land to help to improve its value, so that the Imperial Treasury has contributed something to the increment of that unimprovable land. What I ask is this, when the State is in need of money for armaments and for social needs, is it unfair to ask the owners of this property to contribute a share, and a substantial share, of all the further increment that accrues to them, not from their own efforts, not from their own exertions, not from any investments which they make, but purely from the growth of the community of Sheffield? I say it is a perfectly just and fair tax. I say more than that—I cannot conceive a more just tax, and I cannot conceive a more shabby opposition.

6.0 P.M.

Then I am told that they are the owners of this commons land and that the people reap the benefit from the growth and prosperity of Sheffield. That is a point that has been pressed more than once by the Leader of the Opposition, about there being no distinction between the increment which accrues to the landlord and the increment which accrues to other members of the community, and also by the hon. and learned Member for Edinburgh. That is a fair controversial point, and a point that ought to be met. Let us take that case, and it is far better to argue this not upon abstract principles but by reference to some concrete case. I take the Sheffield case. Hon. and right hon. Gentlemen opposite may say, Does not the tradesmen in those streets benefit by the growth and prosperity of Sheffield? Does not he reap some of the social value? Let me point out at any rate three very important distinctions between him and the land-owner. In the first place they do not start equal. If the tradesman had had a Parliament of grocers that voted to him his capital on the ground that nobody else could make any use of it, there might be something to say, just as the land was voted by a Parliament of landlords. But there is another distinction—the tradesman at any rate contributes by his enterprise, by his industry, and by his assiduity to that prosperity which enriches the community as a whole. The other point is this—the tradesman may have another trader starting next door, and who may take away the whole of his business. The more competition the trader has, the worse it is for him, but the more competition the landlord has, the better it is for him. If the trader has a number of rivals setting up in the same street, he has got to put down his prices. If the landlord has a number of people competing in the same street, he doubles his prices. That is a very essential difference. It is the fact that it is a pure monopoly that makes the real difficulty.

I will give another case. There is a town in South Wales where there are works of either steel or copper. [An HON. MEMBER: "Copper."] It does not very much matter for the purposes of this argument. They wanted a bit of ground for their rubbish; they took a lease of some slob land in the estuary, absolutely slab land covered by the tide, and, therefore, of no use. They paid for permission to tip rubbish into that swamp, and gradually hard, solid ground was formed. And now the landlord is letting that for building leases and getting from 30s. to £2 per house. Here is what I want to point out: In this case the landlord not merely does not develop, but he actually charges a price for allowing another person to develop. He not merely does not make this building land, but he charges the other person for permission to make it building land, and receives probably what runs to £20 or £30 per acre for that which was absolutely worthless, and which was really not land at all, and for land created by the energy and at the cost of others. Is it really unfair when an increment of that kind is created without any enterprise on the part of the landlord to say, "Here you have got to contribute something out of that to the expenditure of the State." I think that is a perfectly fair proposition. Put it as against what would happen if you did not raise the money by this means. The burden would necessarily be increased upon the shoulders of somebody else, probably the owners of those works might have paid their extra penny or twopence, and now I am not talking about the £70,000, but about the revenue when it matures. It would probably mean an extra twopence on the works, and is it not fair that the landlord should contribute out of his increment rather than that you should put an extra burden on the owners who have spent so much capital, energy, and enterprise, and have taken so much risk in developing the industry of the district. I simply mention those two or three cases. Everybody can multiply them from his own experience.

Let me come to mining royalty; and what happens in the case of mining royalty? There are a good many of those mines which were enclosed, and really it is not without its significance for anyone who reads the history of the Enclosure Acts that this occurred during the period of the Napoleonic wars, when a good many of the people interested in them were away. Take some of these cases. Sixpence per ton charged as royalties, and ground rents of from 30s. to £2 charged in respect of the houses, what does that mean? It means that the miner has got to make, that every miner in the country has got out of his labour every week to contribute 3s. 4d. to mining royalties. He has to find a house for himself, he pays 30s. ground rent, which is about 7d. per week, so that he pays 4s. per week for the right to labour and to live in his district. What I say is that when you are asking for money for the purposes of setting up a fund for pensions for those miners, and a sickness fund, and an unemployment fund, is it too much to ask that out of that 4s. which they contribute out of their wages, something which is not ½d. per week should be given by the landowners? Who says that that is unjust, who says that is robbery? I say that the man who objects to pay is a mean man. It is a small contribution to make when those men run such risks as we know they do. [HON. MEMBERS: "Oh, oh."] Why should hon. Members protest against that? Is it not an essential element, especially when you are providing a fund for sickness and invalidity. I do not think that any one who read the accounts of what happened last week has a right to protest, and I do not think any right-minded royalty owner, and I know royalty owners who take this view, and great royalty owners who take this view, and feel that it is a fair thing to ask them to contribute this halfpenny per week.

Those are the reasons for which I think it is a perfectly fair tax, but I am told "it is not merely for fiscal purposes you are imposing the tax; you have got subsidiary purposes." Does it lie in the mouths of Tariff Reformers to object to that? Their view is that their tariff is not for revenue—that it is for protection, that it is for industry. They do not recommend it on the ground of producing revenue; they recommend it on the ground that it will produce employment, and that it improves industry. [Mr. HUNT: "Both."] There is a direct simplicity about the hon. Member which is invaluable. They do it for both purposes, and therefore it does not lie in their mouths to complain if other people do the same. I do not deny for a moment that there are subsidiary purposes which will be served by the Land Taxes. I believe, and I am not alone in that opinion, as I will prove by-and-by, that they will have the effect of developing land—of opening up land. That has been the effect wherever they have been applied Take the testimony of New Zealand. This is what the Town Clerk of Wellington said about similar taxes there. The result of the first year's trial of this system is a very gratifying one. That which was claimed by its exponents has been amply fulfilled. It encourages improvement and stimulates the use of land, and secures the unearned increment to those who have added the values. It is only stating the fact— And I state this for those who say the building is affected— to say that much, if not all of the activity in building operations of the city and surroundings during the past year is due to the influence of this healthy measure. I think we shall be able to say the same thing about this measure. I have got testimony here which I am certain hon. and right hon. Gentlemen opposite will regard as quite unimpeachable. Before the last election speakers on the other side of the House had a valuable guide as to what they were to say. "A Handbook for Conservatives' Campaign Guide." I turned to the taxation of vacant land in this handbook for Unionist speakers, and I recommend it to hon. Gentlemen for the next election, whenever it comes. It is really so valuable that I do not like to leave anything out of it:— It is natural that the friends of the working and middle lower classes should desire for them, and that those classes should desire for themselves more room to live in, more commodious dwellings, and more air and sunshine and light around them, and more relief from the burden of house rent which probably in proportion to their incomes presses more heavily upon them than upon other classes of the community. That is a very useful preface. No policy could be more fatuous than to meet these aspirations, when moderately pressed, with a blank non possumus or with a cry of 'robbery.' I really think hon. Members have forgotten not only their pledges, but have also forgotten their arguments. A man may be quite justified as a matter of business to refuse in the meantime to let at a feu of £50 per acre land which he expects in a few years to let for a feu of £100. and to be content instead to let it for agricultural purposes at £3 per acre: but whether or not it is economically a sound policy, it is certainly not robbery to require him to make a contribution to the revenues of the community, on whose growth and prosperity he relies for the enhanced value of his property. …. It sounds like a Limehouse speech. Really, I must apologise for this amazing act of plagiarism on my part. to make a contribution to the revenues of the community upon a scale which shall bear some relation to the return he might have obtained, but prefers in the meantime to forego. This is not a paltry halfpenny. It is really substantial. My Bill is only petty larceny compared with this. This is making ground landlords walk the plank. But here is the point—on the question of subsidiary advantages:— The proposal is advocated, however, not only on account of the advantage to the rates, but also because of its tendency to bring building land into the market on reasonable terms. … They have got all the points. and thereby to encourage building, check overcrowding, and lower rents. Where is the damage to the building trade now? It seems not unlikely that the system, if otherwise practicable, might have such a tendency, though perhaps its operation would not be as extensive as it is supposed. That is the only qualification. This is an aspect of the question which should commend itself to the Unionist party. I am now going to make an appeal to the right hon. Member for South Dublin. He is at the head of a great league. I think after this he must burn his literature. All the robbery and spoliation leaflets are really not compatible with this. Let him honestly circulate this. It will help him. That is the case put by the Unionist handbook, by the guide, philosopher, and friend of every man who survived the last Election. They are perfectly right. It will undoubtedly encourage building, because it will discourage those operations which trammel building. The 10 per cent. Reversion Duty, the hon. Member for the West Derby division of Liverpool (Mr. Watson Rutherford) has admitted, will discourage the short leasehold system, which is the curse of building in this country. More than that. Everybody knows at the present moment it is not merely the difficulty of getting land, which is great enough; it is very often the stupidity, unintelligence, and prejudice of some individual, either land-owner or land agent, which locks up a whole community. I am certain every land-owner will admit in his heart that there is a good deal of that. The whole community has its prosperity shrivelled up by the stupidity of one man. But it is not merely that. A man prospers in a particular spot; his trade outgrows his premises; he has got to extend them; he cannot help it; but he cannot extend his business without extending his lease, without acquiring fresh land. He is entirely in the landlord's hand. I say that this 10 per cent. duty will discourage that. But, what is still more: there is a part of the taxes which has been very little dwelt upon. It is said that there is nothing new in the Bill. The 20 per cent. Increment Duty on death is new. That is my patent. For the first time it has been imposed in either this or any other country; and I have great hopes of it, because the moment these extortionate prices are demanded from individual traders and manufacturers in respect of land, there will always be a fear that if you charge specifically in respect of one building in a row, you may escape selling, you may escape leasing, but you must part with your property one day, and the valuation for the whole row will be adjudicated according to the demand which you yourself have made. I claim for this Budget that by it we have provided revenue, ample and adequate, for objects which make for the security of the State and the well-being of its people. We have done it by means which, by discouraging, and, I believe, eventually destroying the trammels that burden industry and trade at the present time, will do great things for the enrichment not merely of one class but of all classes of the community.

Lord ROBERT CECIL

The Chancellor of the Exchequer began his speech with a compliment to my right hon. Friend the Member for East Worcestershire which I feel the whole House will agree was thoroughly well deserved. I trust he will not think me guilty of tu quoque compliments if I express, at any rate on my own behalf, a great sense of the courtesy, courage, and, may I add, physical endurance which the right hon. Gentleman has shown throughout these Debates. I have some personal reason for knowing with what great tact and self-command the right hon. Gentleman can deal with a somewhat difficult situation. He began his speech by saying that no one now questions that we require £16,000,000 additional revenue. I am not aware that anyone ever did question that particular statement. He went on to say that no one doubts, either, that the amount will swell, and he proceeded to give his reasons for thinking that a very large addition to the revenue would be required next year. No one doubts, I suppose, that there will be causes largely increasing the expenditure next year. I, at any rate, do not quarrel with any of the causes which the right hon. Gentleman has assigned. But what are we to say about all the pledges of economy with which the party opposite deluged the country before the last election? It is quite true that no one can claim that they are going to spend an additional sum on "Dreadnoughts." I certainly do not complain of the contributory pensions among the purposes which the right hon. Gentleman indicated. But the party opposite led the country to believe that important economies in other branches of the public service were both possible, and would be carried out by the party now in power. I think the country has some right to complain that all those pledges have turned out to be absolutely fallacious, and that precisely the same amount or more is being spent in all the other branches of the public service that were being spent by the late Government. The right hon. Gentleman went on to ask what contribution the Opposition had made during these Debates to the finding of this £16,000,000. I do not myself think that it is the duty of an Opposition to find money for the Government of the day. I observe that almost every speaker on the other side has occupied much time in criticising what he conceives to be the Budget of the next Unionist Government. I admire their energy and vigour; but, for my part, I think one Budget is quite enough to deal with at a time. Sufficient for the day is the evil thereof.

The right hon. Gentleman was very indignant at the suggestion that his taxes were not proper taxes to be included in a Finance Bill because they had subsidiary purposes. I do not think that that charge has ever been made against the right hon. Gentleman's taxes. I do not believe that any tax has ever been imposed which had not some subsidiary reason for its existence. That is not the charge against these taxes. The charge is, and I think it can be made out, that these taxes, or some of them, are not imposed genuinely for the purpose of raising money, but mainly for other purposes; and, in the second place, that those other purposes could have been achieved as well or better by legislation of a different character. I am not going through all the taxes, but may I refer to one or two? Take, for instance, the Spirit Duties, the financial effect of which is now admitted to be the reverse of what a tax should be. That is to say, so far from the increased tax bringing in more, it will actually bring in less than it did when it was lower. Therefore, from the financial point of view, nothing can be said in justification of that tax. But it is justified on the ground that it has reduced the spirit revenue by 20 per cent. The right hon. Member for the Rushcliffe Division (Mr. Ellis) yesterday regarded that as a complete justification. How far do hon. Gentlemen opposite think that that ought to go? Would a tax be justifiable which reduced the spirit revenue by 100 per cent? There surely must be a limit.

Mr. LLOYD-GEORGE

Did I understand the Noble Lord to say that the Spirit Duties bring in less than they did before? That is not the case.

Lord R. CECIL

The amount is less than would have been produced if a more moderate tax had been imposed. I understood him to say distinctly—well, perhaps I am not putting it quite right—but what I think he said was this: "It is quite true that we do get little extra revenue, and it is at the cost of a very much lower consumption, and lower than it would have been but for the tax. And the yield of the tax is going down instead of up." That is what I understood him to say. At any rate, the yield is so far from his own estimate that it has not even achieved half the estimate which he gave. I do not, however, think there is any real dispute between us as to the point I am desiring to make. But what I wanted to ask hon. Gentlemen opposite, who regard this reduction in whisky consumption as a good thing, is how far do they propose to go? Would it be right or desirable to put a tax on which would destroy not 20 per cent., but 100 per cent. of whisky-drinking? I ask hon. Gentlemen opposite to consider that carefully. The evil that this tax will do is absolutely certain. It is going to throw a large number of people out of employment. It is going to dislocate a great trade. It is going to inflict hardship upon a number of people who are at present earning their living in a perfectly proper and legitimate way. What is the benefit to be set against it? Is it said that you are going to cure drunkards? That is possible, of course. But is it really said that there is a large number of people who are capable of disregarding all the teaching of morality and decency, who are prepared to break up their homes and squander their gold, but who will abstain from this disgusting habit because they have to pay one halfpenny more for a glass of whisky? Such men may exist, but for my part I doubt very much that there are many of them. The real truth is that the vast amount of reduction in drinking will be due, not to people who drink to excess, but to people who drink to moderation, and who have a perfect right to drink alcohol in that or any other way. Your tax, which is going to be financially unsuccessful, is, I am convinced, going to be equally unsuccessful socially. Turn to the Licence Duties and the case is even stronger. It is quite true the Chancellor of the Exchequer said, "Oh, I am not going to do very much. I am only going to apply the same scale to a higher grade of licences that already applies to a lower." But what is the effect of that? That is the point you have to consider in these taxes. Is the tax really going to produce revenue without doing injury, or is it in fact imposed with the object of destroying the trade of certain persons by means of a fiscal weapon—trade which you tried and failed to destroy last year by a different weapon. If that is the object, and if that is the effect of these taxes, I say distinctly that is not legitimate finance. The right hon. Gentleman is mistaken in saying that this is a case of a merely subsidiary object of a proper fiscal tax. It is a case of tax which is not a fiscal tax at all, but imposed for objects wholly different and wholly divorced from fiscal reasons. The right hon. Gentleman said truly, I think, that a great deal of time has been spent in the discussion of the Land Clauses. I am not going to spend a great deal of time this afternoon in discussing them. But will anyone really maintain that the Land Clauses are imposed for fiscal reasons? We have heard again, in eloquent terms of the land-owners and the mine-owners who have refused a copper towards the relief of the poverty-stricken workman on their estates. That presupposes that these land-owners are really going to make no important contribution to the Pensions Fund. Will anyone really maintain that? It is not even suggested that they are going this year to make any important contribution. What information has been given to us by the Government; what calculation has been put before the House of Commons showing what will be the effect of these taxes next year? Such calculations must exist. The Government must have known that they are really Budgeting, not for one year, but for two years, and must have some calculations showing what is to be the effect of these taxes next year. Not a word of information has been given to the House of Commons upon the subject. I altogether dispute that these taxes have been imposed for the purpose of raising money. I believe myself that the great central object of these taxes is to obtain the valuation of the land. I believe that if you were to get into a room with any of the hon. Gentlemen who are called land taxers, privately, and without reporters being present, and asked them why they are supporting these particular taxes, that they would admit that they do not care about the Increment Duty, not much for the Development Duty, and as for the Mineral Bights Duty it had no interest for them, but that the thing they valued were the provisions for the valuation of the land. Why is this valuation wanted? The right hon. Gentleman the Chancellor of the Exchequer deals with these subjects in a very different tone in this House to what he adopts in the country. Here we have had it that the whole of the reasons that these taxes have been chosen is fiscal, that he has no ulterior objects at all, except, perhaps, forcing land into the market. Nobody will maintain that the Increment Duty is going to have any effect in forcing land into the market. It will have the opposite effect, because every time a man sells land at a profit he will have to pay a portion of the price to the State. There will be the one-fifth less inducement than before for him to sell. It is quite true that there is a counterbalance provided, and that there will be some inducement in the Undeveloped Land Duty to bring the land into the market, but that will operate only once. After that it will have no effect whatever. But I do not wish to be diverted from what I was desirous of saying.

When the right hon. Gentleman speaks in the country he does not represent for a moment that the main object of these taxes is even to force land into the market. In his speech at Newcastle he discussed this very question of valuation, and this is what he said:— Why did they (the land-owners) object to valuation? Because it does go to the very root of the land question. There has never been a public undertaking in this country, a municipal or State industry—there has never been a commercial enterprise in which the landowner has not cleared from 4 to 40 times the agricultural price of the land. Then, after a little dicussion of other matters, the right hon. Gentleman went on to say:— They (I think the municipalities) have had to pay for every yard of land they needed, often 50 times its real value. That is really why they (the land-owners) object to valuation. I did not believe it was possible to pack into so many sentences so many inaccurate and misleading statements. I do not believe for a moment that the right hon. Gentleman can justify the statement that ordinarily land has been sold from 4 to 40 times its agricultural value. I know something of the price of land which is bought compulsorily, and I say that the statement that ordinarily that price is from 4 to 40 times is a gross exaggeration. And that statement is capped by the further one that oftentimes it is 50 times, not its agricultural, but its real value, which is a monstrous statement for a Minister of the Crown to make. I want to deal with this, if I may, because I observed that an hon. Gentleman who made an interesting maiden speech yesterday repeated that statement in this House. What is this talk about this excessive value which land-owners obtain? I cannot imagine what is meant; what is its reality. What are the provisions of this terrible Land Clauses Act which are supposed to be such an instrument of oppression? They are as simple as possible. They merely provide, when land is taken compulsorily, that compensation shall be paid. The enacting, the important, phrase is compensation pure and simple—nothing else. Very well, is that unfair? Why should that lead to excessive prices? It is said that the land-owner comes with an army of experts and bamboozles the tribunal to obtain an excessive price. Who is he facing? He is facing the great railway companies and the great municipalities. Does the right hon. Gentleman seriously think that they do not provide themselves with experts also? Of course they do, and if any slip is made—as a matter of fact those who attend arbitrations know that the companies are exceedingly well served in this respect—and if any slip is made by the expert adviser of the land-owner it is instantly detected and exposed by the advisers of the railway company. What about this tribunal? It is either an impartial arbitrator or it is a jury of our fellow-countrymen chosen in the ordinary way of juries. It is perfectly preposterous to say that under a law of that kind, worked by a tribunal of that kind, that common land—as a general rule—comes to 50 times its real value. Let me recommend to the right hon. Gentleman the moderation of his colleague, the Lord Advocate. This is what he said last night:— 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. Then he says—only what one would expect from an experienced lawyer:— 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. I wish just to press this matter a little way further. What difference is the valuation of the right hon. Gentleman going to make as he proposes it in this Bill? I say it will make no difference at all. What is it going to do with the value of land "as from April, 1909"? That may be some little guide to the tribunal for the next two or three years. In a few years' time it will have no relevance at all. How is it going to affect this matter at all? I venture to submit to the House that it is perfectly evident that that is altogether an insufficient explanation for the great desire for this valuation. I think that the object is a wholly different one, and appears from later passages in the right hon. Gentleman's speech, and in a recent letter which he has written to "The Nation." Towards the end of his speech we come to this passage:— He accused his audience of having too great sympathy with landlords. I suppose that is a rhetorical accusation. He said:— I thought from your patience that you must have been angels, but I see you have got just the same sort of feeling. You may say to us, Why do you stand them? Because you force us to stand them. We would have got rid of them long ago. When a Celt has a nail in his boot——". And here, I think, the right hon. Gentleman must have been alluding to himself— he takes it out, but you have been marching on until there is a sore. Have it out! Then he concludes, in the course of his peroration, by asking who made 10,000 people the owners of the soil and the rest of us trespassers upon it? [HON. MEMBERS: "Hear, hear."] Yes, I quite understand those cheers from hon. Members below the Gangway. I shall have occasion to prove that the right hon. Gentleman's supposed plagiarism is not the only plagiarism he committed. There is still another passage in the right hon. Gentleman's utterances that I desire to read to the House. In his letter to "The Nation" he says this—and this, I think, really explains the whole object and purpose of the valuation:— The Budget campaign must be the beginning and not the end of Liberal effort in land revenue. The new State valuation must be the basis for all plans of communal purchase. On this basis municipalities ought to buy the land which is essential to the development of their towns, and the State could also buy up land necessary to the policy of recreating rural life in Britain. I think that makes it clear what the right hon. Gentleman's policy is. He proposes not to have this valuation, but to have a series of valuations. He proposes to put taxes upon this particular form of property until he has reduced his value to a certain point, and then he proposes to buy it for the purposes of the State. That may be right or wrong as a policy, but is it unfair to say that these provisions are illegitimate finance, and that they are Socialism? I promised the right hon. Gentleman that I would direct his attention to one other quotation, not from himself. This is the quotation that I desire to read, and I feel bound to explain, lest I should be misunderstood, that it is not from any of the right hon. Gentleman's speeches:— The private ownership of land enables the pro prietary classes to take in the form of rent interest and profit, enormous sums for permission to use the earth. The purpose of Socialism is to transfer land to the people. There are two ways in which, simultaneously, this object may be carried out. The one way is, by the municipal and national appropriation (which such compensation to the existing owners as the community may think fit to give) of the land and industrial concerns. To the extent to which public ownership of land and capital exists will the private appropriation of vent and profit be stopped, and money be available for purposes of public utility. The second method is by taxation. Taxation has its special sphere of usefulness in helping the community to secure some part of its own by diverting into the national purse portions of the rent, interest and profit which now go to keep an idle class in luxury at the expense of the industrious poor. That is a quotation from the hon. Member for Blackburn's work on the Socialistic Budget, and I venture to think that in the next speech the right hon. Gentleman makes he might adopt it in full, and without any qualification. Now, the right hon. Gentleman says in answer to all that, "You Tories made speeches yourselves on land values." Yes, I quite agree, I do not think I myself have ever done so, but I quite agree that a large number of hon. Gentlemen of Conservative opinions have pledged themselves to the taxation of land value. But what for? As a substitution for our existing system of rating which is a perfectly easy and rational proposition. You have already the principle that land contributes to the local rates, and the question is whether the rates should be levied upon the improved value or upon the site value. That is a fair subject of discussion, and I do not think anyone would suggest that the alterations from improved value to site value is Socialism or any extravagant or novel proposition. It is quite a different thing when you come to putting on additional burdens with additional provisions, and when responsible Ministers go about the country explaining that this is only the first step in a policy of land nationalisation, then we have a right to say that whatever the application on which this provision must be otherwise recommended, they are recommended to the accompaniment of Socialism.

My hon. and learned Friend the Member for one of the Divisions of Edinburgh (Mr. Clyde), in a very interesting speech he made a day or two ago, stated that in his view the fixing of communal value was a proposal of a Socialistic character. I agree entirely with that. There is no doubt that that proposal to tax communal value, State created value, is the root proposal which modern Socialists make. That is the first thing he says. There are other passages in the book of the hon. Member for Blackburn that would make that perfectly clear, and the difficulty is to distinguish between what is State created and what is not. The hon. Member and others make this proposal to tax a particular figure, and they say anything beyond that should be treated as State created and subject to appropriation. That is precisely the object which the right hon. Gentleman the Chancellor of the Exchequer uses in all his speeches in the country. What is the significant argument that he addresses to popular audiences? He draws a picture of a very rich man, sometimes he names him, sometimes he does not, and he tries to excite by well-known rhetorical phrases the cupidity of his hearers, and then he says, "Can you tolerate that this very rich man should not make some contribution to the needs of his poorer fellows?" That is exactly the Socialistic argument. That is the proposition that when you get beyond a certain sum of money, particularly if it comes to the owner in a certain way, it should belong to the State, and not to the individual. He tried already in his speech about Sheffield to show that the owner of Sheffield obtained an Enclosure Act because it enabled him to appeal to a Parliament of land-owners instead of a Parliament of grocers. I do not know whether the right hon. Gentleman is aware that the enclosure of commons which we now from our own point of view deplore was regarded at that date at which it was done as the last word of Radical enlightenment.

There is a most eloquent passage in the writings of Jeremy Bentham, in which he points to the enclosure of commons as the great sign of progressive Radicalism. I quite agree none of us would take that view now, but when you are accusing even dukes of scandalous appropriation of common land you should remember that the dukes were acting at the behest and by the instruction of the Radical party of the day, and then the right hon. Gentleman says that they did this because the defenders of the commons were away at the Napoleonic wars fighting for their country. I think the right hon. Gentleman must have thought for the moment that he was on a public platform. Our contention is not that there is anything particularly iniquitous in taxing increment by itself; that is not the contention I am on for the moment, but that it is wrong to select one particular kind of property and tax the increment on that.

Take the ordinary shares and values, and it is an exceedingly good instance, the share values of a gas company. I know a gas company, and many of us know it whose shares have gone up until they are now worth three or four times their original issue value, and have so improved in quite a short time. The whole of that is communal value. Every halfpenny of it arose from the growth of the town and the aggregation of population. Yet that property is not to be taxed, but the landowner and the land-owner alone is to be taxed. [An HON. MEMBER: "That will come."] The hon. Member for Blackfriars says that that will come next. Well, I should like to hear what the right hon. Gentleman the Member for Northwich (Sir John Brunner) thinks of that observation. What is the answer which the right hon. Gentleman the Chancellor of the Exchequer makes in his speech to this kind of criticism? He says, "How can we be dangerous and Socialistic? Look at the rich people who are supporting us. Why, the richest men in the House of Commons sit upon the Liberal side of the House." Yes, Sir, but are they the rich men that are going to be taxed by this Budget? We have heard a great deal of the advocacy of the right hon. Baronet the Member for Northwich and of the hon. Gentleman the Member for Hartlepool (Sir C. Furness), but we should value their advocacy a good deal more if there was to be a special tax put upon the manufacturer of chemicals and the building of ships. But since such taxes are not going to be put on that kind of property, that kind of generosity does not fill me with admiration. The right hon. Gentleman concluded a very eloquent passage by talking of dukes and people of that kind as offering a very shabby opposition to the Budget. In my judgment you may have a shabby support of the Budget just as much as you have shabby opposition.

Mr. LLOYD-GEORGE

May I point out to the Noble Lord when he alludes to the support of the hon. Baronet the Member for Northwich and the hon. Member for Hartlepool that the hon Member for Hartlepool is a very considerable land-owner?

Lord ROBERT CECIL

I have not the least wish to go into matters of that kind, and I withdraw everything I said about the hon. Member for Hartlepool, but it is a striking fact that a certain number of rich people supporting the right hon. Gentleman will not be hit by this Budget. A good many hon. Members who disagree with the views I have ventured to put forward may say that in saying all this you are not dealing with the Budget itself. We are dealing with the policy of the Government, and with the words of the speeches of its Leaders, which are just as important in this matter, or very nearly so, as the contents of the Bill itself. The danger of this kind of legislation, the matter which is worthy of the consideration of the House of Commons is not whether this or that land-owner is going to be injured, I do not think, and I say quite frankly, that these things are going to be of any great importance to any land-owner in his private pocket. It is not because I desire to save the pockets of the land-owners that I oppose this Budget. I do say that the danger of these novel propositions and the danger of the arguments by which they are defended is not the actual injury done to individuals, but the shaking that such proceedings give to the whole credit and confidence of the country. If we are not entitled to look to the Chancellor of the Exchequer as the authorised exponent of the policy of this Budget to whom are we to look? We are sometimes asked by the more moderate men on the other side of the House to have confidence in the moderation of the Prime Minister and the statesmanship of the Foreign Secretary. I quite agree there is much to admire in the qualities of both those right hon. Gentlemen, but will they come here and say they disagree with the Chancellor of the Exchequer? Will they repudiate his policy as set forth at Newcastle and Limehouse? Will they reject this new-fangled theory that you are to tax people not according to their means, but according to the means by which their wealth has been acquired? If they will not do that, then the polciy of the Chancellor of the Exchequer is what we have to oppose, and I shall vote with a very clear conscience against the third reading of this Bill.

Mr. ARTHUR HENDERSON

I intervene at this stage of the Debate in order to give one or two more reasons why we on these benches propose to give a warm and united support to the third reading of this measure. Having followed, as far as I possibly could, the course of the Debate, one thing has struck me very forcibly, and that is the wonderful degree of unanimity which prevails regarding the objects for which this extra taxation has to be raised. I think most hon. Members will admit that this has really been one of the features of the Debate. I do not think I have heard a single criticism of the objects for which the Chancellor of the Exchequer is endeavouring to raise extra taxation. That being so, what, I should like to ask, is the real position of those who are opposing the Bill. It seems to me that the attitude its opponents take up is this: They say, "We are in favour of the expenditure upon the Navy, and approve of maintaining the supremacy of the seas. Our only objection is that the Chancellor of the Exchequer does not propose to spend more money for that purpose." In regard to old age pensions, the Opposition says, "Oh, yes, we agree that we refused our support to the Old Age Pensions Bill when it was before this House, but we have now decided to abandon all opposition," and I do not think I am going too far if I say that they do not include any longer in their programme a contributory instead of a non-contributory scheme. I sincerely hope I am right in that interpretation. If I am not right the sooner this House and the country knows it the better. Am I to understand that should hon. Gentlemen above the Gangway get the opportunity they will change the present scheme, and place it upon a contributory instead of a non-contributory basis? They also say they are in favour of national development, and the improvement of the main roads. These two objects they proclaim as both being worthy, but they put in the proviso that they hope under the Development Bill matters will not be carried too far. I rejoice to notice that there is almost complete unanimity in regard to the proposed expenditure on Labour Exchanges and insurance against unemployment. Almost everybody now is desirous of helping, and, if possible, finding relief for the vast army of unemployed workmen and workwomen in this country. On this point I think I ought to do right hon. Gentlemen and hon. Gentlemen above the Gangway the credit of saying that they have an entirely different way of dealing with this acute social problem of unemployment, and they profess to have a better and more effective way than that which is included in the Budget scheme of the Government. I do not know that I should be doing them any injustice if I state that they claim to have a scheme that will provide two jobs for every workman.

If there is this general agreement, where does the objection come in? So far as I have been able to gather from the Debate, the objection to the spending of the money is centred solely upon one point. They proclaim that the Chancellor of the Exchequer is going to spend too much of the money of the State for the purpose of valuing the land of private owners. I have noticed that this objection has been very much emphasised throughout the Debate. We all admit that £2,000,000 is a large sum of money. I would like, however, to ask why this expenditure of £2,000,000 should should not be looked upon just as such expenditure would be looked upon in other businesses? Why should we not ask ourselves, in these days of great companies and great concerns, whether, after all, the spending of £2,000,000 in securing accurate information as to the present value of the land of this country is not going to be one of the most profitable investments that has ever been made on behalf of the people of the country? It appears to me that, though it is costly in the end, it will provide an excellent return to the Exchequer, and a return which will be for the benefit of the people of this country. I do not think I shall be going too far if I say that it appears to me that all objection to the valuation proposals of the Government on the part of the landlords is because they know full well that once the accurate value of the land is obtained then they will be compelled to contribute as they have not yet contributed towards the public funds and the public upkeep of this country. If there is this general agreement in regard to the spending of the money, what are the serious objections that are being constantly urged to the proposals contained in the Budget?

The first objection I have to deal with is one that has just been referred to by the Noble Lord the Member for Marylebone and other speakers, and especially by those sitting on the Front Opposition Bench. It is one which has done excellent service on the platform of the opponents of this measure, and one which, I suppose, we may hope to have dished up morning, afternoon, and night in the event of this question having to be finally settled by an appeal to the electorate of this country—I refer to the objection that this Budget is Socialistic. The Leader of the Opposition, in his Birmingham speech, declared that the Budget is undoubtedly a development in the direction of Socialistic revolution. I have thought this matter over, and I have put it to myself in this way: I wonder whether, after all, the opponents of the Budget, who are constantly making these statements in regard to Socialism, have asked themselves where the constant reiteration of this statement is going to land them? I remember being in this House when the right hon. Gentleman the Member for South Dublin (Mr. Walter Long) was responsible for the introduction of what, I believe I am right in saying, was the first Unemployed Workmen's Bill ever introduced into our modern Parliament. I remember how that Bill was received; I remember how serious attempts were made by supporters of the then Government to weaken and militate that measure. Who were the strongest supporters of that Bill?

I do not think it will be denied by the present Leader of the Opposition, who was then Prime Minister, that the strongest supporters of that measure, from the moment it was introduced to the moment it passed on to the Statute Book, were the Labour Members in the House at that time. I will go further and say that the strongest of all the supporters of that measure was the hon. Member for Merthyr Tydvil, whose Socialism is never hid under a bushel. I think the hon. Member is always putting his Socialism in the very forefront, whether in this House or upon the public platform.

What I want to ask hon. Members above the Gangway is this: why because the hon. Member for Blackburn supports the Budget should it be described as Socialistic? I might just as well say that because the hon. Member for Merthyr Tydvil gave his determined support to the Unemployed Workmen Bill introduced by right hon. Gentlemen above the Gangway when in office, we are justified in saying by the same method of reasoning that that measure undoubtedly was Socialistic. I venture to say that the Leader of the Opposition or the right hon. Gentleman the Member for South Dublin, who was responsible for the shaping of that measure, would both be ready to deny that it was either Socialism or Socialistic. This point appears to me to be so important that I will venture to take it a stage further. The right hon. Gentleman the Leader of the Opposition, when in office, appointed a Commission to inquire into the administration of the Poor Law. That Commission, after very prolonged investigation, has at last reported. There is a good deal of public agitation going on in the country in favour of something being done to drastically reform our present Poor Law system. Supposing, for a moment, that by the swing of the pendulum the present Opposition are returned to power. Supposing that after the election, which we are told is pretty near at hand, we find hon. Gentlemen above the Gangway sitting on the Benches opposite and the Labour party is here, if not in its present state in increased numbers. I venture to say that one of the first things we shall demand from any Government that is in power after the next General Election is some measure for adequately dealing with the question of the Poor Law system on lines, I hope, of the Minority Report. Supposing the right hon. Gentleman the Leader of the Opposition makes himself responsible for a measure reform- ing the Poor Law, and supposing that measure gets the whole-hearted support of the Labour party, I make bold to say that my right hon. Friend the Chancellor of the Exchequer and some of his colleagues on the present Government Bench will be supplied with splendid material for going on every platform in the country and for using their opportunities in this House to declare that that measure is Socialism and Socialistic merely because the Labour party, including within its ranks, as I hope it will, the present Members for Blackburn and Merthyr Tydvil, are giving it their enthusiastic support. They want much surer ground for describing any of the proposals of the Budget as Socialism. It is most unsatisfactory that they should merely do so because certain Members on these benches are giving those proposals their whole-hearted support. The hon. Member for Blackburn, as I have already said, has been brought very prominently into this question. What has he told the House? I think he told the House on the first day of the Debate that the most Socialistic proposal in the Budget was the Super-tax. Am I right in concluding from statements made by the right hon. Gentleman the Leader of the Opposition in previous stages of this Debate that he leans most, of all the proposals, to this Super-tax. If that is so, and there is agreement between the Leader of the Opposition and the hon. Member for Blackburn, then on this reasoning they must both be pronounced as being in favour of one of the Socialist proposals contained in the Budget.

I want to pass on and to notice other objections that have been persistently raised to the Budget. One of the most formidable objections is that the Chancellor of the Exchequer has selected certain forms of property for special and unfair treatment. The speakers who take this line have, I think, usually declared their objection to the Land Taxes and the increased Licensed Duties. We cannot consider the Chancellor's method of raising his new taxation without some regard to the method that has obtained in the past, and to the proposals which past Chancellors have put into operation for the purpose of raising taxation. There have been two methods adopted. Some of our taxation has been raised by taxes levied directly or upon property, and some of it has been raised by indirect processes of taxation in the shape of Customs and Excise duties upon many necessaries of life. I find that under the present scheme we are going to raise £6,700,000 by indirect processes and £7,500,000 by direct taxation. All who have given any thought to this question of taxation and the method by which our taxes have been raised must agree that all past Chancellors have levied more than a proper share upon the poorest of the poor and upon those least capable of bearing the burden imposed. One point that has commended this Budget so strongly to many of us on these benches is the fact that the Chancellor is at last altering the proportion and is now proceeding to levy a larger amount by the direct method, thus correspondingly reducing the amount of taxation levied upon those who are least capable of paying it. We are still far from satisfied. We still hold that the poorest of the poor, according to their means, axe compelled to pay a much larger share than they ought to be asked to pay. It is, however, satisfactory to us—and for this purpose we are supporting the Chancellor—that a change is beginning to operate, and I hope that future Chancellors will see their way to still lessen the proportion of indirect taxation, and make the whole more in harmony with the ability of the tax-payer to contribute towards the nation's revenue. The right hon. Gentleman the Member for East Worcestershire (Mr. Austen Chamberlain), in moving the rejection of this Budget, seemed to me to lay down one of the correct canons of taxation, but no sooner had he done so then he laid down another, which, in my judgment, cannot be sufficiently emphasised before this House and the country. He said that the rich should be made to bear their share according to their wealth, but no sooner had he said so than he proceeded to say, "let the poor pay according to their necessity."

Mr. H. W. FORSTER

He corrected himself and said "means."

Mr. HENDERSON

I do not object to the interruption of the hon. Gentleman. I am quoting from the OFFICIAL REPORT, and I see no correction whatever. I think I am perfectly justified in saying the right hon. Gentleman said, "Let the rich bear their share, and pay according to their wealth, and let the poor pay according to their necessity." That is the very distinct sentence which I quoted before, and which I think cannot be called into question. Is this the fiscal formula of Members above the Gangway? Am I to understand that the poor are going to be asked to pay ac- cording to their necessities? This is what we have been protesting against ever since we entered Parliament. Nobody, who has studied the process of indirect taxation can have any other opinion than, if you levy according to necessity you will be imposing a very severe punishment upon the workman. We all know that the necessities of the married man with a family dependent upon him, with six, and it may be eight, mouths to feed, compared with the necessities of the single man are something like eight times greater, and, according to his necessities, he has got to pay. I have heard no explanation of this point. It struck many of us on these benches with a great deal of surprise when it was made, and I hope, if I am wrong, we shall in later stages of the Debate have an interruption or an explanation from the right hon. Member for East Worcestershire that will remove the conclusions to which I have arrived. In our judgment the poor have been far too long called upon to pay according to their necessities. We are told, and I think we have been told in the Debate to-day, that the Land Taxes and the Licence Duties are levied in a manner that is altogether unfair. Nothing has surprised me more during the whole of the Budget discussion than the opposition to the land proposals of the Chancellor. I happened, three years before the last General Election, to be a Member of this House, and I think I am right in saying that every year, either by Motion or by a Private Member's Bill, the principle of Land Taxes was discussed and voted upon in this House. I think I am right in saying that I followed into the Lobby the Member for Liverpool, who was one of the tellers, in favour of the very principle that the Chancellor of the Exchequer has included in his scheme, and which, as he rightly pointed out in his most interesting speech this afternoon, was voted upon as well as debated several times in this House before the last General Election. What is more, I think I am right in saying that nearly the whole of our great municipalities have sent Petitions time and time again to this House asking that some of the socially-created wealth in connection with land and some of the value created by the community itself should be secured for public purposes.

Mr. G. RENWICK

For local purposes.

Mr. HENDERSON

I thank the hon. Member for that interruption. He says "for local purposes." I rejoice to think the Chancellor of the Exchequer has recognised the claims of the local authorities, but that is not the point. My point is that, if right hon. and hon. Gentlemen above the Gangway voted for the principle in the old Parliament, and thus led the electors in their constituency to conclude they would be loyal to that vote in the event of their being returned again, we have a right to complain that they are departing from that vote and the impression created in the constituency by refusing to vote now for the very same principle. I think the Noble Lord, in dealing with the land question, complained of the statement of the Chancellor of the Exchequer as to the charges which landlords are supposed to make. Sheffield has entered very largely into this Debate this afternoon. I believe I am right in saying that the great community within the area of Sheffield have done much, by the expenditure of their rates, to improve the condition of that important city. They have laid down what, in my judgment, is one of the finest electric tramway systems to be found in this country. What was their experience? They want a piece of land for the purposes of their tramway system, which is to serve the whole community, and the noble duke who is the great landowner in that city charged them a ground rent for the land upon which car sheds were erected working out for 250 years at £363 per year. I venture to say, if any one capitalises that figure he will admit at once that the charge, especially having regard to the fact that the community have created the value, is one which no municipal authority ought to be asked to pay. If landlords are permitted to make such charges then we hold it is not at all unfair that they should be asked to give some contribution towards the State. I am delighted to think that the Chancellor of the Exchequer has been bold enough to attack this monopoly, even in the moderate form he has done, and I hope the community will thereby be the gainers.

A word about the Licence Duties. I think there is something of the same principle there, as the Chancellor of the Exchequer is trying to get back for the community some of the monopoly value. This point was discussed pretty freely on the Bill of 1904, as well as on the Licensing Bill of last year. On the Bill of 1904—the present Act—the Leader of the Opposition always asserted, in regard to new licences, that it was right the State should resume its claim for some of the monopoly value. The Chancellor of the Exchequer seems to have followed this principle up. He is asking for a return to the State and the community of some of the value it has itself created by setting up this monopoly in the holding of licences for the sale of liquor. I have no hesitation in saying, on this point, we have had to wait far too long before the State has attempted to get some of its own back in regard to this question. As long ago as 1879 a Select Committee of the House of Lords—and I hope another place will not forget this if they do discuss the Licence Duties when this Bill reaches them—a Select Committee on Intemperance recommended that there should be a considerable increase in the Licence Duties, and, reviewing past legislation, added that:— The effect of this legislation has been largely to raise the value of these properties, and it would seem just that the public should receive a greater proportion than hitherto of the profits of a monoply thus artificially created. I do not know that that is not as good a quotation as the one we had given us from the Unionist hand-book by the Chancellor of the Exchequer. I should like to give another quotation in order to bring this matter right home, especially to hon. Gentlemen who sit above the Gangway. I am going to quote the words of a previous Chancellor of the Exchequer (Lord St. Aldwyn), speaking as recently as 1903. The quotation is rather long, but I trust the House will bear with me, as it is, in my judgment, so apropos of the point raised:— He knew something of the Licence Duties for the sale of intoxicating liquors. There were very many of them. There were many anomalies and inequalities in them, and he thought, the simplification of all of them would be a great advantage to the public and to those in the trade. He thought that that simplification might be also accompanied by an increased revenue from them. He would deal simply that night with the publican's licence, which was only a part of the whole, though a large part. They knew that if a little public-house in a village was rated at no more than £10 a year, it would have a Licence Duty of £4 10s., nearly half its rateable value; while a house rated at between £40 and £50, would have to pay a licence of £20. They would then see how the total went up. A public-house rated at a little under £100 would only have to pay £26, and it increased £5 for every £100 rateable value, and when they got to £700 the increase stopped altogether. The public-house might be worth thousands a year, as some of them were, and yet they paid no more than £60 a year in Licence Duty, while the little house with a rental of £10 a year paid £4 10s. He did not think that was fair, and there was something else which was still less fair. They knew that the great, hotels and the great theatres and music-halls had no more than £20 a year to pay for their Licence Duty, notwithstanding their enormous rent and the enormous amount of liquor that was consumed in them, while in restaurants, where the consumption of liquor was also great, the licence would be not more than £30 a year. That is a quotation from the words of an ex-Chancellor of the Exchequer, which, an my opinion, fully substantiates every- thing that the Chancellor of the Exchequer has said in regard to the smallest of the Licence Duties, and the justice of the proposition which he is making in connection with his new Budget. We on these Benches, notwithstanding all that has been said, believe that the increased Licence Duties are fair, just, and equitable. In our opinion this Budget, coupled with the Development Bill as it left this House—and I want to emphasise that point—the Development Bill as it left this House—will make largely for social betterment and economic freedom. We believe, further, in spite of all that has been said above the Gangway, that the adoption of the Budget will facilitate employment and will lessen the amount of unemployment which we are all complaining of. We believe also, as I have already said, it will adjust taxation more to the ability of those who are compelled to pay.

In conclusion, I should like to say one word—I think it is my duty to do so—in regard to the alternative that we have been asked by the Mover of the Motion for the rejection of this Bill to accept. Towards the close of his speech the right hon. Gentleman appealed to us to accept their alternative of the taxation of the foreigner. Is this the alternative of the right hon. Gentleman the Leader of the Opposition? Does the right hon. Member for East Worcestershire speak not only for his Leader but for the entire Tory party? Furthermore, if this is their alternative, may I ask, does that alternative include the taxation of food? Now, having regard to the fact that much has been said about shifting the burden of taxation on to the shoulders of certain classes of the community, I want to ask in all seriousness—and I hope this question will be conveyed to the Leader of the Opposition—does the right hon. Gentleman accept the alternative? It is important, if we are going to have an election, that we should know where we stand. We should know what this alternative means. We want to know whether the alternative includes the taxation of food. I remember hearing the right hon. Gentleman the Member for West Birmingham, whose prolonged absence from this House I venture to say all sections deplore, I remember hearing him say, on 28th May, 1903, "If you give a preference to the Colonies you must not put a tax on food." That is not all. We have heard a good deal from the Member for the Walton Division about the opinions expressed in certain Liberal papers. May I be permitted to quote in this regard a Conservative paper—one of the most prominent Conservative papers published in this city. This, one of the leading papers described the alternative to the Budget, as recently as 25th October this year—I am referring to the "Morning Post," which, in its leading article, said:— It can hardly be supposed that there are any among the Tariff Reformers who do not recognise that, without the food taxes, the policy of Imperial preference is a sham. Here is a statement by the right hon. Gentleman who was first responsible for launching the Tariff campaign, supplemented as recently as the 25th October last, in which we are told that unless you include food in these alternative proposals the whole policy of Imperial preference is a sham. I think I am justified in repeating my request that we should have during the later stages of this Debate, before a vote is taken this evening, from the Leader of the Opposition an intimation as to whether he really accepts the opinions I have just quoted. I would also like to know if the alternative is going to be put before the country as including, as has been said in certain Tariff Reform papers, the proposal that Tariff Reform means two jobs for every workman? I hope, after the personal incidents which have passed during yesterday and to-day, and in view of the fact that there may shortly be an election, the position will be put absolutely straight, and we shall have it made clear whether Tariff Reform is to include the taxation of food, and if its adoption will secure two jobs for every workman. I claim that the Opposition should honestly state their views on these two points before any attempt is made to go to the country. Lastly, we have been repeatedly told in the Press and elsewhere that this Budget is going to be rejected in another place. I do not know that the supporters of the Budget need concern themselves very much on that point. All I have to say is that I join with my hon. Friend the Member for Blackburn in saying that, in the event of its being rejected and an appeal having to be made to the country, we on these benches will take our stand in favour of the whole of the principles contained in the Budget, and we shall do our earthly best to influence a great mass of the people of this country to give a verdict in favour of those principles and in favour of their own House, which I have just had the honour of addressing.

Mr. H. W. FORSTER

I only intervene for one moment in order to correct a mis- take—an unintentional mistake—which was made by the hon. Member who has just sat down. He quoted a single sentence from a speech delivered at the beginning of this Debate by my right hon. Friend the Member for East Worcestershire (Mr. Austen Chamberlain). The sentence he quoted was to the effect that the rich could pay according to their wealth and the poor according to their necessities. I interrupted because my right hon. Friend had explained what he meant, and had corrected the evidently false impression that his words might create, and called the attention of the hon. Gentleman to it. He said that he held in his hand the authorised Report of the Debate, and that there was nothing contained therein which explained or modified in any way the propositions to which he had directed attention, but I think it would only have been fair—it would, at any rate, have been fair to my right hon. Friend if he had continued and read the following sentence, because I perfectly well remember my right hon. Friend explaining what he did mean was this: "Let the rich pay according to their means, and let the poor pay according to their means." That, I think, supplies an answer to the question which the hon. Gentleman addressed directly to myself, and I hope that the matter is clearer to the House than it was before.

Sir CHARLES M'LAREN

It is abundantly clear from the course of this Debate that there is less objection now on the part of the Conservative Members to the actual taxes proposed in this Budget than to the principles which underlie the Budget as a whole. They look back to the days when the Chancellor of the Exchequer had to provide simply for the requirements of the service of the year. The Estimates were brought into the House, and it became a question whether the Tea Duty was to rise or the Sugar Duty was to fall, and what Income Tax would be paid? Those days have gone by, and in my opinion, as a man of business, the Chancellor of the Exchequer has done no more than his duty in looking forward to years to come what may be, and, in fact, must be, the interests of the State. He has responded to the call of the people for social reform, he has recognised that it is no longer a time to rattle the dry bones of party controversy, but that the people demand that something shall be done for them, and he has laid the foundation of those great practical proposals which the House has practically adopted, and also he has laid the foundations of the financial system which is to support those reforms. It seems to me as an ordinary man of business that that is the right course to pursue. It has been said that the British Empire is the greatest business concern in the world, and if that is so surely it is right to provide for its continuance on business principles. If you have a great manufacturing company and they propose to make a great extension in foreign business, or by a new department, they naturally look forward and provide for the finance, and take care, as far as they can foresee, nothing will happen to upset their plans in the course of the next few years.

That is what the Chancellor of the Exchequer has done to-day, he has taken a broad view of the situation, and in my opinion the proposals that he has embodied in this Budget are not only fair to the community, but will be successful in their operations. He has to deal with increasing expenditure—expenditure which is forced upon him on the other side of the House, as well as on our own, and, what is more, he has got to do what he can to satisfy what I call the legitimate aspirations of Socialism. Socialism may have an evil side, but it is not an evil; it has a good side to it, and the Chancellor of the Exchequer is bound to take note of the strong body of opinion in this country which looks for something practical to be done. He has, in my opinion, taken the line of least resistance in providing for the financial requirements. Take the Land Duties. It is a commonplace of history to say that the land used to bear the whole burden of taxation. When feudal tenures were abolished land-owners put the taxation of the country on the Excise, but we still have the relics of the Land Tax, which is very troublesome to many land-owners, and brings in very little result. The Chancellor of the Exchequer might have increased that Land Tax and imposed taxation upon all land. But he has done nothing of the kind; but his proposals in regard to land have been most lenient, and many people think he has treated the land too lightly. For my part, I do not take that view. I think agriculture ought to be treated as an industry, and it is so treated.

Agriculture is the chief industry that we possess, and the Chancellor of the Exchequer, in my opinion, has done wisely in refraining from levying a single impost on agricultural land. On the contrary, he has benefited agricultural land by his readjustment of Schedule A—the allowances under Schedule A. He has practically given an allowance of half a million a year to the land-owner with the object of inducing him to spend more money on improving his farms. The right hon. Gentleman's Development Bill will assist agriculture and will develop rural transport, which is greatly wanted in many parts of this country. His taxes upon motors and petrol will help towards the maintenance of the main roads, and will reduce the rates which press with a very heavy burden upon farmers, and when you consider the effect of old age pensions in reducing the Poor Rate, and the ultimate effect of the Unearned Increment Tax, which it is probable that the rural district councils will share, you come to at least a million of money which is going to be given to the landing and farming interests in this country by this Budget, and, in fact, they will have a great deal more than a million pounds' worth of relief. Whatever you do to improve the position of the farmer you cannot do anything better than induce the landlord to spend more money on his farms in the way of drains, fences, hay-sheds, slates and bricks for building, and so forth. All these are British commodities, and all these are things of which farmers stand too much in need of to-day. We should like to see our farms improved and in that way, and money spent upon British manufactures. I venture to say without fear of contradiction that no Chancellor of the Exchequer has conferred such a boon upon agriculture as my right hon. Friend the present Chancellor of the Exchequer.

What is the grievance which the landlords profess to feel? So far as I can see they complain simply of the Unearned Increment and Undeveloped Land Tax, which only affects the minority of landowners, while of that minority I undertake to say very few will suffer. I undertake to say that this is a tax of which no one will feel the burden. It accrues automatically from year to year for the provision of social reforms, and is never levied except in the case of the transfer of land, and is never levied unless there is a fund of money out of which it can be paid. In other words, no man will have to put his hands in his pocket for this tax, and looking at the fact that half of it is to go in relief of local rates, in that way a benefit is conferred. The present situation of many manufacturing towns in regard to rates is such that trade is actually driven out of them. The manufacturers cannot afford to pay those rates, and factories are moved to neighbouring villages. When you come to competition with foreign manufactures, rates of 10s. in the pound, which very often exist in an English town, is a very serious handicap indeed to our foreign trade. Look at the case of collieries and railway companies, who pay enormously more than their fair proportion of rates in the parishes in which they are situated. A colliery comes and spends £300 in sinking a colliery, and the land is immediately increased in value, as you find if you buy land for building cottages, as you are at the landlord's mercy, and it is only fair that the landlord should contribute something more to the rates in the parish, and not go on paying rates under the old scale. I say it is not unjust, and that the landowner, where he has his royalty, or increased value of the surface of the land, ought to contribute something towards the rates and the relief of the colliery shareholders, who have prefaced the whole of the cost which has made that land worth what it is. That is the system in the United States, and all land there is taxed at its actual value. That is what we hope to see in this country before long. At all events, the Chancellor of the Exchequer has made a beginning, and no one can say that a halfpenny on the real value of the land is an excessive tax. The principle of the Super-tax and of the Death Duties has been adopted and recognised by both parties in the State now for a generation. It is only a question of degree. You may graduate your Income Tax below or above, and my right hon. Friend has only given a little turn or two of the screw in order to get a little more revenue. The object with which he has introduced the Budget is made perfectly plain. That is, that he will not increase the taxes of the poor, he will not increase the burden of the man who earns his living, but he will, as far as he can in fairness, subject the man with an income far beyond his necessities to a certain amount of taxation. It is said that this is robbing the capital of the country, and that it will deplete our trade and deprive British industry of capital, which will be sent abroad.

8.0 P.M.

The question arises who does, as a matter of fact, to-day find the capital required for our home industries? Is it the millionaire? Is it the financier? Is it the great nobleman who leases his land? None of these are contributors to the capital of British industry. The capital of all our great manufacturing and joint-stock companies in this country is contributed by small investors. It is contributed by the doctor, the lawyer, the widow, the retired tradesman, and the manufacturer. They find the debenture money and the shares. They are satisfied with British investments. You do not find men with £50,000 or £100,000 do these things except by way of rare exception. They are generally men who have been brought up to the business, and who believe in the resources of that trade. My right hon. Friend, by exempting that smaller class of persons from the operation of the tax, enables that very class of persons to have a freer hand in investment than they have to-day, while on the other hand the very rich man, the City financier, will go on in the future as in the past. For generations he has been the man who has invested abroad—American railroads, Colonial railroads, and Colonial debts. Where has that money come from? It has come during the last 40 or 50 years from the City of London, and has been largely supplied, not by small investors, but by big financial houses. It does not even come from the landed class. I do not think a word has been said to indicate that there is any greater rush of British money out of the country to-day than there was before the Budget was introduced.

Suppose the tax falls heavily upon the rich man whose surplus income is going to be taxed and he is taxed to the tune of £10,000 or £20,000 a year. What effect has that on his spending powers? Possibly he reduces his establishment to a certain extent. He buys one motor car the less, possibly a foreign motor car, and buys fewer diamonds and jewelleries. He does not perhaps bid for old masters at Christie's against American millionaires and the land that he holds up in South Africa and in our Colonies may be brought into the market and sold. He may cut down his stables, he may even give up backing horses on the turf, but none of these restrictions in his expenditure have the slightest effect in reducing the financial prosperity of the country. The luxuries of our rich are very largely derived from the foreigner, or from money spent abroad, and in my opinion the Budget may have the opposite effect of inducing him to consider really the desirability of spending more money at home than out of the country. The whole Income Tax that is levied on taxable income amounts to only one-third of 1 per cent. of the capital of the country. A percentage of that infinitesimal amount cannot, looked at from an economic point of view, affect the question of whether British capital should remain in this country or go abroad. Suppose you do send it abroad where are you going to send it? Are you going to send it to France, where the Income Tax is being increased, where Succession Duties are very high, where if you sell a piece of land you have to pay 8 per cent. Stamp Duty ad valorem on your purchase? That is not a country where an Englishman wants to invest his money. Go to Germany. You have an enormous Imperial deficit, and a fall in Imperial bonds far greater than the fall that has taken place in our Consols, and you have a financial situation which is full of difficulty. Russia has been tried. In my belief very few Russian investments are doing profitably for English investors, and with regard to the South American States and our Colonies I do not fear any danger to our capital going in those directions. We have built up our Colonies with British capital and we have built up Argentina largely, and Brazil to some extent, with British capital, and what has been the result? We get enormous orders from those countries for railway material, for fencing, for hosiery, boots, cloth, and manufactures of every kind. Money invested in these markets is an excellent investment for British capital, and not merely for the capitalists but for the industrial classes of this country, who provide commodities at high wages which these States buy from us.

But then we are told this large increase of Death Duties means cutting off slices of the savings of the people. It means a penalty on thrift. It means that the capital of the country and the wage fund are being depleted. That statement does not bear serious investigation. Supposing a man has £100,000 of capital and he earns 5 per cent. on that—£5,000 a year. If you tax that income at 1s. in the pound it produces £250 a year. In 20 years that man will have paid £5,000 in Income Tax. If, on the other hand, you do not tax him during his life and he dies in 20 years, and you make him pay 5 per cent. Death Duty you get again £5,000. The financial result of his capital is exactly the same, but by making him pay Death Duties instead of Income Tax you have given him the enjoyment during the whole of his life of that £250 a year which, if he is a man of business, he could invest in his business at probably 10 or 20 per cent profit. Moderate Death Duties are a far more beneficent form of taxation than Income Tax. A man is much less likely to feel the pinch of the Death Duties than to feel a comparatively heavy drain on his resources every year. That principle applies whether your Death Duties are 5 per cent., 10 per cent., or 20 per cent. The principle has been consistently accepted by Chancellors of the Exchequer, and it is too late now to tell the public that the principle of Death Duties is robbery or spoliation. As for capital being frightened by the policy of this Government, nothing could be more untrue or more absurd. I am connected with three large manufacturing companies, and during the last twelve months we wanted more capital for extending our business, and we had no difficulty in raising something between a million and a million and a half without even advertising. We simply put the matter in the hands of brokers and the whole of the money was subscribed by small subscribers on the faith of the permanence and the profitable nature of British industries. That is going on every day, and I defy any hon. Member to say, if he has a legitimate, sound industry which wants capital that he will not get plenty of money at a moderate rate of interest. I am certain that is so. We have in this country more capital than we need for our own business requirements, and if we were to invest all our money in our own industries we should simply reduce the rate of interest to a point at which it would not be worth investing it at all. No one has the slightest fear that the money which is going abroad, and always has been going abroad, will mean any loss to British trade. On the contrary, my opinion is that it will develop and stimulate exports.

I feel, as a man of business, that this Budget has imposed no burden whatever on trade. It has imposed no burden on the workpeople engaged in trade or on the capital invested in trade. On the contrary, if it has any tendency in regard to land or to Death Duties, it is to distribute wealth and to make a man rather distribute his land and his money in his lifetime. I believe the more you distribute it in the man's lifetime the more the country gains by it. I do not believe in men hoarding great portions of their wealth up until they reach their dotage. They are frequently robbed, and they do not know how to invest it, and they would do much better to distribute it amongst their sons. If that is one of the effects of the Budget it will be a good one. The indirect effects of the Budget on trade are obvious to every social reformer. It combats pauperism and unemployment, which are two of the greatest hindrances to our trade when you come to consider foreign competition. The alternative which the right hon. Gentleman (Mr. Austen Chamberlain) laid before the House the other day appears to me to be absolutely disastrous. It imposes a heavy burden on our trade. It would impose a heavy burden on the workman, and it would impose a burden on capital also. I do not know whether any other alternative has been suggested by which you could find the £16,000,000 more which are wanted next year, but it is quite obvious that if you had a 10 per cent. tariff on manufactured articles you would only raise about five millions a year. I have never seen it argued at a higher level than that. But admitting that you are bound to rind some better form of taxation, what is it to be? Is it to be Income Tax? I do not think the country would thank us if we imposed a 1s. 6d. Income Tax all round without any exemption. But supposing the Opposition came into power and relied upon protective duties. You are faced with this alternative. If you put on a duty so high as to keep out the foreigner's goods and so give employment, as you say, to British workmen, it is quite obvious that you get no revenue. If, on the other hand, you admit the goods and gain your revenue, you give no work to any other workmen. All prices will rise, and the position of the working classes will simply be worse by 2s. in the pound. Our Home markets, which are our important markets, will be most seriously hit by anything like a general rise in prices. It has been suggested that the foreigner will pay. If you put that to a meeting of working men it is received with a shout of laughter. They know they paid the halfpenny on tobacco and the foreigner does not pay that, and they know that the foreigner will not pay the tax. If you have any doubt upon it why not propose to tax raw materials? If the foreigner is going to pay let everything be taxed.

The trading classes and the working classes know what a protective tariff would mean. I take four trades with which I am intimately connected, and in which I and my colleagues are responsible for the wages of 50,000 men and boys—namely, coal, steel, iron, and shipbuilding. I have given the greatest possible attention to the subject of fiscal policy, knowing the responsibilities which rest upon us in the matter of employment in connection with these industries. We export from this country something like 50,000,000 tons of coal. Putting that at 10s. per ton, it means £25,000,000 a year. It must be remembered that 10d. in every 1s. of the price of coal represents wages. Coal, if I may use the expression, is about the most highly manufactured article we export. The amount paid for labour in connection with coal is greater than what is paid in almost any other exported material. I should not like to say what the 50,000,000 tons mean in the matter of employment. Besides the colliers who are engaged in producing the coal there are railway men, dock employés, and men connected with the engineering trades who find employment in consequence of that export trade. All these men are actually engaged, directly or indirectly, in the export trade, and unless you retain that trade a disastrous blow will be struck not only at the coal industry, but at all the trades which depend upon the production and export of coal. Why do we export all that coal, though Germany and America are also coal-producing countries? It is because we send it to the neutral markets—South America, the Baltic, Egypt, the Black Sea, and the Mediterranean. We have practically no competition from Germany and the United States. The reason is that our ships which take out the coal come back laden with the goods which we import. In the case of the United States their ships come back half laden. The rate for coal to the River Plate is 10s. per ton, and the ships which are engaged in that trade carry on the homeward voyage hides and other merchandise at 15s. a ton.

Mr. RENWICK

Eight shillings and sixpence.

Sir CHARLES M'LAREN

The freights vary from time to time, but as the hon. Member opposite says that the rate is 8s. 6d., I am willing to take it that he is accurate. It is clear, therefore, that the fact that our ships come back laden in that way means at least about 5s. per ton on the exported coal. Suppose that that advantage were done away with, and that the export trade was strangled by Tariff Reform, we could not export half the quantity of coal. The effect on the coal trade of a 1 per cent. difference between supply and demand means the difference between a boom or a collapse in prices. If you were suddenly to reduce our coal export by 10 per cent. you would have a terrible collapse in all the trades to which I have just referred. The wages of colliers would go down, pits would be closed, wagon building would cease, and shipyards would be cleared away. Shipowners would not lay down a collier or any ordinary tramp, if the export trade were strangled. You would have a disastrous period of years in shipyards and in steel works. You would have a double reaction, because the work done in hosiery factories, in shoe factories, potteries, and hardware factories, would be seriously affected, and the working classes engaged in these industries would suffer. I cannot imagine a greater financial disaster than that which would result from adopting a system of Tariff Reform. You would lay the axe at the root of our whole commercial systems. So far from the Budget being Socialistic, I hold that it is one of the most scientific schemes of finance ever presented in this country to save us from the crudities of Socialism and the still greater crudities of Tariff Reform.

Mr. HART-DAVIES

I think we ought to feel grateful to hon. and right hon. Gentlemen opposite for the great care and pains they have taken over this Budget. They have been extremely useful. They have made the Budget more workable and more palatable than it otherwise would have been. As was generally expect3d, the great struggle was over the question of land. I am rather amused when I hear hon. Members say that the real inspirer of these taxes was Henry George. I rather think that those who say that never read many of the works of Henry George. Those taxes which the Chancellor of the Exchequer is putting on are certainly taxes which Henry George would not have approved of at all. They are not according to his ideas. He desired a system of taxation very much wider, and the followers of Henry George do not think very highly of these taxes. But what they do like is this. They look upon the provisions for obtaining a valuation of land as an invaluable part of the Budget. On that valuation they believe some subsequent Chancellor of the Exchequer will be able to build up a system of land taxation more according to their views. At all events, if this Budget has done nothing else, it has made people think, and think rather furiously. It has made hon. Members on the opposite side think a great deal, and I would not be surprised if they have found out that these Land Clauses are extremely popular in the country. We have always known that what is at the bottom of all our social troubles is this question of the land. Hon. Members have found out, and it is now universally admitted that the most popular part of this Budget are those clauses dealing with the land. I have always held that if any statesman had the courage to take up this particular question he would get a greater reward than by taking up any other. This is the most important question we have got to settle in England. The idea of hon. Members on the opposite side in reference to land reform, so far as I can judge by the papers and the circulars which are sent out, is a very large extension of small freeholds. I am so anxious that the people should get back to the land, so anxious that in case of war England should be able to feed herself, that I should not offer any great opposition to a well-conceived system of freeholds. But it must be under one or two conditions. In order to get the land we must not pay the inhuman price which the landlords always demand, as it would wreck the scheme at the very beginning; and, in addition, the value of the holdings would have to be limited, so that in after years people would not be able to amalgamate the farms and thus introduce once more the old land system. If those two conditions were observed I should not offer any very violent opposition to a system of small freeholds all over England. But our plan, which I venture to think holds the field, and which I think will be the most acceptable to the people of England, is that of communal ownership in which the people would be tenants of the State or the local authority. That is, in other words, the nationalisation of the land.

I have never been able to understand why any Member of this House should look on nationalisation of land as a dangerous or revolutionary measure. It is the oldest form of holding the land amongst all the Aryan races. The original idea was that all the land was held by the chief of the tribe for the benefit of all. There are traces of it in every country. Everybody knows that in England there is no such thing in the eyes of the law as freehold in lands. The theory is that the whole of the land belongs to the Crown. That is the old Aryan idea. It was held in Aryan countries, where I lived for many years, and where the people were as hide-bound in their conservatism as any people could be. The land was nationalised, and with none of those evil results which we are told would follow from the nationalisation of the land here. That is a matter for the future, but I think our scheme of communal tenancies from the local authority or the State will eventually be the scheme accepted, though it will be extremely interesting if the student of human progress could see through the next few years which of those two rival schemes, small freeholds or holding under the State, will prove to be the more popular with the English people. I do not think that the rest of the Budget requires many remarks. On the whole, I think the Budget does not show any great originality. I do wish that the Chancellor had shown a little more originality in his Budget. There are a great many other sources of taxation which he might easily tap. Anybody who sells 52 packages of cigarettes in the year has to pay 5s. 3d., and the same amount is paid no matter what the number sold. Then it is quite absurd that the licence of tobacco companies should be £30 for 150 pounds, and that a great concern like the Imperial Tobacco Company, which manufactures millions of pounds of tobacco, should only pay the same amount. There was the same absurdity in the old Licence Duty of a public-house, which stopped at £60; so that we have by no means got to the end of our resources of taxation. I hope that some future Chancellor will show greater originality than has been shown in this Budget, and will tax some of these new sources. But the great feature of the Budget is the land, and, whatever may be the future of the Budget, the movement which has now been started in England I do not think will ever stop—that is the movement for the reform of the land. Whatever we do with the Budget, it will not stop the advance of this movement, and the steps which we have taken will never be retraced.

Mr. ROBERT BALFOUR

I should like to make a few observations on this Bill, in view of my own experience. My hon. Friend who has just sat down has suggested that this is not a very original Budget, and that it does not contain many original ideas. If that were so, I imagine it would not have received so strong an opposition as it has met with. It does contain certain new proposals in the nature of taxation of certain classes of land in this country. It is in reference to these that I would like to make a few remarks. I have had a great deal of experience in the United States. In that country, as was stated already here tonight, taxation is entirely levied on the basis of value. In this country it is mainly levied on the basis of income, with the result that unimproved building land, and land in towns and the neighbourhoods of towns, practically escapes taxation altogether, and the burden of taxation is consequently borne by the improved land. In an American city unimproved land similarly situated with improved building land would be taxed at precisely the same price. It would be valued at the same price assuming it was similarly situated and of the same size, and otherwise of the same value. The mere fact of one not being built on would not protect it in assessing the value of the land for taxation. The only difference would be that the unoccupied land would be taxed on its value, and the occupied land would be taxed on its value plus the value of the buildings. The tax imposed in the Budget on unimproved building land is one halfpenny in the£, or about one-fifth of one per cent. In an American city the tax would be from 1½ per cent. to 2 per cent. on assessed values. The assessed value usually is considerably less than what might be regarded as market value, probably about 60 per cent. of the market value. The result, therefore, would be that the actual tax would be about 1 per cent. on the market value, as compared with the proposals in this Budget of one-fifth of 1 per cent. I say that is sufficient evidence, and I speak from experience in the matter, that this proposed tax is a very moderate one. Then, turning to the question of valuation. I do not myself see what objection there is to it. I do not know what ulterior motives there may be. I do not think that Members of this House are justified in assuming any evil intentions in the matter. The simple fact remains that it is a reasonable thing that the land of this country should be valued. I do not at all wish to assert that the experience of one country is necessarily a guide as to what ought to be practised in another. Nevertheless, it is in some measure a guide and affords some information. In the United States—I should not, perhaps, assert that all the land, but I know it is so in some States—all the land of those States is valued. It makes no difference where it is situated, it is always valued where it has passed from the control of the United States to the control of the State, and from it into the hands of private individuals. Take a State with which I am very well acquainted, and which is considerably larger than the United Kingdom. The land of that State is assessed for taxation annually. I have no doubt there will be more difficulty in obtaining a valuation of the complex interests of this country, as compared with the comparatively simple titles there; but once you have obtained the valuation there will be no great difficulty afterwards in renewing and continuing that valuation from year to year, or for such stated intervals as may be thought desirable. But the point I make is that they find no difficulty whatever there in making their valuation, and I do not know why there should be any insuperable difficulty in this country. I ought to state that the valuation which is made in that State is not made for the purpose of Increment Tax, but merely for the purpose of annual taxation, and it may be that it is not therefore made with such strict accuracy as would be necessary in the event of dealing with it for Increment Tax purposes. We have heard a great deal in these days about the disturbance of public confidence which has arisen from this Finance Bill. I presume that all taxes are regarded with dislike. We would all prefer to have no taxation. Any additional taxation is necessarily objected to by those on whom it may particularly fall, but the fact we have to deal with is that we have to raise some 13 millions or 14 millions of money, and the main point is to obtain that money with the least possible unfairness to those who contribute it, and that the burden should be distributed with due regard to the interests of all concerned, more particularly from the point of view of placing the heaviest burden on those who are best able to bear it. I do not myself, with some business experience, pay very much heed to those statements which are being made about the disturbance of public confidence. We have heard a good deal about it in the City of London. I have observed recently there is less talk about it, and I think myself that when this Bill has become an Act you will hear no more about the disturbance of public confidence.

There has been also a great deal of talk about the transference of capital to other countries. The earnings of this country appear to be so large that there is always a considerable sum annually available to be invested in other countries. That amount seems to ebb and flow, and will ebb and flow, according as we may find the conditions of the trade and commerce of the country. It is perfect nonsense to talk of people selling out property in this country, as if they took their property and carried it by airship to other lands to be left there. If a man sells his property it is bought by some other person, who gets the advantage according to the price at which it is sold. The main question is, does the property remain as productive as it did before? That is the only point which is really important from the national point of view. No doubt the savings of the country, the surplus profits of the country, will be invested either here or abroad, according as the owners of the capital may deem it advisable. It may be the fact, I think it probably is the fact, that for some time past a comparatively large amount of capital has been seeking investment abroad in preference to seeking investment at home, but that has arisen mainly from the depression of trade through which we have been passing for a considerable period—for the last two years or so. I was in the United States during the crisis of 1907. That was the beginning of the bad times. We pass through recurrent periods of active trade and commerce in this country, and the trade and commerce of this country, as of other countries, was becoming top-heavy, and it was this crisis that brought about the retrograde movement which we have experienced. But these conditions have their ebbs and flows just like other things. There is every reason to believe, in my judgment very good reason to believe, that we may now return to a period of greater prosperity. As I have already suggested, the delay in passing this Budget has contributed to the depression in trade. I fully expect that when this Bill has passed finally through, as I hope and believe it will, we will see a better state of things. Take shipbuilding, which, as we know, is an industry of very great importance. I saw a statement to-day from a most reliable source, that of Lloyd's Registry, that the quantity of tonnage building in this country at the end of the year was less than 53 per cent. of the quantity which was building a year before. That represents a great loss of work to the people of this country. We all know that shipbuilding gives a large volume of employment to a great variety of people—employment in all sorts of industries connected with it. But there is already an improvement. The latest returns, published in September, show that the shipping under construction in this country is 45,000 tons more than it was a year ago. There is a greater interchange of commodities going on in the world, and I think that merchants generally experience in a variety of ways indications of a general improvement. As to foreign investments, to return to that subject, there are undoubtedly greater inducements for capital in these days to seek foreign investments than there were some years ago. There is greater confidence on the part of the investor, and there is justification for their confidence in the better management, for instance, of American enterprises, and there are greater opportunities and greater facilities afforded for transferring capital from one country to another than previously existed. The interchange of business between the Stock Exchanges of London and New York has become an exact science. That in itself has resulted in an increased volume of business, and better returns are obtained from some foreign investments than can be obtained in this country.

Consols are at present 82½, and at that price they yield slightly over 3 per cent. French Rentes stand at about 98, and they yield about the same as British Consols. German Threes, and we hear a great deal at the present time of the prosperity of Germany, are selling at the same price as British Consols, which are a 2½ per cent. stock, while the German Threes yield 3½ per cent. at their price. We all know that the higher the rate of interest the less is the security. That is the general rule, and we have no reason to be ashamed of the position in which the premier security of this country stands, but I think it is absolutely unjustifiable to state that the present low price of Consols is owing to the present Government or to the present Finance Bill. The reason is simply this, that the law of supply and demand affects the price of Consols just as much as it affects the price of potatoes. I think Consols are selling to-day for more than, strictly speaking, they are really worth from an income point of view. They have a special value to financiers in the City, insurance companies, and others who find them useful for the purpose of security and a convenient means of investment for various purposes, and on that account they command a comparatively high price. In my judgment, the Finance Bill is fair from a personal point of view, and it is judicious from a business point of view.

We have got to consider what is the alternative which is presented. We have got to consider what advantages this country will gain from the abandonment of our present fiscal system, and adopting that which is so strongly recommended to us by hon. Gentlemen opposite. I cannot imagine on what grounds they can put forward the argument which they do in favour of Protection. We have had the same thing presented to us for a great many years—under different names. We had Fair Trade some 25 years ago, which, I fancy, spelled Retaliation, and we had Retaliation as strongly advocated, and Colonial Preference and Protection; and we do not know now what form is exactly before us, so that we may discuss it. It appears to be reaching the conclusion that it is pure and simple Protection in conjunction with Colonial Preference. It is alleged that the foreigner will pay the tax. What is the good of any argument of that kind? What is the good of Protection which does not protect? If the foreigner pays the taxes what advantage is it to our manufacturer? Is that going to raise the price? The presumption of the foreigner paying the taxes means that a correspondingly low price must be accepted, and is it any particular gain to a manufacturer in this country to be told that a German manufacturer is getting so much less? The question for him is, Is he to to get any more?

Take the commodity of wheat. In the case of people here they do not buy from the people who ship it to this country and take the chance of paying the duty on it; they buy at a price free on board from the country of its origin. The seller sells it to the man who pays the best price, whether it be to Japan, or China, or Germany, or France, or Belgium, or Spain, or Italy, or to this country. We are not the only buyers and do not control prices. It has been stated that under our Free Trade system we are paying a higher price for bread than we were. It is true, but Free Trade is not responsible for that. What is responsible for it? The fact that we had indifferent crops two years ago in Canada, and in Australia, and id India—the very countries upon which we would have been dependent under a system of Colonial Preference. Are we going to expect that the Canadian farmers or the Australian farmers are going to take a less price because we put on a duty of 2s. on wheat received from foreign countries? The market of wheat and corn has improved in recent years because the consumption of the world is increasing, and because the crops in certain countries have been comparatively poor crops, and that is all there is in that.

Take an article like flour. Five or six years ago I think that the right hon. Gentleman the Member for West Birmingham (Mr. Joseph Chamberlain) claimed that flour milling was one of the declining industries. What are the facts? Six or seven years ago we imported into this country annually 7,000,000 sacks of flour, and we are importing now 4,000,000 sacks or thereabouts. That has been done under Free Trade conditions. The advantage we have is that we draw supplies of wheat from every part of the world. We are enabled to blend qualities, and, in point of fact, we make a better sack and a cheaper sack of flour than the American millers can produce. What is their condition? We know that one company not very long ago was practically in the bankruptcy court, and I do know that American millers have had very hard times. They are making very substantial reduction in their shipments, simply for the reason that the business does not pay, whereas our millers in this country, under the favourable conditions in which they are placed, have not only been doing a larger business, but a highly successful business.

As a merchant engaged in business in the City of London, with opportunities of meeting many, who from political motives and otherwise have strong objections to put forward to this Finance Bill, I would like to take this opportunity to state that I have heard nothing from them at all of a convincing character to show that there is any real objection to this Bill, and, as far as I am able to judge, and so far as I have been told by very many others who are, I consider, better able to judge, this Finance Bill is one which ought to receive the cordial acceptance of this House, and I venture to hope that it will find a safe passage through the other place.

Mr. RENWICK

The hon. Member opposite (Mr. R. Balfour) has used the same arguments with reference to Tariff Reform that we have heard in so many speeches in the course of these Debates. I have noticed one similarity in regard to speakers on the other side, namely, that they first of all ask us to state what our case is, then they proceed to set up their own case, and immediately go on to knock it down. It has been extremely difficult in this Debate to realise that we are discussing whether or not the Finance Bill should be read a third time. I thoroughly agree with one remark made by the last speaker, namely, that the long time occupied by this Bill is undoubtedly doing injury to the trade and commerce of the nation. It is unsettling business men, who, instead of discussing business matters, are discussing the political questions raised by this Bill. That is bad for the country. But whose fault is it? [An HON. MEMBER: "Yours."] But one of the previous speakers acknowledged the service done by this side of the House in making the Bill presentable. The right hon. Member for the Rushcliffe Division (Mr. John Ellis) last night took the same line. He pointed out the extraordinary fact that whereas the Finance Bill when introduced contained 14,000 words, it now contained 21,000. He also thanked us for the trouble we have taken in putting the Bill into shape.

Mr. J. WARD

And now you are going to kill it.

Mr. RENWICK

The right hon. Gentleman went further, and blamed the Chancellor of the Exchequer, as we blamed him at the beginning and blame him now, for putting before the House of Commons without due consideration a crude measure raising great issues of vital importance to the country. We maintain that even now the Bill is in a crude condition. As far as I can see the only people who will benefit by it are lawyers, because there will have to be innumerable lawsuits and arbitrations to settle what the meaning of the measure is. Many Clauses have never been discussed. I have many times sat here long after midnight hoping the Bill would be debated, but I have found Clause after Clause, Amendment after Amendment, simply put to the House and passed without discussion.

Mr. COLLINS

Forty days and forty nights.

9.0 P.M.

Mr. RENWICK

It does not matter whether it is forty days or forty nights. If a Bill was of such magnitude that it required 400 days and 400 nights, it would be the duty of this House to pass such a measure as the people could understand without having to embark upon costly litigation. The Financial Secretary to the Treasury, when tackled on one Amendment dealing with a clause which we were trying to make plain, said that the clause was "fairly clear." To whom? To himself? No one else seemed to understand it; no one else understands it now; and before the people understand many of the clauses actions will have to be taken to the Court of King's Bench, then to the Court of Appeal, and finally to the House of Lords, at enormous expense. That is not what ought to take place. If we had more attention from the business men in the House, and a greater opportunity of giving expression to our views, we should demand, as we have a right to do, that measures should be such as are understood by the lay mind, and not exclusively by the legal mind.

I listened with great interest to the speech by the hon. Member for the Barnard Castle Division (Mr. A. Henderson), recognising that he is the leader of a very important party, not only in the House, but in the country. He said that the Labour party were thoroughly in accord with this Bill, they enthusiastically supported it, and he believed that their supporters in the country would do likewise. We are well aware that in the House they enthusiastically support the Bill, but it remains to be seen whether they do in the country.

Mr. J. WARD

We will show you.

Mr. RENWICK

The opportunity will probably come very soon. Not for the first time we have been twitted that in previous years we supported a Bill for the taxation of land values. I am not aware whether during the Parliament of 1900–06 I voted for the second reading of such a Bill; possibly I did; but, if so, I did so on the same ground as many other Members, namely, that at that time the Bill was put forward for the purpose of taxing land values, not for national, but for local and municipal purposes. At the present time many of our large municipalities are highly indignant because the State have stepped in and deprived them of what they have been looking forward to for years—that is, an opportunity of finding some relief from local taxation by the taxation of land in various forms. I myself had an Amendment on the Paper proposing to give three-fourths instead of one-half of the proceeds of this tax to the local authorities. Our local governing bodies were expecting that they would get a substantial sum; but it has been frittered away to such an extent by the cost of valuation that, as they are to share in only the net amount, it is quite indefinite whether they will get anything at all. A great injustice has been inflicted on local authorities by the State attempting to take over the proceeds of this tax. Everybody knows perfectly well who knows anything about local government that in the development of the city the tram-lines may lead to increment in one part of it and to decrement in another part. Therefore it is inflicting great injustice upon a local authority for the State to step in and say, "We are going to take the whole of the increment and leave the local authority to do the best they can with the decrement." It was upon those grounds, I maintain, that many Members voted for the second reading of the Bill to deal with the Taxation of Land Values. I am not going any further with that particular point. I want to refer to a remark made by the Chancellor of the Exchequer. The right hon. Gentleman read a very long extract—we have had a great many long extracts during the course of this Debate—from a book called "The Campaign Guide for Unionist Speakers." I listened to him with the greatest attention while he showed from this long extract—no doubt to his own satisfaction—that it was laid down for the guidance of Unionist candidates that a certain tax, or a very similar tax to those in the Budget, should be advocated by Unionist candidates. I often wondered why at the last General Election so many of my colleagues and friends were defeated and went to the wall. It was undoubtedly because they advocated these very taxes! I am going to venture into the region of prophecy, and I prophesy that many Members upon that side of the House, and this side below the Gangway, will lose their seats at the coming Election because they advocated these taxes. The hon. Gentleman the Member for Barnard Castle seemed to attach great value to the proposals for the valuation of land. But that may be bought at too high a price. The Government tell us they are going to spend £2,000,000 in arriving at the value. Those parties to whom I have spoken, and whose opinions I have read, do not put it down at £2,000,000, but more likely at £10,000,000. If the local authorities had been left to carry out that valuation in their own way, to suit their own needs of local taxation, they had all the machinery at hand; they had their own valuers, and it would have been done at an infinitesimal cost as compared with the cost of valuation proposed by the Government. Probably, too, at the end of five years, the conditions will be so altered that the valuation will be obsolete, and we will have to set to work to revalue the land before we probably have got a penny in net taxation. These are practical points which, I think, the House ought to consider and deal with. They may not be strictly party points to raise a cheer, but I maintain that they are points that ought to be considered, and even if it be 40 days or nights that we have been busy I think the House ought to have given more consideration to that question than it has done.

I would like to say a word or two in regard to the question of Tariff Reform. I have been a Tariff Reformer, and a very ardent one, for 25 or 30 years. I am more ardent now than ever. The first thing I would do, so far as I am concerned, is that I would commence by a tax upon foreign manufactured goods. I am mentioning that because it was mentioned prominently by two hon. Members last night. One was the right hon. Gentleman the Lord Advocate, and the other was the hon. Member for Paddington (Mr. Chiozza Money). Both Gentlemen are entitled to our consideration in the arguments they put forward. They both ridiculed the idea that we would raise any large amount of revenue from a tax on foreign manufactured goods. They proceeded first to show, as usual, that we might tax some £70,000,000 worth of manufactured goods. A 10 per cent. duty on that will raise £7,000,000. The hon. Member for Paddington said that that would cost £1,000,000 to collect. That will leave us £6,000,000. The Lord Advocate put the cost of collection at £2,000,000, and to his own satisfaction—certainly not to that of Members of the House I hope—proceeded to show that we would only get £5,000,000 from that duty. I am not going to discuss that detail; but I maintain that by a judicious tax upon foreign manufactured goods upon the basis I have suggested, we could do much. I am not speaking on behalf of the Government, but on my own behalf, for, having been challenged to give my views, I am giving them. We import some £140,000,000 worth of foreign manufactured goods. I quite understand that some of them are used practically as raw material. Some are not. A tax upon these goods, upon the basis of the greater tax, the more labour that is expended upon them, from 5 to 20 per cent. upon luxuries such as pianos, silks, motor-cars, etc., would probably reduce—I hope it would—the import of these goods by half. That would be about £70,000,000. An average tax of 10 per cent. upon these goods would bring us in £7,000,000. It would do something else: It would mean the manufacture of £70,000,000 worth of goods in this country, which would mean £35,000,000, £40,000,000, or £45,000,000 in wages. [HON. MEMBERS: "No, no."] The British working man would get that instead of the working men abroad. Then it would mean something even more. For if our working men have £35,000,000 or £40,000,000 more in wages, there would be less poverty, less pauperism, and the workman would gain in respect in feeling that he was working at his particular trade under fair conditions and for fair wages. It would do something else. If the working classes had £35,000,000 to £40,000,000 more in wages they would spend more money upon tea, coffee, sugar, tobacco, beer, spirits. Therefore you would have indirect taxation £7,000,000, and in addition an increase of revenue upon the articles we already tax, and the falling-off in some of which the Chancellor of the Exchequer laments.

As a business man and an ardent Tariff Reformer I venture to say that a system of Tariff Reform when put in force in this country will be put in force after due and careful consideration, and with a determination that, come what may, the food and necessaries of life of the working classes shall not cost them one penny more. That is not beyond the power of Statesmen; it can and ought to be done. It has been done in other countries. Surely all the wisdom of this country is not upon the Treasury Bench. I venture to say there are people who are acquainted with other countries, and I cannot believe that any dire result would happen in this country from Tariff Reform which have not happened in other countries.

Quite recently the Chancellor of the Exchequer came down to my Constituency in Newcastle and delivered an able speech—he always speaks forcibly and eloquently, and he puts his arguments forward in a way that shows he does his very utmost to convince his audience. He delivered a speech in Limehouse, which was called a rousing speech, but I do not think it had the effect that was expected. It was not the first time the right hon. Gentleman came to Newcastle and delivered a rousing speech; he came to Newcastle in 1903, and I have taken the precaution to look up the verbatim report of the speech he then delivered. In that speech in 1903 he said:— We have got great problems in front of us. Never were we confronted with greater or more serious problems. What is the condition of the people of this country at the present time? Seven per cent. of the people of the great cities live in a state of chronic des- titution, a hand to mouth existence. Thirty per cent., or nearly one-third on, or below, the poverty line. Who can tell what that means? That is the problem which the Liberals have to grapple with. That was delivered in 1903, at a time when the right hon. Gentleman the Member for West Birmingham (Mr. Joseph Chamberlain) recognised the state of poverty and unemployment in the country, and suggested Tariff Reform. Then hon. Members assailed us and said, "You have no mandate to deal with that question." We had no mandate to deal with it. We appealed to the country to give us a mandate. They refused the mandate, and we acknowledged their refusal; but now I want to ask the right hon. Gentleman is it not a fact that there are more paupers than in 1903? [HON. MEMBERS: "No."] That there is more unemployment? [HON. MEMBERS: "No."] And that there are more men living upon the poverty line. After four years of Liberal Government what have you done to deal with this great problem? The Government have brought in their Budget. I ask if this Budget is going to find work for one man out of employment at the present time? [HON. MEMBERS: "Yes."] Is it a fair Budget? Is it a Budget for the working classes? [An HON. MEMBER: "Ask them."] On the same night that the Chancellor of the Exchequer was at Newcastle a Member of the Labour party below the Gangway was at Huddersfield, and he said the Budget was a disgusting fraud. [HON. MEMBERS: "Name."] I think you all know his name. It was the Member for Colne Valley. He is a Member of the Labour party. [HON. MEMBERS: "No, no."] Well, then, he is a Member of this House. I was quite prepared for that interruption. The same night the hon. Member for Blackburn (Mr. Snowden) was speaking. Do you agree that he is a Member of the Labour party? [HON. MEMBERS: "Yes."] What did he say, speaking at Manchester the very same night? He said nothing would be realised by the Land Taxes, and he went further and said the Licensing Taxes would inflict hardships upon the publicans, and, he added, upon the public. Then he added something more. He said the Spirit Taxes would come out of the pockets of the working classes. [An HON. MEMBER: "Everyone knows that."] In face of facts like these how on earth can it be said this is the people's Budget? What people are going to gain by it? Are the people going to be in pocket by it? We had a perfect cataract of words last night from the hon. Member for Paddington (Mr. Chiozza Money). He told us he had gone to the towns in the North and the South and the Midlands of England, and what did he find? He said he found squalor and poverty. We had another speech from the hon. Member for Ince (Mr. Stephen Walsh), and he told us that the working classes did not receive any advance in wages, and that the cost of living was high. Is this a state of affairs of which the Government can be proud? The position of the people under this Budget will be worse than at the present time. I maintain that any Chancellor of the Exchequer in bringing in a Budget ought to hesitate and pay attention when he finds that the great mass of the commercial classes of this country, whether in London or in other great cities of the country, are nine out of every ten of them against it. Speaking to men in railway trains, in the hotels and other places, I say that nine out of every ten of them with whom I come into contact, and I travel a good deal over the country, condemn the Budget. Nearly all the valuers, auctioneers, land agents, and lawyers, except those who are politicians in this House, tell you that this Budget is wrong in principle and will do injury to trade. That is a serious state of affairs, and one to which the Chancellor of the Exchequer ought to give attention. The Chancellor of the Exchequer made another remark in his Newcastle speech. He said:— Now here comes the Budget, affecting every trade and industry in the country. It is not right for a Chancellor of the Exchequer to bring in a Budget affecting every trade and industry in the country. Why should he have brought into this Budget all these new taxes? Any business man would have felt his way carefully at first. Any commercial man wishing to introduce novelties would do so gradually and not in a way that would affect every industry at once. A business man would try one novelty first, and if it proved beneficial to trade and commerce, then next year he would introduce another. It is not good policy to introduce a Budget of this description which unsettles so many interests and causes all this anxiety and uncertainty in the minds of capitalists and others. The Chancellor of the Exchequer says there is nothing unfair in the State charging the tolls when property passes. I know there is nothing unfair in charging a toll if it is reasonable. I might be charged one penny to go over a bridge, and that might be reasonable, but if they charged me 3d. or 6d. I should try to find some cheaper way over it. The very enormity of these taxes will set clever men to work to see how they can evade taxes which they consider unjust. With regard to tobacco and spirits, I maintain that it is bad policy to pile up taxes upon articles which are already heavily taxed in proportion to their cost. [An HON. MEMBER: "The foreigner pays."] No, the foreigner does not pay. You already exact £14,000,000 taxation upon tobacco, which the hon. Member for Blackburn (Mr. Snowden) says amounts to 500 or 600 per cent. of its cost. Not satisfied with that, you exact another £2,000,000 in addition from the pockets of the working classes. The result is that you are driving all the poor men and all the small men out of the trade, and you are enriching the already rich men who make such colossal fortunes out of these things which you by your enormous taxation turn into a monopoly. It is a false system of taxation to apply to tobacco, spirits, and licences, all of which come out of the pockets of the working classes, such heavy taxes. It is almost certain that the greater part of the taxes under this Budget will come out of the pockets of the working classes, but it is very problematical whether any of the Land Taxes will come out of the pockets of the land-owners. For these reasons I object to this Finance Bill, and I shall have great pleasure in going into the Lobby against it.

Mr. J. M. HENDERSON

I do not propose to follow the hon. Member in the arguments he has used in the course of his interesting speech. I think that so long as Tariff Reformers entrust their programme to such exponents as the hon. Member opposite Free Traders have nothing to fear. It has been very clear to anyone who has sat for the last six months through the Debates upon this Bill that the whole dispute has centred upon two points, namely, the Land Taxes and the Licence Duty. With regard to the Land Taxes it has been reduced almost to an academic question, because it has been admitted by the two Leaders on the Front Opposition Bench that, so far as the Land Taxes are concerned, they have no objection to their principle. What they object to is the destiny of the tax, and they object to the local authority having the money instead of the Chancellor of the Exchequer. I think in this matter the Chancellor of the Exchequer has been too generous in giving to the local authorities one-half of this tax, and I will tell the House why. I will take a concrete case in the City of London. Within the last few years a site in the City of London was sold for £350,000. Without going into details, I will simply state that the increment value on that site was £200,000. If that had happened after the passing of this Bill the increment value would have been £40,000, and that amount would have gone to the Exchequer. What does the City of London get? It will come into an increased assessment of £8,000, and 5s. in the £ on that sum brings in £2,000 a year, and that is the sum which the City steps into. Although you may say the City had to do something to create that value in the way of extra lighting, for the extra £2,000 it did not spend one single shilling nor had it to provide one extra policeman. In all cases of increment the local authorities by the increased assessment of the development of the land get all they are entitled to, and I think the Chancellor of the Exchequer is dealing most generously with them in giving them half the improvement value. I am now going to make a statement which may possibly not please hon. Members opposite. I say that all land-owners ought to be very thankful to the Government for bringing in the Land Taxes. Hon Members are aware that for some years past there has been a great agitation for the taxation of land values. A league has been established for propagating their doctrines. Three-fourths of the local authorities of England joined it, and many of them passed resolutions in favour of the taxing of land values. What was the particular form of taxation promoted by this league? It was not an Increment Tax or a Reversion Duty, but a tax on ground rents and feu duties and on the site value of all land, with the avowed intention of increasing that tax from 10 per cent. to 20 per cent., and then to 30 per cent., and so on until 100 per cent. was reached. The object being to get the whole land value for the community. Those hon. Members, who were pledged to this tax on land values, have brought pressure to bear on the Government to carry out this doctrine. I think the Government deserve our thanks for having resisted their efforts, and for having brought forward their taxes on land in this Budget. If the hon. Member for Newcastle-under-Lyme (Mr. Wedgwood), or the hon. Member for East Denbigh (Mr. Hemmerde), had been trusted with the drawing up of these Land Taxes, I am sure they would have been nothing like these. Hon. Members ought to be thankful that the Government have adopted the Increment Tax and the Reversion Tax, because it secures to every man the full present value of his property. I cannot conceive any Government, under any circumstances, going back upon this datum line and taxing the present value of property. If the present value of his property, which, of course, includes the prospective value, is secured to a man, I see no reason why he should complain if he is called upon to give 20 per cent. of any increase which may hereafter arise on that property. The only two arguments advanced against the Increment Tax which are really worthy of consideration are the arguments of my hon. Friend the Member for Preston (Mr. Harold Cox). He said:— If the State is entitled to 20 per cent. of the increment, why not to the whole? Logically, they are entitled to the whole. I agree with him, but then logic is such a funny thing. You cannot govern a country by logic. There is no danger in the least of the tax being increased to 100 per cent., because the moment you press the argument of logic to its ultimate point the whole benefit of the tax entirely disappears. Then the hon. Member asked why not tax personalty? I agree logically, but practically no. It cannot be done. The constitution of certain of the States of America prohibits the taxation of income. The consequence is that in these States—and, in fact, in all the States of America—real and personal property is taxed, and a member of the community may be called upon to do what he is never called upon to do in this country, and to make a statutory declaration of his private estate. It has been found there that men who will die for their country will lie for their taxes. The consequence is it is impossible to get at the value of a man's personal property, and this difficulty has been so much recognised that public feeling condones incorrect returns, and, as a matter of fact, there has never been a single prosecution for perjury.

I admit that I have opposed the Government on the Undeveloped Land Tax. I am satisfied that it is not a proper tax. I have objected to it, not in any factious spirit, but because I think the principle is wrong. I think it is founded upon two fallacies. The first fallacy is that you can cheapen land for anything else by taxation. I do not think you can. The next fallacy is that by charging a tax of a halfpenny you will compel a man to sacrifice £100 in selling his property. I may be wrong, and I am old enough to know a man should never be cock-sure about anything. What has happened with regard to that tax? Agricultural land, all corporation land, all parks, cricket grounds, football grounds, private houses with five acres of ground, and so forth have been struck off the tax, and it has been reduced to a minimum. I may be wrong again, but my own private belief is that this Undeveloped Land Tax will be found to work so poorly and with such small results to the Exchequer and such friction and anomoly that it will die out. It is the smallest of all the taxes, and I have steadily supported the Increment Tax, the Reversion Tax, and the royalties upon coal and minerals. It cannot possibly injure any man to pay a royalty upon coal.

With regard to the Licence Duties, I dc not think it would have been possible for any Chancellor to have been more desirous of meeting objections and of removing difficulties and hardships. Throughout the whole of the discussions he has endeavoured to meet all objections, and, if he has not gone quite the full length, I do not believe he himself would have been unwilling. I think if the two great stalwart prohibitionists, the Member for the Appleby Division (Mr. Leif Jones) and the hon. Member for Lincoln (Mr. Charles Roberts), had kept away those other small concessions would also have been granted. He has, however, met all really serious objections. He has removed our difficulties with one or two exceptions, and he has laid the foundation of the principle that Licence Duties should be charged upon poundage of sales, which is the only safe and sound method. For these reasons I intend to vote, as I have always intended to vote, for the Third Reading of the Bill.

Mr. E. C. MEYSEY-THOMPSON

I desire to make one or two observations with regard to two points which have been urged in the course of the Debate. It has been said everyone is agreed that sixteen millions extra revenue must be raised, and the second point is that the dukes, the landlords, and the occupants of these Benches refuse to pay any form of taxation, however it may be applied. This is by no means the case. They rather feel themselves to be in the position of shareholders of a public company upon whom a heavy call is made. It is a very old argument that shareholders are unwilling to meet the call, and that cones- quently the company will be ruined. The position of the shareholder, however, is this: Why has it become necesary to find this money? Has the company got into a bad position because the directors have allowed the expenses to rise? It may be a great railway company or a great gas company. The shareholders are not unwilling to pay the call. They are perfectly willing to pay if they are convinced that the expenses of the company will be reduced and the sales will be pushed. Some of us on this side believe that the reason why we are called upon to find this extra taxation is because the Government have not reduced the cost of governing the country, and because, by their policy, the trade of the country will go down. I think that is a sufficient answer to the observations whether or not we are unwilling to bear any form of taxation. We are in the position of shareholders. We are perfectly willing to pay any amount of taxation if we are convinced that that taxation is really going to be used in an economical way for the benefit of the trade of this country. But we are not so convinced. We therefore propose to remove the directors of this great gas company, and before long to have a reconstitution of the company, and with a new set of directors and with the business run on business lines we shall be perfectly willing and even anxious to pay our full share of the taxation.

Mr. J. M. ROBERTSON

It is difficult to believe that the speech we have just listened to is the prelude to a great constitutional fight. It would perhaps be less than fair to hon. Members opposite to ignore the fact that in a long Debate on the third reading of the Finance Bill the objections must necessarily be very wide. But is it too much to ask that there shall be a certain amount of coherence? I venture to assert that incoherence has obtained in this Debate to a somewhat startling degree in the view of those who regard the present occasion as the prelude to a great constitutional struggle. The Noble Lord the Member for Marylebone has suggested that certain rich Members on this side of the House support the Budget because they have no reason to fear that the taxation it imposes will fall very heavily upon them. But surely the Noble Lord cannot expect that those rich Members hope to evade the Super-tax. Therefore, he must assume they will be compensated by not having to pay as owners of mining royalties, or as receivers of unearned increment. The Noble Lord seems to suggest that votes on these benches are generally given by hon. Members from the point of view of their own pockets. He will not, therefore, I think, resent a similar suggestion being applied to himself. I do not think he has a right to resent it. He has lately taken up the position that he would rather embrace Tariff Reform than accept this Budget, and he justifies that ignominious capitulation by calling this Budget Socialistic.

In the course of this Debate we have heard a good deal about Socialism. But the upshot of it all seems to be that the word "Socialistic" means nothing at all, and that the word "Socialism" means very little. We have been told that this Budget is Socialistic, and we have also been informed that it heavily taxes the working classes. It must be a remarkably Socialistic Budget if it does that. One hon. Member last night told us that the Land Taxes were purely Henry George-ism, and he also went on to say that they were a delusion and a snare. I have heard an hon. Member speak of Henry George as a half educated fanatic. It must be a great comfort to be perfectly educated judging from some of the observations we have heard. I would suggest to that hon. Member that he should take heed to himself lest his imputations should come home to roost. Henry Georgeism, if it means anything, means the advocacy of a single tax. But the mere advocacy of taxation on unearned increment is older than either Henry Georgeism or John Stuart Mill. Henry George advocated the imposition of one tax, and one tax only, and that tax was to swallow up all others. We have been told that these Land Taxes are not worth imposing at all because they will yield so little, and because the cost of the valuation will be so much greater. It would appear from speeches by hon. Members opposite that the advocacy of these taxes constitutes an appeal to cupidity. May I suggest that the drink trade stands for cupidity pure and simple, yet we are told that the taxation upon it is indefensible. Because the Government sought to deal with it in another way and failed to do so their present proposals are said to be vindictive. The Noble Lord, when dealing with the argument of the Chancellor of the Exchequer that he was merely equalising the Licence Duties, contended that since the taxation fell on a trade which was hostile to the Liberal party it must be regarded as vindictive. The right hon. Gentleman who moved the rejection of the Bill wound up his speech by a declaration to the effect that his party was standing for a policy of Tariff Reform. What is that but an appeal to the cupidity of certain classes? Again and again we are told that cupidity is a characteristic of people who feel themselves overtaxed and would like to see rich men bear a greater proportion of the taxation. I suppose it is because some right hon. Gentlemen on the Front Opposition Bench feel the poverty of such blind advocacy that some of them do fall back upon more respectable propositions. The right hon. Gentleman the Member for South Dublin told us yesterday that capital, as usual, was going out of the country, and that £8,000,000 went out within the last few days. I do not know from whom he got his information. Apparently right hon. Gentlemen opposite are willing to believe anything told them by members of the stockbroking class—a class of whom one might almost say that a large part of their business is to spread misconceptions in regard to matters of that kind. [HON. MEMBERS: "Oh."] I will not say all, but do hon. Members dispute that a large part of the business of the Stock Exchange is due to the change in share value set up by the currency of more or less ridiculous rumours? No one who knows how stocks and shares fluctuate through the circulation even of wilfully false rumours by someone would take a random declaration from any person representing that kind of interest that capital was leaving the country. But suppose that it did. The right hon. Gentleman the Member for South Dublin (Mr. Walter Long) said that a sum of £8,000,000 has left the country within a week or two. Does he urge that it went in bullion, and does he mean that it did not affect the Bank rate? If it did not go as bullion he must admit that it must have gone as products, and if it went as products is not that a revival of the very export manufactures which the party opposite has again and again taken as a test of national prosperity?

The Leader of the Opposition in the year 1903, speaking in this House, endorsed the doctrine which was then prevalent to the effect that it was a very good thing—that was the implication of his speech—that British capital should go abroad. His language was—— A certain evil effect of Free Trade is at present disguised by the fact that we have enormous investments abroad; that we are a creditor country on a great scale, and that we get our necessary imports not merely by export of our manufactures, but also by the collection of the debt which foreign countries owe us as investors in this country. That is a passage which shows that the right hon. Gentleman at that time regarded the export of capital and our being a creditor nation as a highly advantageous thing. Later he expressed the opinion:— There is some fear that there is a movement in an opposite direction—a movement which seems to tend in the direction of making us debtors of the United States. 10.0 P.M.

The calamity at that time was not that we were sending capital abroad, but that foreign nations were buying our stocks and shares and securities. That was the reason which was given by the right hon. Gentle man at that time, his obvious reason for seeking to change Free Trade. A short time, a few months later in that year, in his pamphlet, he informed the country that he saw no reason to suppose that we were living on our capital. The point of view had changed in six months. The dialectical emergency was different. Now we have the right hon. Gentleman speaking as if the export of capital was almost an unmixed calamity. I can understand, as he once argued in his pamphlet, that it is desirable if you have capital to spare that it should be invested in this country rather than abroad, but to suggest that it is a calamity that it should be invested abroad, which I take to be the effect of the right hon. Gentleman's present purpose——The right hon. Gentleman shakes his head. Then it comes to this, if our capital is being invested abroad, if, as many highly competent authorities can show and have testified here this evening, no capital is lacking for enterprise in this country which showed a fair interest, then what is lacking in this country is demand for the products of industry, not want of capital to carry it on. What is there in this pretence that the Budget is in any way responsible for the capital going abroad? We have been told again and again within the same speech that capital is going abroad—it seems to be thought the easiest thing in the world, it goes without any bullion or manufactures, it goes in a sort of spiritual and ethereal way—and in the same speech we are told that capital is lying idle in the bank because of the fear of the Government Bill. Those who make that statement know perfectly well that the capital was lying idle last year when nobody knew what the policy of the Government would be. It was lying idle for the same reason—lack of demand for the products of industry—and the only thing which will cause that capital to be employed is not a tariff, which the right hon. Gentleman proposes, it will be a demand for the products of industry, and your tariff would check the demand for the revival of industry. I think it would be unfair to enlarge upon the obvious reason for saying, if you impose a tariff either upon food or upon semi-manufactured materials in the case of all of these things, the effect must be to check consumption in this country; and if it be true that a duke, or other person with a large margin, is forced to cut down his purchase of commodities or his purchases of certain things as the result of this Budget, infinitely more injurious must that be the result of a tariff which will cut down the purchasing power of two-thirds of the whole population. These points have been urged so often that to repeat them seems to be trifling with the time of the House. But we are told that it is an injurious thing to tax capital, and a tax on capital is to be deprecated, and one is tempted to ask, is your position this, that all taxes ought to be laid upon persons who have no capital? That is, in fact, the position of the Tariff Reform party. It is how Tariff Reform will work out. The hon. Member for Sevenoaks Mr. H. W. Forster) corrected an impression that the right hon. Gentleman the Member for Birmingham (Mr. Austen Chamberlain) had said that his policy was that the rich should be taxed on their wealth and the poor on their necessities. It seems he did not mean that, but it will be the absolute result of the policy of the right hon. Gentleman. The right hon. Gentleman says they are averse to taxing them upon their luxuries—upon their tobacco or their whisky—but he will have to tax them upon their bread and other articles which are necessities, and therefore it is on their necessities that he will tax them. That is the policy which is offered as the alternative to the Budget which has been so often and so ably defended. I would only like to make one observation as to the effect of the Budget raised by my hon. Friend the Member for Blackburn (Mr. Snowden), who in one sense lent him to the position of the Opposition by saying that there were forms of unearned increment which the Budget does not tax. My hon. Friend did not specify what those forms were. He simply told us that if his Friends were in power, they would undoubtedly go on and tax yet further forms of what is called socially created wealth, and it seemed clear that he did not mean by that all wealth, because he went on to say that certain taxes in the Budget, such as the Whisky and Tobacco Taxes, did not tax socially created wealth. I think he has there fallen into the verbal fallacy of Lord Hugh Cecil, who told us that all values are socially created. That is a mere truism, and it has no bearing whatever on the problems here raised. But if you are going to take all other forms of socially created wealth, merely meaning wealth above a certain figure, the fallacy is obvious. A working man's wealth, in that sense, is as much socially created as the rich man's. I am taking the hon. Member's argument that when you tax the working man's tobacco, you are not taxing socially created wealth. All wealth must be socially created. The salary of a working man represents his share of socially created wealth—a much smaller share, of course, than the rich man's. But this Budget really primarily taxes all forms of wealth in the common sense by taxing not only all increment above a certain figure, but specially taxing, under the Super-tax, the larger incomes. It seeks, over and above that, to select certain kinds of income which are not merely socially created but are specifically of the unearned order. We have been told again and again, in regard to these taxes, that they set up an inquisition. They ask how a man got his wealth. It is not a matter of the amount of work done by a given man but a question of the species of increment that is to be strictly denned as unearned increment, and that is the justification of the Budget taxes. What are the forms of unearned increment? We have been even told that railway shares come in that category, but they are specifically earned. They are earned by services. The fact that a given shareholder may not even take the trouble to elect the directors is neither here nor there. The income, as income, is earned. You might have cases of individual men who own factories and employ good managers and foremen, and who did no services themselves, but none the less the income is of an earned kind. I should say that all possible forms of uncrement, e.g., the value of old pictures and old china, are demonstrably incapable of taxation, and in so far as the hon. Member (Mr. Snowden) lent himself to the argument that the Budget is unjust, inasmuch as it does not tax certain forms of un- earned increment, the reply is, that those other forms are in the nature of the case untaxable. If that be so, the Budget is vindicated on its main grounds.

Mr. A. J. BALFOUR rose to address the House.

Mr. SPEAKER

I should remind the House that, properly speaking, the right hon. Gentleman has exhausted his right to speak, but I understand that the House yesterday was anxious to hear him again to-day. I wish, however, to enter a caveat on the ground that the circumstances are entirely exceptional, and must not be taken as a precedent for allowing an hon. Member to address the House twice while I am in the chair.

Mr. BALFOUR

I need not assure the House that I fully recognise what Mr. Speaker has said, with authority, from the Chair, that it is only by their indulgence that I again intervene on the third reading to make some observations upon the general question of the Budget. I understand that the Prime Minister, who has, like myself, technically exhausted his right to speak, proposes to reply, and if I may interpret the assurance given last night, and what has just happened, as indicating that the House will give me a hearing. I am sure that no less courtesy and consideration will be shown to the right hon. Gentleman opposite, who is, in this respect, in the same case as myself. One peculiarity of the Third Beading discussion upon the Budget Bill of 1909 is that very little has been said about the Budget, though a great deal has been said about a great many other important questions. The hon. Gentleman (Mr. Robertson) is he exception to the rule which has been exemplified on all sides of the House, and perhaps more especially upon the other side. I do not know that he referred at all to the Budget, at any rate, only in the most indirect fashion, and many Gentlemen on that side of the House, wholly differing from him in opinion, have followed the same rule as he has himself.

Mr. J. M. ROBERTSON

I spoke for the last five minutes in defence of its fundamental principles.

Mr. BALFOUR

I think there was about five minutes which might be admitted. But Members on the other side differ very deeply from him. The hon. Member (Mr. Cox), for instance, made a most interesting speech on the first night. The speech can be very briefly summarised. He began by explaining that he was going to vote for the Budget. He went on to explain that he objected to every tax in the Budget, except that I think he did not mention the Petrol Tax, and he devoted all the rest of his speech to an attack on Tariff Reform. Tariff Reform is not the present Budget. The time may or may not come when it will be the Budget under discussion, and when that time comes I hope exactly the some proportion of the hon. Gentleman's speech will be devoted to this Budget, as on Tuesday night he devoted to the present Budget; that is to say, about one-fifth of the whole time during which he addressed the house. I think the House cannot, and ought not, to put out of his mind the fact that we have a different view as to the manner in which the taxes necessary to carry on the business of the country should be raised. Nevertheless, I suggest to the House that detailed discussions on the hypothetical Tariff Reform Budget are no substitute for discussions upon the actual Budget now before us. If I were going to fall into the fault committed by so many hon. Gentlemen opposite I really might bring to bear the inconsistencies on that very subject which I have heard from hon. Gentlemen opposite, who are all agreed in condemning Tariff Reform. For instance, there was a very interesting speech this evening by the hon. Member (Mr. Simon). The whole point of that learned Gentleman's speech on Tariff Reform was that all the expenditure of the working classes was expenditure practically on necessities. Part of the speech of the hon. Gentleman who has just sat down (Mr. J. M. Robertson) was devoted to arguing that you ought not to tax the necessities of the working classes, but that you may tax their luxuries. You cannot have a really more fundamental divergence of opinion upon a very important point. But I do not dwell upon that. Nor am I going to say more upon Tariff Reform. [Cheers.] I do not know why hon. Gentlemen are always so anxious to hear me upon that subject. I am not going to say more upon Tariff Reform than to respond to a direct challenge that was made by the learned Attorney-General who spoke second in this Debate. The learned Gentleman, followed by the First Lord of the Admiralty and others, declared it to be perfectly ridiculous to suppose that any part of an import duty would be borne by the exporting country. But, really, I am amazed that anybody should hold that proposition either as a doctrine of theoretical economics or as a doctrine based upon practical experience. I am perfectly confident that if any hon. Gentleman would take the trouble to make investigation, he will find that over and over again, in countless instances, the exporters of this country, in the face of a rising tariff and a rising demand in the countries to which they exported, have had themselves to pay the tariff which those countries imposed. I do not mean to go into these profound and much-argued theories. May I tell the First Lord of the Admiralty that when forced to admit that there were cases in which the import duty, or part of it, was borne by the importer and not by the country from which the import came, he exactly reversed the true economic doctrine. He seems to think that the only occasions on which the importer paid the duty was when the importer had a monopoly. These are exactly the cases in which the importer is perfectly safe. Perhaps it was by a slip that he put the matter exactly as it ought not to be put. He put it in the reverse way, and when he quoted to us the Coal Tax of the late Government as an example of a special tax laid on a special industry, I thought the culmination of inconsistency was reached, because the whole point of that criticism must have been that the exporter of the coal paid the tax. Does the First Lord of the Admiralty really believe that it makes the whole difference if the tax is imposed on coal at Newcastle or at Hamburg? So far as the importer is concerned it makes no difference to the importer. One further observation only will permit myself on this subject, which has occupied the greater part of this three day's Debate. That is this: One Member after another on the other side of the House has got up and said not merely the effect, but the object of Tariff Reform is to throw a burden upon the working classes that would otherwise be borne by the rich. I will not now argue whether there is the smallest plausibility in the accusation that it will fall upon the poor rather than the rich. Of course that would involve me in an argument not relevant to this Budget. But I will state quite definitely and emphatically that in the view of all those who are in favour of fiscal change we believe, rightly or wrongly—[An HON. MEMBER: "Wrongly"]—and at the proper time we are prepared to argue that in our opinion the fundamental differences between the proposals of the Government and the proposals of fiscal reform are that the latter are specially advantageous to the whole community as an industrial body, and more especially, indeed principally, to the working classes of the community.

After that statement, which nobody will think, at all events, unduly developed in point of length, after the speeches which have been made, I come to what I personally regard as the proper subject of our discussion on the present occasion, and that is the present Budget, not a future Budget. What are our objections to the present Budget? I am not going to attempt anything so foolish as to summarise the smaller objections which we have urged to the best of our ability during the past six months to various portions of the Budget. It cannot be done in the course of a final speech, and the House would resent any attempt by anyone to do it. I only say, as regards the taxes which are intended to be based upon the sound principle that all people of equal wealth are to be treated alike, even in those cases, I think there are instances of gross injustice in particular cases. I think, for example, that nothing can be less justifiable than the argument of the Secretary to the Treasury (Mr. Hobhouse), who justified the augmentation of the Death Duties on the ground that everybody of 35 years of age with a certain estate would only have a certain burden to pay. I suggested with painful self-consciousness that everybody was not 35. Some of us happen to have the misfortune to be much more; and in the case of estates of people of 60 or 70 years of age it is perfectly ludicrous to say that the tax is equal. It is not equal. It falls with great injustice with very different weight on one kind of property of equal size compared with another property of the same size.

I do not mean to press that point. It is not the kind of argument that really moves me in connection with this Budget. It is not against the taxes, believe me, which the Chancellor of the Exchequer intends to be equal as between properties of equal size, that I raise my voice. He was entirely wrong, let me tell him, in supposing that we divided against the Income Tax. There was a division against the Super-tax, but there was no division against the Income Tax or Death Duties, so I am informed, either in Committee or on Report. Though, as I told the House before, I do see great danger in these taxes, I have always held one language on this subject from the first day that I spoke in April last to the present. I quite admit that if there is no other way of finding the necessary resources for carrying on the work of this country and fulfilling its obligations, you must have recourse to Income Tax and Death Duties to an amount and of a character which would have horrified every great financier, Liberal or Conservative, in the past. It would have horrified Sir William Harcourt, Mr. Gladstone, and all their predecessors. It may be a necessity, an evil and unhappy necessity, and it is not upon those taxes on the rich that any fair controversialist will for one moment assert that we have concentrated the forces of the Opposition. I am not going to discuss either the extraordinary complexity or difficulties of the measure which the Government wish to press through the House. They are going to get nothing out of the Land Taxes this year; that is, of course, a matter of common knowledge, as was admitted to the full by the Chancellor of the Exchequer to-night. I would suggest that the Government might imitate the example of enterprising journalists. I understand that a newspaper puts a conundrum and offers a prize, and gets an enormous income from the people who buy the newspaper and send in answers for the prize. If the right hon. Gentleman and the Government would ask for the best possible explanation, in the clearest language, of the first part of the Bill on Land values, the 13 or 14 separate definitions of values, and ask a jury of small freeholders to decide the question. I think it would get a great deal more money in the course of the present year than possibly it even hopes to get. Without pressing the point as to the complexity of that part of the Bill, I do say that if it is to be a permanent part of the fiscal system of this country, its very complexity is a most serious argument against its efficiency, and the very fact that a man who deals in land, either as seller or as buyer, has to make himself acquainted with all the provisions of Part I. of this Bill, is in itself an impediment to trade, and must have a most evil influence upon the whole business of dealing in that commodity. These are matters of great importance. In an ordinary Budget they perhaps would be matters of supreme importance, but they sink into insignificance, in my opinion, compared with the real objections we feel to this measure.

What are the taxes we object to, and I believe I speak for the Opposition? They are the taxes which are arbitrarily selected on the fiat of the Chancellor of the Exchequer, who chooses between two citizens, and says to Mr. A: "You have £5,000, I will let you off," and "you, Mr. B., have also £5,000, but you have your £5,000 in a different form of property, and you, please, will pay a special contribution to great national objects—'Dreadnoughts,' pensions, National Debt," and all the rest of it. I think that is a very evil system of finance, I think it is perfectly indefensible. And how does the Chancellor of the Exchequer try to defend it. He said to-day: "I think the best way of defending it is to take a concrete instance." Certainly, it is in that direction that his controversial methods naturally run. He always gives concrete instances, but by some amazing coincidence the concrete instance is always a duke. Is that a fair way of dealing with the question? The right hon. Gentleman took a property to-night at Sheffield. He went back three or four generations. He said that that property originally had been common land, which, remember, does not mean land belonging to the public, but which means land belonging to the lord of the manor of the common. [An HON. MEMBER: "No, no."] It never has belonged to the public. He says that on this estate common land has risen very greatly in value. How much a capital sum invested at that moment at 4 or 5 per cent. would have accumulated in the three or four generations I do not know. At all events, there has been a great increase in that property as in many other kinds of property.

Is that the way to test whether a tax is a good tax or a bad tax? It surely is altogether grotesque. When the right hon. Gentleman quoted Mill in favour of his tax, let me tell him that if he will look at the passage in "Mill" on which he relies he will see Mill exactly contemplated the kind of tax which the Government are putting on, and he used a word quite as strong, perhaps stronger, than any word used by us on this bench or by hon. Gentlemen behind us: he called it "confiscation." He said, by all means buy a man's land at its fair value and take any increment that comes from it. He had a very sanguine view of things. I should not have pronounced that as "confiscation." What Mill called confiscation was quite a different thing. He said it is confiscation to select the owners of land and treat them specially. That is exactly what the Government are doing, and what the Government are proud of doing. If the right hon. Gentleman or the Prime Minister will take the trouble, and I think I made this criticism before on a speech of his, of looking up the passage of Mill he will see I am not misrepresenting him or Mill or the Chancellor of the Exchequer.

I will tell the House in what, I think, the fundamental vice of the Chancellor of the Exchequer's method of defending these questions by what he calls concrete cases consists. He always chooses the rich man, and he always says "Here is a very rich man, and do you mean to say he cannot afford to give up this or that." Nobody doubts it. That is not the point. Does not everybody admit that it is a land tax on rich men? But, remember, you may have a very large property for the purpose of taxation and a very small property for purposes of enjoyment. A man may own the whole of Sheffield as ground landlord, but if it is mortgaged he has to pay the tax.. [Several HON. MEMBERS: "Oh, oh!"] Is anybody so ignorant of the way in which financial work is carried on in this and every other civilised country as not to know that the nominal owner of any property, whether stocks, or shares, or land, or houses, is very often the man who gets the smallest income out of that property. You are not taxing the income; you are taxing the property. If you were taxing the income, if you said, "This man gets £50,000 a year, therefore let him pay on a higher scale than if he got £20,000 a year," and if everybody with £50,000 was taxed at the same rate, the thing might be right or wrong, it might amount to confiscation or not, but everybody with equal property would be treated alike. There is no pretence here that the fundamental principle is carried out. Under these proposals you may be taxing a man at 20 per cent., or 50 per cent., or 80 per cent. of his whole income. Do you call that an equal tax upon all people equally situated? That is an undoubted result of your tax, and that result is entirely disguised by the Chancellor of the Exchequer's favourite method of dealing by what he calls concrete cases—concrete cases always selected by himself.

That is not the only defect of the "concrete case" method. What did the Chancellor of the Exchequer say to-night with regard to the tax on mineral royalties? He said that 3s. 4d. a week was paid by every workman in a certain copper or tin mine in South Wales.

Mr. LLOYD-GEORGE

Throughout the country.

Mr. BALFOUR

That 3s. 4d. was paid by every workman in a mine in consequence of the royalties. Does any economist in this House—for instance, the First Lord of the Admiralty is learned in these subjects; is he going to defend such a proposition? I do not think anybody is going to do so. What is more, I should like to know, if it is true, how the property which the public manage, technically known as Crown property, stands? The Crown owns mines; the Commissioners of Woods and Forests owns mines; they have royalties; they rob the workmen. Do the Government propose that, at all events, they should set an example as good landlords, and have no royalties? And if they do, do they think the workmen are going to gain? Of course, everybody knows that the workmen would not gain. Royalties do not come out of the wages of the workmen; and to abolish royalties to-morrow might rob Peter to pay Paul, but it would not help the workmen in the least. And do let the House remember this: The Chancellor of the Exchequer, in his search for concrete instances, is always taking this duke or that duke, this or that land-owner or mine owner, or whoever it it may be. Well, he who has official access to the necessary information, does he pretend that the property of the Woods and Forests is controlled and managed on a different principle from that belonging to private owners? Is it managed better? Is it managed more liberally? Are the tenants happier? Are the workmen better paid? Why, of course, they are not! The Chancellor of the Exchequer, remember, can refuse his consent to any lease granted under the Woods and Forests. I wish the Chancellor of the Exchequer, in his search for concrete instances, instead of falling upon private individuals, about whose affairs he must be and is imperfectly acquainted, would confine his attention to a Department with regard to every detail of which he might know everything, and from which he might give to the House all the details of these matters, and what the Government think the best method of managing private property in land and minerals.

We have been charged with describing this measure as a Socialistic Budget. The hon. Member for North Paddington, who is widely informed on all these questions, reproached this House with using the word Socialist as an indiscriminate term of abuse without anybody knowing precisely what it meant. I hope I shall be absolved from that charge, because I think the hon. Gentleman the Member for Blackburn, widely as we differ in opinions, suggested, I think, that the account I had given of Socialism—it was very impromptu and un-considered utterance—some two years ago was not inaccurate.

Mr. J. M. ROBERTSON

The noun, not the adjective.

Mr. BALFOUR

I have never used the word "Socialist" as a word of indiscriminate abuse. I have never used it as a word of abuse at all. I differ profoundly from Socialism. But, after all, Socialism is a thought-out scheme. And therefore you may well ask why do I, with other of my Friends, call this a Socialistic Budget? Socialism is logical. This Budget is not logical. Neither is it a case of equality. Socialism is equality. At all events, it aims directly at the equality of everyone under an all-powerful Government. But I should be disposed to call an equality quite incompatible with freedom. This Budget is an equality which does not pretend to treat people similarly circumstanced in a similar way. There again it differs, and in that respect pro tanto for the worse. You may say why is it Socialistic? It certainly is not Socialistic, because the Chancellor of the Exchequer says he is going to devote any money he gets to all sorts of social reform. Every party in this House is desirous of promoting social reform without thereby for a moment laying themselves open to the charge that they are, or, indeed, that they share at all the fundamental doctrines on which logical Socialism is essentially based. Why is it Socialistic? I think the word is perfectly deserved, and not for any of these reasons but for this reason: that it is a Budget which strikes at the security of property. Socialism does not require that security. Indeed, it does not recognise property, at all events, in the instruments of production. Therefore that security, which is absolutely necessary if you are not a Socialist, if you do not believe in Socialism, and if you believe industrial enterprise must be carried on by individuals with a view to their own profit—why then, of course, security is necessary, but on Socialistic principles it is not. And it is for that reason, among others, that the hon. Member for Blackburn said in his speech that he was going to support the Budget as a step in his direction. He thinks this undermines private property, and, in my opinion, he is absolutely right. It does undermine private property. [An HON. MEMBER: "How?"] "How?" says an hon. Member? I will tell him how. You undermine private property directly a Minister takes upon himself to say, "I will not consider the amount of the property. I will consider whence it came. I will exercise my independent judgment, and if I think the property was more produced by social effort than by individual effort, why then I will ask for a big tax, and, if otherwise, I will ask for a small tax or no tax at all." You cannot work individualism on these lines—I dislike the word "individualism." I dislike being called an individualist—you cannot work a system based upon private property upon this principle, and it is because you cannot work it upon this principle that hon. Members below the Gangway, perfectly rightly, perfectly reasonably, and perfectly logically, are enthusiastically unanimous, and more enthusiastically in favour of the right hon. Gentleman's Budget than any other section of the House. And if I may give a second reply to the hon. Member who asked me how this interfered with private property, I will give him another reason.

What is the method of operation of the Chancellor? He goes to Mr. A or Mr. B—perhaps I am wrong in saying Mr. A or Mr. B; perhaps I should say His Grace the Duke of A or B—and says to him, "You have done nothing for your property; it has grown without your efforts; you do not show intelligence, enterprise, or foresight; therefore it does not belong to you." He goes further and says, "Therefore it belongs to me." That, I frankly admit, I cannot understand. I really cannot understand why the Chancellor of the Exchequer, after he has proved to his own satisfaction that somebody has not a right to what the law calls his property, says that that right naturally lapses to the Exchequer. There could not be a more striking example of that amazing fallacy than what the Chancellor of the Exchequer has done with regard to site value. He quoted at enormous length to-day a passage about the propriety of land taxation for municipal purposes. How can anybody who wants to give Land Taxes to the municipalities think that they ought to go to the Exchequer? That is really the most extraordinary doctrine. Since Robin Hood there has been nothing like it. The theory of those who think it right to tax land values for municipal purposes is based upon the fact that land values within municipalities are supposed to have gained an advantage from the rates to which they have not added. That may be a good reason or a bad reason, but it is no reason for the Chancellor of the Exchequer to take his stand upon. I think I am not misrepresenting him when I say that he quoted a case of a tube railway which had enormously increased the value of land at Hampstead. He said, "What right have the people who own the land at Hampstead to the increased value caused by that railway?" That is a very good reason for giving the unearned increment to the railway, but why is it a good reason for giving it to the Chancellor of the Exchequer? If you are going to accept the doctrine that a man who owns property under the laws of this country has a right to the same consideration as any other man who owns property under the laws of this country the Chancellor of the Exchequer's theory is altogether untenable. If you hold the view of hon. Gentlemen below the Gangway that all the instruments of production should be in the possession of the State then take all the instruments of production and do not select here and there, but do the whole job, and make a clean sweep of it.

Do let the House observe that this is really in our view the fundamental problem. We think that for an industrial community situated like ourselves in this modern world of ever-increasing invention and development with numerous rivals around us as well equipped as ourselves, it is perfect madness to tamper, as the present Government are doing with equality in the rights of property. Destroy confidence, and with confidence you destroy enterprise. When you choose to establish a State in which neither enterprise nor confidence are required, that is all right; but, as long as you choose to carry on your system as it has always been carried on, upon private enterprise and private initiative, so long you must make the rewards of private enterprise absolutely secure. You are not doing it; you are endangering it, in my judgment, without even attempting to provide any substitute for it. So far as my judgment goes, you are doing the greatest injury which a Government can inflict upon a great industrial community like our own country, and you are making it ever more and more difficult for that competitive industrial fight which is going to be the great difficulty of modern international politics.

The PRIME MINISTER (Mr. Asquith)

Like the right hon. Gentleman who has just resumed his seat, I have already intervened in this Debate, and I can only speak by the indulgence of the House. If, knowing the House as I do, I feel certain that that indulgence will be granted, I will undertake not to abuse the privilege by more than the shortest draft upon the exhausted patience of its Members. It is now six months, as the right hon. Gentleman has reminded us, since my right hon. Friend the Chancellor of the Exchequer opened this Budget to the House of Commons. In the interval it has been discussed, I venture to say, with a freeness and a fulness of detail almost, if not entirely, without precedent in our recent Parliamentary annals. It has emerged from that ordeal, not in any way transformed in point of principle, but improved, as its authors would be the first to admit, in many matters of detail, and supplemented by a number of carefully devised provisions to prevent or to mitigate any possible case of hardship. And, when in a few moments you, Sir, from the Chair put the final Question, it will, as I believe, receive the sanction of an overwhelming majority of the only authority in this country which has any constitutional competence to deal with or to regulate our national finances. I have been struck, in listening to this Debate on the third reading—I think there I agree with the right hon. Gentleman opposite—I have been struck, apart from some extraneous and scarcely relevant topics of debate, in the thinness of the attack, not due, I need scarcely say, to any lack of dialectical skill, or rhetorical resource, or, I will add, ardour of conviction on the part of those who have conducted the attack, but due, I think, to the fact that in the absence of more substantial enemies they have been compelled to devote most of their time to grappling with ghosts and fighting against shadows of their own creation.

Let me in the very few moments that remain—and I am not going to detain the House long—let me, before we come to our final decision with regard to this measure, point out that there is a real Budget and a fictitious Budget. The fictitious Budget plays a part outside this House; it plays a comparatively subordinate part within these walls. But it is not to the fictitious Budget, it is to the real Budget, in the form in which it now emerges, after un- precedented consideration on the part of this Assembly, that I want to direct the attention of the House. Everybody admits that special efforts must be made, and special sacrifices incurred, to meet the exigencies of an acknowledged, and, in some respects, an unparallelled emergency. What is the manner in which the Budget for which we are now asking the final sanction of this House proposes to deal with that situation? The taxes in this Bill are to be divided into two classes. The great bulk of them, as the right hon. Gentleman has admitted, are mere extensions or modification of existing and familiar imposts. That is the case with the Income Tax, with the Estate Duties, and even with the Super-tax, which is nothing but the logical development of a principle which has long formed part of our Income Tax law. I do not know, even after listening with the utmost attention to the right hon. Gentleman, whether he and his parity are, or are not, prepared to assent to these proposals as a necessary provision for the expenditure of the nation. I do know this, that at one stage or another in the course of this Bill they have voted against every one of them.

In regard to these taxes, of course, there is no question of principle arising. The only question that can be raised is as to their expediency from the point of view, not merely of their immediate productiveness, but of their ulterior effect on the trade of the country. No one disputes their productiveness, and as far as I have been able to follow the Debate, the attack—and the only attack—directed against this part of the Budget is confined to conjectural apprehensions of the possible effect of these increased taxes on the accumulation and the investment of capital. I am not much moved by those apprehensions. They were expressed with equal confidence when, 60 years ago, Sir Robert Peel revived the Income Tax as part of our fiscal system. They were uttered again with even greater vehemence when, in 1852, Mr. Gladstone introduced the Succession Duties, and they were reiterated with a shrillness the echoes of which still ring in the ears of some of us, when in 1894 the Death Duties were remodelled by Sir William Harcourt. What has been the teaching of the history and experience of those 60 years during which these three great additional impositions have been laid on the income and capital of this country for the benefit of the State? These 60 years have been an era not only of increase but of a steadily progressing increase of accumulated capital beyond anything ever known or even dreamt of in the past. We hear a great deal of the exportation of British capital. It is perfectly true that during these 60 years something like £3,000,000,000 of British capital has been exported and invested in the development of India, Canada, Argentina, and almost all the great dependencies and Dominions of the Crown. What has become of it? Is it lost? Has it disappeared? It comes back here in the shape of food and raw materials, in the shape of an ever-increasing demand for the employment of British labour. The investment of British capital abroad has been one of the most fruitful sources of the increased prosperity of our industries at home. There are some people who seem to think that it leads to the starvation of industries at home. On the contrary, as anyone who reads the figures of the returns of Income Tax and the estimates of the increase in the value of the wealth and capital of this country must know, industry here has not been stopped. It has been developed by British capital at home. It is the greatest of all possible fallacies to suppose that every £l of British capital sent elsewhere for investment means the loss of £1 which might have been employed at home. The two processes have gone on side by side. They have been the supplementary proofs and illustration of the productiveness and the prosperity of British trade. Side by side and together they afford the most absolute refutation possible that the steadily progressive taxation, both upon income and capital, has done anything whatsoever to arrest or to destroy the accumulation of our national wealth. I would much rather lean upon the proved lessons of experience than give once more a credulous adherence to these often repeated and always refuted prophecies of national disaster.

But I pass from that to the other class of taxes, those to which the right hon. Gentleman has devoted the larger part of his speech, the taxes to which main exception is taken, which, I agree, are in some respects novel, and on the strength of which this Budget is described as a Step towards Socialism. I listened with the greatest amazement to a large part of the right hon. Gentleman's speech. He appears to think, I cannot formulate his proposition in any other way, that no property is taxable, or, at any rate, no property ought to be singled out for special taxation unless the State is prepared to appropriate it and make it its own. Talk about Socialism! A ranker form of Socialism than that has surely never been propounded by any responsible statesman. But, says the right hon. Gentleman, how do you justify the singling out for special treatment of these two particular classes of property, by which, of course, he means the special values of particular kinds of land and the liquor licences which are enjoyed by the vendors of intoxicating drink. I will deal with this matter briefly, and I want to make it as clear as I can, and I will make one general observation first, which applies to both those taxes. What is their subject-matter, not land, and not liquor, neither one nor the other. Their subject-matter is a particular element of value, which I believe from an economic point of view can, in the strict sense of the term, be defined and described as monopoly value, which accrues in the case of certain classes of land, and in the case of the liquor licences, from the direct action of the Government and the State itself, and in neither case is in any degree or in any sense contributed to by the result of the efforts, endeavours or enterprise of the owner of the property himself. I will not say anything about the liquor Taxes, because I do not want to detain the House, and the matter has been thoroughly discussed here. It is admitted that the State has always asserted and exercised this right of claiming the monopoly value, and that some part of the additional value was created by the licence, and the only question which can arise in regard to that part of the Budget is whether or not my right hon. Friend has been justified in saying that, as regards the higher and more highly assesed and valuable class of this kind of monopoly, an equivalent scale of duty shall be exacted to that which has been exacted for 30 years past for that which is on the lower scale and is more lowly assessed. The hon. and learned Member for Edinburgh laid down the proposition that there are 20 values which are not socially created. As has been said, that is a truism. The social fabric is the condition of value, and one of the greatest of the ancient thinkers said that a solitary being was either a wild beast or a god. You cannot have value of any sort or kind; you cannot have traffic or trade or buying or selling unless a social organism exists. In that sense it is true that all social value is created, and all value is social. The question is, with all deference to the hon. Gentleman, whether as regards the particular class of land value from which my right hon. Friend desires to derive a very small contribution or toll, there is not a special or peculiar value accruing from social causes which justifies him, as a matter both of equity and policy, in singling that out for exceptional treatment. So far as I know, there is no economist of repute—certainly no British economist of repute, from the time of Adam Smith downwards—who has not noted the fact that in the case of the land of the country, which is necessarily limited in amount, it, from special circumstances, acquires a value sometimes even against the will of the owner. It also acquires value by the growth and movement of the population, and through the existence of a multitude of social causes. Is not that enough? It has not been traversed by anybody, and my right hon. Friend was justified in saying that if you want justification of it you cannot do better than go to the municipalities of England, Wales, and Scotland. I am loth at this hour to enter into an economic argument. The right hon. Gentleman referred to the authority of John Stuart Mill. I was amazed almost out of my faculty of astonishment, if it had not already been exhausted, at the use to which he to-night has put that venerable authority. I have gone to the fountain-head. I will read not more than I can help, but as much as is necessary for the purpose, not only to vindicate the memory of Mill, but to support the Government proposals—an authority which not even the laxest usage of popular language can possibly describe as Socialistic. In Book 5, chapter 2, paragraph 5, second volume, he says: "Suppose that there is a kind of income which constantly tends to increase without any exertion or sacrifice on part of owners, those owners constitute"—he does not speak of dukes particularly—"a class in the community whom in the natural course of things progressively enriches consistently with complete passiveness on their own part." I am rather inclined to regard this as another anticipaton of the Limehouse speech. "In such a case it will be no violation of the principles on which private property is grounded if the State should appropriate this increase of wealth, or part of it, as it arose. This would not properly be taking anything from anybody, but would merely be applying an accession of wealth created by circumstances to the benefit of society instead of allowing it to become an unearned appendage to the riches of a particular class." If I am not making too long a quotation I must read one more sentence from the concluding part of the same paragraph, because this is a practical application of the principle that has there been laid down in general or abstract terms. There is no word about confiscation. Confiscation is applied to a totally different proposal. This is Mr. Mill's own proposal, which would hardly be put forward if he had thought it were confiscation. "From the present date"—he is careful of the past, like the tender and scrupulous conscience of my right hon. Friend the Chancellor of the Exchequer—"or any subsequent time at which the Legislature may think fit to assert the principle, I see no objection to declaring that the future increment of rent should be liable to special taxation, in doing which every shadow of injustice to the landlords would be obviated if the present market price of their land was secured, since that includes the present value of all future expectations."

The argument that is used against them, I venture to say, can be used with equal appropriateness and equal force against the Income Tax itself. Let us see what the Income Tax is. The Income Tax, under the system which now prevails in this country, which, be it observed, was brought in this respect to its highest point of perfection under a Conservative Chancellor of the Exchequer, acknowledges the principle of graduation by means of exemptions and abatements up to, I think, the level of £700 a year. Further, the differentiation, according as the income to be taxed is earned or unearned, is justified by every great authority in the past, although for a long time it was supposed to be impracticable. That differentiation, which I myself had the good fortune to bring about, and which I venture to say no one of my successors in the office of Chancellor of the Exchequer will ever seek to disturb, proceeds on the principle that you must have regard, if you are going to do justice, not merely to the amount, but to the source and the character of the income. So that both as regards graduation and differentiation the Income Tax is open to every one of the theoretical or abstract objections that the right hon. Gentleman has brought forward. And there is another one, a practical one, which is very much to the point. We are told about these taxes that they are admittedly very small. One of the complaints against them is that they are not going to produce enough of money, but hon. and right hon. Gentlemen opposite say that it is only the thin end of the wedge, that it is the first step, and only the first step, and that in course of time what is now a halfpenny will become a penny, the penny a shilling, and the shilling a pound. Exactly the same thing was said about the Income Tax. Sevenpence in the £, and under Socialistic manipulation, the manipulation of that Socialistic doctrine which bulks so largely in the apprehensions, or at any rate in the dreams of hon. Gentlemen opposite, there is nothing whatever to prevent the Income Tax, the most conservative of all our sources of revenue, from being perverted to precisely the same purpose which you fear in regard to these Land Taxes. In fact, as my right hon. Friend the Chancellor of the Exchequer says, it would be very much easier. I pass from that to say one final word in regard to what is, after all, I will not say the sole, but, I think, the dominating issue tonight. I said, when this Budget was introduced, and I have repeated the statement over and over again, both in this House and outside, that it was incumbent upon those who objected to our taxes to produce and to provide some alternative scheme to meet the needs of the nation. Where is it? The right hon. Gentleman who moved the rejection of this Bill, the Member for East Worcester, in the peroration of his speech, though he did not condescend to particulars, in a perfectly manly, and, so far as it is possible for a Tariff Reformer to do so, in a fairly explicit manner, at any rate adumbrated his alternative specific. You know what that means. You do not know at this moment how far it commends, itself to the conscience, to the intellect, to the judgment, or to the tactics of the Leader of the Opposition. I, as a humble inquirer after truth, have more than once here and elsewhere put one or two very plain and common-place questions, which I addressed to the right hon. Gentleman. He has never condescended to give me an answer. I do not complain in the least, not in the least. The longer the answer is delayed, the more certain we are of what its character will be. Sooner or later the right hon. Gentleman will show his hand, and it will have to be a hand which will suit the game of Tariff Reformers. We may be well content to possess ourselves in patience. What then are the two ways, and the only two ways, before the country of meeting the necessi- ties of the nation. On the one hand, you may do as we are doing. You may impose simultaneously and in fair proportion, taxes on accumulated wealth, on the profits of industry, on the simpler luxuries, though not the necessities of the poor. You may seek as we are seeking, for new taxes on those forms of value which at present are either inadequately taxed or not taxed at all, values which spring from monopoly, which are not the fruit of individual effort or enterprise, but which are the creation either of social growth or of the direct activity of the State itself. That is one way—that is the way proposed by this Budget. What is the other, the only other, that has yet been disclosed or even foreshadowed to Parliament and the country? It is to take a toll on the prime necessaries of life; it is to raise the level of

prices to the average consumer of the commodity; it is to surround your markets with a tariff wall which in so far as it succeeds in protecting the home producer will fail to bring in revenue, which, in so far as it; succeeds in bringing revenue, will fail to protect the home producer. That, Sir, is the choice which has to be made, and if this be my last word to the House, and to this alternative there is to be added another, which I decline to believe, the choice between the maintenance and the abandonment by this House of its ancient constitutional supremacy over all matters of national finance. I say there is not a man who sits here beside or behind me to-night who is not ready to join the issue.

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

The House divided: Ayes, 379; Noes, 149.

Division No. 893.]	AYES.	[11.30 p.m.
Abraham, William (Rhondda)	Bryce, J. Annan	Elibank, Master of
Acland, Francis Dyke	Buckmaster, Stanley O.	Ellis, Rt. Hon. George Edward
Adkins, W. Ryland, D.	Burns, Rt. Hon. John	Erskine, David C.
Agar-Robartes, Hon. T. C. R.	Burnyeat, W. J. D.	Essex, R. W.
Agnew, George William	Burt, Rt. Hon. Thomas	Esslemont, George Birnie
Ainsworth, John Stirling	Buxton, Rt. Hon. Sydney Charles	Evans, Sir S. T.
Alden, Percy	Byles, William Pollard	Everett, R. Lacey
Allen, A. Acland (Christchurch)	Cameron, Robert	Falconer, J.
Allen, Charles P. (Stroud)	Carr-Gomm, H. W.	Fenwick, Charles
Armitage, R.	Causton, Rt. Hon. Richard Knight	Ferens, T. R.
Ashton, Thomas Gair	Cawley, Sir Frederick	Ferguson, R. C. Munro
Asquith, Rt. Hon. Herbert Henry	Channing, Sir Francis Allston	Fiennes, Hon. Eustace
Astbury, John Meir	Cheetham, John Frederick	Findlay, Alexander
Atherley-Jones, L.	Cherry, Rt. Hon. R. R.	Foster, Rt. Hon. Sir Walter
Baker, Sir John (Portsmouth)	Churchill, Rt. Hon. Winston S.	Freeman-Thomas, Freeman
Balfour, Robert (Lanark)	Cleland, J. W.	Fuller, John Michael F.
Baring, Godfrey (Isle of Wight)	Clough, William	Fullerton, Hugh
Barker, Sir John	Cobbold, Felix Thornley	Gibb, James (Harrow)
Barlow, Sir John E. (Somerset)	Coilins, Stephen (Lambeth)	Gibson, J. P.
Barlow, Percy (Bedford)	Collins, Sir Wm. J. (St. Pancras, W.)	Gladstone, Rt. Hon. Herbert John
Barnard, E. B.	Compton-Rickett, Sir J.	Glen-Coats, Sir T. (Renfrew, W.)
Barnes, G. N.	Corbett, A. Cameron (Glasgow)	Glendinning, R. G.
Barran, Rowland Hirst	Corbett, C. H. (Sussex, E. Grinstead)	Glover, Thomas
Barran, Sir John Nicholson	Cornwall, Sir Edwin A.	Goddard, Sir Daniel Ford
Barry, Redmond J. (Tyrone, N.)	Cory, Sir Clifford John	Gooch, George Peabody (Bath)
Beale, W. P.	Cotton, Sir H. J. S.	Grant, Corrie
Beauchamp, E.	Cox, Harold	Greenwood, G. (Peterborough)
Beaumont, Hon, Hubert	Craig, Herbert J. (Tynemouth)	Greenwood, Hamar (York)
Beck, A. Cecil	Crosfield, A. H.	Grey, Rt. Hon. Sir Edward
Bell, Richard	Cross, Alexander	Griffiths, Ellis J.
Belloc, Hilaire Joseph Peter R.	Crossley, William J.	Grove, Archibald
Benn, Sir J. Williams (Devonport)	Curran, Peter Francis	Guest, Hon. Ivor Churchill
Benn, W. (Tower Hamlets, St. George)	Dalziel, Sir James Henry	Gulland, John W.
Bennett, E. N.	Davies, David (Montgomery Co.)	Haldane, Rt. Hon. Richard B.
Berridge, T. H. D.	Davies, Elis William (Eifion)	Hall, Frederick
Bethell, Sir J. H. (Essex, Romford)	Davies, M. Vaughan- (Cardigan)	Hancock, J. G.
Bethell, T. R. (Essex, Maldon)	Davies, Timothy (Fulham)	Harcourt, Rt. Hon. L. (Rossendale)
Birrell, Rt. Hon. Augustine	Davies, Sir W. Howell (Bristol, S.)	Harcourt, Robert V. (Montrose)
Black, Arthur W.	Dewar, Arthur (Edinburgh, S.)	Hardie, J. Keir (Merthyr Tydvil)
Bottomley, Horatio	Dickinson, W. H. (St. Pancras, N.)	Hardy, George A. (Suffolk)
Boulton, A. C. F.	Dickson-Poynder, Sir John P.	Harmsworth, Cecil B. (Worcester)
Bowerman, C. W.	Dilke, Rt. Hon. Sir Charles	Harmsworth, R. L. (Caithness-shire)
Brace, William	Dobson, Thomas W.	Hart-Davies, T.
Branch, James	Duckworth, Sir James	Harvey, A. G. C. (Rochdale)
Brigg, John	Duncan, C. (Barrow-in-Furness)	Harvey, W. E. (Derbyshire, N.E.)
Bright, J. A.	Duncan, J. Hastings (York, Otley)	Harwood, George
Brocklehurst, W. B.	Dunn, A. Edward (Camborne)	Haslam, James (Derbyshire)
Brodie, H. C.	Dunne, Major E. Martin (Walsall)	Haslam, Lewis (Monmouth)
Brooke, Stopford	Edwards, A. Clement (Denbigh)	Haworth, Arthur A.
Brunner, J. F. L. (Lanes., Leigh)	Edwards, Enoch (Hanley)	Hazel, Dr. A. E. W.
Brunner, Rt. Hon. Sir J. T. (Cheshire)	Edwards, Sir Francis (Radnor)	Hedges, A. Paget
Helme, Norval Watson	Middlebrook, William	Shipman, Dr. John G.
Hemmerde, Edward George	Molteno, Percy Alport	Silcock, Thomas Ball
Henderson, Arthur (Durham)	Mond, A.	Simon, John Allsebrook
Henderson, J. McD. (Aberdeen, W.)	Money, L. G. Chiozza	Sloan, Thomas Henry
Henry, Charles S.	Montagu, Hon. E. S.	Snowden, P.
Herbert, Col. Sir Ivor (Mon. S.)	Montgomery, H. G.	Soames, Arthur Wellesley
Herbert, T. Arnold (Wycombe)	Morgan, G. Hay (Cornwall)	Soares, Ernest J.
Higham, John Sharp	Morgan, J. Lloyd (Carmarthen)	Stanger, H. Y.
Hobart, Sir Robert	Morrell, Philip	Stanley, Albert (Staffs, N.W.)
Hobhouse, Rt. Hon. Charles E. H.	Morse, L. L.	Stanley, Hon. A. Lyulph (Cheshire)
Hodge, John	Morton, Alpheus Cleophas	Steadman, W. C.
Holden, Sir E. Hopkinson	Murray. Capt. Hon. A. C. (Kincard.)	Stewart, Halley (Greenock)
Holland, Sir William Henry	Murray, James (Aberdeen, E.)	Stewart-Smith, D. (Kendal)
Holt, Richard Durning	Myer, Horatio	Strachey, Sir Edward
Hooper, A. G.	Napier, T. B.	Straus, B. S. (Mile End)
Hope, John Deans (Fife, West)	Newnes, F. (Notts, Bassetlaw)	Strauss, E. A. (Abingdon)
Hope, W. H. B. (Somerset, N.)	Nicholls, George	Stuart, Rt. Hon. James (Sunderland)
Horniman, Emslie John	Nicholson, Charles N. (Doncaster)	Summerbell, T.
Horridge, Thomas Gardner	Norman, Sir Henry	Sutherland, J. E.
Howard, Hon. Geoffrey	Nussey, Sir Willans	Taylor, Austin (East Toxteth)
Hudson, Walter	Nuttall, Harry	Taylor, John W. (Durham)
Hutton, Alfred Eddison	O'Donnell, C. J. (Walworth)	Taylor, Theodore C. (Ratcliffe)
Hyde, Clarendon G.	Parker, James (Halifax)	Tennant, Sir Edward (Salisbury)
Illingworth, Percy, H.	Paul, Herbert	Tennant, H. J. (Berwickshire)
Isaacs, Rufus Daniel	Paulton, James Mellor	Thomas, Sir A. (Glamorgan, E.)
Jackson, R. S.	Pearce, Robert (Staffs, Leek)	Thomas, David Alfred (Merthyr)
Jardine, Sir J.	Pearce, William (Limehouse)	Thompson, J. W. H. (Somerset, E.)
Johnson, John (Gateshead)	Pearson, Sir W. D. (Colchester)	Thorne, G. R. (Wolverhampton)
Johnson, W. (Nuneaton)	Pearson, W. H. M. (Suffolk, Eye)	Thorne, William (West Ham)
Jones, Sir D. Brynmor (Swansea)	Philipps, Col. Ivor (Southampton)	Tillett, Louis John
Jones, Leif (Appleby)	Philipps, Owen C. (Pembroke)	Tomkinson, James
Jones, William (Carnarvonshire)	Pickersgill, Edward Hare	Toulmin, George
Jowett, F. W.	Pirie, Duncan V.	Trevelyan, Charles Philips
Kearley, Rt. Hon. Sir Hudson	Pointer, J.	Ure, Rt. Hon. Alexander
Kekewich, Sir George	Pollard, Dr. G. H.	Verney, F. W.
Kelley, George D.	Ponsonby, Arthur A. W. H.	Villiers, Ernest Amherst
King, Alfred John (Knutsford)	Price, C. E. (Edinburgh, Central)	Vivian, Henry
Laidlaw, Robert	Price, Sir Robert J. (Norfolk, E.)	Wadsworth, J.
Lamb, Edmund G. (Leominster)	Priestley, Arthur (Grantham)	Walker, H. De R. (Leicester)
Lamb, Ernest H. (Rochester)	Priestley, Sir W. E. B. (Bradford, E.)	Walsh, Stephen
Lambert, George	Radford, G. H.	Walters, John Tudor
Lamont, Norman	Rainy, A. Rolland	Walton, Joseph
Layland-Barratt, Sir Francis	Raphael, Herbert H.	Ward, John (Stoke-upon-Trent)
Leese, Sir Joseph F. (Accrington)	Rea, Rt. Hon. Russell (Gloucester)	Ward, W. Dudley (Southampton)
Lehmann, R. C.	Rea, Walter Russell (Scarborough)	Wardle, George J.
Lever, A. Levy (Essex, Harwich)	Rees, J. D.	Waring, Walter
Lever, W. H. (Cheshire, Wirral)	Rendall, Athelstan	Warner, Thomas Courtenay T.
Levy, Sir Maurice	Richards, Thomas (W. Monmouth)	Wason, Rt. Hon. E. (Clackmannan)
Lewis, John Herbert	Richards, T. F. (Wolverhampton, W.)	Wason, John Cathcart (Orkney)
Lloyd-George, Rt. Hon. David	Richardson, A.	Waterlow, D. S.
Lough, Rt. Hon. Thomas	Roberts, Charles H. (Lincoln)	Wedgwood, Josiah C.
Lupton, Arnold	Roberts, G. H. (Norwich)	Weir, James Galloway
Luttrell, Hugh Fownes	Roberts, Sir J. H. (Denbighs)	White, Sir George (Norfolk)
Lyell, Charles Henry	Robertson, Sir G. Scott (Bradford)	White, J. Dundas (Dumbartonshire)
Lynch, H. B.	Robertson, J. M. (Tyneside)	White, Sir Luke (York, E.R.)
Macdonald, J. M. (Falkirk Burghs)	Robinson, S.	Whitehead, Rowland
Mackarness, Frederick C.	Robson, Sir William Snowdon	Whitley, John Henry (Halifax)
Maclean, Donald	Roch, Walter F. (Pembroke)	Whittaker, Rt. Hon. Sir Thomas P.
Macnamara, Dr. Thomas J.	Roe, Sir Thomas	Wiles, Thomas
Macpherson, J. T.	Rogers, F. E. (Newman)	Wilkie, Alexander
M'Callum, John M.	Rose, Sir Charles Day	Williams, J. (Glamorgan)
M'Kenna, Rt. Hon. Reginald	Rowlands, J.	Williams, W. Llewelyn (Carmarthen)
M'Laren, Sir C. B. (Leicester)	Runciman, Rt. Hon. Walter	Williams, Sir Osmond (Merioneth)
M'Laren, H. D. (Stafford, W.)	Russell, Rt. Hon. T. W.	Williamson, Sir A.
M'Micking, Major G.	Rutherford, V. H. (Brentford)	Wills, Arthur Walters
Maddison, Frederick	Samuel, Rt. Hon. H. L. (Cleveland)	Wilson, Henry J. (York, W.R.)
Mallet, Charles E.	Samuel, S. M. (Whitechapel)	Wilson, J. W. (Worcestershire, N.)
Manfield, Harry (Northants)	Scarisbrick, Sir T. T. L.	Wilson, P. W. (St. Pancras, S.)
Mansfield, H. Rendall (Lincoln)	Schwann, Sir C. E. (Manchester)	Wilson, W. T. (Westhoughton)
Markham, Arthur Basil	Scott, A. H. (Ashton-under-Lyne)	Winfrey, R.
Marks, G. Croydon (Launceston)	Sears, J. E.	Wodehouse, Lord
Marnham, F. J.	Seddon, J.	Wood, T. M'Kinnon
Mason, A. E. W. (Coventry)	Seely, Colonel	Yoxall, Sir James Henry
Massie, J.	Shackleton, David James
Masterman, C. F. G.	Shaw, Sir Charles E. (Stafford)	TELLERS FOR THE AYES.—Mr. Joseph Pease and Captain Norton.
Menzies, Sir Walter	Sherwell, Arthur James
Micklem, Nathaniel
NOES.
Anson, Sir William Reynell	Balcarres, Lord	Banner, John S. Harmood-
Anstruther-Gray, Major	Baldwin, Stanley	Baring, Capt Hon. G. (Winchester)
Arkwright, John Stanhope	Balfour, Rt. Hon. A. J. (City, Lond.)	Barrie, H. T. (Londonderry, N.)
Ashley, W. W.	Banbury, Sir Frederick George	Beach, Hon. Michael Hugh Hicks

Beckett, Hon. Gervase	Gretton, John	Parkes, Ebenezer
Bellairs, Carlyon	Guinness, Hon. R. (Haggerston)	Pease, Herbert Pike (Darlington)
Bertram, Julius	Guinness, Hon. W. E. (B. S. Edmunds)	Peel, Hon. W. R. W.
Bignold, Sir Arthur	Haddock, George B.	Percy, Earl
Bowles, G. Stewart	Hamilton, Marquess of	Powell, Sir Francis Sharp
Bridgeman, W. Clive	Hardy, Laurence (Kent, Ashford)	Pretyman, E. G.
Brotherton, Edward Allen	Harris, Frederick Leverton	Randles, Sir John Scurrah
Bull, Sir William James	Harrison-Broadley, H. B.	Ratcliff, Major R. F.
Burdett-Coutts, W.	Hay, Hon. Claude George	Rawlinson, John Frederick Peel
Butcher, Samuel Henry	Healy, Maurice (Cork)	Remnant, James Farquharson
Campbell, Rt. Hon. J. H. M.	Heaton, John Henniker	Renton, Leslie
Carlile, E. Hildred	Helmsley, Viscount	Renwick, George
Carson, Rt. Hon. Sir Edward H.	Hermon-Hodge, Sir Robert	Roberts, S. (Sheffield, Ecclesall)
Castiereagh, Viscount	Hill, Sir Clement	Ronaldshay, Earl of
Cave, George	Hills, J. W.	Ropner, Colonel Sir Robert
Cecil, Evelyn (Aston Manor)	Hope, James Fitzalan (Sheffield)	Rutherford, John (Lancashire)
Cecil, Lord John P. Joicey.	Hunt, Rowland	Rutherford, Watson (Liverpool)
Cecil, Lord R. (Marylebone, E.)	Kennaway, Rt. Hon. Sir John H.	Salter, Arthur Clavell
Chamberlain, Rt. Hon. J. A. (Worc'r.)	Kerry, Earl of	Sandys, Col. Thos. Myles
Clive, Percy Archer	Keswick, William	Sassoon, Sir Edward Albert
Clyde, J. Avon	Kimber, Sir Henry	Scott, Sir S. (Marylebone, W.)
Coates, Major E. F. (Lewisham)	King, Sir Henry Seymour (Hull)	Sheffield, Sir Berkeley George D.
Cochrane, Hon. Thomas H. A. E.	Lambton, Hon. Frederick William	Smith, Hon. W. F. D. (Strand)
Corbett, T. L. (Down, North)	Lane-Fox, G. R.	Stanier, Beville
Courthope, G. Loyd	Lee, Arthur H. (Hants, Fareham)	Stanley, Hon. Arthur (Ormskirk)
Craig, Charles Curtis (Antrim, S.)	Lockwood, Rt. Hon. Lt.-Col. A. R.	Starkey, John R.
Craig, Captain James (Down, E.)	Long, Col. Charles W. (Evesham)	Staveley-Hill, Henry (Staffordshire)
Craik, Sir Henry	Long, Rt. Hon. Walter (Dublin, S.)	Stone, Sir Benjamin
Dalrymple, Viscount	Lonsdale, John Brownlee	Talbot, Lord E. (Chichester)
Dickson, Rt. Hon. C. Scott	Lowe, Sir Francis William	Talbot, Rt. Hon. J. G. (Oxford Univ.)
Doughty, Sir George	Lyttelton, Rt. Hon. Alfred	Thomson, W. Mitchell- (Lanark)
Douglas, Rt. Hon. A. Akers-	MacCaw, Wm. J. MacGeagh	Thornton, Percy M.
Du Cros, Arthur	M'Arthur, Charles	Tuke, Sir John Batty
Dumphreys, John	M'Calmont, Colonel James	Walker, Col. W. H. (Lancashire)
Duncan, Robert (Lanark, Govan)	Magnus, Sir Philip	Walrond, Hon. Lionel
Faber, George Denison (York)	Mason, James F. (Windsor)	Warde, Col. C. E. (Kent, Mid.)
Faber, Captain W. V. (Hants, W.)	Meysey-Thompson, E. C.	Whitbread, S. Howard
Fardell, Sir T. George	Middlemore, John Throgmorton	Wilson, A. Stanley (York, E.R.)
Fell, Arthur	Mildmay, Francis Bingham	Winterton, Earl
Fetherstonhaugh, Godfrey	Moore, William	Wolff, Gustav Wilhelm
Fletcher, J. S.	Morpeth, Viscount	Wortley, Rt. Hon. C. B. Stuart-
Forster, Henry William	Morrison-Bell, Captain	Wyndham, Rt. Hon. George
Foster, P. S.	Newdegate, F. A.	Younger, George
Gardner, Ernest	Nicholson, Wm. G. (Petersfield)
Gibbs, G. A. (Bristol, West)	Nield, Herbert	TELLERS FOR THE NOES.—Sir A. Acland-Hood and viscount Valentia.
Gooch, Henry Cubitt (Peckham)	Oddy, John James
Gordon, J.

Lords Amendments considered, and agreed to.