§ The amount of the permanent annual charge for the National Debt under Section 1 of the Sinking Fund Act, 1875, shall, during the current and every subsequent financial year, be the sum of twenty-five million instead of twenty-eight million pounds.
§ Sir F. BANBURYI should like to say a few words on this Clause before the Committee decides to pass it.
§ Mr. T. M. HEALYI understood the Government promised a new Licensing Clause. I do not see it on the Paper.
§ The CHAIRMANThis deals with the Sinking Fund, and has nothing to do with the Licensing Clauses.
§ Mr. T. M. HEALYWe had it promised.
§ The CHAIRMANThat is another point.
§ Mr. LLOYD-GEORGEThese are purely postponed Clauses.
§ Sir F. BANBURYThis Clause, which was postponed till to-day, deals with the Sinking Fund, and proposes to reduce the sum set aside for the services of the nation from £28,000,000 to £25,000,000. I think we should not acquiesce in this proposal, because I believe, from a financial point of view, it is one of the worst proposals in a very bad Bill. When the Party opposite came into power five years ago they stated all over the country that their desire was to re-establish the finances of the country upon a sounder basis. This is a proposal to disestablish the present sound basis of the Sinking Fund and to put in its place a proposal which from the financial point of view is of the very worst description. When the Party opposite came into power the National Debt was, roughly speaking, £730,000,000. Since then they have added something like £300,000,000 to the National Debt. I am prepared to substantiate that statement. They have devoted some £9,000,000 to Old Age Pensions, and that capitalised will represent £300,000,000. That is a simple fact, and why hon. Members below the Gangway laugh at it passes my comprehension It is unremunerative expenditure, and it is exactly the same whether the money is devoted to Old Age Pensions or to payment of interest on the National Debt.
1051 What have the Government done, to reduce the amount of the Debt? They have gone about the country declaring that they have reduced it by £40,000,000 sterling. I do not want to use an unparliamentary phrase, or one calculated to give offence to hon. Members, but the most moderate expression I can apply to that statement is that it is quite inaccurate. What the Government have done is that they have taken the £28,000,000 devoted to the service of the Debt by the late Chancellor of the Exchequer. They have taken the old Sinking Fund. But they could not help themselves. The money went automatically to the reduction of debt. The only thing they can plume themselves upon is that their estimates have been so wrong that they got a large surplus which they were obliged to apply to the reduction of debt. The fact is that what reduction of debt there has been has been effected by the Government without any desire on their part, and simply in consequence of the position in which the finances of the country were left by the Unionist Government, and also through the bad budgetting of the Chancellor of the Exchequer and his immediate predecessor the Prime Minister. The fact remains that by their policy they have increased the national indebtedness at a time when the finances of the country are in a very bad state, and when Consols stand lower than at any date during the last 20 years, while the expenditure is increasing on all sides.
12.0 P.M.
I venture to say that from a financial point of view a more foolish proposal never was made, and as the right hon. Gentleman has consented to waive his first proposal to abolish the Sinking Fund, I trust that he will waive this proposal and allow the Sinking Fund to take its natural course. I may say that when this sum was originally set aside by Sir Stafford Northcote his idea was that a temptation to alter it should not be present to the mind of the Chancellor of the Exchequer, whoever he might be. He was aware that human nature, being frail, the temptation to use this money for other purposes would assail all Chancellors of the Exchequer to whichever party they belonged, and he endeavoured to set aside a fixed sum. That sum has never been altered except in cases of national emergency, such as war or in one case, I believe, the necessity of adding largely to the Navy. These are the only occasions on which it has been 1052 altered, and I trust the Chancellor of the Exchequer will see that his true policy is to leave the Sinking Fund in the position in which it is now.
§ Mr. LLOYD-GEORGEThe hon. Baronet is the only financial authority of any position in this country who has challenged the wisdom of the Government in the course taken in regard to the Sinking Fund. So far as to our being criticised for reducing the Sinking Fund by three millions, I think it will be a matter of astonishment to many people that we have not taken another million. Lord Cromer, another financial authority, proposed to the Government that they should reduce the Fund by four millions, and that is the criticism which has been directed from every quarter except the hon. Baronet. The right hon. Gentleman (Mr. Austen Chamberlain) frankly admitted, in his speech immediately after I had made my Budget statement, that it was an agreeable surprise that I had not taken more. I do not want merely to indulge in a tu quoque, but I would remind the hon. Baronet that I am not sure that he did not vote for the reduction of the Sinking Fund to 25 millions under Lord Goschen when that sum would provide for a smaller reduction of the National Debt than it does now.
§ Sir F. BANBURYBut the National Debt was much lower.
§ Mr. LLOYD-GEORGEYes, I know; but the sum available for the payment of debt was smaller because of the rate of interest. The hon. Baronet also afterwards assented to a proposal of Lord St. Aldwyn for the reduction of the Sinking Fund from 25 millions to 23 millions, and that was at a time when there was no heavy liability upon the Exchequer, and no necessity for new taxation. I am not sure that Lord St. Aldwyn had not a surplus, and still the hon. Baronet supported a proposal to reduce the Sinking Fund from 25 millions to 23 millions. Now we have to raise £16,000,000 this year, and something over £20,000,000 next year, and the hon. Baronet says this is a ludicrous proposal that we should reduce it to £25,000,000 when Lord St. Aldwyn reduced it to £23,000,000. The position of the hon. Baronet is rather inconsistent. Supposing I left the Sinking Fund exactly where it was after the gigantic efforts of my predecessor to pay off debt, and proposed to raise this extra three millions by increasing the taxation of the country, the whole 1053 House of Commons would have thought it was pure brigandage on my part. It means very nearly another 2d. on the Income Tax by the time all the concessions have been added. Do we want another 1½d. on the Income Tax in order to save the Sinking Fund?
The hon. Baronet must also remember that certain charges which used to be treated as capital charges are now put on the Estimates of the year—considerable sums of money which, under the old order, we should have borrowed and added to the floating liabilities of the country, so that the £25,000,000 does not nearly represent what we are doing in preventing debt from being piled up, and the amount that we get out of this £25,000,000 will be a clear reduction of debt, whereas under the old system it was by no means a clear reduction, because what we paid out of Sinking Fund was piled up by means of borrowing for purposes for which we now pay. We are paying our way now. That is the difference between the finance which the bon. Baronet now opposes and the finance which he used to support.
§ Sir F. BANBURYI believe on one occasion I voted for the reduction of the Sinking Fund. The National Debt was then £630,000,000, as against £735,000,000 now. Consols were then 111. They are now 83.
§ There was a question whether it was wise to redeem Consols when they were at such a high price. The expenditure of the country was certainly at 20 or 30 millions a year less than now, and under these circumstances a reduction of the Sinking Fund was on the whole wise and could be supported. But the circumstances are totally different. We have an expenditure of £162,000,000—a thing we have never had before in time of peace. The financial position is quite changed, and though I was right in voting for the reduction then, I am equally right in opposing it now.
§ Mr. T. M. HEALYThe Chancellor of the Exchequer has made an important admission of which we ought to take note, namely, that he was pressed to take £4,000,000 instead of £3,000,000 out of the Sinking Fund. I think it is important that those who represent Irish constituencies should remember that the right hon. Gentleman was pressed to take an extra million out of the Sinking Fund instead of out of the taxes.
§ Question put, "That the Clause stand part of the Bill."
§ The Committee divided: Ayes, 164; Noes, 48.
1055| Division No. 738.] | AYES. | [12.15 a.m. |
| Agnew, George William | Dickinson, W. H. (St. Pancras, N.) | Hope, W. Bateman (Somerset, N.) |
| Allen, A. Acland (Christchurch) | Duckworth, Sir James | Howard, Hon. Geoffrey |
| Allen, Charles P. (Stroud) | Duncan, C. (Barrow-in-Furness) | Hudson, Walter |
| Balfour, Robert (Lanark) | Duncan, J. H. (York, Otley) | Hyde, Clarendon |
| Barker, Sir John | Dunne, Major E. Martin (Walsall) | Jones, Leif (Appleby) |
| Barnard, E. B. | Edwards, Sir Francis (Radnor). | Jones, William (Carnarvonshire) |
| Barnes, G. N. | Elibank, Master of | King, Alfred John (Knutstord) |
| Barran, Sir John N. (Hawick B.) | Essex, R. W. | Laidlaw, Robert |
| Beauchamp, E. | Everett, R. Lacey | Lambert, George |
| Beck, A. Cecil | Falconer, James | Lamont, Norman |
| Belloc, Hilaire Joseph Peter R. | Ferens, T. R. | Layland-Barratt, Sir Francis |
| Berridge, T. H. D. | Ferguson, R. C. Munro | Lehmann, R. C. |
| Black, Arthur W. | Findlay, Alexander | Lever, A. Levy (Essex, Harwich) |
| Boulton, A. C. F. | Fuller, John Michael F. | Levy, Sir Maurice |
| Bowerman, C. W. | Fullerton, Hugh | Lewis, John Herbert |
| Bramsdon, Sir Thomas A. | Furness, Sir Christopher | Lloyd-George, Rt. Hon. David |
| Bright, J. A. | Glendinning, R. G. | Lundon, Thomas |
| Brodie, H. C. | Glover, Thomas | Lupton, Arnold |
| Brunner, J. F. L. (Lancs., Leigh) | Gooch, George Peabody (Bath) | Mackarness, Frederic C. |
| Burns, Rt. Hon. John | Guest, Hon. Ivor Churchill | Maclean, Donald |
| Byles, William Pollard | Gulland, John W. | Macnamara, Dr. Thomas J. |
| Causton, Rt. Hon. Richard Knight | Gwynn, Stephen Lucius | MacVeagh, Jeremiah (Down, S.) |
| Cawley, Sir Frederick | Hall, Frederick | M'Callum, John M. |
| Cecil, Evelyn (Aston Manor) | Harcourt, Robert V. (Montrose) | M'Laren, H. D. (Stafford, W.) |
| Channing, Sir Francis Allston | Harmsworth, Cecil B. (Worcester) | M'Micking, Major G. |
| Clancy, John Joseph | Harmsworth, R. L. (Caithness-shire) | Maddison, Frederick |
| Clough, William | Haze, Dr. A. E. | Marnham, F. J. |
| Cobbold, Felix Thornley | Healy, T. M. (Louth, North) | Massie, J. |
| Collins, Stephen (Lambeth) | Hedges, A. Paget | Masterman, C. F. G. |
| Cooper, G. J. | Helme, Norval Watson | Montagu, Hon. E. S. |
| Corbett, A. Cameron (Glasgow) | Henry, Charles S. | Muldoon, John |
| Corbett, C. H. (Sussex, E. Grinstead) | Higham, John Sharp | Murray, Capt. Hon. A. C. (Kincard.) |
| Cotton, Sir H. J. S. | Hobart, Sir Robert | Nicholson, Charles N. (Dancaster) |
| Cullinan, J | Hobhouse, Rt. Hon. Charles E. H. | Norman, Sir Henry |
| Davies, Sir W. Howell (Bristol, S.) | Hodge, John | Nuttall, Harry |
| Dewar, Arthur (Edinburgh, S.) | Holland, Sir William Henry | O'Connor, John (Kildare, N.) |
| O'Connor, T. P. (Liverpool) | Roch, Walter F. (Pembroke) | Wason, Rt. Hon. E. (Clackmannan) |
| Parker, James (Halifax) | Roe, Sir Thomas | Wason, John Cathcart (Orkney) |
| Partington, Oswald | Rogers, F. E. Newman | Waterlow, D. S. |
| Pearce, Robert (Staffs, Leek) | Rose, Sir Charles Day | White, Sir George (Norfolk) |
| Pease, Rt. Hon. J. A. (Saffron Walden) | Rowlands, J. | White, J. Dundas (Dumbartonshire) |
| Philipps, Owen C. (Pembroke) | Russell, Rt. Hon. T. W. | White, Sir Luke (York, E. R.) |
| Pickersgill, Edward Hare | Rutherford, V. H. (Brentford) | Whitehead, Rowland |
| Pirie, Duncan V. | Samuel, Rt. Hon. H. L. (Cleveland) | Wiles, Thomas |
| Pointer, Joseph | Seely, Colonel | Wilkie, Alexander |
| Pollard, Dr. | Sherwell, Arthur James | Williams, J. (Glamorgan) |
| Ponsonby, Arthur A. W. H. | Stanley, Albert (Staffs, N. W.) | Williamson, Sir Archibald |
| Price, Sir Robert J. (Norfolk, E.) | Summerbell, T. | Willoughby de Eresby, Lord |
| Rea, Rt. Hon. Russell (Gloucester) | Taylor, John W. (Durham) | Wilson, Hon. G. G. (Hull, W.) |
| Rea, Walter Russell (Scarboro') | Thomas, Sir A. (Glamorgan, E.) | Wilson, Henry J. (York, W. R.) |
| Rees, J. D. | Thorne, G. R. (Wolverhampton) | Wilson, P. W. (St. Pancras, S.) |
| Richards, T. F. (Wolverhampton) | Toulmin, George | Wood, T. M'Kinnon |
| Ridsdale, E. A. | Trevelyan, Charles Philips | |
| Roberts, Charles H. (Lincoln) | Verney, F. W. | TELLERS FOR THE AYES.—Captain |
| Roberts, G. H. (Norwich) | Walsh, Stephen | Norton and Sir Edward Strachey. |
| Robson, Sir William Snowdon | Ward, John (Stoke-upon-Trent) | |
| NOES. | ||
| Acland-Hood, Rt. Hon. Sir Alex. F. | Guinness, Hon. R. (Haggerstan) | Remnant, James Farquharson |
| Ashton, Thomas Gair | Hamilton, Marquess of | Renwick, George |
| Balcarres, Lord | Harris, Frederick Leverton | Rutherford, John (Lancashire) |
| Baldwin, Stanley | Harrison-Broad, H. B. | Rutherford, Watson (Liverpool) |
| Carlile, E. Hildred | Helmsley, Viscount | Salter, Arthur Clavell |
| Carson, Rt. Hon. Sir Edward H. | Hermon-Hodge, Sir Robert T. | Smith, Abel H. (Hertford, East) |
| Cecil, Lord R. (Marylebone, E.) | Hill, Sir Clement | Starkey, John R. |
| Clyde, James Avon | Hunt, Rowland | Staveley-Hill, Henry (Staffordshire) |
| Cochrane, Hon. Thomas H. A. E. | King, Sir Henry Seymour (Hull) | Walker, Col. W. H. (Lancashire) |
| Dalrymple, Viscount | Lane-Fox, G. R. | Warde, Col. C. E. (Kent, Mid) |
| Dickson, Rt. Hon. Charles Scott | Lockwood, Rt. Hon. Lt.-Col. A. R. | Wortley, Rt. Hon. C. B. Stuart- |
| Doughty, Sir George | Mildmay, Francis Bingham | Wyndham, Rt. Hon. George |
| Douglas, Rt. Hon. A. Akers- | Nicholson, Wm. G. (Petersfield) | |
| Fell, Arthur | Oddy, John James | |
| Fletcher, J. S. | Pease, Herbert Pike (Darlington) | TELLERS FOR THE NOES.—Sir |
| Forster, Henry William | Pretyman, Ernest George | Frederick Banbury and Mr. Walter Guinness. |
| Goulding, Edward Alfred | Ratcliffe, Major R. F. | |
| Gretton, John | Rawlinson, John Frederick Peel |
§ Committee report Progress; to sit again to-morrow (Tuesday).