FINANCE BILL, 1909–10.

HC Deb 27 April 1910 vol 17 cc461-535

Order for Third Reading read.

Motion made, and Question proposed, "That the Bill be now read the third time.—[The Chancellor of the Exchequer.]

Mr. BONAR LAW

moved, as an Amendment, to leave out the word "now" and at the end of the Question to add the words "upon this day six months."

4.0 P.M.

We have now reached the final stage in this long discussion, and the Government are generous enough only to give us four hours out of the time set apart for legislative work to-day. That time, however, would be sufficient if we concentrated ourselves—if the whole House concentrated itself on one detail and considered, for instance, the way in which the present Government have fulfilled their pledge to exempt agricultural land from the scope of this Bill. They took care in framing the Closure Resolution to say that in Committee we should have an opportunity of dealing with this point. The Debate yesterday, however, was not without its value, for even under this guillotine Resolution the Chancellor of the Exchequer gave one explanation which is important. He said that he had always intended not to tax agricultural land but that he had never refrained from intending to tax, and he did intend to tax, agricultural value. That is a very interesting distinction for agricultural Members in all parts of the House. Personally, from the point of view of the duty which I am now attempting to perform, I am not sorry that the Government has given us so little time. The subject is stale to me. I have nothing new to say upon it, and I have no hope of saying anything old, even in a new way. I am not sorry, therefore, as far as I am concerned, that it is necessary for me to be brief. Apart from that, the Budget really has no interest for the present House of Commons. There has been plenty of interest connected with the Budget, but it has not been in the House of Commons. Here the Government have been simply marking time; their real activities have I been elsewhere. Their energies have been concentrated upon those underground burrowings—on the mines and countermines— by which for two months they have been endeavouring to obtain a majority for the people's Budget by securing the vote of hon. Members who have told us in this Parliament that, on its merits, they are opposed to the Budget.

They have succeeded, and from the day of that memorable Thursday, which will be the one enduring monument of the present First Lord of the Treasury—from the memorable evening when the right hon. Gentleman told us, clearly and precisely, the real terms of the bargain by which he had created a majority for the Budget, there has been no interest in the Budget discussions in this House. In spite of this, I must say something to justify the Motion which I am driven to move, and to this extent I am sure the whole House will agree with me—and I do not expect hon. Gentlemen opposite to agree with much that I am going to say—this Budget has excited a greater amount of interest, it has aroused a larger amount of hostility than has ever been encountered by any previous Finance Bill What is the explanation? Hon. and right hon. Gentlemen opposite have a very simple explanation to give to the House, to put it in the concrete form in which it was given by the right hon. Gentleman the Home Secretary (Mr. Churchill) during the election. He has one great advantage, he is always able to describe most minutely the motives of his opponents, and he does that by a process, simple but not always accurate, of measuring them by the same standard which he applies to himself. He told this particular audience that the Lords had rejected the Budget to save their own pockets and to transfer taxation from the banking accounts of the rich to the weekly wages of the poor. The right hon. Gentleman is not singular in that, for the Chancellor of the Exchequer, with that pleasant humour which characterises his platform speeches, put the same thing in a different way. He said, Lord Rosebery sincerely objects to the Budget because he sincerely objects to pay. That is a very simple explanation, but there is one objection, and that is that it does not explain. The hostility to this Budget is not confined to the House of Lords. It is felt, with I believe equal unanimity, by the whole trading community of this country.

I will give one illustration, and I think one proof. A meeting of the Glasgow Chamber of Commerce was summoned to discuss the Budget. It is perfectly true that there is a majority of Unionists in the Glasgow Chamber of Commerce, but it is perfectly true, also, that on every other subject there is a strong minority. The question of Tariff Reform has been raised several times, and there has always been a majority for it, but there has also always been a strong minority against it, and the minority has been on strictly party lines. On this occasion party lines were absolutely obliterated. There was an attendance of 400 people—a very large attendance—and a motion hostile to the Budget was carried against a minority of two only, and those two were avowed Socialists. That explanation does not account for that opposition. These Glasgow business men are not interested in land—not one in ten of them are interested in land or in the trade in it. They felt precisely the same hostility to the Budget which we feel, and they felt it for the same reason. They opposed it, and we oppose it, not because, as hon. Gentlemen opposite say, the Budget imposes too great a burden on the rich and too small a burden on the poor. Not at all; we oppose it because it is our belief that it imposes burdens upon the rich and poor alike in the worst possible way, because for the first time in our history the Government has gone out of its way deliberately in arranging its Finance Bill, not to put the burden of taxation on men in accordance with their ability to bear it, not to put it upon them in accordance with their wealth, but with the particular intention of selecting particular forms of wealth which are obnoxious to them to put upon them crushing burdens which were bound to destroy the trade on which they were inflicted. That is the reason, that is the explanation, of the hostility to the Budget. The right hon. Gentleman the Chancellor of the Exchequer took my right hon. Friend beside me (Mr. Austen Chamberlain) to task, for smiling when he spoke of the Finance Bill as a great financial instrument. It is no wonder he smiled—financial instrument is good, but what has it to do with this Budget?

This Budget, it is perfectly true, does raise money, but so far as the controversial parts of it are concerned, that is an accident—it is incidental—it is not the purpose of the Budget. This Budget is not in the ordinary sense a Finance Bill at all. It is a Penal Code—it is a means by which the Government are trying to get even with their enemies, as they call them, throughout the country. As I have said, I am going to be brief. I am not going to deal with many of these taxes. I shall take one of them only in proof of my statement that this Budget is penal and intended to be penal, and that is the method in which they deal with what they call "the trade." [An HON. MEMBER: "What trade?"] I think hon. Members opposite know what I mean, at all events, they always use that expression in regard to it. Look at the first duty—the Spirit Duty—is that a financial instrument? What happened? The right hon. Gentleman selected a trade which was admittedly a falling one, and he imposed upon it in the shape of new duties burdens so crushing that in spite of his putting on taxation one-third heavier than it was before, he derived actually less revenue at the higher rate of taxation than he did before from the lower rate. If that is a financial instrument, it is one which has broken in his hands. Instead of getting more money, he has got less, but he has got something else. He has seriously injured, and in some cases almost ruined that trade whether he likes it or not. The distilling trade in Ireland and Scotland is one of the most important trades in those countries. He has injured them in many cases to the verge of ruin, and he has done more than that. The indirect injury which he has done to other trades dependent upon that industry is greater than the injury inflicted upon the distilling trade itself. He has inflicted a great hardship on all kinds of industries in Ireland and Scotland. Why? To gain money? He has lost money. What has he gained? Revenge upon a trade which he thought was responsible for his reverses.

But as the right hon. Gentleman beside me pointed out, the Chancellor of the Exchequer has always two strings to his bow. He admits that as a question of finance these extra duties have been an actual failure, but he says, "Look at the great temperance reform which they have brought about." I wonder whether there is any hon. Member on that side of the House who seriously believes that the temperance of the working classes can be promoted by raising the price of alcohol? What a simple process that would be if it were true. If hon. Members wish to see the truth of it, let them take the reverse way. There is another way in which they can do it as well. They can procure precisely the same result by creating bad trade and by producing less employment. By the man getting lower wages in the one case, the result is achieved, and by the man having to pay more money for the commodity in the other it is also brought about, because the man has less money to spend on the commodity in either case. If that is temperance, and if that is the way the working classes are to be made temperate in this country, I am bound to say the present Government are the greatest temperance reformers the world has ever seen. They promote temperance in both ways—they have promoted it by raising the price of the commodity, and they have also promoted it still more by giving the working classes less money to spend upon it. Look at the Licence Duty, which is now, for the first time, going to come into effect. Does the right hon. Gentleman still pretend that it is a financial instrument? Does the right hon. Gentleman still pretend that this duty is put on mainly for the sake of raising revenue? If he does he gives the lie to scores of statements made by hon. and right hon. Gentlemen sitting on those Benches. I have the extracts here from their speeches, but I will not repeat them, though everybody knows that man after man on those benches has stated over and over again in the country that what the Government are doing and intend to do is to carry by means of the Finance Bill that the House of Lords would not touch, as they thought, the same provisions with regard to the reduction of licences, which they failed to carry by their Licensing Bill. That is the object of this particular Clause of the Finance Bill. Is that an object which any Government has a right to have in raising money? I should like in this connection to remind the House of what happened during one of the Committee stages of this Bill last year. The hon. and learned Gentleman the Member for Waterford (Mr. John Redmond) objected to these taxes as they affected Ireland—he wanted some relief. The words he then used express so exactly my own feeling on this matter that I shall read them to the House:— I daresay, if you look forward to twenty years hence, Ireland will be all the better if the number of these small houses be small. But what this Bill proposes is by a wholesale and violent process to destroy thousands of these houses, and, if it is permitted to do that, it will undoubtedly inflict the greatest possible suffering, misery, and injustice upon thousands of people in Ireland. The arguments of the hon. and learned Gentleman had their effect. The Prime Minister was immediately convinced—he always is—iby the arguments of the hon. and learned Gentleman. He at once made a concession. It was pointed out afterwards, I think by the hon. Member (Mr. T. M. Healy), that the concession was not of much value, but it was good enough to be of some value. But this is the point I wish to put, even to hon. Members on the other side: If it is not right to inflict the greatest possible suffering, misery, and injustice upon thousands of people in Ireland, why is it right to inflict the same misery and injustice upon a far larger number of thousands of people in England? What is the answer? The Chancellor of the Exchequer the other night told us that the Leader of the Opposition had created a freehold. He admits that it is a freehold, but he is taking away that freehold, although in many cases the men who possess it have, since 1904, paid large sums of money by way of compensation in order to secure that the freeholds should continue for their benefit. The right hon. Gentleman proposes to take it away. On what grounds? They are carrying out, as they have themselves told us, the principles of the Licensing Bill. But they are going a great deal further. The Home Secretary was right when he said the trade will find that they are falling from the frying-pan into the fire. They have. The Government are taking away this freehold, not on the principles of the Licensing Bill, which did attempt to give some kind of compensation; they are taking it without any compensation, even in the shape of time. It is not a question of what these Gentlemen say in their speeches. The right hon. Gentleman's own estimate of the result of the yield shows that he contemplates an immense reduction of those licences. The estimate would be ludicrous on any other supposition. He is deliberately turning out of employment, turning into the street, thousands of men who have committed no crime, and who have carried on a legitimate trade in a legitimate and legal way. I am not going to give many illustrations of the hardships of these proposals; I shall take one only. It was the illustration given by the right hon. Gentleman (Mr. Austen Chamberlain). I take it, not because I think it is the most striking, because I think some of those given by the hon. Member (Mr. Cave) showed the hardships still more clearly. I take it because of the replies which have been given to it from that side of the House. The right hon. Gentleman (Sir Thomas Whittaker) was the first to deal with it. He said my right hon. Friend truly gave the amount of the profits which were divided, and the facts were that the new Licensing Clauses would take 50 per cent, more than the total profits divided among the ordinary shareholders. The right hon. Gentleman said, "It is quite true, but he does not take into account the amount for depreciation and bad debts." The right horn Gentleman is a business man. I still think I am a kind of a business man, and it is new to me to learn that bad debts are profits, and I hope he does not conduct his own institution on those principles. But that is not the reason why I refer to the criticism of the right hon. Gentleman. He went further, and said, "This trade has to make this big depreciation, because it is a falling trade, because there is a diminishing consumption from natural causes." And it is that trade, under those conditions, which the Government select for this crushing burden of taxation.

But the Postmaster-General gave another reply, which is more important, not because it is a better argument, but because it comes from the Government. He said, "I deny altogether that this new taxation must necessarily come out of profits; it can come out of other things." And one of the other ways in which it could be raised is by raising the price of the commodity to the consumer. The Chancellor of the Exchequer told us that was his intention. It would have been quite easy to carry out that intention. If they had put precisely the same burden on all the channels of distribution, that result would have followed and to some extent the burden would have been transferred to the consumer, but they have not done that. They put a burden on these licensed houses which is out of all proportion to the burden which they put upon clubs. The hon. Member (Mr. Sherwell) pointed out last Session, and gave figures for it, that the result of the Bill as it stands will be that the clubs, owing to the smaller burden that they have to bear, and owing to the increased trade which will flow to them out of the licensed houses, will be able to sell at the old price without any diminution of profit. What happens? The Government deliberately drive the trade out of the licensed houses, over which they have control, into clubs, over which they have no control. What is the value of that as a financial estimate? The licensed houses are going to be taxed, and they are deliberately driving the trade into a channel from which they will not get taxes. That is not the worst part of it. What is the nature of the channel? It is being driven into such clubs as we have heard a great deal about, those Radical clubs in London and in many of our big towns where music-hall entertainments are given every Sunday. The Chairman of the Labour party, in a question the other day, seemed to imagine that we were attacking those clubs on Sabbatarian grounds. We are not. Though if we are to have music-halls on Sunday, I think it is better to have them open and inspected, than to have them without inspection. The Government pretend that their object is to cause a smaller sale of intoxicating liquor, and how do they do it? How are these entertainments on Sunday, or any other day, paid for? Where do the salaries of the performers come from? They are paid for in every case by the increased sale of drink which is due to these performances, and here is a Government which professes to be making these changes for the sake of temperance, and which is deliberately driving the trade out of the channel which always has been and can be controlled into a channel which never has been controlled and never properly can be. Hon. Gentlemen opposite call that temperance. I do not. I call it hypocrisy.

There is only one other subject in connection with the Budget upon which I should like to say a few words. We have maintained from the first that the Government, by their legislation, and still more by the speeches in which they defend their legislation, have injured the national credit and have damaged the whole trade of the country. The Chancellor of the Exchequer the other night said what he has often said before, "You are pretty patriots to be running down the trade of your own country." But if there is one man in this country who above all others should be careful, so far as he can, in everything he does, and in everything he says, not to injure the sense of security of this country, it is the Chancellor of the Exchequer. How has he fulfilled that duty? He has gone all over the country holding up to big masses of his countrymen the men whom he had selected for special taxation as if they belonged to the criminal classes. [Hon. Members: "No."] If anyone doubts it let him read the Lime-house speech. Indeed, the right hon. Gen- tleman went so far that, if I am not mistaken, I saw a reference made by the hon. Member (Mr. Snowden), who is not generally weighed by a great sense of responsibility, in which he pointed out that the right hon. Gentleman had gone rather far considering the position which he occupied. So he had. It is not only these speeches, it is more than that. Both he and the Home Secretary have deliberately told the country that the principle of the Budget is that men are to be taxed, not in proportion to their wealth, but on consideration as to whether or not they deserve that wealth.

The SECRETARY of STATE for the HOME DEPARTMENT (Mr. Churchill)

No.

Mr. BONAR LAW

I will give the exact words. "In future the question that we are going to put is not, how much have you got, but how did you get it?" Does not that mean "whether or not you deserve it"? If it does not, what does it mean?

Mr. CHURCHILL

I do not object in the least to a quotation, but I do object to a misleading paraphrase.

Mr. BONAR LAW

The right hon. Gentleman has not shown in what way the paraphrase was misleading. What does that mean? It means that in future, if these doctrines are to prevail, the title to property in this country is not to depend upon the law courts, but upon the opinion of the Chancellor of the Exchequer, who is backed by a majority in the House of Commons. While the right hon. Gentleman and the Members of his Government, who above everyone else ought to be the guardians of the sense of security in this country, are making that kind of speech, what right has he to charge us with un-patriotism or anything else when we point out to our countrymen what the effect inevitably is, and increasingly will be, if power is left in the hands of men who use it in the manner in which this Government have done? I said they had damaged national credit and damaged trade. It is possible to prove both statements, and I am going to do it. As regards national security, the Postmaster-General the other day put to us this question. He said, Do you think it reasonable when our national security has been falling for years to draw a hard and fast line at 1905, and say that up to that point it is due to natural causes, but that since then it is due to the wickedness of the Government. We do not say anything so foolish. So long as our national security fell in the same way as the national security of other countries fell it was due to causes which were common to them all, and for which the Government are not responsible. But when the time comes when we find that our securities continue to fall while those of other countries have begun to rise, then we say with justice, that the fall is due to the men who now control the Government of the country. I do not know whether the right hon. Gentleman has read an interesting letter in "The Times" to-day by the hon. Baronet (Sir F. Banbury). If he has it ought to teach him a lesson. During the time since he has been Chancellor of the Exchequer Consols have fallen 6½ points, from the day he became Chancellor of the Exchequer to the day before yesterday—6½ points, or between 7 and 8 per cent. During the same time the national securities of all other great countries have not fallen. They have risen. How do they account for that? [An HON. MEMBER: "British security is better."] I think the right hon. Gentleman can account for it a little better than his follower behind him. The right hon. Gentleman asked, How can you complain of the fall in Consols when we are borrowing money? Well, why are we borrowing money? The hon. Member for Waterford (Mr. John Redmond) has one great advantage over his allies on the Treasury Bench. He is not afraid to say what he thinks. He has given the reason quite plainly. He said in public that financial confusion was in the interest of the cause he was serving. I do not suppose the Government will agree with him. They do not agree with him, but they obey him. They borrowed the money because the hon. Member for Waterford made them borrow, and for no other reason. Apart from that, does the right hon. Gentleman, having been four years in. Government Departments, really believe that borrowing on a small scale would affect the price of securities if there were no other grounds?

Mr. LLOYD-GEORGE

indicated assent.

Mr. BONAR LAW

He certainly does believe it. Well, I shall prove out of his own mouth how little reason there is for the belief. He referred the other night, as he is fond of doing, to the financial position of Germany. I hope when the right hon. Gentleman has more time at his disposal, six or nine months hence let us hope, he will have an opportunity of examining the financial position of Germany and finding out what is the rate of taxation per head of the population as compared with what it is in this country, of finding out what the debt is in proportion to the debt behind us, and of finding out a great many particulars which are open to anyone who takes the trouble to find out, but which the right hon. Gentleman has never looked into, or he would not have made that statement. Apart from that, take what the right hon. Gentleman did say. He said the German Government have a deficit, that they are borrowing to pay their way, and that we are paying our way. What is the inference? A country that is paying its way ought to find its securities rising, and a country that is not paying its way and which is borrowing ought to find its securities falling. Well, what happened? Ours fell and Germany's rose.

Mr. LLOYD-GEORGE

I would not interrupt the hon. Gentleman if it were a matter of argument, but since he has quoted me I think he ought to quote the-whole of my statement. I said that the fall was attributable to the fact that the Sinking Fund has been suspended, and that the market for Consols was in suspense. Everyone knows perfectly well that the price of Consols depends very largely on the fact that the Government go into the market and buy. If they cease to buy, of course the market falls.

Mr. BONAR LAW

That is an extraordinary statement to be made by any business man. We have a debt of £600,000,000 or £700,000,000. The amount of the Sinking Fund which has been suspended is £6,000,000, and the fact that we have not bought £6,000,000 of Consols is given by the right hon. Gentleman as the reason for the fall. If he believes that, I do not think any business man believes it. I do not expect hon. Gentlemen opposite to agree with me, but I think I have proved that the Government have injured our national credit. But it would not be complete if we stopped there. I say they have also injured, and I am afraid injured permanently, the general trade of this country. I am not going to make that statement without giving some reason for it. During the election campaign the right hon. Gentleman the Home Secretary made the curious statement that between the day the Budget was issued and the day of its rejection by the House of Lords there had been an actual rise in the case of 397 representative securities. That seemed to me such an extraordinary statement, coming even from the Home Secretary, that I examined it, and I will tell the House how I examined it and the result. I caused an examination to be made of the commercial columns of "The Times" the day before the Budget was made and the day before the Finance Bill was rejected by the House of Lords. I found that in the case of British securities—that is to say, every security regarding trade of any kind carried on within the United Kingdom during that period— there had been a fall in the case of 90 per cent, of these securities, while in the case of the other 10 per cent, some had remained steady, and in one or two cases there had been a rise. But the amazing feature in connection with the figures was that the fall had taken place precisely at the time when similar securities were rising in every other industrial country in the world. More than that, it is proved by the figures of the right hon. Gentleman himself. He took as representative securities securities quoted on our stock markets, and what was the result? All those outside the United Kingdom were rising, and those inside the United Kingdom were falling. The Chancellor of the Exchequer told us the other night that trade is flourishing—that every trade is booming except whisky [An HON. MEMBER: "Hear, hear."] Somebody says, "Hear, hear." Ask the Labour Members' below the Gangway if that is true.

Mr. LLOYD-GEORGE

I said it is improving.

Mr. BONAR LAW

I beg pardon, the right hon. Gentleman said it was booming. If he says he did not mean to say so I will say nothing more about it.

Mr. LLOYD-GEORGE

It is difficult to remember the exact words. My recollection is that I said trade was still improving, and that only. I did use the word "boom," but I said we were on the road to one of the greatest trade booms we have ever experienced.

Mr. BONAR LAW

The right hon. Gentleman says quite truly that it is difficult to remember what one says. He said every trade was booming, but since he no longer maintains that it is no use arguing it. He did give one extraordinary proof of the prosperity of this country. "Look," he said, "at the Stock Exchange, they are having the time' of their lives. Look at the gamble in rubber, and the millions of money that are pouring into them." I think his description is perfectly accurate, but does the right hon. Gentleman not realise that when he said that he was proving our case? How much out of all these millions will result in giving a penny in wages or an hour in employment to any working man in the United Kingdom? He proves our case up to the hilt. We all say there is plenty of money waiting for investment, but what we do say is that the public will pour it into any kind of investment which promises high profit or security on the one condition that it is an investment which is not within the reach of the long arm of the Chancellor of the Exchequer. The right hon. Gentleman the other night closed his speech by saying that we were on the eve of one of the greatest booms this country had ever seen. If the right hon. Gentleman had been as long in business as I have been, he would know that that is one of the most dangerous prophecies any man could make. It is perfectly true, as the right hon. Gentleman says, that there are signs of improvement in trade. It is perfectly true that there is a revival in trade all over the world, that even the present Government are not able to keep us for ever in a state of depression, and that they are not able to prevent us from getting some small share. He talks about our imports and exports growing every month. Does he imagine that ours is the only country of which that is true? [An HON. MEMBER: "No."] Then why does he boast of that as if it had anything to do with him or his Government? If he chooses to examine it, he will find that taking Germany after the boom of 1907 they did not sink into the same state of depression in 1908 as we did. It is a matter of figures. Their exports and imports did not fall as ours fell, and yet the improvement in Germany since has been much larger than in the United Kingdom. I do agree so far with the right hon. Gentleman. I admit that there are signs of improvement, and I believe further, that from the moment it becomes clear to the people of this country that the gentlemen who sit on the Treasury Bench are no longer going to have the controlling power there will be a revival in trade which will be felt in every trade and industry in the United Kingdom.

Mr. GIBSON BOWLES

The hon. Mem-for Dulwich (Mr. Bonar Law) has suggested that trade will only revive when the present Government leaves office. He paid an indirect compliment to the Government which would replace the present Government when he said so, but I think it is an undeserved compliment. His argument was that this Government is pursuing a system of extravagant and unsound finance. What are we to expect from those who formed the Government that preceded the Liberal Government of 1906? I can conceive no finance so unsound, no expenditure so monstrously extravagant as that of the Conservative Government. First let me note that the whole contention of the hon. Gentleman dealt not with the numberless classes who are said to be ruined and extinguished by this Budget, but was confined to that class which deals in beer and spirits. [An HON. MEMBER: "And land."] No, I think he said nothing about land. I think he has lost all feeling for the landowners. They must look after themselves. It is only the dealers in spirits who excite his compassion. I thought he was rather beside the question when he quoted the dictum of the Glasgow Chamber of Commerce, or of Glasgow merchants to the number of 400, who had pronounced against the Budget. Surely that was not done solely on account of the Spirit Duties. Does the hon. Member suggest that the thoughts of Glasgow run upon nothing but whisky? Surely they had other reasons for objecting to the Budget. I should have expected the hon. Member, when speaking as the champion of these 400 merchants, to have something to say in regard to other things than the Licence Duties. I confess I do not understand his argument about that. He said this wicked man the Chancellor of the Exchequer, this black spirit from the nether regions, who is bringing ruin on everybody, is actuated by revenge against the trade. Then he says his revenge has not succeeded because he has not got any money out of the trade, so I presume the revenge has still to come. At present evidently it has failed. The right hon. Gentleman himself proves that it has failed.

Mr. GEORGE YOUNGER

It has ruined the trade.

Mr. GIBSON BOWLES

Already?

Mr. GEORGE YOUNGER

Yes.

Mr. GIBSON BOWLES

By taxes that they have not paid?

Mr. GEORGE YOUNGER

The hon. Gentleman forgets that they have paid the Spirit Duties.

Mr. GIBSON BOWLES

The hon. Gentleman who preceded me (Mr. Bonar Law) reproached the right hon. Gentleman with inventing a tax in order to ruin the trade, and then said that he had got nothing out of the tax, which consequently, as I suggested, did not ruin them.

Mr. BONAR LAW

I deliberately stated that the right hon. Gentleman had got no money, but at the same time it has brought the distilling trade to the verge of ruin.

Mr. GIBSON BOWLES

Really it must be a most peculiar trade that is brought to the verge of ruin by something that it has not paid.

Mr. GEORGE YOUNGER

By stopping the consumption.

Mr. GIBSON BOWLES

Really it is a small point. If the hon. Gentleman likes I will admit that a trade is brought to the verge of ruin by not paying taxes. Then he says that if the taxes were paid, or at any time that they are paid, they will not reach the consumer because, says he, it will not be the publican henceforth who will sell the drink, it will be the clubs. Again, I would remark that, as a business man, he knows perfectly well that in the future, as in the past, and for all time, the great bulk of drink sold in this country will not be sold by clubs.

Mr. BONAR LAW

My point was that the liquor will inevitably be a great deal cheaper in the clubs than in the licensed houses, and therefore it will inevitably tend to be sold through the cheapest channels.

Mr. GIBSON BOWLES

No doubt to some extent that result will ensue, but the hon. Gentleman cannot seriously suppose that all the licensed houses in the country, or even a majority, or any very considerable number of them, are going to be replaced by clubs. Upon reflection, he will come to the conclusion that the licensed houses will still be the main suppliers of liquor and not the clubs. Even the Carlton and the National Liberal Club itself will not be able to wrest from his present position the seller of liquor, the man who keeps the licensed house.

With regard to the Budget generally I am not prepared to say that the Budget is without spots. It is like the sun. It han defects. I can point to several, none of which, I may remark, have been mentioned by any hon. Gentlemen who have yet spoken. But I like it because it is a Free Trade Budget. This Budget raises taxes, increases taxes, and imposes some taxes by new methods. Some of the methods I think doubtful, possibly risky; and I am not at all sure that we shall get all that is expected from them. But the money has got to be raised, and when hon. and right hon. Gentlemen opposite denounce the Budget, let them remember that the Budget must be modelled on the expenditure that has been agreed to by the country. What is the record of hon. and right hon. Gentlemen opposite? They did nothing to decrease expenditure when they were in power. They raised the expenditure of the country by £57,000,000 in ten years. They added in those ten years £129,000,000 to the debt of the country, and during those ten years the Consols, of which they talk so much, fell 14 per cent. With this record of a fall in Consols, I wonder they do not hesitate before speaking of that security now. Expenditure has been further increased now. We have had old age pensions, an entirely new item of expenditure, and we have right hon. Gentlemen opposite desirous of adding to that expenditure, and crying out that they want "Dreadnoughts"—that they want eight, and will not wait, though now when the money has to be paid they will not pay it.

You cannot deal with the merits of a Budget without considering the propriety or the want of propriety of the expenditure, which, after all, lies at the bottom of it. It may be that the Budget's methods are not the best means that can be adopted. That is possible, but, at any rate, there is some excuse for a poor Budget which has to deal with so large an expenditure as is now agreed on by the House, and, large as the expenditure is and vast as are the sums required to be raised, the amount scarcely exceeds that which was imposed under the right hon. Gentleman the leader of the Opposition. Coming a little more closely to the Budget, I confess I think that the financial situation will become very shortly very serious. His Majesty's Government have got to collect £30,000,000 of arrears due. They reckon upon collecting those in the text month or six weeks. That is a very large sum to expect to get from the taxpayer in so short a time as that, and, as regards some of last year's duties which are to be collected this year, I am afraid it will not be possible to get anything from them at all. Take the Land Value Duties. They are to be levied on occasions which will only arise after the passing of this Act, and, therefore, not one farthing of duty can be expected from Increment or Reversion Duty, at any rate, in the collection that is about to be made. I am sorry that the Chancellor of the Exchequer is not here, because I would wish him to realise the enormous amount of the differences that are made by the new system of taxation.

Do hon. Members realise that the Income Tax as it will stand under this Budget imposes taxation at the lowest point of 7–100ths of a penny per pound, and at the highest point at a rate of 20d. in the pound? In other words, one man will have to pay at 288 times the rate of another man. It is the same way with the Death Duties. The lowest rate is ½ per cent., and the highest is 15 per cent. In other words, one man will have to pay at sixty times the rate of another. I am not arguing against all graduation; but at the same time I do say that when you impose a graduation so severe as to make one man pay at 288 times the rate payable by another man on the same taxable article, or make one man pay sixty times the rate imposed on another man for the same taxable article, you are going to very serious extremes, and in the result your tax may be seriously disappointing. I cannot forget, if the House will allow me to remind it of them, the experience of past times in other countries. Unsound finance, unsound methods of dealing with finance, have been the ruin of Empire in all times past. It was unsound finance that ruined the Roman Empire. It was unsound finance that immediately led to the French Revolution; and it was unsound finance that lost us our North American Colonies; and whenever you are engaged in a system of finance that is unsound, and the unsoundness of it is greatly emphasised, the most dreadful results may ensue.

In France what largely tended to the Revolution was the fact that there was a privileged class at the top. That caused a sense of injustice. I am not sure that you will remove that sense of injustice if your privileged class, instead of being at the top, is at the bottom. The sense of injustice must still remain. Here it is that I would address a word of warning to His Majesty's Government. Under the old régime, as it is called, the French had an Income Tax. They had no Death Duties to pay. They had a system of Income Tax graduated the wrong way up, but graduated—in the form of taille, capitation, and dixicme. Those three systems were introduced on account of the need for more revenue arising from the war in which the Duke of Marlborough played such a prominent part. The result of these taxes, which were all on declarations, was so distressing and the difficulty of getting a declaration of income was so great and the amount of spying and inquisition was so immense that the whole thing very soon became insufferable, and not very long after the tax was first instituted the great towns of France came to Louis XIV. and said, "This graduated Income Tax levied on declarations"—for it was that—"is so onerous and causes so much distress that we beg you to allow us to compound for it." Each of the great towns compounded and paid the whole tax for all its individuals, and it was in consideration of this that Louis XIV. granted what is called the octroi, that is the right of levying duty on articles of food at the gates of the town.

Here is where I see the danger, that by too great a duty and by too great a graduation you may produce too great a sense of injustice, and the result of one or two Budgets of this kind may be to call for a return to that system of octroi, which represents a tax on food, to a demand even for Tariff Reform as an escape from evil. That is a danger against which I would respectfully warn His Majesty's Government. But as to this Finance Bill, even with all the danger that I consider it does contain, I infinitely prefer it to any Budget that could possibly be framed on the opposite side. For no Budget could be framed on the opposite side that did not involve taxation of the food of the people; and let me tell hon. Gentlemen opposite that so long as they stand to that, so long as they make their first constructive policy taxation of the food of the people, so long will they remain out of power, in the country, for so long will they fail to receive the support of Lancashire and Yorkshire, without which they can never return to power. I am very sorry the right hon. Gentleman the Member for the City of London (Mr. Balfour) is not here, because to him especially I would make some appeal. He has informed the world at large that the first result of his advent to power—and that would be the effect of any defeat of this Budget—would be in the opinion of very good judges a war between this country and Germany, in which this country would succumb, through the prohibition by Germany of Tariff Reform. That is not a prospect to which I can look forward with equanimity. I am sorry he is not here to hear this reminder of what he said.

Mr. PEEL

Quote.

5.0 P.M.

Mr. GIBSON BOWLES

I will quote it. I thought somebody might ask me, perhaps. Speaking at Hanley on 4th January last, the right hon. Gentleman said this:— Consult, the statesmen and diplomatists of the lesser Powers, and I am perfectly confident yon will find among them an absolute unanimity of opinion that a struggle sooner or later between this country and Germany is inevitable. Then he proceeds:— They are all unanimous that there will sooner or later be a struggle, and they have come to the conclusion that, in that struggle we are predestined to succumb. He then quotes Germans:— I have known of Germans not connected with the Government, men of position and character, men engaged in affairs, who if you talk to them about, the adoption of Tariff Reform by this country, actually say, 'Do yon suppose we should ever allow Great Britain to adopt Tariff Reform?' In justice to the right hon. Gentleman I ought to say that, in quoting the opinion of the statesmen that we should have a struggle in which we should succumb, he said, "I do not believe it." But he did not go to Hanley merely to tell the people what he did not believe. He must have had some purpose in making that statement. Whatever the purpose was, he, at any rate, cited the statement of diplomatists and distinguished German men of business, that, in their opinion at least—and he thought it worth while to cite it, I will not even say it was cited for the purpose of winning an election—Tariff Reform, which was to be his first constructive operation, would be forbidden by Germany, war would then ensue, and we should succumb. Therefore, I would far rather have this Budget, with all the faults which have been pointed out, and those which have not been pointed out, by right hon. Gentlemen opposite, and many others which might be added to them, than I would have Tariff Reform, which would lead to a war with Germany in which we should succumb. With the short time allotted to the discussion of the Third Reading, I did think that most of the time would be taken up by the two Front Benches. I recognise that the right hon. Gentleman opposite (Mr. Bonar Law) has taken rather less than his share. I do not know whether this Front Bench will take more than its share, but usually I observe, whenever there is a short time allowed, the two Front Benches share the most of it between them, and leave very little time for the rest of the House. I again repeat, for I wish to draw to a conclusion as quickly as I can, that I recognise there are financial dangers in this Budget. I think it is quite possible, and, in some respects, I think probable, that it will not produce all the revenue that is expected from it. Certain I am that for last year it will not produce all the revenue expected from it. I recognise myself that a serious financial situation may arise in consequence, I must say, of the rejection of this Budget in another place. I recognise all that. But with all its faults and with all its defects, I would rather have the severest Budget levied upon the principles of Free Trade than the mildest Budget ever brought forward that taxed the food of the people.

Sir JOHN ROLLESTON

I am not one of those who object to this Budget as a whole, but in my view there are points in it which are sufficiently objectionable to render the whole objectionable. It affects large classes, and more particularly those who own urban land. They are a large class of men who do not appear, I am sorry to say, to have many friends in this House. With regard to the Agricultural Clauses, I suppose, after the assurances of the Chancellor of the Exchequer, we ought to be grateful; but I interpret those Clauses as the Leader of the Opposition did the other day, and as they were interpreted by the Local Taxation Committee of the Central Chamber of Agriculture, and it has led that body to condemn this Bill. I am aware that the Chancellor of the Exchequer has taken considerable pains to mollify the opposition of agricultural Members and the agricultural classes. He has made concessions for which we ought to be grateful. But those bringing gifts are open to suspicion, and we should not be human if we did not suspect that there may be some ulterior purpose in spending a huge sum of money on making a valuation of the whole land of this country while revenue is to be derived from only a small portion of it. That, anyhow, is not business. We always understood that the land taxers meant business. In any case, some prominent supporters of the Budget have gone about the country saying that once they get the land valued and registered under a system, then they will in future get all the money they want from the land, and that this system will be capable of indefinite expansion, and so on. That clearly is the business meant. Not, perhaps, by the Chancellor of the Exchequer—After his assurances I could not say so—but by those with whom he is associated, and by those who may succeed him. I can only hope, therefore, that everyone in this House interested in agricultural land, or in agriculture, will not be lulled into acquiescence in these proposals, and will not respond to the invitation of the Chancellor of the Exchequer to walk into his parlour in order to provide a banquet for him and his successors. In my opinion these Clauses dealing with agricultural land should earn the dislike of all those interested in agriculture, and of every labourer on the land in the United Kingdom. There is a superstition abroad that land and wealth are synonymous terms, and that there exists an unsatisfied land hunger in this country. I have never been able to observe that. In this country, and it is peculiar to it, land has experienced a fall in value estimated at one thousand millions sterling in the1 last thirty years; the small owner, the yeoman class, have been completely wiped out owing to the great fall in agricultural produce that has taken place, and the land has been thrown up in all directions by discouraged and impoverished occupiers. There has been no holding up. Land has been thrown upon the market by impoverished owners, but it is avoided by the public as an undesirable and unprofitable form of investment. It is with reference particularly to the classes holding urban and semi-urban land that I object to these proposals. It would be, I suppose, forty or fifty years ago, when the great growth of the large towns and of the population set in, and land appreciated in value. A great industry resulted, and large areas of land changed hands at that time. Only a few owners developed and sold land retail themselves, and the rule has been for landowners to dispose of it to others who have undertaken the risk, and it is these people, like the late Mr. Cubitt, who have mainly built up the land purchased or leased from the original owners. It is these people who, at their own risk, have built up the large towns of this country, and who, under competition, have provided, for the increasing population, houses of a better character year by year. It is due to these people that the inhabitants are as well and comfortably housed as they are at the present time.

I contend that it is idle to say that overcrowding or insufficient house accommodation exists in towns where thousands of houses are empty. The large towns in this country have been built up, and their rateable value and wealth created, not by the municipalities or the communities, who have taken no risks and ought not to take any, but by the enterprise of private people. If profits have resulted from that enterprise they have been legitimate profits, useful to the community in the making. This form of enterprise has employed a, vast amount of labour, and it has also been a large consumer of material, largely produced by British labour. It has attracted capital largely to the land. It has been a large user of the capital of builders, bankers, mortgagees and other investors, who at one time found in this way excellent security at their own doors and in their own country. I submit that the communities and municipalities are deeply indebted to the building pioneers. Yet this is the class, crippled already by these proposals, who are to be further injured by their consummation. They had been already hard hit before these proposals were made, by the great fall in value, the stagnation in building, the slump in the building trade, and the price of land, with exceptions. It is fair to say that, owing to these causes, no banker or mortgagee will lend money on building land or finance builders, even if their houses could be let if built. A great home industry has gone, and those who conducted it are very largely idle. There is no one now to buy blocks of building land and spend money upon them. The landholder who has sold his land at high prices has been fortunate. He has realised, and his capital is now probably developing towns and enterprises in some other country. If anyone ought to pay the taxes it is the man who has realised large profits; but he has 'gone away, he is out of sight, he is over the skyline already, and it is the unfortunate purchaser who remains to be shot at. The purchaser who formerly could buy land, develop and sell it, now finds it unsaleable on his hands, and he at last knows the lesson which it has taken a generation to learn, that the moment he buys land which costs more than an investment price—that is, more than will return an adequate yearly income—it begins to eat its head off, and every year which he is unwillingly forced to hold it brings him nearer to the bankruptcy court, into which many of his class, through neglect of the elementary principles of business, have already fallen. I am speaking always subject to exceptions. In the desert there are usually oases, but the description of an oasis is not a description of the desert, and because there may be a few cases where building is going on at the present time, that does not describe the general position of the trade of the country. I agree that there are exceptions, but as a rule it is fair to say that there is no market for prospective building land today, and a lender would scorn it as a security. The market has completely gone, and those who have bought land are left with it on their hands, and they are fortunate if their resources are otherwise sufficient to enable them to face the loss or to pay the interest, if the money has been lost. This class of persons exceeds in number any other class of owners of urban and semi-urban land. Many of them have bought land and developed it for sale without success during the whole period of forty years which I have mentioned, and the limitations in point of time, to the concessions in regard to the development rendered them practically useless. There is some manipulation of the figures which may be very injurious to the class I have mentioned.

I believe that the end of April last year is taken as the time when the increment value is to be taken. That was a very low point in the value of urban land, but the cost to the builder under this Bill is not to be considered. I know a great many cases where land would not have been in April last year worth one quarter what it cost. There is only one way of reckoning the cost of land from which no annual return is being derived, or a very small return, and that is to reckon the accrued interest. That is the way in which insurance companies value claims in order to arrive at whether they can derive a profit or loss from the claims of their companies. Let me take the case of two men investing each a thousand pounds thirty years ago. One does so in bonds of the Russian Empire, which I believe have paid a regular 4 per cent. during that time. If he has not spent his interest, but reinvested it in tine same security he would have to-day liquid assets of over £3,200. If the other man took a thousand pounds of urban land and spent, say, £500 in developing it, that would appear in his books to-day, reckoning 4 per cent, interest, as £4,800. The value of that land in April of last year might only be a thousand pounds, the original cost of the land. [An HON. MEMBER: "Land idle all the time."] Yes, even with population increasing and with streets laid upon it, but although, as far as human sagacity can forecast, there can never by any possibility be any profit on that land. If the owner is ever fortunate enough to get £1,200 for what has cost him £4,800, he will have to pay £40 of Increment Duty, while a halfpenny in the pound on the land as well has to be paid. Even if the man had made £500 on this venture it would have been legitimate profit, which ought not to be taxed. But to add to a serious loss by a tax constitutes a case of gross injustice, and one which I can assure hon. Gentlemen opposite will be bitterly objected to when people come to realise it in the country. If under this Bill such cases do arise, I can only say that is sufficient to condemn the clauses which create them.

It is held by hon. Gentlemen opposite that it would be a good thing for the community to force land into the market, and that it is being held up against builders and purchasers. That is not my experience. As far as I know, owners of urban land of late years have been tumbling over each other to reach the market. Urban land was once a favourite form of investment and land development was a favourite and profitable form of enterprise, but the great fall of value in the building trade has caused bankers and mortgagees to call in their loans, which has caused owners to lower their prices and hurry their sales, and if they could not repay, their creditors began to force the land as far as they could into the market. That has been going on all over the country in late years. I am not aware that that process is taken advantage of by the municipalities. Is it not a fact that the municipalities many of them are cadging for new industries, competing with each other for capitalists who will come and start new works, fill their houses and provide employment and food for the people? It is the man who spends his capital provides work and employment, who really improves the value of the land, and the builder who succeeds or precedes him who spends his money and creates the wealth of the community. I do not know that because 100,000 people live in 20,000 houses, beyond that they are customers for local trades, that they are primarily the cause of prosperity and value, but that it is rather the person, or group of persons, who venture their capital and use their brains and energy in the shape of maintaining works and providing employment who do so. I believe it is contended that local rates are spent for the benefit of land. The portion of rates spent in improvements is a very small proportion, land does not benefit by police, by education, by-poor rate; it has to make its own streets and sewers, and if it wants gas and water has to pay for the pipes. Rates spent on lunatic asylums, cemeteries, sewerage farms, and small-pox hospitals do not improve, but tend to depreciate, the value of adjoining land. Municipalities have no thought of benefiting land, and sufferers in the enterprise of land development have to bear their losses without help from the municipality. I contend that to put these burdens of taxes on urban land is against and not in favour of the interests of the municipalities or the community.

I have been told that one of the large towns in the North has 8,000 empty house* at present, and an hon. Member who used to represent it says there are now 10,000 houses wanting tenants. How can you force land into the market in towns like that. What builder could be induced to spend his capital in building houses, even if you gave him the land for nothing. I think there is a good deal of misconception abroad as to the interests of the community with regard to holding up land. One other class of owner who is dealt with under this Bill is the owner of land that is called prospective building land; land on farms, perhaps, near towns or populous cities, and it is supposed it may be required for building and become valuable because something may happen which has not yet happened. I can only say that that prospective value is absolutely speculative value, and there is no one in this country skilled enough, and there is no class of men in this country skilled enough or with foresight enough, to estimate with sufficient accuracy to justify the imposition of annual taxation on the capital value of land, because something may happen which has not yet happened, and of which there is no certainty it will happen. A valuer to do this would have to decide whether the trade of this country is to advance, stand still, or recede. He would have to make up his mnid as to whether the country is to be ruined or prospered by Free Trade or Tariff Reform, and he will find a large body of opinion in either direction. He would have to divine whether new works, railways, or waterways, or the abandonment of existing ones, may attract or divert traffic and population from one place to another. He will have to forecast where the enterprising community is going to plant its sewage farms, its lunatic asylums, and its small-pox hospitals before he can conclude whether a neighbourhood is likely in future to be desirable or derelict. He must not be confused-by the knowledge that in the past, where building has progressed, that that progress has been uncertain and precarious, leaving one side of a town and taking the other, following Certain routes and leaving others, not progressing in regular zones from the centre. I believe that the astronomer can foretell with accuracy the appearance or reappearance of a comet or planet long years beforehand, but I am told that he works on reliable data. I know of no data which would enable a valuer to forecast events before they happen. I can only say that if capital value is to be assessed and subjected to annual taxation on the grounds that something is to happen which has not yet happened, that if the forecasts made by the assessors are not realised, that a very grievous wrong will be inflicted on a very large number of landowners in this country.

I heard an hon. Gentleman opposite say yesterday that none of us understood what value was. I am afraid that I have not myself been enlightened by listening to the discussions on this Bill. I know a case where a gentleman went to a broker, who was an expert, to ask the value of shares of the British South Africa Company. The broker said he heard there were great possibilities of prospective value, and that they were then £8. The man bought them and went away to a remote part of the earth. He came back after a series of years and went to the broker about the shares. The broker said, "You have heard what has happened," and he replied, "Yes, I have heard that the oligarchy has been overthrown, that South Africa has now got a Constitution, and I suppose it is now in for a career of progress and prosperity—and the shares, what are they now worth?" The broker said they were worth 10s. What the man said is not reported. He went back to that broker in about six months and was told they were worth 40s. The man said, "You must be a fool, and you professed to be an expert valuer, since you gave £8, 10s., and 40s. as the value of the same stock without any reason." There are great difficulties in valuing, and there are lots of cases now where men will tell you they used to be able to get £1 per yard for ground and now they cannot get a half-crown. Those are the sort of difficulties which will present themselves to valuers.

I do not make these criticisms in the spirit of a political partisan, although I am one. I believe if the Leader of the Opposition were making these same proposals that I should offer the same criticisms, because experience has shown me they are justified. I am well aware that the Chancellor of the Exchequer has taken very great pains and a large amount of trouble on a very complex and difficult subject. I know that criticism is useless, because he is going to be successful. With the help of the dukes he is going to get his Budget. I hope, therefore, he will not be impatient of criticism, and I can assure him when the proposals become law he will hurt very badly a class of men whom I will not believe it was his intention primarily to injure. If a man makes profits and is industrious he is useful to the community; but if he is a fool and fails to do so, he is useless to the community, because they have to keep him in the workhouse. To tax earned increment must surely be objectionable, and to add to serious loss by taxation, and thus to stimulate pauperism, must be far worse. I am afraid that the immediate prospect before the owners of urban land is a very gloomy one. But there is a brighter prospect before us. The results of the last election were so much in contrast with those of 1906, that we may hope for still further progress in that direction. If the Leader of the Opposition should be returned with a substantial majority we might then look for the modification, amendment, or perhaps the repeal of those Clauses which are found to be objectionable. But even if he is not, and the Chancellor of the Exchequer finds himself again in control of the national finances, speaking on behalf of a class of men with whose needs I am intimately acquainted, and who have not many friends in this House, I hope that even he, should he find under these far-reaching proposals cases of hardship and injustice, will not set his face against their removal from a class who do not indeed deserve the condemnation, but, on the contrary, in their present difficulties, the sympathy of the community.

Mr. HEMMERDE

The hon. Member opposite (Sir J. Rolleston) is in a melancholy position. He seems to rely on a hope of escaping from his embarrassments by the return to power of the present Leader of the Opposition. May I remind him that not long ago the right hon. Gentleman said that, although he was absolutely opposed to the taxation of land values, he thought there was a good deal to be said for rating them? As the Leader of the Opposition has never suggested that there is anything in the rating of rural land values, he must have had a special eye to the very class of property which the hon. Member has just been defending. Before dealing with the question of rural land values, I should like to answer one or two criticisms made by the hon. Member for Dulwich (Mr. Bonar Law). The hon. Member told us a piteous story of what this Budget was going to do for certain members of the licensed trade. He also accused the Government of having injured the whisky trade in Scotland by the Spirit Duties. He did not tell us that the whisky trade in Scotland was by no means flourishing during the five or six years previous to the imposition of those duties. The Government certainly cannot be blamed for the present condition of that trade any more than they can for a great many other more or less accidental features of commerce. As regards the condition of the licence-holder, under the legislation now proposed by the Government, I think the licensed trade will have learned a pretty rude lesson for what they chose deliberately to do a few years ago. We have heard a good deal lately about bargains. Right hon. and hon. Gentlemen opposite have not been sparing of the epithets by which they have described what they are pleased to call a bargain between the Irish party and the Liberal party. As the right hon. Member for West Birmingham (Mr. J. Chamberlain) once said, they are no bad judges of bargains. When I think of the bargain by which for some thirty years the Tory party have been able to command the undivided or almost undivided support of the liquor trade, by swallowing whole every proposal put forward by that trade for its own advantage, I think they are very considerable judges of bargains, and even, as someone said the other day, of corrupt bargains. The liquor trade chose, two years ago, when a very moderate provision was brought in—a provision so moderate that not one of our Colonies would have stood its moderation—to ally themselves with the Conservative party, who, for political motives, used the same language, or worse, about the then Licensing Bill, which did provide compensation, as they now use about these taxes, which do not. They were warned then clearly, by the Prime Minister, that if they would not accept those moderate provisions, or, at any rate, those provisions so modified that they might accept them, they would have to face something in the way of high licences. Now they have got to face them. They made their choice. There are bound to be hard cases. Hon. Members opposite seem to imagine that because the House of Lords threw out the Licensing Bill we are, therefore, debarred from carrying out by means of finance many of its provisions. They were warned that we should do so. Any popular party would stultify itself if it refused to use this weapon merely because its opponents, who are in a perpetual majority in another place, chose to throw out its considered measures. In all the hard cases which are now quoted to wring our tears the people whom the licensed trade have to blame are those who, for political purposes, exploited them two years ago. The party who now sit opposite are the people to be blamed for any of the hard cases which arise through the necessity to which we are driven in this Budget.

The hon. Member for Dulwich seemed to ridicule the idea that the fact that the Government had not been buying had something to do with the fall of Consols. A year ago, almost every day, the Chancellor of the Exchequer was pestered with questions as to whether he had not been causing a rise in Consols by excessive buying in the market. Hon. Members cannot have it both ways. Either the Government by buying are able, or are not able, to affect the price of Consols. Another point taken by the party opposite is that the Limehouse speech and speeches of a similar nature have had the effect of depreciating the credit of this country- Greater nonsense was never talked by a political party in the most desperate straits. I do not know in which character the hon. Member for Dulwich is more amusing—as a defender of agriculture or as a judge of manners on the political platform. I have read carefully the speeches made by the Chancellor of the Exchequer, the Home Secretary, and the Lord Advocate, the men who have made most of the great speeches upon our side during this controversy, and I say that all three of them in every speech took care to say that, although they were attacking the system, they were not attacking individuals. The hon. Member for Chelmsford (Mr. Pretyman) represents the system, and objects to attacks upon the system. It is utterly impossible to attack the system without taking concrete cases that appeal to the individuals whom you are addressing. Again and again when speaking on the subject I have given cases without names, and I have been asked to give names. If you give names you are called vulgar; if you do not give names you are not believed. That really has been the history of the whole of this controversy. The Chancellor of the Exchequer, by having the courage to give names, has called upon himself all the abuse of the party opposite, who would at once have denounced him in unmeasured terms as an inventor of fiction if he had not given them. It is not what the Chancellor of the Exchequer has said that has been any blow to the credit of this country. It has been the constant attempts to depreciate everything British for the last three or four years to serve the party exigencies of the Opposition. For four or five years there has been an organised Press and platform campaign to depreciate all British industries. At the end of it we find that most of the industries are not much the worse. But if there is any hesitation in putting money into home industries it is much more likely to arise from the fact that nobody knows what to-morrow or the day after may bring forth in fiscal experiment than from any speech made by this or that Minister. I can assure hon. Members opposite that if they read the political speeches of leaders twenty years ago they will be surprised at the moderation with which the present Chancellor of the Exchequer has expressed himself. We used not to be afraid in this country of a little hard hitting, and I think the people of the country have always estimated it at its true value. If we did a little less decrying of our own country we should find that the condition of trade would revive a good deal more quickly.

The hon. Member for Dulwich began his speech by discussing agriculture quite briefly. I am always entertained and amused by the pose which hon. Members opposite affect of being the special guardians of agriculture. All the legislation for the benefit of agriculture, almost without exception, has come from this side of the House. Hon. Members opposite are always ready to voice the complaints of agriculturists, but they are not prepared to remedy them. It is very much easier to voice complaints than to remedy them, as they doubtless find.

Sir J. ROLLESTON

What does the hon. Member say about the Agricultural Rates Act?

Mr. HEMMERDE

I am going to deal with that very question. As a Member of the land group in this House, the Members of which are popularly supposed to have had some influence in inducing the Government to take up this great experiment in taxation, I am very glad to have the opportunity of saying a few words upon this question on the eve of the departure of the Budget to another place, where it is likely to meet with a more friendly reception than before, although we are always told that it is passed only by a minority of this House. We are told that, but nobody believes it, otherwise the Lords would promptly throw the Budget out again. It is merely another piece of electioneering or journalistic clap-trap. I wish to say something about the extraordinary misconceptions as to the principles of this land group. The hon. and learned Member for North Louth, during these Debates, has told us that many English Members, who are what he calls single-taxers, think that agricultural land should bear the burden of the rest of the land, and a Noble Viscount opposite has informed us that he imagines that, with the exception of a few single-taxers below the Gangway on this side, the view generally taken in this House is that agriculture is far too heavily burdened. Both these Gentlemen, and many of their colleagues, are labouring under an entire misconception as to the objects and principles of this land group, which numbers probably over 100 Members in the present House of Commons. Far from believing that agriculture could bear new burdens, our whole case is, and always has been, that it is already overburdened. Where we differ from right hon. and hon. Gentlemen opposite is not in our view as to the heavy burdens upon agriculture; but whereas they engage in perpetual moanings as to those burdens without making a single suggestion as to how they can be diminished, we have definite proposals as to their alleviation, and we intend to give an enthusiastic support to the Government proposals, because we see in them the completion of the first step by which alone our proposals can approach fulfilment. If the Opposition are right in their estimate of the views and principles of the Land Group in this House, when the Government proposed to leave out the agriculturists from the purview of the Budget taxes, you would have expected indignant remonstrances from those benches. As a matter of fact we had nothing of the sort. What we have always felt was the great value of the Government proposals was that by them we were to get a complete valuation. If the Government had for a moment wavered—as some of the Government Press wavered, and as some Members upon these benches wavered—in their desire for a complete valuation, the Government would soon have been able to estimate exactly the strength of the Land group. They never wavered on them, and therefore we have all through given them a cordial and enthusiastic support. The proposals of the Government, as a matter of fact, have always struck us as being open to grave tactical objections, in that the burden which they impose is a cumulative burden, rather than a substitutive burden. My Friends and I were, and are, in favour of the taxation of land values which would cover all land, agricultural and urban, but—and this is the point which is never really understood, or is ignored, by hon. Gentlemen opposite, and if it is understood is always ignored by some hon. Members on this side of the House, such as the hon. Gentleman for the Spen Valley Division of Yorkshire, whose denunciation of the principles which we hold is often, perhaps fortunately for himself, more outspoken in this House than in his own constituency—although we wish the tax to cover all land, agricultural as well as urban, we would not make the effect of the tax cumulative, but in substitution for the rates, which now fall with most unfair incidence upon agricultural enterprise. We realise that the burdens upon agricultural land are too heavy—because the burdens upon unoccupied build- ing land and undeveloped land and underdeveloped land are too light.

Year after year the chambers of agriculture in this country protest against the unfair way in which agricultural land is burdened by taxes—by the education rate, the Poor Law relief rate, and the main roads rate. Day after day, week after week, year after year, hon. Gentlemen opposite identify themselves in general terms with these complaints. When in office they adopt the clumsy expedient of the Agricultural Rates Act, to which we object, not because we begrudge the relief to agriculture, but because the relief often goes into the wrong hands. Under present conditions the burden of the rates is easily shifted, and the benefit intended for the ratepayer is easily and often absorbed by the landlords. How can agriculture be relieved of these unfair burdens? Someone must pay rates and taxes, and someone in our own country; because at present we are a long way off the Utopia in which every foreigner pays the taxes of his neighbours, who, in turn in some mysterious way, lives tax free, while they pay his. Can these burdens be relieved by Tariff Reform, because Tariff Reformers are very quick to appreciate these burdens, especially when they are addressing chambers of agriculture? Considering that no Tariff Reformer has ever yet suggested how under a system of tariffs we can meet the present Imperial obligations, it is quite obvious that Tariff Reform could not possibly meet the transference of these very heavy local burdens to the Imperial Exchequer. If Tariff Reform cannot meet the transference, agriculture must go on paying these burdens, or must find some other way to meet them. The only hope I can see for a successful and adequate readjustment of local burdens lies in the Valuation Clauses of the Budget. I would like to point out, especially to some of my friends on the Irish benches, that valuation has two aspects. It is necessary for the relief of present burdens, as well as for the imposition of new ones. As a means of securing a perfect system of valuation there is much to be said for the Budget taxes, and a great deal has been said for them. Although we think, as I have stated, that the Government plan is unnecessarily clumsy and tactically a source of no little difficulty, it is impossible to exaggerate the importance of what we get by this present Budget. Tactically, I think, the Government plan is open to this grave objection: No one is obviously relieved by the plan. The fact that taxes are additional instead of substitutive deprives us of that large measure of the support which a substitutive scheme certainly would bring us. For in a substitutive scheme there would be thousands of people who would be obviously and manifestly relieved by a reduction in their rates, and would therefore give us their enthusiastic support. Under the Government scheme this gain, though in a measure real—because they do get some relief of rates—is, as a matter of fact, a good deal smaller.

Apart from this, hardly one of the objections which have been made, and then pressed, against the Government scheme, would be valid against the substitutive proposals which we would much rather have had, and which we think, tactically or in principle, preferable. Fortunately the Government scheme does not shut the door to future developments, and in securing valuation, which we regard as the keystone of the whole situation, and of the commercial and industrial developments of this country, they leave the door open to not only the relief of agriculture, and the offering of such relief as hon. Members opposite have never even suggested, but also to a very much wider relief of the industries in this country. When the Government has obtained universal valuation there is nothing to prevent them putting these three great rates, at least, the education rate, the main reads rate, and the poor relief rate upon the Imperial taxes, and paying them for them by a tax upon the unimproved value of land. Such a tax would automatically or at once relieve agriculture— because it is probably an exaggeration to say that the average unimproved value of agricultural land is £7 an acre—I have been told so by many valuers. We shall soon know. The valuation will tell us. We know that land has been sold in the City of London for more than £3,000,000 an acre. You get these vast differences in value. You have these small values in agricultural districts, and these enormous values in urban districts shelving away into the great undeveloped values of the suburban districts. Is it not obvious that if you take off the poor rate, and the roads rate, and the education rate from where they are at present, and put them upon a universal Land Tax based upon land values, you are giving relief to agriculture. By putting on one burden you are going to take off another and a greater burden, and giving the greater values of the towns and the part adjacent to the towns to redress the grievance of the agricultural districts.

I say these are the lines upon which the Government can proceed if they choose to-proceed, because they have had the courage, against all criticism and abuse, to stick to the Valuation Clauses of the Budget. And I know that I am speaking, for many Members in this House when I say that we do hope that the Government will proceed along these lines. I believe if they do proceed along these lines they will get behind them the full force of the agriculturists of this country in a way that they have never had before. The other side can promise them nothing. Tariff Reform will do nothing whatever for rating reform. The only possible line of assistance for agriculture lies in some system of Land Taxes. For years it has been the custom for some Members of this House to decry Land Taxes, as though in themselves Land Taxes must be evil. They have never faced the fact that there was a possibility of removing far more burden by having Land Taxes. We have heard a great deal of the disadvantage of Land Taxes, but we have fortunately experience to guide us in this matter. The other day the hon. Gentleman the Member for East Birmingham (Mr. Steel-Maitland) told us that the taxation or the rating of land values would increase overcrowding. I prefer the teachings of experience to his prophecies, however disinterested. The teachings of experience in countries that have tried this scheme show us perfectly clearly that building and employment are stimulated by the taxation of land values and the forcing of land into use. You must stimulate building by forcing land into use. If you do not stimulate building, at any rate you reduce rent, and the reduction in rent makes for employment. If people have to pay less in rent they have more money for other purposes.

Mr. REMNANT

There is much more overcrowding in New York than in this country.

Mr. HEMMERDE

But this system has not been adopted in New York.

Mr. REMNANT

It has been in force for some years.

Mr. HEMMERDE

No, no; the valuation has only been quite recently completed, and is not working to any extent that can enable hon. Gentlemen to judge. That has been already pointed out in this House on more than one occasion.

Mr. REMNANT

This taxation of land values has been in force in New York for many years past.

Mr. HEMMERDE

No. I cannot accept that at all. I have looked carefully into the thing. [An HON. MEMBER: "On unimproved value."] No, they have not differentiated between the two values either in New York or in many other parts of America. The whole of these figures ware given in the Debate last Session, and it was completely shown that what I say was the case. I have not got the figures by me, because I did not for a moment think that the matter would be disputed again in this House. In New York the matter is in its infancy. The valuation there is upon the lines that we suggest, and there are very many Members on this side of the House—and on the other side, too—who know that. In certain parts of the State of Massachussets and New York this system has been in force for some years, and in Australia and New Zealand, where the system is at work, it is perfectly obvious that it has had the effect of diminishing overcrowding. I can call to witness on this point a member even of the Tariff Reform Commission, Mr. Charles Booth, who sees in the rating of land values the only possible way out of the difficulty of overcrowding in the City of London. You find practically every one who has ever studied the housing question in this country has come to the conclusion that the system by which we rate improvements in this country is not only absolutely unfair to industry, and particularly to the poor, but it is the very system that makes for overcrowding in this country. If hon. Members do not accept that I would like to give an instance. I can take one from a Lancashire town which is probably known to many hon. Members. A few years ago that prosperous Lancashire town, with a great cotton industry, was practically land-locked. It could not develop in any direction. After a few years of this, one of the leading landowners died. His executors were rather more progressive. Certain land came into the market. What was the result? Prior to that land coming into the market all the evils of overcrowding were in that growing town. Directly after the land came into the market the town developed with a rush, and within ten years there were 10,000 looms added to that Lancashire town, employing 3,000 people directly, and indirectly 10,000 more people. Yet people tell us that the tax upon land values will do nothing to prevent overcrowding; will do nothing to cause employment! I can give an instance in my own Constituency in answer to the hon. Gentleman who spoke last. No land hunger! What about the village of Chirk in Denbighshire? There you have 1,000 men employed at a couple of collieries. Another Member of this House and myself tried to get land for these men who were living under horrible and beastly conditions. The three land owners stuck out for prices varying from £800 to £1,100 per acre for land which is rated at £1 per acre. Those facts are-known to other Members of this House. I have challenged them on the platform, and they are not denied because they cannot be denied. There, in that village, are living, in sight of the most beautiful land in this country, some of the finest men and women of the country, and living under conditions not fit for beasts, and all because people hold up the land. These proposals will do something for them, for we shall be able to say to these land owners: "On what basis do you value your land, £1,000 per acre? Very well, pay on that basis." They will soon get tired of paying upon that basis. It is for that reason that these people—and many like them—realising that in the Valuation Clauses lies the whole salvation of rural England, get up and say: "The thing is impossible; you cannot value land apart, from improvements."

6.0 P.M.

It has been in existence in America for years, and in Australasia for years and years. It can be done, and it is going to be done, and it is going to be of greater advantage to rural England than anything that could possibly be done in this country. I hope that Irish Members, when they realise the importance of this question to England, will shortly realise the importance of this question to Ireland also, and to the small holders in Ireland. This system of making the basis rating upon land is a system of oppression to the poor and adds a vast proportion to their cost of living on the land. When once you get the system of valuation you accomplish a great deal, for it is the future that interests us not so much as the present yield. Hon. Gentlemen opposite talk as if the Chancellor of the Exchequer must not make provision for the future, as if Budgets must only be calculated for one year. We say you must look in advance, and for years ahead. Look at the history of land valuation. During the last Parliament but one the principle of land valuation actually passed through this House with a Tory majority. Hon. Gentlemen opposite talk of the rating of land value, but it is the opinion of everyone that the only way you can rate land values is by getting a preliminary valuation. How can you rate or tax anything without valuation? [An HON. MEMBER: "They do it in Germany."] They only do it on the composite site, and not on the two. You can only get rural rates on land values by valuation.

What are hon. Members' objections to valuation. Simply because they think we shall find too much out. If the land is worth very little, that is a good thing to note. If it is worth very much, the country ought to know. As a matter of fact, the rating of land values was supported in the House of Commons from the year 1895 upwards by any number of Members of the Tory party. Practically every Tory candidate from Lancashire and Yorkshire came to the House a year ago to support it, but then they trooped into the Lobbies to vote against the only mans of accomplishing it. At the last election the same thing happened. The Noble Lord the Member for Portsmouth (Lord Charles Beresford) spoke in favour of the rating of land values, and then the reason he gave for voting against it was that it was full-blooded revolution. He was in favour of the rating of land values, but he treats the taxing of land values as revolution. There is really no difference between the two. If we put a tax upon land values and apply it in relief of rates, it is exactly the same as rating land values. That is what the Government are doing.

Sir JOHN ROLLESTON

Is the valuation of agricultural land intended for the future also?

Mr. HEMMERDE

I should say so, certainly. But if the hon. Member had not only been interested in my speech, but followed it, he would realise that the whole point I was making was that in taxing agricultural land in the future we should be able to take off more in rates than we put on in taxes. There is agricultural land paying more than 100 per cent, of rates upon its unimproved value. What land taxes would be worse than that? The idea that the land taxation group are highwaymen is merely a figment of hon. Members' imagination. The very thing for which we stand in practical form, they used to stand for when making practical appeals to the electors.

I want to point out the enormous force of public opinion that is behind us upon this question of the land. Not only did we get it at the last General Election, but there are many Members on the other side who are pledged to the principle for which we stand. See what happened in the last Parliament. In the first Session the Government took up the Scottish Valuation Bill. The House of Lords threw it out. The people who had been pledged to it voted against it. We wanted to get a valuation of the land and we were driven to the Budget. From the very moment the House of Commons saw this Budget or heard the statements in regard to it, the fortunes of the Liberal party revived. For two or three years previously the party was going down. Their big majorities were falling; they were losing by-election after by-election. But from the moment that the party took up the positive side of Free Trade as well as the negative side of Free Trade, and determined to free the country from the trammels of the land system, then a wave of public opinion came to them the like of which they did not have for years. [An HON. MEMBER: "You lost 106 seats at the last General Election."] Yes, but hon. Members opposite are in too great a hurry. I knew they would say we lost 100 seats, but in the year 1906 there were thousands and thousands of people who never took the trouble to vote for the party opposite. At the last election the party that spoke in favour of the Land Taxes polled the larger than in 1906. It is true that vested interests were attacked, and rightly attacked, and that they brought up all their battalions and their armies of followers and solicitors and agents, and those who depend upon them for a livelihood. They defended the land system while we attacked it. They said the same things that were said in America and in New Zealand. The professional classes always stand, or, at any rate the bulk of them always stand, for vested interest. As a matter of fact, we found that from the moment the Liberal party decided to deal with the land question the whole fortunes of the party revived.

We value the Budget for its treatment of this question, because it gives us this valuation upon land upon which we can proceed with these great reforms. We see the possibility in the future of reform in urban districts; we see in the Budget the only possible chance of reform in the rural districts. About two years ago the Chancellor of the Exchequer used these words:— Do not let us have false remedies. We want to do something to bring the land within the grasp of the people. The resources of the land are frozen by the old feudal system. I am looking forward to the springtime when the thaw will set in, and when the people and the children of the people shall enter unto the inheritance that has been given them from on high. The Chancellor of the Exchequer, speaking again at the Queen's Hall on 23rd March last Session:— No man who looks at England as it is, can possibly deny that with the more scientific application of agriculture, with greater security to the cultivators, you will double the resources of the soil, now that you give additional opportunities for helping healthy productive remunerative labour. It is not enough to obtain the valuation. Will the Government, having obtained it, use it to obtain that economic pressure such as they have used in New Zealand and Australasia, and which alone can grapple with the rural question and prevent the exodus to the towns, and which in the towns, as Charles Booth pointed out, alone can grapple with the question of slums and overcrowding? The answer to these questions lies in the future. The fate of the Fusionists in Australia is a grim warning of the fate which awaits the Liberal party if it refuses to advance along the road which this valuation opens to it. The land question saved the Government at the last election. Upon the land question they will win the next election. With the land question we can break down the feudalism that keeps the rural districts back. Upon the land question this Budget has won its way in this House. Let the Government in the future take their courage in both hands when dealing with this question, and I believe they will find even a greater measure of support from the people of this country than they had in 1906, and than they had at the last election. It is simply a question of courageously moving along this path. The Government know quite well at the present moment that the whole Liberal party is behind them, because they are showing courage, and because they are going forward in the strength and the fullness of the pledges they made. I can only say that I rejoice in this change in policy in the whole attitude of the country towards the Liberal party, and I believe if we go on upon these lines breaking down this feudal supremacy in the rural districts and breaking down the power of monopoly whether in land or in drink regardless of the consequences, and only going forward on what I believe to be the right path we shall win in this fight a great and glorious victory for democracy.

Mr. WILLIAM O'BRIEN

I have already made my protest against this Budget, and I now intend to stand only for a moment or two in the way of anybody else who may desire to take advantage of the very limited opportunities now available under the draconic closure which is now taking the place of free speech in this mother of free Parliaments. I have simply risen for the purpose of expressing my amazement that the leaders and the principal men who are really responsible for the unconditional surrender that has been made of the case of Ireland—the masked conspirators in the background, to use a phrase the significance of which is well understood in Ireland — that these Gentlemen have not, up to the present, plucked up courage to present themselves in the course of the Debates on this Bill to offer any defence of their action. I simply desire to make these two observations. The venue as between them and us will now be changed from this House to Ireland, I do not envy them the task that is before them of explaining to an all-too-confiding people why they have so misused the greatest opportunity and the greatest power that the Irish representatives ever had in this House, and that the only practical result of it will be to barter away Ireland's whole case as to over-taxation to the Treasury, to postpone for another generation the abolition of landlordism and the peace and happiness of our country, and to make Home Rule a financial impossibility, and why they have got absolutely no return whatever except to drive the Government to a General Election in circumstances as disastrous and as fatal as they could well be both for the Government and for Home Rule and for Ireland. I only desire to add one other observation, and it is this, that we, for our part, wash our hands of this Budget, and of the smallest responsibility in reference to it or to its consequences, and we respectfully warn this House beforehand that Ireland disowns this Budget. [HON. MEMBER: "No, no."] Well, wait and see. Ireland repudiates this Budget, and will give no rest either to those who have proposed it or to the Irish representatives whose votes alone enable it to pass into law—we will give no rest or peace to them until every provision of this Bill imposing extra taxation upon Ireland has been either torn from the Statute Book or the present Government swept from power by the Irish Vote, either in this House, in the British constituencies, or in Ireland.

Mr. JOSEPH DEVLIN

Last January the hon. Member for Cork City (Mr. O'Brien) submitted the question of this Budget, I understand, as the vital question on which he forced a candidate of his own against me in West Belfast. As one who has remained silent through all these controversies in this House, and as one who has listened with amazement from time to time to the remarks from the Tory Benches that the Irish Parliamentary party are opposed to the Budget, I rise as a representative of Ireland to give the Budget my unqualified support. This Budget next to Home Rule was the great issue on which I fought my contest in West Belfast. The hon. Member for Cork City sent down his candidate in order to draw Nationalist votes from me with the money of Lord Dunraven and the Tories. He now challenges us to go to the country. May I point out that it is we who are forcing the election, it is we who want him to go to the country, and I am confident if he does he will receive the same answer in Cork that I gave him in Belfast when I beat the combination of converted Nationalists and Tories, and raised my majority from 16 to 600. One would imagine to hear the speeches of some of these gentlemen that the only people in Ireland were the landlords and distillers. They talk about the farmers—these gentlemen who added £17,000,000 to the cost of Irish land. The gentlemen who talk here about this Budget throwing an additional burden of £430,000 upon Ireland are the gentlemen who raised Irish land from seventeen years' purchase to twenty-eight.

Mr. GILHOOLY

It was the Swinford revolt.

Mr. DEVLIN

They are here not in the interests of the farmers, but in the interests of the plutocrats, the reactionaries, and the landlords. Why, Sir, the hon. Member for Cork City has started the All For Ireland League. Everybody who has listened to his speeches in this House knows he is an exceedingly mild-mannered rhetorician here compared with what he is in Ireland. In Ireland he has constituted himself the Apostle of Peace and Conciliation for the union of all creeds and classes, a union by which all democratic feeling may be killed in Ireland; and the landlords having robbed the people, now want to be the masters of the situation, and so the hon. Member for Cork City has constituted a Landlord League for Ireland, with a paper financed by the landlords and paid for by the fiscal reformers.

Mr. WILLIAM O'BRIEN

There is not one word of foundation for that or any other statement which the hon. Member has made.

Mr. DEVLIN

I make this assertion with authority, and I ask the hon. Member for Cork City is it a fact or is it not that Lord Dunraven, the head of the Tariff Reform League, has subscribed £500 to the newspaper which is to fight the Budget and the Irish party at the next election? [HON. MEMBERS: "Answer."]

Mr. WILLIAM O'BRIEN

Do you want the answer? My answer is that Lord Dunraven is as good an Irish Nationalist—

Mr. DEVLIN

Need I recite the names of the other Irish Nationalists, the other eminent Nationalists who are to fight against the humble people, whose subscriptions we are taunted with receiving from day to day? The hon. Member for Cork City does not need to appeal for these subscriptions because he has organised the wealth of the Tory party to aid him in his fight. Ireland is a poor country, but up to the present the Irish Parliamentary party have depended upon the honest instincts and the passionate democratic convictions of the people. [HON. MEMBERS: "Patrick Ford" and "America."] Yes, and we are proud to receive those subscriptions from Patrick Ford. The hon. Member from Cork City has built his popularity on subscriptions received from America and raised by Patrick Ford. He was the man who was glad to go out there, but he is now the darling of the Tory gods who made the same taunts against him that they are making against us to-day. He has changed, but we have not, and when he comes to this House to turn it into a platform for the discussion of Irish controversies, those of us who in the interest of our country have remained silent will remain silent no longer, and we meet him here in this House as we shall meet him in every constituency in Ireland. He is a gentle controversialist, and perhaps the House would like to hear his opinion of the hon. and learned Member for North Louth (Mr. T. M. Healy), who is his colleague in their missionary zeal to save the House of Commons from the counsels of the Irish party, and from submitting-to appeals of this party. He and the hon. Member for North Louth now claim to be the saviours of Ireland. The hon. Member sits silent at the feet of the hon. Member for North Louth—alone they are going to save Ireland from the Budget. They Are going to save our country from destruction and the Government from the Irish party, and the Tory party from the Irish party—

Mr. GILHOOLY

And the "Molly Maguires."

Mr. DEVLIN

Order in the synagogue. You are asked not to trust the Irish party, not to believe the words of their representatives, and one of their chief charges against us in Ireland was that we are selling Ireland to the Government at luncheon parties in Downing Street. Two or three days afterwards they themselves were seeking interviews with the Ministers and holding those interviews. They were actually suggesting that you ought to enter into an alliance with them to dish the Irish Parliamentary party, and the principal agent in working with the hon. and learned Member for Cork City inviting us to go to Ireland is the hon. Member for North Louth. I will give English Members of Parliament some idea of the opinion the hon. Member for Cork City used to have of the hon. and learned Member for North Louth. It is an opinion extravagant in its denunciation compared to that which he now offers with regard to my colleagues and myself. He says:— Mr. Healy has brought himself to this dilemma that either every man, except himself who was ever prominently connected with the Irish party must be a scoundrel, or else he must be himself the only man of the whole lot who is capable of working as a loyal comrade, and thinking of anything except himself and his temperament. I know of no case in history of a man who was borne with so long and so much deferred to, and so much petted, and so much cringed to, to see if anything could appease him…will tell you that when the story of all these years comes by and by to be told of all we have had to endure year after year in silence, the way he succeeded in torturing everybody, taking the spirit out of everybody, starving out the Party, starving out the evicted tenants in pursuance of his own cold-blooded policy the way he manufactured the falsest and most infamous charges against his colleagues, and then ran away from them the moment he was faced by the full attendance of the Party, and repeated them all over again the moment the majority of the Party had their backs turned—I tell you that whenever the story of that time comes to be told you will find that no body of men ever showed such patience—'criminal patience' I hear somebody truly say-so much criminal patience in dealing with a tyranny so unreasoning and so wicked. … We hear the cry of toleration! Is there to be no toleration for the majority or for the interests of the Irish cause? Well, Mr. Speaker, as I stated in the beginning, I am an unqualified and an unequivocal supporter of this Budget. From the moment it was introduced in the party, and out of it, I have publicly given the Budget the unqualified support in Parliament which I gave it upon the platforms in Ireland. To hear the hon. Member for Cork City, one would imagine that we came shivering over here, saying to Ministers we would stealthily steal into the Lobbies to vote for them, and would go back to make apologies to Ireland. I will go back to Ireland and say that next to Home Rule I rejoice to be able to vote for the Budget.

Mr. WILLIAM PEEL

Why did you not vote for the Second Reading?

Mr. DEVLIN

I will give my reasons for what I do to my own Constituents, and I hope they will be more intelligently expressed than the hon. Member expresses his. [HON. MEMBERS: "Withdraw."] Every Member of this party who has ever discussed the Budget intelligibly in Ireland has received the enthusiastic cheers of his constituents and their approval. As a matter of fact, I agree thoroughly with the declarations made by the hon. Member who spoke from the other side of the House. I agree that this Budget has limitations. I myself fought in the House when the Budget was before Parliament last Session against what I thought was the injustice contained in some of the licensing provisions. I also fought against the Whisky Tax, but all Ireland is not bound up in licences and whisky, and we succeeded last year in securing for the small licence-holders in Ireland concessions to the extent of 90 per cent. The hon. Member for Cork City was not here. We fought the Whisky Tax. The hon. Member opposes the Budget because he wants a text upon which he can assail the Irish party, and endeavour to break up our movement in the interests of fiscal reform and the House of Lords. If I were as strongly opposed to the Budget as I am in favour of it I would passionately associate myself with my colleagues in the attitude they have adopted and the course they have pursued. My hon. Friend the Leader of our party (Mr. John Redmond) was assailed here the other night by the hon. Member for North Louth (Mr. T. M. Healy). My hon. Friend is not only the Leader who has been assailed by the hon. Member. These two apostles of conciliation and of the union of all the creeds and classes in Ireland are the Gentlemen who declared they would drive a great Leader to a lunatic asylum or the grave. He was driven to the grave. Mr. Justin McCarthy, an hon. Member of this House, was driven into retirement, and Mr. Sexton was driven out of Irish politics. We will take mighty good care there will be neither a cause nor a leader sacrificed while we have the courage and the spirit to maintin them. We here on these benches declare that, as our leader stands in England for high statesmanship, courage and political prescience and for great Parliamentary success, he stands deeper and warmer in the affections of the people of Ireland, and he will come back to this House with a stronger and a more indestructible party than that which he leads here to-day. I would vote against this Budget, much as I believe in it, if I believed the larger and greater cause was thereby to be advanced. I am an Irish democrat. I have never had any association with Lords, unless, if I may say so, in this House, and I was not deeply impressed. I believe the House of Lords not only to be an enemy of Home Rule, not only to be the agent by which Home Rule has been prevented in the past, and may be prevented in the future, but I believe it to be the enemy of all social and democratic causes.

The Budget which has been introduced is, in my opinion, something more than a financial measure; it is a great democratic instrument. They have not told Ireland that you propose, and that this Budget is to be the instrument by which you will carry your proposal out, to deal with afforestation, with drainage, with the general development of the country, and with all those great rural grievances, which are deeply felt in every branch of rural life in Ireland. There is to me a bigger question even than that. There is not one of the social curses that apply to the great cities of Great Britain which we do not feel in Belfast, and all the Dunraven meetings to be held from now to Doomsday would not do half as much to bring into communion and into a harmonious relationship Protestants and Catholics than one speech on the taxation of land values from the right hon. Gentleman the Lord Advocate (Mr. Ure). In the city of Belfast there are sweated women and sweated children; there are unemployed men who feel the curse and the character of the whole social system as deeply as you do in your country; and I want to know, am I, as a representative of these people, to sit here and listen to all these fiscal fables told from these benches in the supposed interests of the distillers and landlords whilst my Constituents and the people are to be robbed of all these beneficient advantages which we hope to secure through the agency and operation of this Budget? There are children in Belfast with wizened faces, old before they ever know what it is to be young, who go to work at six o'clock in the morning and work till six o'clock at night for three shillings a week. They work and toil and work and toil, and it is recorded that on an average they die at thirty-nine. They are not to count. You must take away the money from old age pensioners who now have earned their pensions by arriving at the age of seventy in order that the margin may be given in extra years' purchase to the landlords. Have they not got enough? Why do not some of these ex-democrats who exhibit all this passion for the distillers and the landlords think of their better and higher and nobler days when they fought for the people? There is a generation rising up in Ireland who are tired of all this humbug; there is a generation rising up in Ireland who will never be satisfied with the hysterical shriekings of played-out politicians, and who are not going to be led by lords or noodles. The Irish democracy, like the English democracy, are enlightened and educated; they know what they want, and they are determined to have it. I believe that this Budget proposes to give them some of the things they want, and, when the judgment of the people is taken on this Budget, it will be unequivocally in favour of it.

The biggest question, as I have stated, is the question of the House of Lords. We believe there is only one alternative to the course which my hon. and learned Friend has taken, backed up as he is unanimously by his colleagues. We must either in the politics of this Empire, join with these Gentlemen (the Opposition) or these (the Ministerialists). We cannot carry any great cause to triumph by ourselves. Are we to join with men who have stained the Statute Book of England by their opposition to every genuine reform that has been introduced by every statesman who has ever been friendly to Ire- land, or are we to take the side of the democracy of England, who have warm hearts for Ireland, with hopes and the belief that when the great policy of national pacification is completed and when Gladstone's life-work has been crowned with success, an emancipated democracy in England will emancipate the democracy in Ireland? I say that is not the millennium, but it is the triumph we hope to see, and it is the policy Ireland wishes to carry out, and the policy which will receive the mandate of Ireland when we appeal to our constituencies. The hon. Member for Cork talks about forcing a General Election. What has he to complain of? Does he not want to bring us over to Ireland and beat us? We are forcing the impeachment; we want it to come, and the sooner that impeachment is brought the better. I tell him, and I tell the House, that when that General Election takes place, whatever changes there may be in the vicissitudes of party fortunes in this Parliament of Great Britain, the Irish Parliamentary party will come back stronger and more powerful than it was before to assist you in destroying this Juggernaut which is crushing down the hopes and aspirations of all people who are passionately animated by a desire for social reform and to bring about peaceful relationships and contentment to the two peoples and progress to the interests of the democracy.

Mr. PRETYMAN

I think the powerful speech which has just been delivered by the hon. Member for West Belfast in support of the Budget would have carried rather more conviction as to his belief in the merits of the Budget if it had been delivered last Session instead of this. I do not think the House can really value on its merits an opinion which led the hon. Member and his friends to vote against the Budget on the Second Reading. I cannot help thinking we have only to look at the few words in his speech, in which he said that even if they were opposed to the Budget he and his friends would have been prepared to vote for it for another consideration, to see the truth of the matter. That is particularly evident if we read the terms of the resolution which was passed at the Nationalist Convention in Dublin in February, 1909. It was to this effect:— This Convention declares that any attempt to impose fresh taxation of any kind on Ireland in the Finance Bill of this year, on any pretext, would be a gross violation not only of every principle of justice, but even of the terms of the Act of Union itself; and it calls upon the Irish party with a Nationalist organisation to resist any such attempt with the utmost vigour. That was moved by the hon. Member for East Tyrone (Mr. Kettle), and I believe in the newspaper report of the proceedings he added that he would have to be dragged across the floor of the House to support the Budget if 6d. extra were added to the taxation of Ireland. Apparently, the hon. Member is going to be dragged across the floor of the House into the Government Lobby, because a good deal more than 6d. is going to be imposed on Ireland. I leave it to the consideration of the House what is the consideration that has overcome the scruples of the hon. Member and his friends.

The hon. Member for East Denbighshire (Mr. Hemmerde) and many other speakers in favour of the Budget have drawn true and harrowing pictures of misery and distress, overcrowding, wretchedness, and unwholesome conditions of life, and have used those descriptions as a lever for advocating the passage of this measure. I am sure they do not suggest we on this side of the House have less sympathy or less desire to remedy those conditions than they have. If they do, they entirely misrepresent us. We are as anxious as the hon. Member opposite can be to do everything possible to relieve those conditions. We recognise their existence, and we do desire to remedy them. It is because we do not believe this Budget will remedy them but will aggravate them that we oppose it. The hon. Member and his friends, in order to make their case for the Budget good, have got to prove that it will remedy those conditions, and I have never yet heard any proof adduced that the conditions to which they draw attention, and which excite the sympathy of this House, would in any sense be improved by the passing of this Budget. I think the hon. Member for East Denbighshire must see that the argument with which he commenced his speech was one of the most remarkable that could be brought forward in answer to my hon. Friend the Member for Dulwich (Mr. Bonar Law). My hon. Friend had stated? that the Government had ruined, or were ruining the licensed trade by the imposition of these duties. What was the hon. and learned Member's reply? It was that the trade was not ruined by these taxes, because, at the time they were proposed the trade was already declining, and, therefore, the Government could not be blamed for its ruin.

Mr. HEMMERDE

What I said was, the whole of the decrease in the whisky trade could not be laid to our credit, because, for about six or seven years, it had been declining. I was not referring to the licensed trade.

Mr. PRETYMAN

The hon. and learned Member declared that these taxes were not the cause of the ruin of the trade, because the trade was already declining. That exactly confirms my point.

Mr. HEMMERDE

No. I said the whole cause of the decrease in the whisky trade was put down to the Budget, and that was not right.

Mr. PRETYMAN

That is a different point. Our point is as to what has caused the decline in the consumption of whisky, and ruined individuals who are concerned in this trade. The hon. and learned Member's statement proves to the hilt our contention that this trade, exactly like any other trade, must be taxed out of existence if you impose a heavy burden on a declining industry. That is the point which the hon. and learned Member's defence of the Government makes perfectly clear. The hon. and learned Member put another point which has constantly been advanced in regard to the Budget taxes. He stated that the trade has learned a lesson—that they were warned by the Prime Minister, and he went on to admit that these taxes were not financial but political.

Mr. HEMMERDE

No, no.

Mr. PRETYMAN

If the hon. and learned Member did not say that, what did he mean?

Mr. HEMMERDE

Really I do not want to interrupt the hon. Gentleman. I did not say that. What I said was that the trade was warned that the monopoly value would either be obtained through the Licensing Bill or through high licences. They allied themselves to the party opposite, which opposed the Licensing Bill, and they were then thrown back upon high licences, and, for that, they have to blame the party opposed to us.

Mr. PRETYMAN

That is simply saying, in so many words, that the matter was political, and not financial. ["No, no."] That is absolutely so. A political Bill is brought forward and is thrown out. The trade are warned by the Prime Minister that the consequences of that Bill will be the imposition of a Licence Duty which will effect a political object in a different way. His threat is carried into effect, and that is the finance of this Budget. I say it is not finance—it is polities. Then, when this Budget is sent to the country, from another place, we are told that the House of Lords are dealing with a purely financial matter in which they have no concern. The hon. and learned Member, in his own defence, clearly demonstrated, and he in fact admitted, that the whole matter was purely political and had no connection at all with finance. I can only say, if it is finance it is the worse finance ever introduced into this House, and if that is the only excuse they have, I can only say that, from a financial standpoint, there is no justification whatever for it. The Government may stand on which leg they like; they are absolutely convicted either of having sought to further a political object under the guise of finance, or of having introduced finance of a vital character which has actually resulted in a smaller receipt of revenue than was obtained on a lower basis of taxation. The country will have a good opportunity of judging whichever standpoint the Government may choose. The hon. and learned Gentleman went on to say—and his argument has been used over and over again—that this attack on the land and on the trade is an attack upon a system and not upon individuals. Whatever proposals are made by hon. Gentlemen opposite for extorting a special tax from special classes of the community are always attempted to be justified by the simple statement—"We are not attacking you, we are only attacking the system you represent." That is all very nice, but who pays the tax? The system or the individual? I think if the hon. and learned Member and his Friends could devise a method of attacking a system without injuring individuals who happen to be living under that system they would find no particular objection from this side of the House.

Mr. HEMMERDE

I never said that at all. I was referring simply to some supposed abusive speeches, and I said the speeches were abusive, not of the individual, but of the system. I did not say we attacked the system in the sense of taxing it, and not the individual. I referred simply and solely to the so-called abusive speeches.

Mr. PRETYMAN

I do not think there is much difference. That statement has been made over and over again. I understood the hon. and learned Member to make a distinct statement that the attack was on the system and not on the individual. If he did not make it it has been made, and is constantly made by others, who ignore the fact that they cannot tax the system, but must tax the individual. On the question of speeches, the hon. and learned Member defended the Chancellor of the Exchequer, and he told us that the right hon. Gentleman in making his attacks upon the system was obliged to refer to individual cases, because otherwise his facts would have been regarded as fictions. I am afraid, even when the right hon. Gentleman did refer to individuals his facts were regarded as fiction by a great many people.

Mr. LLOYD-GEORGE

Then why did you not challenge them in the House?

Mr. PRETYMAN

They were challenged over and over again in the House, and on public platforms.

Mr. LLOYD-GEORGE

When? Give me one case.

Mr. PRETYMAN

The Mostyn case.

Mr. LLOYD-GEORGE

When was that challenged?

Mr. PRETYMAN

During the Debate of last Session.

Mr. LLOYD-GEORGE

I am very sorry to have to interrupt. Upon three separate occasions I invited hon. and right hon. Gentlemen opposite to challenge any one of the facts which I stated in the House that I relied on. I know they were challenged outside, but here they were never once challenged—not even the Mostyn case—in my presence in the House of Commons.

Mr. PRETYMAN

I am perfectly ready now to take up that challenge in regard to Lord Mostyn's case, but unfortunately there is no time. My recollection is that the matter was frequently referred to here, and in addition to that Lord Mostyn himself sent a distinct statement to the Press which the right hon. Gentleman made no attempt to reply to. The right hon. Gentleman has never contradicted it in this House or elsewhere. Lord Mostyn's denial is on record. There is a form of truth which is much worse than fiction, and that is to state figures in a manner which misleads the public; even although the figures themselves may be correct, material facts may be concealed which place an entirely different construction upon the matter. That is what I call fiction. I should like to refer to a further statement made in a speech of the hon. and learned Member for East Denbighshire, a powerful and considered speech from his point of view, in regard to the objects of the land group. I was rather surprised at the statement he made. It was a somewhat important statement of the objects of the land group. By that I mean those Members in this House who make it their special business to advocate new taxation on the land. So far from thinking agriculture could bear new burdens, we think it is overburdened. The group to which the hon. and learned Member referred is a group which has been in existence for some time. It has carried on its propaganda in this country for a considerable number of years, and at the conclusion of the hon. and learned Member's speech he made a strong claim that their agitation had borne extraordinarily good fruit as an electoral asset of the Liberal party. That was the claim which he made out. What is that organisation? How is it supported? It is an organisation of Members of this House and a certain number of gentlemen outside. Whence does it draw the financial support which has made it so strong? A curious light is thrown upon that by an extract I hold in my hand from a paper called the "Morning Leader," which, I believe, is a paper of strong Liberal views. That paper published in July last an interview with a gentleman who, I believe, is not a British subject— Mr. Josef Fels.

Mr. HEMMERDE

He has a large business here.

Mr. PRETYMAN

He is an American manufacturer, I believe.

Mr. HEMMERDE

And English.

An HON. MEMBER

He manufactures here on account of Free Trade.

Mr. PRETYMAN

I have had most careful inquiries made, and have been unable to find that Mr. Josef Fels carries on any productive manufacture in this country. Of course, if the hon. and learned Member can tell me he does I will withdraw the statement.

Mr. HEMMERDE

I am not sure that he does.

Mr. PRETYMAN

He is not a British subject. He is an American manufacturer who is importing into this country large quantities of products made in America. In the interview with the representative of the "Morning Leader" he himself stated that he is subscribing £5,000 a year for five years to the funds of the organisation represented by the land group here in this House, and he is willing to give as much more as they want. It is well that the people of this country should know the source whence these sums come. [An HON. Member: "Why do not you publish the names of the subscribers to the Tariff Reform League?"] This is a statement which appears in a Radical newspaper. There is an old proverb that the man who pays the piper calls the tune, and on that ground I have good reason for supposing that Mr. Josef Fels calls the tune to which hon. Members dance.

7.0 P.M.

The hon. Member—I quote his statement—said that their object was to reduce the burdens on agricultural land, because they considered it overloaded, but I hold in my hand a report of a dinner given about a week ago by the Parliamentary group to which the hon. Member belongs. He is not stated as being present himself, but I have a list of hon. Members sitting on those benches who were present. On this occasion Mr. Joseph Fels gave his account of the objects and the policy of the land group, which he finances, and this is what he said about agricultural land:— Mr. Joseph Fels, who has just returned from the United States, said many of their friends were anxious about the Budget. So was he that it should he destroyed and a better one introduced. They wanted a tax levied at 6d. in the £ on all land, rural and urban. Sixpence in the pound on the capital value levied annually on agricultural land valued at £30 an acre would be 15s. an acre annual tax. The hon. Member shakes his head, but is not that the fact? I do not know whether the land group will follow the hon. Member or Mr. Joseph Fels, but if they want to keep the funds of their organisation, I am afraid they will have to follow Mr. Joseph Fels, and not the hon. Member. Here we have a policy definitely stated, and I do not think sufficient notice has been taken of it that the objects of that group, if they follow their real leader, is to impose a tax of sixpence in the pound on capital value, which would mean 12s. in the pound on annual value, for a halfpenny in the pound on capital value is 1s. in the pound on annual value, and therefore 6d. in the pound is 12s. on the annual value of rural land. I think, under these circumstances, the House may take at their proper value the professions of the land party, as they call themselves, in regard to rural land. Then the hon. Member went on to state that these taxes should not be cumulative, but in lieu of rates. I ask the hon. Gentleman who supports these taxes are they cumulative or are they in lieu of rates? They are cumulative and that is our principal objection. [An HON. MEMBER: "Not on agricultural land."] So far as they fall on agriculture they are cumulative, and one of our principal objections to these taxes is that they are cumulative and that they destroy one another.

I do not wish to devote all I have to say to the hon. Member's speech, but I felt that those statements of his, having been made, required an answer. I should now like to turn for a moment to a challenge made by the Chancellor of the Exchequer last Monday. He said that one thing that struck him very much was that the finance of the Budget had not been challenged at all. I do not know whether hon. Members may have sometimes thought it was not worth while challenging because it bore its fallacies on the face of it, but I think it has been challenged, and I would venture in the short time at my disposal to challenge it again on every financial ground that can be put forward. There are certain definite canons of finance which should be followed by every Chancellor of the Exchequer and by everyone who is concerned in the imposition of taxation. Every one of those considerations are ignored or transgressed in this Budget. I do not want to labour this point, because it has been made over and over again, but I must refer to it in view of that statement. Is it not one of the first canons of finance that no tax should be so high as to reduce the taxable area from which it is levied? I am sure the right hon. Gentleman will not challenge that, but let us take the Whisky Tax. If any taxation obviously transgressed that canon of finance, clearly at the first glance this is the tax, because it not only destroys and reduces the taxable area, but it raises actually less than was raised on a lower basis. In response to that challenge, I think I am justified in repeating that point.

What I would put forward as the next canon is that taxes should fall evenly upon all those in the country who pay them according to their ability to pay. The right hon. Gentleman applauds that state- ment, but does he suggest that under his Budget a similar tax is levied upon the unearned increment of a man who has made thousands in the recent boom on the Stock Exchange as on that of a man who has invested his money in land? On the one whose ability to pay is enormously greater than the other no tax is levied in the nature of the Land Taxes. It may be said that they fall under other taxes, such as the Income Tax and the Death Duties, but that can easily be shown to be fallacious, and, so far as the Land Taxes are concerned, which form the principal feature of the Budget, there is no test of ability to pay whatever. So far as the Licence Duties are concerned also, where is the test of ability to pay? Only recently in a country village the free tenant or the owner of a local inn—a man of the highest respectability and honour—told me that if this Budget passed he was a ruined man, as he could not pay the taxes imposed upon him. This man has to pay a special tax imposed upon him, but is his ability to pay equal to that of other individuals who made a quarter of a million in stocks and shares? What is the excuse and on what ground are these departures mode from the ordinary rules of finance? The right hon. Gentleman himself stated the ground in his speech to which I referred just now, and what was his excuse for placing this special burden on the trade? Why, it was the identical ground for placing a special burden on land. How did he justify the tax on the licensed trade? In about five or six words:— This is not an ordinary trade. How are the taxes on land justified? Simply by a similar expression put in a different phrase. It is said:— Land is different from other forms of property. Therefore, any subjects who are the' object for the moment of the animosity of the Chancellor of the Exchequer of the day may be so taxed. Is there any industry which could not be selected as to which some particular feature could not be brought forward to which these words could be applied, and in regard to which we could be told that, the trade is not ordinary and is like no other trade. There are no features, however, properly looked at which are different from the features of everything else. That is the thin, feeble and unsubstantial justification which the Chancellor of the Exchequer puts forward for putting penal taxes upon people, and which cannot be justified, for most people can be told that their trade or industry is not ordinary. I think a more flimsy pretext for departing from the sound canons of finance was never advanced.

Mr. GIBSON BOWLES

Was not that the very pretext on which the Agricultural Rates Act was passed, under which the ordinary ratepayers contributed £21,000,000 for the benefit of agricultural property in this country?

Mr. PRETYMAN

I do not think that the hon. Member has strengthened the case for the Government by that interruption, because I think that he will remember that the ground for the Agricultural Rates Act was simply that this particular section of the trading interest of the country was bearing a heavier burden than other portions of the industry of the country. If anything was wanting to prove my point, it would be the hon. Member's interruption. Another canon of finance is that taxes should be cheap and easy to collect. I do not think the Chancellor of the Exchequer can contend in his wildest moments that these taxes are easy and simple to collect. That opens up a matter on which I should like to say a word or two. The matter of valuation referred to by the hon. Member for East Denbighshire is one of the most important matters in this Bill. The Government have put down a sum of £2,000,000 for their valuation. That is not very cheap, but it has been a matter of great astonishment to those persons throughout the country who are skilled in valuation, and have a knowledge of the conditions under which, valuations are made, and who have read the extraordinarily complicated valuation provisions in this Bill.—it has been a matter of astonishment and wonderment to them as to how it is proposed to carry out this valuation for the sum of £2,000,000 of money. A little daylight was let into this question yesterday when the hon. Gentleman the Member for Louth challenged the Chancellor of the Exchequer as to the necessity of the valuers in regard to Ireland. The right hon. Gentleman slipped out that no valuers were going to Ireland. The Chancellor of the Exchequer did make some reference to that subject before, but nobody apprehended its importance on this side of the House. I am not complaining of that; I am not imputing blame to the Chancellor of the Exchequer; I am only presenting the facts as they present themselves to me, and at the last moment this matter was shown to me in that light for the first time. That may be my own fault, but it slipped my notice until yesterday that valuers are not to go to Ireland.

It appears, therefore, that agricultural land in Ireland is not to be valued. Why? Because in Ireland there exists a valuation. What is that valuation? That of the annual value and the annual value only. That having transpired in regard to Ireland, my right hon. Friend, one of the Members for Glasgow, naturally felt a little anxious about Scotland, and he questioned the right hon. Gentleman as to the visits of valuers to that country, and he was informed that an annual valuation already existed for Scotland, and the right hon. Gentleman said that, so far as land valuation in Scotland was concerned, that valuation was good enough for him. I should like to ask, and perhaps the Prime Minister will enlighten England on this very important point, where does England come in, and are these valuers to visit the rural districts of England or not? If not, what vista opens up before us. I begin to see dimly now what is the real object of the Government. The hon. Member (Mr. Hemmerde) used a very strong expression. He said they of the land party meant to get at once a complete valuation, and without that complete valuation of capital value and site value their schemes could not be carried out. But the right hon. Gentleman has not explained how the site value is to be obtained from the annual value, and perhaps the Prime Minister will explain that point. But what is the vista opened up?

If we take these admissions which the Chancellor of the Exchequer made yesterday, and if we collate them with the fact that only £2,000,000 is to be charged for the valuation of the whole country, and also with a third important factor that, so far as I am aware, there is no time limit stated in the Bill within which the valuation has to be made, it looks very much to me as if this were not going to be a general and immediate valuation fairly and equally carried out at the time from which the site value has to be dated. It is already a year beyond the date from which these specified values are to start, and it now looks as if this valuation was not to be immediate, was not to be impartial, and was not to be genera], but that the Government are going to take £2,000,000 of money and select at their own will certain particular kinds of property owned by certain particular kinds of individuals, someone who is not ordinary, like the licensed trader and the landowner, for taxation, and, so far as the majority of the people are concerned, particularly those who carry large numbers of votes, there will be no valuation for some considerable period. We shall see whether our suspicions are justified, but if this valuation is to be carried out in that manner I should like the Government to look at that and to collate it with their action in regard to the Veto of the Second Chamber. Here we have an absolute power of taxation placed in the hands of the Government without question and without appeal to the electors of the country, and you have the weapon of valuation placed in their hands, which need not be general, and which they can exercise exactly as they like, to the detriment of particular subjects who may or may not happen to have incurred their displeasure. I should not desire to stand here to accuse the Government of misusing such power, but that is a power which this House ought not to place in the hands of any Government or any Chancellor of the Exchequer. When this valuation has got to be carried out, whether it costs £2,000,000 or £10,000,000, we have a right to demand that if this House grants the valuation it should be immediately carried out, and that it should be evenly and impartially carried out, and that there should be no selection, and I trust the Prime Minister will give us the pledge that that valuation will be complete, and will be as far as possible contemporaneous, and that there will not be an immediate valuation made on certain kinds of interests, and that other interests from which less may be expected in the way of money and from which more may be expected in the way of votes will have their valuation papers delayed for some considerable period before they receive them.

These taxes are not easy to understand, and I think a tax ought to be easy to understand. How are these Land Taxes, for instance, to be levied and on what are they to be levied? They are to be levied on hypothetical deductions from an imaginary valuation. There is not a lawyer in the country who could definitely predict to any owner of property exactly what the burden of taxation will be upon him after this Budget has passed. After some twelve months of most careful and close application to the Budget, after studying it in every particular, when I apply the principles which it contains—if they can be called principles—when I apply its Clauses to particular concrete cases with which I am absolutely familiar, and when. I try to deduce from that what will be the actual burden placed by those taxes upon any particular kind of property, I absolutely fail, and the matter is completely obscure. It follows from that that the country, so far as it has been considering this Budget, has had to do so purely upon the ground of conjecture. Hon. Gentlemen opposite have stated that the tax will only fall upon the rich and upon large owners, and not upon the poor. I traverse that statement. I will give the actual position in regard to a Lancashire town—Burnley. I am not speaking from personal knowledge, but I have had the facts given me. There are a few owners only who are of the class on whom the right hon. Gentleman wishes the country to believe his taxes will fall. These large owners have let their land on building leases for 999 years. The owners of the leases are no fewer than 4,500, mainly working men. Upon whom are these taxes going to fall? What is the position of the rich man? He is drawing what is called a chief rent, which is fixed, and is for 999 years. There are three taxes. No increment can possibly be chargeable upon a chief rent which is fixed, and can never increase in value. There can be no Undeveloped Land Duty as the land is already built upon, and there can be no Reversion Duty until 999 years have passed, and that will not trouble the owners much. So far as these large owners are concerned not a penny of taxation can conceivably fall upon them. The 4,500 small owners are the people upon whom these taxes are to fall, and the people who will have to be valued. What is the position as presented to them by the other side? They are under the impression that when this Budget passes they will pay less chief rent, and that the taxes will fall upon the persons who are in receipt of the chief rent. What are the facts? The chief rents will be exactly the same as they are to-day, and the burden of taxation will fall not upon the owner but upon the dwellers in the houses.

I do not wish to multiply instances, but we have had now twelve months' arduous discussion and hard labour upon this Budget. I am devoutly thankful that this is the end of our discussion. But it is not the end of the struggle. We have hitherto been working upon the conjec- tural results of the Budget. When we meet again, or soon after, we shall have some concrete cases, and when we bring forward concrete cases I do not think the right hon. Gentleman will get out of them so easily. If I may say so in all friendliness, he is a master of evasion in debate, and I only hope, for his sake, that those whom he taxes will not be so capable in evading them as he is in evading our arguments regarding them. [HON. MEMBERS: "How?"] You must ask the right hon. Gentleman, not me, how he does it. It is for the expert to describe, and not for me. I merely stand at a distance and admire. The fact remains that when these concrete cases are available, then, and then only, will the electors be able to judge this Budget upon its merits, and we, on this side of the House, are absolutely confident that when that takes place we shall receive the thanks of the country for the fight we have made against it, and the Government will receive the condemnation they deserve for the ruin that they will have wrought and for the trouble they will have caused throughout the country on political grounds, and without any real gain to the stable and permanent finance of this country.

The PRIME MINISTER (Mr. Asquith)

I agree with the concluding observation of the hon. and gallant Gentleman that it is with a sense of relief, so far as this House is concerned, that we have now reached the last stage in the fortunes of a Budget which, not only from the nature of its provisions, but from the circumstances of its history, will always be memorable in our political annals. It is this week exactly twelve months since my right hon. Friend (Mr. Lloyd-George) made his financial statement, and we of the late House of Commons expended six full months of Parliamentary time in examining, with minuteness and care, and with an expenditure of labour which I believe has never been paralleled, all the many and complicated provisions of that great financial scheme. What happened to it afterwards is well known. It went to another place, and by what we hold, and shall continue to hold, to be both an unexampled and an unconstitutional exercise of their powers, the whole financial provision of the year was set at nought. That proceeding has cost the nation in money, directly, £1,300,000, and indirectly a vast deal more. What its moral, social, and political results will be the near future will disclose. It was, perhaps, inevitable that a dissolution followed, and the Budget was submitted to the country, and it is now in the new House of Commons—I will not say without the alteration of a comma, but in all substantial respects unaltered and unmodified—referred for the last time to the judgment of those whom the electors have sent here to represent them. Everybody knows, and it does not require any gift of prophecy or of divination to make the prediction, that within an hour of the time I am speaking it will receive the approval of the overwhelming majority of the new House of Commons. [An Hon. Member: "How is it composed?"] I will say something to gratify the hon. Gentleman's curiosity before I sit down. I will say something a9 to the composition and authority of that majority. But let me first, before I do that, pass in very brief review—for this is surely the appropriate occasion to do so—the main features and the governing principles of this financial scheme. It was devised, as everybody knows, to meet what is now universally acknowledged to have been a twofold national necessity—to provide funds for old age pensions and to satisfy exceptional calls for the purposes of national and imperial defence. How has my right hon. Friend met the demand—the exceptional, and I may say unprecedented, demand—made upon him as Chancellor of the Exchequer? In the first place, and necessarily, he has met it by a very considerable reduction in the sum which we have been in the habit of setting aside for paying off the principal of our National Debt. My right hon. Friend was justified in taking that course, and no one, I think, has quarrelled with this part of his scheme. He was justified by the unprecedented efforts of the previous three years, in which we had reduced the debt by an amount absolutely unexampled in our financial history. But let me point out, and it is a most significant fact from another point of view, that even with the suspension which my right hon. Friend justly made of the large provision we have been in the habit of setting aside for the reduction of the principal of the debt, the actual redemption of principal in the financial year just expired amounts to no less than £12,657,000. Of that, £6,970,000 of reduction in the funded debt was, of course, provided by the Sinking Fund of the previous year, but the balance of very nearly £6,000,000 has been entirely derived from the revenue of the year just expired. Terminable annuities to the extent of £2,133,000, unfunded debt, or what are called lottery bonds, and other miscellaneous payments amount to £1,339,000; and capital liabilities under the Naval and Military Works Acts have been paid off from the Army and Navy Estimates to the extent of no less than £2,215,000, so that in this very year of exceptional emergency and necessity we have actually out of the taxation of the year paid off something like £6,000,000 of the principal of our national and capital debt. That is a fact which, I think, my right hon. Friend may justly regard with complacency when he compares his practice and proceedings with those which have been pursued by the Finance Ministers of every other great country in the world. That was the first great expedient which we resorted to.

The next, of course, and far more important and more wide-reaching, was the new taxation which this Budget imposes. I have been listening, as I always do, with respect and, so far as I could, with understanding, to the arguments of the hon. and gallant Member opposite (Mr. Pretyman), and I find that be, like so many of those who preceded him on the same bench and behind him, discovered no principle whatever in the new forms of taxation proposed by the Chancellor of the Exchequer, and sanctioned by the late House of Commons and about to be sanctioned by this House of Commons, other than a vindictive selection for what I may call the retributive treatment of special classes and interests in the country, who for social or political reasons are obnoxious to His Majesty's Government.

Sir F. BANBURY

Hear, hear.

The PRIME MINISTER

The hon. Baronet cheers that sentiment, and I think it exactly expresses his view. On the other hand, our contention has been throughout that we have made an honest and, as we think, a successful attempt to ensure that the new burden, very large and very heavy burden as it is, should be carefully and equitably distributed among the various members of the community. These are the two contentions. I think I have stated them both as they were stated by their respective supporters. Let us see which is right. Has any class been allowed to escape scot-free from the new taxation to meet these necessities? The working class do not escape in so far as they are consumers of alcohol and tobacco. The middle class have not escaped. The Income Tax has been kept at a very high rate, a rate which in the old days would have been called a war rate, and a rate which I say quite candidly could not have been justified even under the exceptional conditions in which we live had it not been that we discriminate between earned and unearned incomes, and place it on a fair and equitable basis. The well-to-do have not escaped. They have got to pay the Super-tax in the character of Income Tax payers, and their descendants, who succeed to their property, have to pay the extra Death Duties imposed under the higher scale. Finally, the owners of monopolies have not escaped—monopolies which | are, I will not say so dear to the right hon. Gentleman opposite, but which he finds difficulty in understanding why they should be regarded as fair pray for the tax collector. He has spoken of the land and liquor monopolies, but in both cases, in so far as they are subject to taxation in this Budget, they are the creation, either direct or indirect, of the State and the community. Nothing has escaped. Whether you look at the Land Taxes or the Liquor Licences, nothing is taxed under this Budget except the added value by the exercise of industry or by the action of the State.

Mr. AUSTEN CHAMBERLAIN

What about brewers' licences?

The PRIME MINISTER

lam not dealing with brewers' licences. I expressly said that the licence of the retail publican and the brewers' licence are on a totally different footing. It is a tax on beer, and it is on exactly the same footing as the Spirit Duty. A clear proof of that is that we put on a Customs duty in order to meet it. I have admitted from the first that was obviously and absolutely necessary. Why is it necessary? Because it is a tax on the commodity itself. It is not a tax on the monopoly at all. As regards the Land Taxes and the taxes on the retail sale of intoxicating liquors, I say they are monopoly duties, and monopoly duties alone.

The right hon. Gentleman has rather challenged me on this point and I shall take, by way of illustration, those very Licence Duties. I think they have been more attacked in detail in the course of the discussion than perhaps any other specific part of the Budget. Let us see what they are. The hon. and gallant Gentleman (Mr. Pretyman) seems to think that the Chancellor of the Exchequer has singled out some particular trade. It is this trade to-day, it may be that trade tomorrow, and another trade the day after, and he makes it subject of special and vindictive treatment. Does he really contend that a trade carried on by a licensed dealer stands on the same footing as any other trade in this country? Let him show me any other trade which a man cannot carry on without a licence from the State, let him show me another trade where the trader's licence is a protection from competition, let him show me another trade where the State by its own action confers on the person who carries on that trade a special chance and opportunity of making a profit which is not enjoyed by other members of the community—if he will show me such a trade I will say, "Certainly it is a very fit subject for the Chancellor of the Exchequer, and I hope in the next Budget he will tax the monopoly value as he is doing in regard to the liquor trade." What are these Licence Duties which are so burdensome, so iniquitous, and so inequitable? Let us see what they are. The drink bill, as it is called, that is the amount expended on the consumption of alcoholic liquor for last year, is I see estimated at £155,000,000. You have to add to these Licence Duties the old Licence Duties. They make something like £2,100,000. That is the estimated yield from my right hon. Friend's new duties. These Licence Duties, imposed on the persons who retail the drink, which is represented by that enormous sum, amount to £4,210,000. In other words, they are a tax of 2.6 per cent, on the retail trade. I am reminded by my right hon. Friend (Mr. Herbert Samuel) that the £2,000,000 includes the wholesale manufacturers' licences. The publicans' licences are only £1,500,000. Therefore I overstated when I said that the Licence Duties amount to a tax of 2½ per cent. They do not amount to so much.

Let me ask the House to bear these figures in mind. Mr. Gladstone's scale, that is the existing scale, of Licence Duties was imposed in 1880. Between 1880 and 1908 the population increased by 8,000,000 in England and Wales. The drink expenditure has increased by £15,000,000, and the number of licensed houses had diminished by 10,000. In other words, the monopoly has become more profitable, and it has also become more concentrated by falling into fewer hands. Again, we are dealing with the ability to pay, which the right hon. Gentleman opposite very justly said is one of the canons of taxation. Taxation ought to bear some proportion to ability to pay. What is the case as regards this scale? Under the scale laid down by Mr. Gladstone in 1880, and now the law of the land, all public-houses with a rental of £50, or under, pay from 40 to 60 per cent, of their annual value in the shape of Licence Duties. Out of 87,000 public-houses in this country no less than 50,000 at this moment fall under this category. What do we propose to do in this vindictive measure in which we entirely ignore the people's ability to pay, and in which, out of a pure spirit of vindictiveness and spite, we are imposing an intolerable burden upon a much afflicted and persecuted industry? What are we doing? We are simply saying that that which is at present the law in regard to all public-houses of £50 or under shall be the law in regard to public-houses which are of an annual value which is greater; and in addition to that, the right hon. Gentleman, in that spirit of conciliation—I might almost say a tenderness—which he has shown in reference to this Bill from the first moment it was introduced, has made a number of most expensive concessions to hotels, restaurants and public-houses on the higher scale. I do not think that there is any part of the Budget which is more clearly justified as a consistent and logical carrying out of principles already embodied on the Statute Book than that part which proposes increased Licence Duty on the most valuable class of public-houses that are enjoying the largest part of the monopoly granted by the State.

I pass now to an entirely different point. I must say a word on the more general topic which has been mooted in the course, of these discussions, as to the financial position and credit of our country. I do not think that the mere quotation of prices at which the funds happen to stand at a particular time affords any satisfactory or adequate criterion, but I should not be in the least afraid to take that. What are our Consols at now? They happen to be very low at the present moment; I do not know what they are to-day, but they were 81 for this 2½ per cent, security. What are German Three per Cents.? I do not know whether the right hon. Gentleman expects to be taken seriously in this connection. I thought that Germany was the paradise, the model, and the exemplar which we are all invited to follow in these days. German Three per Cents, stand at 83, and reduced to a 2½ per cent basis they are at 69.17. In other words, there is an advantage of no less than eleven points in favour of the English security. I do not regard that as in any way a sufficient or conclusive test. So far I agree with the hon. Baronet. Why is it not? Much reference has been made to the undoubted fall in the price of Consols, our premier security, since 1898. That fall is due, as everybody acquainted with the facts knows, not to diminished prosperity in this country, not to any relative falling back as compared with other nations in our industrial activity, or in the profits of that activity. It is due to the number of specfic causes, which are perfectly familiar to every man of business, and ought to be familiar to every politician. We have seen during that time an enormous increase, due to the action of the Legislature, in the amount and the range of what are called trust securities, which accounts for a very large part of the relative fall in Consols. We have had since the South African War a colossal addition to the debt of the country for the time being, though I am glad to say it is now disappearing, and the borrowing that was necessary at the rate of 3 per cent. We have had the issue of Irish Land Stock on a very large scale at 2¾ per cent., and we have had the constant and growing competition of municipal and local bodies, who are constantly coming into the market. If you take into account those and many other circumstances which have contributed, it would have been morally, fiscally, and financially impossible to have; maintained Consols at the artificial price at which they stood twenty or thirty years ago.

I want to take another test than looking at these more or less disputable comparisons between the prices of securities as such. These are very often due to local and transient causes. Let us just look at the financial position as disclosed in the Budgets of the present year of three or four of the great countries of the world, including our most energetic and successful commercial rival. I would begin with France. For the financial year ending 31st January the expenditure is £166,000,000; the revenue is £158,000,000, and the deficit is £8,000,000. That deficit is to be covered by the issue of short term bonds. If the hon. Baronet will allow me I will take next the German Empire. The financial year begins like ours on 1st April. Take 1909. The expenditure, adding the ordinary and ex- traordinary, was £139,500,000, and the revenue was £129,000,000. The deficit has to be met by a loan of £10,000,000. The deficit of the year before was no less than £8,000,000. I will take now the Empire of Russia. In the same year, 1909, the expenditure was £279,000,000, and the revenue was £270,000,000. The deficit is to be met by a loan of £9,000,000. Finally I will take the United States of America, which is the greatest and most serious of all our rivals. The financial year begins there on 1st July. On the Budget for 1908–9 the expenditure was £173,000,000; the revenue was £161,000,000, and the deficit was £11,750,000. The estimated deficit for the year not yet expired is £6,500,000. So whichever of those four countries you take you will find in every one of them what we should regard in this country of ours as an enormous deficit which is being met not by taxation, but by additions to the National Debt. My right hon. Friend closes the financial year 1909–10 in possession of a large surplus. He is the only Financial Minister among the Ministers of the great countries of the world who is at this moment in that position. And as I pointed out earlier in my speech, that result has been achieved after paying off out of the revenue of the year no less than £6,000,000 towards the capital of the National Debt.

I said at the beginning that before sitting down I would say one word as to the majority by which this Budget was; going to be carried. We were told that the votes of the people of this country, the people of Great Britain, were going to be overridden by an element introduced from elsewhere. As a matter of fact there is a very large majority for the Budget among the representatives of Great I Britain. I should like to make two observations upon that. I have never myself practiced or preached what I may call this form of Separatist logic which seeks to discriminate between the votes of Members of Parliament according to the parts of the country from which they; come. I am much too good a Unionist to indulge in any such practice. But indeed I have never thought and do not think now that, apart from Great Britain, there is any steady preponderating volume

of opinion against the Budget on the other side of St. George's Channel. The House listened—unfortunately I was not able to hear it—to a most powerful and able speech from the Member (Mr. Devlin) who, expressing the opinion of that great commercial community—[HON. Members: "No."] The part which he represents, at any rate, said that the Budget had the whole-hearted support of the people.

One is tempted to ask the question, when is a bargain not a bargain? Apparently if and when—it is not going to happen—the hon. Gentlemen who represent Ireland join forces with the hon. Gentlemen above the Gangway. These enemies of the Constitution, these disintegrators of the unity of the Kingdom, these accomplices in treason, and heaven knows what other crimes, they are then clad in the garb of immaculate innocence, and are welcomed as the authorised exponents of the views of the people of the United Kingdom. That is the notion which hon. Gentlemen opposite entertain of what is a bargain. What hypocrisy all this is; arrant, rank, transparent hypocrisy. In taking leave as we do to-night of this Budget, as far as the House of Commons is concerned—I do not think we are likely to hear of it again—if it were the last word I ever had to utter in this House, I should be glad to record my own unalloyed satisfaction that in the first place it fell to my lot to lay the foundation, prepare the way, and initiate the working of what is now a national and indestructible system of Old Age Pensions, and that in the next place I was permitted through the genius, tact, patience and courage of my right hon. Friend to be associated with him in this great financial scheme which, without entrenching in any way upon the principles or the practice of the fiscal system that has made our country prosperous and commercially supreme, is going to provide an adequate, an ample, and an expanding revenue, alike for the needs of national defence and of social reform.

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

The House divided: Ayes, 324; Noes, 231.

And, it being Eight of the clock, Mr. Speaker proceeded, pursuant to the Order of the House of the 18th April, to put forthwith the Question necessary to dispose of the business to be concluded at Eight of the clock this day.