BUDGET RESOLUTIONS (INCOME TAX AND SUPER-TAX). (Hansard, 6 July 1910)

Dr. HILLIER
In previous observations I ventured to express my deep regret that the time has not yet come when a British Chancellor of the Exchequer can see his way to introduce the policy of preference with our Colonies. But if we are not to have preference we apparently are to continue to have protection in the shape of a tax of 2d. in the pound on manufactured cocoa, and a similar duty on chocolate. With regard to that stimulating and refreshing beverage I would like to ask the Chancellor of the Exchequer a few questions. It does appear to many people somewhat unfortunate that the one manufacturing industry which derives some measure of protection under his Budget should obtain its raw material under conditions of labour which I am quite sure all parties in this House join in deploring. In this Bill, if the right hon. Gentleman will forgive me for saying so, he has been guilty of what appears to me to be very like "tacking." Temperance has been tacked on to this Bill in order to satisfy the somewhat unctuous rectitude of the Chancellor of the Exchequer, and Protection has been tacked on in the shape of the duties on cocoa and chocolate that I have mentioned. What I desire to ask the right hon. Gentleman is, Why, as a Liberal Chancellor of the Exchequer, does he find it necessary in Budget after Budget to re-enact this clearly protective duty of 2d. in the pound on cocoa? I find that an excellent defence of that policy is given by a gentleman interested in the trade. We have had the opinion of one hon. Gentleman, who very courageously and frankly stated his case to the House. I will say personally that I am grateful for the frank and courageous manner in which the hon. Gentleman made that statement of his case. But in this connection I cannot refrain from quoting the opinion expressed by another eminent manufacturer in this industry who has already been referred by the hon. Gentleman who spoke on the subject.
He said in regard to this tax that it was justified, because it places the British manufacturer on an equality with foreign competition in the home market. That does appear to be a very excellent reason. The Gentleman who made that statement was Mr. Cadbury. I do not desire to 1744 introduce personalities, but his name has been mentioned before. I say that is a very excellent reason, and I say this duty is a very excellent one, and Mr. Cadbury practically admits it confers privileges in the conduct of his business; and what I want the Chancellor of the Exchequer to tell us is why these privileges should be reserved for this particular class of manufacturers alone? Why should it not be extended to other manufacturers as well? Surely equality with foreign competition in the home market is just as desirable for other manufacturers and workers engaged in other industries as it is for those engaged in the manufacture of cocoa. I hope the right hon. Gentleman will give us an answer upon that point. I should also like to know whether the argument used by Mr. Cadbury in favour of this duty appeals to the Chancellor of the Exchequer. Does the right hon. Gentleman think that equality in the home market with foreign competition is desirable in other British manufactures?
This Budget on examination does not appear, to me, at all events, and I think to many others as well, to be the simple embodiment of all those Christian virtues to which the right hon. Gentleman made such frequent allusion. I venture to suggest that this Budget is not merely a Free Trade Budget, and the right hon. Gentleman's assurances as to its character do not appear to me to be worthy of entire acceptance by the Committee. One is driven to the conclusion, on an impartial examination of the Budget, that it is not what the Chancellor of the Exchequer claims it to be, but that it is intended to serve, not merely the interests of national and Imperial finance, but also those of a subtle electioneering opportunism.

§ Mr. AUSTEN CHAMBERLAIN
Perhaps I might ask the right hon. Gentleman what he proposes to do in respect of the conduct of this Debate. I think he will agree, having regard to the length of time taken by the private Bill to-night and to the fact that we did not have the full amount of time on Monday, also owing to a private Bill, that it is impossible that a general Debate should close to-day, as was generally hoped by the Government. I hope, in view of what the Prime Minister said the other day, the Chancellor of the Exchequer will be able to say the Government will give another day for the continuation of this discussion.

§ Mr. LLOYD GEORGE
We had originally intended, as the right hon. Gentleman knows, to close to-night, but I confess I think the appeal of the right hon. Gentleman is not an unreasonable one. The Debate on the Birmingham Bill took up more time of the House than was anticipated. There has been a considerable desire expressed on both sides of the House to take part in the Debate, and my hon. Friend the Member for King's Lynn (Mr. Gibson Bowles) has got a number of Amendments down. I think it is rather doubtful whether we should get through in a reasonable time to-night, and under those circumstances I suggest that the discussion should go on for a short time, that Progress should then be reported, and that we should resume the Debate on Friday.

§ Mr. ROWLAND HUNT
The Prime Minister in his speech to-day, I think, finally disposed of the lie about the old age pensions. He made it perfectly clear that whichever side was in the old age pensions would be continued. It is a great pity he did not tell the Lord Advocate that before he loosed him to travel all over the country to tell his unfortunate and easily deceived fellow countrymen that if the Tories got in they would not pay the old age pensions. There were two interesting statements made to-day. The right hon. Gentleman the Member for the Forest of Dean (Sir Charles Dilke) said he was in dreadful distress because Liberal Governments did not keep their promises. I am very sorry for him, but I think he took a long time to find it out. An hon. Member on the other side of the House, who I think represents the cocoa manufacturers, complained that they did not have any drawbacks in respect of the cocoa sent abroad. He forgot the home trade is from six to eight times more important than the foreign trade, and as the present heavy protection on manufactured cocoa enables them to keep the great bulk of the home trade in their own hands, I do not think that they have much to complain of. They publish statements to the effect that they would be very glad to have the duty removed, but I notice that they are particular to say that the duty on raw cocoa should be taken off as well as the duty on the manufactured article. I always understood Free Traders to argue that the tariff made no difference; if so, why do they want the tariff taken off raw cocoa? It only shows what frightful humbugs these Free Traders are.
1746 The hon. Member for South-East Lancashire declared that the people engaged in the cocoa trade were labouring under unworthy and inaccurate inuendoes, while the hon. Member for the Tyneside Division (Mr. J. M. Robertson), although he took the same line of argument, admitted that the cocoa duties worked out as very high protection. We on this side of the House, I think, justly complain that the Free Trade cocoa magnates, having obtained both for themselves and for their work-people all the benefits and prosperity arising from heavy protective duties on what Mr. Cad-bury has admitted to be an important food of the people, should in spite of that declare day after day in the great Liberal Free Trade papers which they finance and control that any form of Protection means misery and starvation to the working people of this country. We see advertisements stating how well the people engaged in the cocoa industry are treated, and what good wages they receive, but of course the cocoa magnates, having got almost the only protected industry in the country, can well afford to pay good wages and get the pick of the labour market. As manufactured cocoa does not appear to be any dearer in this country than in any other country, we do not complain of its being protected, although the protective duties abroad on our manufactured goods are so high as to be almost prohibitive. The Government get a comparatively small amount from protected cocoa—only about £96,000— although the industry in this country is valued at £10,000,000, and I think we may well complain of the way in which the working people of this country who are not engaged in the cocoa industry had been humbugged and deceived by the cocoa magnates, who have made vast fortunes out of this protected food industry.
Moreover, they have set themselves up as Free Trade Liberals and great friends of the poor. The agitation against a possible but very unlikely increase of part of half a farthing on four pounds of bread in these cocoa papers was terrific and continuous, but in spite of what the hon. Gentleman on the opposite side of the House—who represented the cocoa industry—said, there was in them no agitation against heavily protected cocoa, although it was known for years that the raw material was produced under undesirable conditions. [An HON. MEMBER: "Divide."] I know it is very 1747 unpleasant for hon. Members, but I am not going to be put down by clamour, and there is plenty of time. Although it appears that the cocoa magnates knew perfectly well that the raw material was grown under conditions of atrocious slavery this was the course they pursued. Just fancy how, if a syndicate of the Lords had owned the cocoa industry, the "Star" newspaper, with its many betting tips, would have commented upon the matter; and is it not a fact that the Radical politicians and the Radical press would have screamed from Cornwall to Caithness. I think I have shown that it is the hypocrisy, not only of the cocoa magnates, but of the Liberal party in general. There was a complaint made by the cocoa magnates against Tariff Reform cocoa firms, but those who supported that principle neither owned Free Trade papers nor did they preach Free Trade. The Free Trade cocoa manufacturers seem to be worse than the hypocritical Pharisee of old who, it will be remembered, tried to take the mote out of his brother's eye when all the time there was a great beam sitting in his own.
The hon. Member (Mr. Snowden) told us when he showed us his poster that of course it lied, but he did not explain what the lies were, and I certainly have never heard that the figures in the poster have been disputed. The hon. Member, however, added that lies help elections. I think the Liberal and the Labour parties did pretty well on Chinese slavery, the big loaf, black bread, and horse flesh, at the last two elections, and they should be pretty good judges of the beneficial political effect of lies cunningly invented to deceive our unfortunate working people. I agree with the hon. Member thus far, that the Government should buy up all the ordinary public-houses. I have said so for years, and in my own Constituency I got into dreadful trouble not only with the publicans but with the teetotalers. I think the Government should run the ordinary public-houses for the benefit of the people. But the public-house trade is a distributing trade like the Post Office. It is not a manufacturing trade, and in most ways it is entirely different from all others trades. After all, the publican, like the rest of us, is only human. He sells as much beer and spirits as ever he can. But it is a bad principle. It is bad for the insides of the people of the 1748 country. I think a great many on both sides of the House and in the country will agree with me.
I also agree with the hon. Member for Blackburn that if a halfpenny extra on the Income Tax would really prevent the privation, extremity and necessity of 5,000,000 men, it certainly ought to be put on, but I cannot believe that it would have that effect. It would be only a drop in the ocean. It seemed to me that the hon. Member for Blackburn gave away the Free Trade case. He told us "that from 1901 to 1909, under our nick-named Free Trade—he did call it that— the rich had got much richer, the poor had got poorer, unemployment had got greater, and wages had gone down. This was in spite of a period of booming trade. That good trade hardly helped any more of our people than about 5 per cent." From that, it seems to me, at all events, that many of our poor people never have a good time at all. I think the hon. Member for Blackburn might have added that food had become considerably dearer and that emigration was very high—ten times higher than that of Germany. The best, strongest, and most industrious of our working people are flying as hard as ever they can go from us. They are going from this country with its Free Trade principles to countries which protect their industries and working people. Although so-called Free Trade may be advantageous to some rich men, it does make the poor poorer. It is a ruinous system for working people, because it deprives them of work and wages in their own country, and gives work and wages to people abroad. The hon. Member for Blackburn said that those on the Labour Benches were earnest and active supporters of Free Trade, but he added that he had yet to see whether all our social and industrial problems could be solved within the limits of Free Trade finance.
The hon. Member for Blackburn is a leader of the Labour and Socialist Members in this country. I think that is a very serious question. I was in America thirty-two years ago for between one and two years, and my experience there settled me, although I was only a boy, on this question. I found in America practically untaxed agricultural land, and the labour done by black men, cheap labour done by the descendants of the African slaves; and I said then, and I have said always since, that we cannot, comparing the conditions in this country and the conditions of other 1749 countries, compete with untaxed land and cheap coloured labour, when we have in this country heavily-taxed land and dearer white labour. If hon. Gentlemen who represent labour on the other side of the House would get rid of those curious views of the Free Trade fiction that hopelessly stultify their generally powerful intellect, if they could only get rid of those things they must see that it is absolutely impossible that they could have general prosperity and high wages as long as they allow the products of cheap labour and cheap land to come absolutely free into this country. That is what is the matter with the finance of the right hon. Gentleman the Chancellor of the Exchequer. I have no doubt he knows it perfectly well himself. Of course he has got to hang on, because if he did not his party would part with him.
Last week I saw an article in a leading Socialist paper by a leading Socialist writer, Mr. Suthers, and he referred to what hon. Gentlemen on the other side of the House do on this question of finance. This is what he said—I think he put it unusually plainly: "Under Free Trade all industries are always in danger and some must inevitably be injured. Therefore a Labour party must be protectionist." And he went on to contend that a nation which preserved and protected its national resources and nourished its own people was far better oil and far more likely to keep the peace of the world than a nation of cosmopolitan sweating and greedy Free Traders. That the Labour party's policy of bitter opposition to any and every Tariff Reform proposal was madness. It meant the retention of Free Trade and was directly opposed to the principle of great Unionism, which was protection. It was anti-Labour, anti-National, anti-Socialist. He also strongly advocates preferential trading within the Empire, and he ended up his article with "Down with Free Trade." Some of the Socialists, at all events, have found out the folly of so-called Free Trade, and I recommend the hon. Labour Members to study the question if they want to save their seats. There is another matter on which the hon. Member for Blackburn touched [HON. MEMBERS: "Agreed."] I am going on now. After all I am only telling you the truth. The hon. Member for Blackburn said:— There are many indirect taxes on which the working classes pay more than people in better circumstances. 1750 I should rather think there were. If a working man spends three shillings on buying tea he pays in taxation to the Government three fivepences. The rich man who buys one pound of tea at three shillings only pays one fivepence to the Government. With alcohol the case is much worse. The working man on his whisky pays about 500 per cent. The rich man on his champagne pays about 15 per cent. The Chancellor of the Exchequer raised the poor man's whisky tax by more than 100 per cent., and now he cannot get any revenue he rejoices he is making the poor man sober by Act of Parliament. But there is no extra import taxation on champagne. I conclude the Chancellor of the Exchequer does not think a rich man wants sobering. I call this class legislation, and insult added to injury. Tobacco is worse still. I was refused an answer to-day by the Financial Secretary to the Treasury.
I think I am correct in saying that the taxation on expensive cigars of the rich man is only 6 per cent., while on the tobacco of the poor man it is 600 per cent. That is a form of Free Trade which is supposed to be in favour of the working classes. On the top of that tremendous taxation of our workpeople, practically all our import taxes are on food, drink, and tobacco, and the working classes pay far the greater part, whilst there are coming into this country every year £30,000 worth of luxuries without a single halfpenny of import taxation. Added to that, manufactured goods come here quite free, and many of these the working classes do not use. I read a short time ago a definition given by Mr. Andrew Carnegie of the difference between the import taxation of Great Britain and that of America. I beg the working classes of this country to think this matter out. Mr. Carnegie said that the import taxation in America is greatly in favour of the great mass of the people of that country. There they get from the taxation on luxuries about £45,000,000 a year. It does not cost the poor a halfpenny. Mr. Carnegie further said, referring to this country:— The whole of your taxation is on food and drink and tobacco, of which the working classes pay by far the greater part. The Import and Excise Duties on food, drink, and tobacco, added to the Death Duties and the Income Tax, come to nearly £130,000,000 a year. Look how you hit the working classes. The Death Duties are taxes on capital, but they no doubt affect 1751 very heavily the working classes, who are deprived of work. The Income Tax is admittedly a tax on wages as well as upon income In the matter of excise and import duties on food, drink and tobacco the working classes probably pay £50,000,000 a year out of £65,000,000. The hon. Member for Blackburn a year or two ago put it at £52,000,000. It seems impossible to drive these facts into the heads of hon. Gentlemen who are supposed to represent labour. On all wheat and meat and agricultural produce grown in this country there is heavy taxation. You tax the land, you tax what it grows, and therefore all bread, meat, vegetables and fruit that you eat are heavily taxed. Taxation in this country is now more than three hundred million pounds. We are more heavily taxed because foreigners pay nothing on their imports for the upkeep of our markets. We have to make up in extra taxation, the amount which foreigners ought in common justice to pay for the privilege of using our expensive market. I will give an example which really ought to appeal to hon. Members. If France and Great Britain were one country our rates and taxes per head would probably be rather less than they are now. In that event we should have the French market, as well as our own, without any extra taxation. As it is we have to pay heavy extra taxation at the French ports, and the Frenchmen have our market quite free. The Chancellor of the Exchequer said the other day:— I am quite content for the moment to know, and to rejoice, not merely that the country is doing so well, but that millions of the people who live in it are going to participate in the joys of abounding prosperity. Does the right hon. Gentleman forget that at the Colonial Conference he said that many of our people were so miserable and poor. Has he forgotten that only on Monday he told us of the horrible poverty in Ireland? The Irish pay taxation on their tea and considerable taxation on their bread, potatoes, etc., if grown in their own country. Is he going to give the Irish abounding prosperity on 5s. a week? Has he forgotten that the Home Secretary told us in Birmingham that millions of our people were more miserable than people of any other country in the world, and straggled into conditions crueller than barbarism? Then he talks about the abounding prosperity of the country. I do not think much of your prosperity. Has he forgotten the twelve millions of people living on the 1752 brink of starvation and in the grip of perpetual poverty. That is after sixty years of the Free Trade system of finance about which he is so continually boasting. Does he forget the appalling misery, destitution and starvation that there is in our great towns at the present moment? Has he read the written statements of almost hundreds of Liberals and Socialists that there is no such poverty and misery, squalor and slums in Protected Germany as there is in Free Trade Britain? Can he justify the fact that under his system of finance the poor man's ounce of tobacco-is taxed at our ports six hundred per cent, whilst there is not a single halfpenny of import taxation on the thousand-pound motor of the rich man? Hon. Members opposite do not dare tell their constituents, these facts. They would not get into Parliament if they told them the truth. The Socialists, after all, put forward a definite remedy for the misery and destitution of the country, but the supporters of Free Trade finance have no remedy. Lord Morley, for one, has said so. The Free Trade Government rely on false promises half a century old, of a free breakfast table and cheap food, and on various flagrant inexactitudes which they invent as they go along. The Chancellor of the Exchequer is trying to bolster up an out-of-date, discredited, ruinous system, in which I do not believe he really believes. He is deceiving and humbugging the working people of the country for the sake of keeping himself and his party in power. [Several HON. MEMBERS: "Oh."] Of course I am speaking politically, and politically the Radical party will do anything.

§ Sir J. D. REES
I beg to move, "That the Chairman do report Progress, and ask leave to sit again."

§ Mr. LLOYD GEORGE
In assenting to this Motion, I assume that the Debate will be brought to a conclusion on Friday.

§ Mr. AUSTEN CHAMBERLAIN
The right hon. Gentleman met us very fairly earlier in the evening, and, as far as I can, I will second his efforts to bring the Debate to a conclusion on Friday. I think, however, the Government ought to suspend the Five o'clock Rule. There are two Resolutions to get, and when you have to conclude by a fixed time I am always afraid of a hitch. But if it is impossible under the rules of the House to do what I suggest, I will do my best to secure that the Resolutions should be obtained by five o'clock.