CUSTOMS DUTY ON TEA.

HC Deb 30 June 1910 vol 18 cc1143-220

"That the Customs Duty now Charged on Tea shall continue to be Charged until the first day of July, nineteen hundred and eleven, that is to say:—

"Tea, the pound … fivepence."

Mr. AUSTEN CHAMBERLAIN

The Chancellor of the Exchequer departed in the last few sentences of his speech from what is the well-established and wise practice of those holding his high office, that in making their Budget statement they should not unnecessarily introduce controversial matters. The time for controversy comes later, and I think that the Chancellor of the Exchequer finds that it often lasts long enough to gratify even the most ardent desire to tread upon his opponents' coat-tails that any possible person could want. [An HON. MEMBER: "Answer it."] I thank the hon. Gentleman for his courtesy. The Chancellor of the Exchequer, in a hasty survey contained in a couple of sentences on the financial position of other great Powers finds himself profoundly satisfied alike with his Budget and the fiscal system of this country, and he is profoundly convinced that every other country is labouring order financial burdens and difficulties in- comparably greater than our own. When the right hon. Gentleman has time to study the facts a little more he will find that the untapped financial resources of those countries are much greater than he supposes. Their fiscal systems, it is true, have their weaknesses and difficulties, and what fiscal system does not? And in some cases—and some of the most significant cases—these difficulties are aggravated and increased by that federal semi-Home Rule constitution of the countries themselves, which we happily are spared in this country; but he makes a great mistake if he supposes that because certain other countries choose to carry out by short currency loans work which we Charge upon the Estimates, or because, in the conflict of political and class interests and of Imperial and States interests, they have failed to balance their Budget year by year, that therefore they are in a position in which they must rapidly restrain their expenditure or otherwise come to grief. I venture to say that the right hon. Gentleman in this respect takes a very shortsighted view of the financial position of other countries, or he takes much too optimistic and rosy a view of the financial necessities of our own.

We have got to work out our own fiscal and financial system, and I do not suppose that whatever happens it will be like that of any other country. Certainly I do not wish to see it showing any such resemblance; but it is already a lop-sided system, and it is made increasingly so by the Chancellor of the Exchequer, and whilst he boasts of the results obtained by his efforts I think that I should say to him he had better wait and see what the permanent effects of his taxes are before he takes up that position. After all, what does he or do we know of the actual effect of those taxes in working? Of his new taxes, the Land Taxes have not yet got to work. The Super-tax also has not really got to work, and the billet doux which have emanated from Somerset House have not yet reached the gentlemen to whom they are addressed. The tender advances of the Chancellor of the Exchequer have not received that treatment which in a little time he will begin to find out they will in the quarters in which they are sent. The only taxes which have been at work of the Chancellor's new invention are his Liquor Taxes and in particular the Spirit Duty; also the additional Stamp Duties. As regards stamps, I think he has done pretty well, but as regards the Spirit Duty he himself admits that as a fiscal expedient it has failed deplorably. I say he admits that, though in a sentence he said that both in a financial and a higher sense he regarded it as a great success. I can hardly see, however, that in regard to a fiscal expedient, in reference to which the Chancellor of the Exchequer himself said he was a million wrong, and which, instead of producing £1,600,000, which he thought he would get from it, produced less than one-third of that sum—I can hardly see that that is a tax which has most effectively been at work in the last year, and that is the fiscal result which it has produced. Certainly the Death Duties have been at work, but not so much lately, and the effect of an increase of the Death Duties is necessarily slow. It cannot be expected, and it was not expected by anyone, that those full results which we have traced, but which the Government have omitted to trace, would have followed, and that the result of those Duties which were passed would immediately become visible in an aggravated degree. Time has to elapse, and the effect of the taxes is gradual, but as time does elapse I maintain that the statement I made last year in the course of the Budget discussions is true, that the Government will find that they are losers, and will not be gainers, by the new taxes which they put on, and although their apparent advantage is immediate, their loss is permanent and continuing.

I do not propose to detain the Committee for long or to say much about the statement which the Chancellor of the Exchequer has just made. I find that there prevails in many quarters of the House an idea that the Chancellor of the Exchequer is accustomed to send to the ex-Chancellor on the eve of the Budget a proof of what he is going to say, or, at any rate, the figures to which he is going to refer, in the same way as the Prime Minister is good enough to send to the Leader of the Opposition a proof of the King's Speech. No, Sir, that is not the case, and the Committee will readily understand that it would not be easy to adequately follow a statement such as that to which we have just listened, and I do not think it is in anybody's interests—either in the interests of the speaker or of the Committee—that a detailed attempt should be made to reply to it. I only propose, therefore, to make one or two observations upon it. In alluding to the Chancellor's reflections upon the past I often differ from them. I think many of them are ill-founded, and some of them are generous, but he is not nearly so generous when he is recalling his past glories as when he is prophesying as to the future. His mind delights in vast schemes, and he has a sanguine mind. Figures do not seriously trouble him, at any rate until the moment comes to pay, and in his platform oratory and in his speeches in this House he is wont to paint a lurid picture of what vast sums he has, or will have, at his disposal for social reform in all its branches, and by the time he has finished talking about it he has produced an impression upon his audience that the money is already there, and that they have only to walk round to the nearest post office to have whatever kind of pensions they deserve or require. I distrust these vague explanations of the Chancellor of the Exchequer. I think they are rash in any one, but I think they are not merely rash but dangerous on the part of one who holds his high office.

I wish the Chancellor would be content to allocate the money he has—to make correct estimates for the year which he has to deal with, and leave future years until we can judge a little more accurately of them. In the course of the speech which he has made he has at intervals produced a series of the most speculative estimates—estimates as to what would have been produced by his Budget of last year if the taxes had been collected when: they were not—estimates of all he is going to get—highly speculative estimates which can be based upon no definite facts, and which he uses in order to produce not one, but a series of surpluses varying in size, but all highly creditable to the author of the late Budget. These are works of imagination, they are really not physical facts that the Committee can deal with, or which it is desirable that the Chancellor should lay before them. Of course every Budget statement is largely concerned: with estimates: so is this one. The Chancellor has to estimate revenue for the current year. As he says, and rightly says, that is a very much easier task than usual because so much of the current year has already passed. But I observe that that causes no anxiety. After the experience he has had, he thinks there is not the slightest reason why this House should be in any hurry to pass the Budget. July is reached practically before the Budget is introduced, and November, we are told, is to be reached, and perhaps December, before the Budget leaves this House. What does become, after that, of all the outcry against the House of Lords? "Are you going," ask Gentlemen on that side of the House, "to collect Income Tax and Death Duty up to the month of November on the strength of the Resolution?" "Certainly," says the Prime Minister. Then what becomes of all the talk we heard before Easter? We pressed upon the Government at that time that they should bring in a Resolution to authorise the collection of the Income Tax, and that on the passage of that Resolution, which could have been carried in a couple of hours, those wasted hours, when we all went away and dined at home, the Government could at once proceed to collect the tax, and so save borrowing the money that ought to have been paid.

What was the Government defence? "It is true," they said, "that, in the past, money has been collected on the strength of Resolutions, but the House of Lords has destroyed the sanctity of a Resolution. We should not dare to collect taxes merely on a Resolution now." And yet, now, deliberately, for six months or more, they are going to postpone the final decision of the House upon the Budget, and proceed to the collection of taxes on a Resolution. They have themselves exposed the hypocrisy of the attitude they adopted before Easter. They have shown the hollowness of the pretence which they then gravely put across the floor of the House. They have once more shown us that, whilst it is high treason in the House of Lords to quarrel with the Liberal Government, the Liberal Government would be an obedient servant when the hon. and learned Gentleman (Mr. John Redmond) definitely states what he requires. I think it was yesterday that we saw in the papers that the hon. and learned Gentleman and his friends required that the Budget should not pass till an autumn Session. To-day the Prime Minister announces, spontaneously—I do not suggest that there is a bargain—that the Government have come to the same conclusion. I do not know how long the Government is to sit on those benches. Personally, I think the divorce of power from responsibility and of responsibility from power is one of the greatest dangers of our present system.

In connection with the non-collection of the Income Tax in the earlier part of the year there is a remark of the Chancellor of the Exchequer's about which I wish to ask for some further information. He said that the whole of the arrears of ordinary Income Tax had been collected before the present time. That is to say, that in less than two months from the date of the passing of the Income Tax Resolution the whole of the Income Tax of last year was secured. What a justification of our statement that if the Government would only have passed that Income Tax Resolution at the first opportunity this Session all their difficulties of the closing months of last year would have been swept away! All the cost to the taxpayer for interest would have been saved, or the larger portion of it; and the disturbance of the money market by the borrowings of the Government would not have occurred. But if the whole of the arrears have been collected within two months of the time when the Government asked for it, why are there to be £2,000,000 of arrears at the end of this year? The Chancellor of the Exchequer estimates that on the ordinary Income Tax for this year—meaning Income Tax at the rate of 1s. 2d.—there would be £2,000,000 of arrears outstanding on 31st March next. I cannot for the life of me conceive why. Under ordinary circumstances the great bulk of the Income Tax is not collected till the first months of the new calendar year—January, February, and March. If you disposed of the whole of the arrears of ordinary Income Tax by, at any rate, the end of June this year, why cannot you collect the ordinary Income Tax for the present year by the end of March next? I might question one or two other estimates of the Chancellor of the Exchequer as regards the revenue of the coming year: but I certainly question his estimate for Income Tax. I think he has stated it too low, and I cannot conceive on what grounds he and his advisers suppose that there will be £2,000,000 outstanding at the end of the year. I should have thought it was highly improbable that there would be £1,000,000 of the Super-tax money also outstanding at the same time.

The Chancellor of the Exchequer said that, whilst the revenue, owing to circumstances with which we are familiar, did not come in quite so fast as he would have liked, nothing has hindered the growth of expenditure. That is quite true. Least of all the Government. The Chancellor of the Exchequer invited the attention of the House to the growth of expenditure, but he really did himself and his colleagues an injustice. He did not disclose the whole picture, and I think he confused his statement a good deal by bringing in the deficit last year when he spoke of the expenditure which he had to meet this year. Let me eliminate the deficit of last year, and treat this year as a normal year. Let me compare it with what the Government found when they came into office, and I beg the Government and those who sit behind them to remember that when the predecessors of this Government were in office gentlemen of that party were loud and continuous in their denunciation of the supposed extravagance of the party with which I am connected. On, I should think, every Radical platform every Radical speaker denounced our extravagance and our bloated expenditure, and in saying that I make no exception of Members of the present Cabinet. Have they reduced expenditure? Have they done anything to justify the language they used or to fulfil the promises and expectations they held out? Let me ask the House to contrast the last year for which we were responsible with the present year. The expenditure for the year 1905–6 was less than the estimate, and, therefore, to that extent the comparison which I make tells against my own party. I do, at any rate, no injustice to the Government. For that year the expenditure was estimated at £142,000,000, but that is not a fair comparison with the statement of accounts as now presented. In order to make it a fair comparison I must add the money which was then intercepted and paid over to local taxation account, amounting to £9,750,000.

Mr. GIBSON BOWLES

Eleven million pounds.

Mr. AUSTEN CHAMBERLAIN

The hon. Gentleman is always interesting on these subjects, but he is often hasty in forming an opinion about the facts, and sometimes wrong. £9,750,000 not brought into the account then, which would be brought into the account now, for the payment of local taxes, and £9,000,000 spent on capital account. That makes the total expenditure £160,750,000, of which I should say that the sum of over a million—I have not been able to verify this figure, but I think it was £1,500,000; it may have been £1,250,000—was abnormal expenditure under the Army Estimates for rearming the Artillery with quick-firing guns, a process which it was most necessary to carry out as expeditiously as possible, and which was met out of the current Votes of two years, but a non-recurrent abnormal expenditure. Including that, our expenditure in comparison with the present year was £160,750,000. What is the expenditure this year? £171,850,000 I think I heard the hon. Baronet (Sir F. Banbury) say. That is not a fair comparison either. In the first place this Government also borrowed. They try to distinguish as to what you may borrow. You may borrow for the Local Government Board office or for the Admiralty office; you may borrow to provide offices for the Secretary of State for War; but you must not borrow for barracks for soldiers or docks for the Navy. I do not know why expenditure on Ministers' and officials' offices is considered to be of a more permanent character than expenditure on the Army and Navy, but the Government can make that distinction, and in accordance with that distinction they have nearly, though not quite, ceased to borrow for the Army and Navy. But they continue to borrow for certain Civil Services, and to the £171,850,000 you must add £1,335,000 which they propose to borrow. But that is not all. In order to make the comparison fair, you must add to their expenditure that additional amount which we were devoting to the repayment of the National Debt, and which they have taken away. That is another £3,500,000. Accordingly you find that this Government, pledged to economy, very ready and very expert in denouncing their predecessors, and having denounced them for nothing more violently than for their bloated expenditure, and their supposed extravagance, have, in the course of the five or six years for which they have been responsible, increased our expenditure from £160,750,000 to £176,750,000.

I think that comparison is more instructive than the comparison which the Chancellor of the Exchequer made. In the first place, it compares the last year for which we were responsible with the last year for which they are responsible, and shows what has happened during their whole period of office. In the second place, it is more instructive, because, unlike the Chancellor of the Exchequer's comparison, it is not confined to a single item of the National Budget, but covers the whole range of our expenditure. The Chancellor of the Exchequer, when' he talks about the growth of expenditure, invariably singles out one particular item and deals with nothing else. He always speaks of the Navy. I confess I do not understand the meaning to be attached to his allusions to naval expenditure in the course of his Budget speech. He invited the special attention of the Committee to the growth of naval expenditure as being considerable. Does he think it is too great? If so, why does he concur in it? I assume, and I am bound to assume, that if he is concurring in it, he believes it to be necessary for the safety of the country. Then, in that case, why does he single it out and hold it up to special odium? Why does he recur to the same subject, and, with a sneer which I think would have been better omitted, say that the rubber boom did more to protect the country than fifty "Dreadnoughts"?

Mr. LOUGH

Scares.

Mr. AUSTEN CHAMBERLAIN

Do the Chancellor of the Exchequer and his colleagues mean that they are building against scares? Does the Chancellor accept the view of the right hon. Gentleman the Member for Islington (Mr. Lough), and, if so, what is he doing on that bench? It is not compatible with his position as a Member of the Government that he should turn round and hold up the Navy as if there was money being spent upon it which could be saved, and as if he wished to seize that money. The rate of expenditure on the Navy in the last year or two is due to the facts which are within the knowledge of us all, and which I am not going to state at any length, but there is one which I must call attention to. It is due to the fact that two or three years ago, with heavy liabilities staring them in the face, the Government took that opportunity to reduce naval expenditure and naval construction, and so caused, in the last two years, as we told them they would, to be thrown on the country an excessive burden which they find it hard to meet, and which they are certainly not more than meeting in the proposals they have made to the House. Let us look a little further into this expenditure. The expenditure on the Navy has gone up by £7,200,000 during their term of office. I do not complain of it, but how rash and how foolish must now seem to them the reckless talking they indulged in when in the irresponsibility of Opposition. The Army Estimates, compared with those in the last year of our tenure of office, have gone down by £2,000,000. All the Secretary of State's schemes and all his boasted reforms have not saved £1,000,000 on the annual ordinary expenditure of the Army, and of the last year's expenditure when we were in office between £1,000,000 and £1,500,000 was abnormal expenditure.

Let me look at the other side. The Civil Service expenditure has gone up by £14,000,000 under the care of the right hon. Gentlemen opposite. They say much of that is to be attributed to old age pensions. When you have deducted the cost of old age pensions you still have a considerable balance of increase for which they are responsible. I think, perhaps, the most suggestive item is the last which I shall mention—Customs and Inland Revenue. The two Revenue Departments have gone up by very nearly £1,000,000. Why, you could have collected the taxes under a reformed tariff for a quarter of that sum. For what is this £1,000,000, or to be exact, £900,000, wanted? To employ, pay, and pension hordes of officials the Government are letting loose all over the country. We have just had the first fruits of the new land taxation, amounting to £480,000, and practically the whole of it is required for salaries, wages, travelling and sustenance allowances, and so forth, for the new officials. I do not know whether revenue is coming in well from this taxation or not, but the money is going out, at any rate. What is more serious is the enormous addition to the number of officials the Government, by administration and by legislation, are creating, and have been creating, annually during their term of office. I have no means of checking the calculation, but I am informed that one in 160 of the population is an official in the public service. If the Government go on in the course they have adopted, that proportion will rise rapidly, and be it remembered that one in 160, if that be the figure, means that the other 159 have got to pay him during his active life and pension him when he ceases to be an active official, and that all these new officials mean not merely new inquisitions into the life of the general body of citizens but new burdens on the taxpayers for which the Chancellor of the Exchequer has to provide money in his annual statement. I think the Chancellor of the Exchequer and his colleagues owe, not only to their party but also to the House and to the country, some apology for the action they have taken and the language they used in Opposition and some explanation of the reckless expenditure in which they have indulged, and the still more reckless promises with which the Chancellor of the Exchequer concluded his fresh Budget statement in the light of their professions of economy and their absolute promises to reduce taxation. I think that these figures should give pause to all of us. I never have pretended that you could reduce these figures. I maintained that you could not, and that you ought not, reduce them at the time when the right hon. Gentlemen and his colleagues took the offices they occupy to-day. I say that when expenditure is growing at the rate at which I have shown it to be growing you should be very cautious how you enter into new obligations. You should not sketch these new and costly schemes long before you are in a position to carry them out, describing them in the vaguest terms which are calculated to raise the highest expectations. I must say that when they are so produced they are liable to cause grievous disappointment. You should confine yourselves to what is strictly necessary for the present. When you are not providing the money for these new proposals you should not flaunt them in the face of the electors until you have the money to carry them out and until you are able to produce a practical scheme and proceed with the first steps of it. [MINISTERIAL cheers.] I am glad to hear that hon. Members opposite concur in that, and I hope I shall have their assistance in restraining the Chancellor of the Exchequer from giving further manifestations in the style in which he concluded his speech to-day. If that is the result of my appeal on this occasion, I shall not have spoken in vain.

Mr. JOHN REDMOND

There was one portion of the concluding remarks of the right hon. Gentleman (Mr. Austen Chamberlain) with which I confess I have a certain amount of sympathy, namely, the argument he advanced as to the extremely serious character of the increasing expenditure of this country. That certainly appeals to all of us on the Nationalist Benches, because we have for thirty years been preaching the same doctrine. The right hon. Gentleman said he was going to employ himself in restraining the extravagance of the Chancellor of the Exchequer, but I note that it was only with reference to what he calls social reform that he really raised any point. My position is that the increased expenditure which has sprung from putting in operation old age pensions and from providing additional educational facilities for the people, and measures of that kind, is thoroughly justified, and will be justified by its results in the future, but the enormous increase of expenditure on the Navy and on the military armaments of this country which has gone on is, to my mind, the really serious aspect of this question. There is a certain amount of truth in the reproach of the right hon. Gentleman when he says that the Radical party and the Liberal party who advocate a diminution in the cost of these enormous armaments have been themselves responsible for increasing the Navy expenditure by £8,000,000 in the last two years, and that they have not been able to make any appreciable diminution in the bloated cost of the Army. But with what face does it come from representatives of the party who actually forced the Government into this expenditure? My reproach of the Government is that they have allowed themselves to be forced into this expenditure, and that they have allowed this artificial panic, raised for political purposes, to induce them to go into this expenditure. I think that is a reproach they will have to answer to their own party and to the people of England.

I shall follow the example of the late Chancellor of the Exchequer (Mr. Austen Chamberlain) in this respect, that I do not intend to attempt to make a general survey of the new Budget or of the speech of the Chancellor of the Exchequer. The fitting occasion for that will be, no doubt, on Monday next, when we will be able on the Income Tax Resolution to have a general Debate. I have only risen for the purpose of calling attention to a few items in this Budget as it affects Ireland. Let me say, in the first place, that I was very glad to hear the Chancellor of the Exchequer say that he proposes out of his surplus to provide the money for educational purposes, both in this country and in Ireland, which is at present provided by the fluctuating amounts which come from the whisky money. It is certainly absurd that the amount of money which goes to intermediate education in Ireland is dependent on the amount of whisky consumed in the country, and the same remark is true in the case of technical education in this country. I am very glad that the right hon. Gentleman is going to provide this money on a solid basis, and not allow it to depend on the fluctuations in the consumption of whisky. In that connection there was one remark of the right hon. Gentleman which caused me some disquiet. As I understood him, he said that one-half of the Land Taxes which were to go to the local authorities were to be impounded and were to go towards this money for education. The reason I take exception to that is that last year we repeatedly protested to the right hon. Gentleman that so far as Ireland is concerned we desired to have the half of the Land Taxes which were to go to the local authorities, and that they should be reserved for the purpose of assisting our schemes for the housing of the working classes in the towns, and the money that is necessary for education to take the place of the whisky money at present ought to be provided without depriving us of that much needed aid to the working of the scheme which was contained in the Bill passed in this House by my hon. Friend the Member for North Dublin (Mr. Clancy). Another matter that I shall allude to, only in a sentence or two, is the pauper disqualification. I believe everybody will read with the greatest possible gratification the announcement that these poor people, most of whom, I believe, are just as deserving of assistance in their old age as any other class in the community, and who are at present excluded because they may be in receipt of a shilling or two a week from the local authorities, are, from the beginning of next year, to be included within the range of the Old Age Pensions Act. That will give intense satisfaction. The only reason I mention it is to say, with reference to the scheme which is to be embodied in a Bill to come later on, whereby money that was saved to the local authorities must be contributed by the local authorities, that it is a scheme which will have to be most carefully scrutinised and most carefully discussed; but as I understood the right hon. Gentleman, even the scheme that he adumbrated provided that in the first quarter of the next year, the last quarter of the existing financial year, £450,000 would come directly out of the Treasury for this purpose, and that £350,000 would come from the ratepayers.

Mr. LLOYD GEORGE

That is not quite accurate.

Mr. JOHN REDMOND

One-half of the additional cost would come from the Treasury.

Mr. LLOYD GEORGE

More than half.

Mr. JOHN REDMOND

And there would be no attempt to have that repaid to the Treasury by the local authorities. I notice also he stated that that would only be a provisional arrangement. Let me say that I am extremely glad to hear that in his opinion the whole of the relations between local and Imperial taxation will have to be overhauled in the near future. I am especially glad that he has not put off until that date the extension of old age pensions. Now I desire at once to deal very shortly with that particular portion of the Budget which more particularly offends public opinion in Ireland—I mean the retention of the Spirit Duty. I desire at the earliest possible moment to renew the protest which my colleagues and I have made in the past upon this subject, and to tell the right hon. Gentleman that our opinion—he knows it quite well—has not changed with reference to this tax, and that we still consider it an unjust and oppressive tax to our country. Allow me shortly to recall the attitude which my Friends and I have taken on this tax all through. Last year, on 29th April, when the right hon. Gentleman introduced his Budget, I spoke in the name of my colleagues that very night, and I expressed the strongest disapproval of this tax. When the Resolutions came off for discussion we opposed these Resolutions both by our votes and our speeches. On the Second Reading we did the same. In Committee the clauses of the Bill dealing with that tax were opposed both by voice and by vote by my hon. Friends, and I say that on every single occasion on which this Spirit Duty came up as a distinct and separate issue it was opposed by the Members of the Irish party. We abstained from voting against the Third Reading of the Budget last year. One would think, from the murmurs of hon. Members, that that was news to the hon. Gentlemen or that the reason was new to them. Why, it has been stated ad nauseam in this House. The reason we abstained was that a great and overshadowing constitutional issue had been raised, and that we came to the conclusion that in voting against that Budget on the Third Reading we would have been striking a blow in favour of the House of Lords at the very commencement of a fight in which we believed the liberties of our country were at stake.

When the Budget of this year came up, practically the same Budget as before, the question of the Spirit Duty was never presented to this House as a distinct and separate issue. We never reached it. We had to make up our minds whether we would vote for this Budget as a whole or whether we would turn the Government out of office. It was a Budget which contained many provisions for which we had been working for thirty years. It also contained several provisions which we objected to, and especially this provision with reference to the Spirit Duty. Notwithstanding the Spirit Duty, we voted for the passage of the Budget into law, and we did so because of the circumstances at the time. The Veto Resolutions had been passed by this House; a public pledge had been given by the Prime Minister that those Veto Resolutions would be submitted to the House of Lords; and further, if they were rejected by the House of Lords, the Government would go to the Steps of the Throne and give certain advice, and if they failed, and they could not pass the Veto Resolutions into law in this Parliament—I think these were the words—then they would either resign or dissolve, according to the circumstances that arose. Now, in these circumstances, we felt that to defeat this Bill would have been to have ended absolutely the constitutional crisis that had arisen, which we regarded as full of hope for our country, and to have entrenched the House of Lords once more for, perhaps, a generation in the power they now possess. I cannot help making this observation that the circumstances are different at the present moment. I am not complaining. I have sense enough to know that the tragic events which have taken place necessarily made a change in our political situation; but the fact remains that at this moment the Veto Resolution and the policy of last April are, for the time being at any rate, hung up, and the whole constitutional crisis is in a state of perplexity, of doubt, of anxiety, and of suspicion. I listened with great pleasure to the statement made at Question Time by the Prime Minister. I confess his statement that the House is going to assemble for a Winter Session is almost the only crumb of comfort which I have had for many weeks past.

I take it for granted that before the Recess takes place we shall have some statement with reference to the Conference that is going on, and I take it for granted that when we assemble in the winter the uncertainty, the perplexity, and the suspicion of the moment will have been dispelled, and that we will then know exactly where we stand; and I am glad to know that until then it will not be possible for this tax, which is objectionable to us, to come up as a distinct and separate issue, inasmuch as it is not contained in the Resolutions, and it can only come up when a new Clause is moved in Committee to repeal the arrangement of last year. Before that time comes I do appeal to the Government to consider this matter on its merits. What justification has the Chancellor of the Exchequer made either last year or this year for this tax? I contend that there is only one justification possible for a Chancellor for a tax, namely, the raising of necessary revenue. Allow me to read a few words of what the right hon. Gentleman said on this point in introducing his Budget last year. He said:— I am aware that the small increases in the Spirit Duties which were made by Lord St. Aldwyn during the South African War were disappointing in their financial results, and that any further increase would undoubtedly result in a considerably diminished consumption, which would, to a large extent at any rate, nullify the benefit to the revenue which might otherwise be expected to accrue from it. It does not, however, follow from the result of this small experiment that we have reached the absolute limit of the profitable taxation of spirits, or that a substantial increase in the rates of duty would not, in spite of its effects upon consumption, produce an appreciable amount of revenue. I am disposed, at any rate, to try the experiment. And he went on in the same speech to say that, taking fully into account the question of forestalments and other considerations of that kind, he did not feel safe in counting upon receiving more than £1,600,000 additional as a result of this change. So that he said this was an experiment. He justified that experiment in the belief that he could get substantial results, and he actually estimated the substantial results as £1,600,000 for last year. He held that opinion all through the discussions on the Budget. On 23rd September here is what he said:— The justification for this tax is simply this; I have to get £16,000,000; I have to find sources of revenue; I have to decide between tea, beer, sugar, tobacco, and whisky. These are the only sources of revenue from indirect taxes which would bring in a substantial sum. I came to the conclusion that it would not be desirable to tax tea or sugar. I gave my reasons with regard to beer. Any tax we could put on beer which put the price on to the consumer would produce £15,000,000 or £20,000,000. That is more than we want. I therefore had to choose tobacco and whisky. In an ordinary year I think they would produce a very substantial addition to the revenue. So that there again he put forward as a justification, and the sole justification of this tax the necessity of getting money, and the belief that this tax would produce a large amount of revenue for the Exchequer. That justification has gone completely by the board. The right hon. Gentleman quoted some figures as to how this tax has worked. His figures were very ingenious and very elaborate, but he cannot get away from one or two simple figures. Yesterday, in answer to a question asked by my hon. Friend the Member for North Meath (Mr. Patrick White) the Secretary to the Treasurer (Mr. Hobhouse) gave this answer. He was asked the amount of duty collected on spirits in England, Scotland and Ireland in the year ending March, 1910, as compared with the preceding year, and here are the figures. In England the amount was £1,434,000 less than the year before. In Scotland it was £1,046,000 less, and in Ireland it was £1,079,000 less: So that the total loss to the Treasury on the year was £3,559,000.

Even if you make the most liberal allowance from that for forestalments or for what the right hon. Gentleman calls "cellars for the reserves," the effect of this additional tax has been that not only do you not get your £1,600,000 which you expected, not only do you not get one single penny from the additional taxation, but on the total amount coming from spirits the Treasury have made a loss of some millions of pounds. The right hon. Gentleman has made his experiment, and he has failed. Instead of obtaining revenue, for some extraordinary reason which I cannot understand, he is actually prepared for a loss to the Treasury of two, three, or four millions a year for the purpose of hitting this particular industry. The right hon. Gentleman to-day attempted a new justification, which he bases upon the spread of temperance. He said that the effect of this tax has been good from the temperance point of view. He quoted figures as to Scotland; then he said, so far as Ireland was concerned, there had been also an improvement, but he gave us no figures in regard to that country. He said Waterford was the one place where there had been no improvement. I think if he would give us the figures for the whole of Ireland he would find that the improvement has been very little anywhere, and, little as it is, it is not attributable to this tax. One of the most happy circumstances connected with Ireland to-day is that there has been for some years past a wave of temperance spreading over the country. The habits of the people are changing in Ireland. The Chancellor of the Exchequer said that the people who are giving up whisky are not taking to the drinking of beer. That is not the case in Ireland. The consumption of beer has enormously increased there. For years past they have been drinking less whisky and more beer, and, whatever importance there is in the statistics, so far as Ireland is concerned the improvement which is experienced is not due to this tax, but to the temperance-wave that is going over the land. From the point of view of temperance I regard this tax as a very injurious one, because it leads to the sale and consumption of inferior spirits.

Mr. T. M. HEALY

Why did you vote for it?

Mr. JOHN REDMOND

I will not say a word which will lead to any altercation between Irish Members. I say I regard this tax as injurious from the point of view of temperance, because it promotes the sale and consumption of inferior spirits. It is injurious, and not merely to distillers and publicans but to many allied trades, as well as to the agricultural industry of the country. These are the reasons why we maintain the objection which on every occasion we have expressed in this House when this tax came up as a distinct and clear issue. It is because we hold these views strongly that I have risen at this early period of the Debate to renew our protest, and tell the right hon. Gentleman that we are of the same view now as we were on the day he introduced his Budget, that it is a bad tax, a useless tax from the point of view of the Treasury, and an oppressive tax to Ireland.

Mr. BARNES

I suppose there will be general agreement when I say that the outstanding feature of this Budget, as disclosed to-day, is its humdrum character. I suppose Parliament, like other institutions and other bodies, follows the natural law, and reverts to the normal, and it may therefore be expected that, after the epoch-making Budget of last year, there should be a period for recovery, especially after the shock of its novelty. But it seems to me that we have sprung back not only to the normal, but a good deal behind the normal, and I think this Budget, viewed from the standard, not of the last Budget, but of Budgets previous to it, will be considered in the days to come as a very small achievement indeed. I, however, congratulate the Chancellor of the Exchequer upon the successful manner in which he has struggled with adversity in the last two years, that is to say, with bad trade on the one hand, and, on the other, with the agitation caused by the production of his Budget. He has emerged from the struggle with a balance of £160,000. That it seems to me is striking testimony to the satisfactory nature of the principle of Free Trade upon which this Budget has been based. I congratulate the Chancellor upon the prospects of increased trade in the near future. I followed the figures he gave to-day, especially in regard to unemployment; I have also followed the Reports of the Board of Trade, and therefore I know that the right hon. Gentleman's figures are perfectly accurate. I am glad to know that there is an improved prospect of a greater volume of employment in the near future, and that, with the greater "volume of employment, the wealth and trade of the country will increase, and, therefore, the Chancellor of the Exchequer will benefit. I notice that the right hon. Gentleman opposite (Mr. Austen Chamberlain), though this is a hum-drum Budget, made a brave show of opposing it, as was his duty; but there is little in it to oppose, and little to boast of. The Chancellor of the Exchequer, in nearing the end of his speech, made mention of two matters which lie found it had been necessary to omit from his Budget, but which were, I think, if not promised to us, at all events, we had been led to believe would have been dealt with before now—I refer, I need scarcely say, to unemployment and to insurance against invalidity. Of course, I am aware of the exceptional difficulties of the situation; nevertheless, I cannot help expressing my sincere regret, and I am sure the regret of those associated with me, that the Chancellor of the Exchequer has not found it possible to redeem, if not promises made, at all events expectations held out of the Government being able to deal with the matter before now. There are other omissions from the Budget which are worthy of observation. Not a single word was said in regard to the great burden of indirect taxation still levied upon ordinary goods of everyday consumption. Although it may be that the Chancellors of the Exchequer have not been in a position to deal with indirect taxation and to relieve the consumers of the Sugar Duty and the duty on other articles of consumption, yet there has generally been some lip-service to the principle of direct taxation, and something said by way of promises of future amendment. But today not only is it not proposed to reduce indirect taxation, but not a word is said a? to anything being done in the future. Sugar, we all know, still bears a heavy tax in proportion to its price. That fact not only bears hardly upon the consumer, and upon the poorest of consumers, but it is also a considerable tax upon the raw material of many industries.

For my part I greatly regret that nothing has been said as to the intention of the Government in the near future to wipe out the remainder of that tax. I am glad to know, of course, that there has been revenue from the Land Tax, even a little more than was expected. I think it is reasonable to anticipate that the revenue from the Land Tax will increase in the near future, and I would make the appeal to the Government that as its revenue from the Land Tax increases, indirect taxation, the tax upon tea and upon sugar, may be abolished as speedily as possible. I was also glad to hear from the Chancellor of the Exchequer that it is the intention to give statutory effect to the promise already made as to the abolition of the pauper disqualification. I followed the right hon. Gentleman's argument as well as I could in regard to the allocation of the burden as between the central and local authorities. I am not at all concerned, or not much concerned, as to who pays the money. I am exceedingly glad that provision is to be made for placing an additional 270,000 old folks upon the pension list next year, and, so far as they are concerned, we may be sure that they will never make any inquiry as to whether the money is coming from local or Imperial sources. It is not a matter that greatly concerns us. On the whole, if I have any preference at all, I should be in favour of the money, or the bulk of it, coming from local rather than from Imperial authorities. I believe it would then fall more upon property than would be the case if it were derived from Imperial taxation. There are other disqualifications in the Old Age Pensions Act in regard to which I am sorry no provision has been made for their abolition. I think I am right in saying that there are one or two provisions of that Act which have operated more harshly than ever anyone expected. Take, for instance, the residential qualification. It is provided by the Act that a person has to live actually in this country for twenty years to become qualified. I think that was mainly aimed at the foreigner, and I think it was intended that any persons coming to dwell in this country must live here twenty years before they could become entitled to the pension. This particular Clause has operated, not against the foreigner who might come to this country when about forty or fifty years of age, but against our own countrymen; and countrywomen, who in many cases, at the age of fifty and even sixty, have left this country for a year or two, and have come back to find themselves disqualified for the pension. There have been so many cases of that sort during the last two years that I am exceedingly sorry the Chancellor of the Exchequer has not seen his way, while introducing a Bill—for I suppose he will have to introduce one to give effect to this abolition of the pauper disqualification—at the same time to deal with the residential qualification in regard to aliens, under which, as all Members know, many women have been disqualified simply for the reason that they have married foreigners and notwithstanding that they have lived all their lives in this country. There is also the further question of income, which has given rise to a good deal of trouble, especially in regard to the sums of money which members of friendly societies may be entitled to receive, averaging some 7s. or 8s. a week. Thousands of these men have been paying into friendly societies or into trade unions, in many cases for forty years and over, yet because these men have become entitled to a few shillings a week they are disqualified from getting the pension. I am sorry it is not to be done this year, but I hope that at the speediest possible moment these defects of the Pension Law may be removed, and that a great many more may come under the operation of the Act.

I desire to say a word in regard to the expenditure on the Navy. For my own part—and I am sure I voice not only the opinons of those with whom I am associated on these benches, but the opinions and sentiments of a great many others—when I say that I regret this immense increase in the expenditure on the Navy this year. I go further, and I say that it seems to me that this increase is altogether unnecessary. The Chancellor of the Exchequer last year, in introducing his Budget, said that the Government were called upon to build navies against nightmares. I would venture to express the opinion that there is a good deal of the building of navies against nightmares in this £5,500,000 increase. I heard the statement made both from the Government and Opposition Benches in regard to the rate of acceleration of the German programme last year. I have followed what has actually taken place in Germany since that time, and I know—and it is within the knowledge of every Member of this House who likes to make himself acquainted with the facts—that not a single one of those predictions then made have been borne out by the facts. We are now to be called upon to add this £5,500,000 because of the irresponsible speeches of men occupying great positions, and who ought to have made their statements with more deliberation. I regret this increase on the Navy because of that. A great deal more might be said, but there is no need for a long speech. I thought it was my duty to refer to a few of the outstanding items of the Budget. We, of course, shall consider the Budget in all its stages, and while we regret the omissions I have mentioned, we shall, of course, have due regard to the exceptional difficulties of the situation during the last few months. While making allowance for that, I will conclude by expressing the earnest hope that those indirect taxes I have mentioned may be dealt with before long, and that there will be less money spent on the Navy and on the fighting forces than there has ever been.

Sir FREDERICK BANBURY

I rise to express the surprise which I felt when I listened to the speech of the Chancellor of the Exchequer. Of all the Budget speeches which I have listened to I never remember a single speech, with this exception, and perhaps that of last year, in which the Chancellor of the Exchequer did not draw attention to the pressure which was put upon him by Members from all sides of the House to increase the expenditure, and of the necessity which the Chancellor of the Exchequer felt to endeavour to persuade not only heads of Departments and Members of this House but the country generally to exercise some little economy and to be more careful in the expenditure of the country. There never was a time when such a caution was more necessary than at present. The Chancellor of the Exchequer introduces a Budget which provides for the expenditure of £171,800,000. Through the whole of his Budget speech the only reference to economy that he made was a reference to economy with regard to the Navy, which was cheered largely by hon. Members on the other side of the House. The natural inference that one can draw from that is that in the future, if this country is unfortunate enough to be cursed with the continuance in office of the right hon. and hon. Gentlemen opposite, that there is to be a reduction in the expenditure on the Navy while in every other direction the expenditure is to go on increasing Of course it is easy enough to read between the lines. The hon. and learned Member for Waterford (Mr. John Redmond) tells us that the Whisky Tax is a bad tax, and that he always in this House declaimed against it. He omitted to say that in this House he has always voted for it. [An HON. MEMBER: "Abstained."] Or abstained, which is practically the same thing, be cause he knew that by his abstention the tax would become law. The hon. and learned Member now tells us that some thing funny is going to happen next November. We all know what is going to happen next November, and we all know perfectly well what is the reason of the vague promises in the Chancellor of the Exchequer's speech to-day. [An HON. MEMBER: "What?"] There is to be an election in January, and the Chancellor of the Exchequer is salting the ground before that time comes. That was the meaning of his speech, and that was the meaning of the reference in the remarks of the hon. and learned Member I for Waterford a few moments ago.

I do not know that there are many hon. Members in this House with the possible exception of the hon. Member for King's Lynn (Mr. Gibson Bowles) and also the hon. Member for Salford (Mr. Byles), though I do not think that he really is an apostle of economy only on certain subjects—therefore, I think I may say that with the exception of the hon. Member for King's Lynn and myself there are no other Members who are in favour of economy. I hope the hon. Member for King's Lynn does not object to be classed with me, but I will put him first. I really do ask this House to pause for a moment when we have an expenditure of £172,000,000, because that is practically what it is, and ask themselves where it is all going to end. The right hon. Gentleman apparently consoles himself by saying that other countries were much worse off than we were. I will not go into that because the finances of other countries are managed in a different manner from the finances of this country, and at present I have not the data to go into the question. I remember a speech of the Chancellor of the Exchequer in June, 1906, in which he said that the index of the prosperity of the country was the price of Consols. I do not know how he reconciles that statement with the present price of Consols, but I would point out what I have mentioned before, that while the price of our Funds during the term of office of the right hon. Gentleman has fallen from 90 to something like 82 the price of the Funds of all the other great Powers with the exception of Germany has risen. Therefore, if the Chancellor of the Exchequer was. correct in his statement made in June, 1906, it follows that the prosperity of foreign countries is very much greater than the prosperity of our own country.

I would like to make a reference to the Land Taxes. According to the right hon. Gentleman they are estimated to produce £600,000. The right hon. Gentleman the Member for East Worcestershire (Mr. Austen Chamberlain) mentioned that a Supplementary Estimate was issued yesterday which provides for an increase of expenditure in connection with the Land Valuation Tax of £457,000. The original Estimate of expenditure last year was £43,000. So, according to the Supplementary Estimate, you are to spend £500,000 in collecting £600,000. I am not quite certain whether the £500,000 is not the total amount of expenditure. I am rather inclined to think it is. The hon. Member for the Blackfriars Division (Mr. Barnes) talked about indirect taxation and one or two items which he disagreed with, but he never took any notice of that at all. I will ask the hon. Member for King's Lynn whether it was not always an accepted maxim in finance that in imposing a tax you should impose a tax which would cause as little irritation in the collection as possible, and as little expenditure in the collection as possible. Here we are going to impose a tax which is only going to yield £600,000 and to spend £500,000 to get that. When hon. Members talk about the triumph of Free Trade finance I do not think they can have very carefully studied their own Budget, because that cannot be a triumph of finance for Free Trade, Tariff Reform, or any other kind.

Mr. JOHN WARD

It is a beginning.

Sir F. BANBURY

I do not know what the hon. Gentleman means. If he means that in the future for every six millions we are going to collect that we are going to spend five millions, I cannot say that I am greatly impressed with the financial capacity of the party below the Gangway opposite. I really rose because I considered that somebody, however humble, even so humble an individual as myself, ought to point out to the country the precipice down which they are falling. The expenditure is rising. The right hon. Gentleman talks about a great boom in trade. It is quite true that during the past eight months there has been an improvement in trade. I do not know where the boom comes in. There has been an improvement, but not a very enormous improvement, and even if there was that is no reason why we should be extravagant and reckless in finance. No man in business because he happens to have a good year immediately says, "I will go and spend large sums of money." On the contrary, if he is a prudent man he takes advantage of the good year, curtails his expenditure, and puts by money for the rainy day. All that seems apparently quite foreign to the right hon. Gentleman. He, apparently, is only desirous of increasing the number of salaries and the number of Government officials and magnifying the enormous offices which are rising up all round us, and which, in my opinion, are absolutely unnecessary and tend to extravagance. I should have thought they would have been objected to by the Labour party. But apparently they do not object to anything of that sort, but love to see all this extravagance in officials, and think it is a good thing.

Mr. SNOWDEN

Why did you vote for £5,000,000 more for the Navy?

Sir F. BANBURY

Because I thought it was necessary so to do, and because it was economical. The hon. Gentleman does not know what economy is. Economy is the spending of a sufficient amount of money to do what is right and just for you to do. It is necessary that we should defend our shores and have the means to do so, and it is economical to take time by the forelock and to keep our powder dry. That is far and away more economical than to allow everything to go to rack and ruin, and at the last moment, when the enemy is on the shore, to have to spend millions which would not have been necessary if we had exercised a little foresight some years before. All history proves that. Si vis pacem para helium is an old proverb, but one the truth of which grows the more apparent the more it is studied. I hope that even at this last moment one or two Members on the other side will endeavour to inculcate —though it is a hopeless task—some slight principles of financial knowledge and economy into the Chancellor of the Exchequer.

Mr. GIBSON BOWLES

I cannot help feeling flattered at being associated as an economist by the hon. Baronet opposite with his great financial experience and authority, but historical accuracy compels me to remind him that his zeal for economy is new-born. When he and I sat together on the side of the Government I was an economist, but he was an extravagant supporter of an extravagant Government. May I also remind him that it was in the time of that Government that the great fall in Consols took place; but I do not remember any brilliant orations or great perorations from him then in reference to the great dangers that were accruing to the country. He has reserved them for this moment, when he sits on the Opposition Benches. I am far from claiming the knowledge of finance possessed by the hon. Baronet. I am but a student, an apprentice, and, being such, I am actuated by the old principles of finance which used to be preached in this House. I am appalled at the enormous extravagance of our expenditure. In 1894 it was considered almost incredible that Sir William Harcourt should have introduced a "Hundred Millions Budget," as it was termed. Now we have close upon a £200,000,000 Budget, and still no halt is called. In every Department—not merely in the Army and the Navy, but in the Civil Service—expenditure is going up in the most marvellous manner. But it is still true that there has been far less increase under the present Government than there was under the late Government. The late Government found in 1895 an expenditure of £109,000,000, but left in 1906 an expenditure of £166,000,000. There has been no corresponding increase to that.

Sir FREDERICK BANBURY

That was due to the war.

Mr. GIBSON BOWLES

There was no war in 1906; and, moreover, the war was paid for mainly by loans. I am seriously alarmed by the way in which our expenditure is going up, but I am still more seriously alarmed by the way in which our debt is being increased. When you are given a certain total expenditure, and that total includes only a diminished amount for the extinction of debt, if you take three, four, five, or six millions from the Sinking Fund, that amount in fact should be added to your expenditure in order to make a fair comparison with years in which a larger sum was taken for the payment of debt. At the moment of the introduction of the Budget it is always dangerous to enter into anything more than general criticism. Detailed criticism should be reserved for a subsequent occasion, when we discuss the proposals in general, after having had time to consider them. The danger is illustrated by the fact that an ex-Chancellor of the Exchequer, in quoting a relatively small sum, made a mistake of £2,000,000 out of £9,000,000. When the right hon. Member for East Worcestershire (Mr. A. Chamberlain) told the Committee that in the year 1905–6 the amount paid to the Local Taxation account was £9,750,000, and I ventured to inform him that he was wrong, and that it was £11,000,000, he made a remark which, in a person of less culture and politeness, I should have said was jeering. I now hold in my hand the Finance Accounts for the year 1905–6, which I may say are the only accounts at all trustworthy, and not in any way doctored; they are the accounts of the Treasury, and on page 107 I find that the total paid into the Local Taxation Account up to 31st March, 1906, was £11,058,058. I know where the mistake has arisen. The right hon. Gentleman has omitted a sum of nearly £2,000,000 which Tie did not find in the same place. It was a rather unfortunate error for a gentleman who has been Chancellor of the Exchequer, and may conceivably—in ten or twelve years—become so again. Neither this Committee, nor the House, nor the public outside, as a rule, are able to appreciate either the true amount of the expenditure of the country or the true amount of its debt. All our accounts are doctored. For many years there were left out the payments to Local Taxation; there are still left out all the Appropriations in Aid, which mean the income derived and the income immediately spent from such things as the sale of ships or contributions from India. There are left out from the debt all your contingent liabilities, and the Secretary to the Treasury has even invented a new idea—what he calls the dead-weight debt. There is no such thing as dead-weight debt specially. All debt is dead weight; but in order to produce or convey a certain impression the right hon. Gentleman singles out a certain portion of the debt which has not increased, or perhaps has diminished, and calls it dead-weight debt, but he leaves out of account that other part of the debt, which has increased, and which he regards with the loftiest of contempt. Indeed, he has a new faked account—I can call it nothing else—which, instead of giving the debt to 31st March, as it has been given for centuries, as it should still be given, and as it must continue to be given if there is to be any comparison, gives the total as it is on 1st April—a most suggestive date.

I said just now that it is dangerous to criticise a Budget on the day of its introduction. It would be especially dangerous on this occasion, because the tangle is so great between this year and last, this year and next, that it will require a great deal of address and attention before one can disentangle one part from another. But there is one salient point which occurs to me as a very great and dangerous novelty. As I understand, we are to have but two Resolutions put before the House in Committee of Ways and Means during this Session of Parliament, namely, the Tea Duty Resolution—which duty, I may remind the Committee, expires to-night— and the Income Tax Resolution. All the other Resolutions which may be required for the provision of money for the services of the year and the Finance Bill itself are to be postponed until November, the next Session of Parliament. I think that is a very serious financial novelty. Originally, and only 150 years ago, every tax imposed and agreed to by this House was an annual tax. No money was granted to any Government except from year to year. That principle was affirmed year by year, because the House of Commons intended to keep its control over Ministers. In consequence of the Ministry being forced to come every year to this House for every item of Supply, the control of the House of Commons became complete. In my own time, one half of the grants of taxation were yearly grants. Now there remain but these two duties, the Tea Duty and the Income Tax, that are yearly. All the rest are enacted by permanent Acts of Parliament, and whereas these two duties are but small, the permanent taxation provided by Act of Parliament and other permanent receipts amount to £100,000,000. Will the Committee and the Government itself consider the danger involved in this? Suppose, as may happen at some future time, there come into office a Government of unscrupulous "backwoodsmen," headed by a "backwoodsman" peer, and that Government desire to enter upon a campaign of reaction. They have £100,000,000 to run the country with, independent of Parliament. They could not, indeed, lawfully expend it without an Appropriation Act, or without authority to issue, but "backwoodsmen" with £100,000,000 coming in and no scruples would be a very dangerous position of power.

In my opinion, it is a most unfortunate thing that little by little this House has allowed itself to be coaxed into giving the Government of the day everything, except these two taxes, in the shape of permanent enactments. These two taxes—indeed the Income Tax is from 5th April last—are to be levied from now to November by sole virtue of Resolutions of this House. I asked the Prime Minister, and I understood him to agree that that was so. That method of levying taxes is illegal. It has been pronounced illegal again and again. Sir Erskine May, in his wonderful book, tells you two or three times that it is illegal. Manifestly it is illegal. You may, by indulgence, allow a tax to be collected by the authority of a Resolution of this House alone for a short time, but that is in the certitude that within a short time—a few weeks at the outside—you will have enshrined your Resolution in an Act of Parliament, and that thereby you will have given it the only authority under which a tax may lawfully be levied. But if you are avowedly to say in the month of June, "I am going to pass certain Resolutions, and illegally to collect taxes under them until November, and only then will I even attempt to clothe them with the authority of an Act of Parliament," I respectfully urge upon my friends the Government— the only friends hon. Gentlemen opposite have left me—that they are entering upon a somewhat dangerous course.

7.0 P.M.

Now I cannot but ask myself at this moment why do His Majesty's Government not attempt now to clothe their Resolutions with an Act of Parliament. Here we are at the end of June Usually you get your Budget at the beginning of April. The Budget is very late. "Why, then, are we to be asked to wait till the month of November before we proceed to clothe with the authority of an Act of Parliament the Resolutions which we are asked to pass? I confess I hear all sorts of suggestions. I hear hon. Gentlemen from Ireland—or, at any rate, one hon. Gentleman from Ireland. I see before me another hon. Gentleman from Ireland—perhaps he could put a different aspect on the case I hear hon. Gentlemen below the Gangway. But whatever suggestions there may be, not one of them, to my mind, avails entirely to excuse the very serious irregularity, and I think inconvenience, attaching to the postponement of the Budget. I see below me the Secretary for the Treasury. I would ask him can he tell us—will he kindly tell us—why it is that the Finance Act is to be postponed until November? If we are only to have, of this Budget, at this moment, in this Session, these two Resolutions on the Tea Duty and the Income Tax, it is to-invite very unusual proceedings. It will invite, what by the Rules of this House is perfectly possible, an Amendment to the Resolutions themselves. If we had the Finance Bill immediately following I should certainly take the opportunity of introducing Amendments with regard to the Income Tax which is being levied.

The thumbscrew Department of the Inland Revenue requires to have a bit put in its mouth and a curb-chain under its chin. That curb-chain it will be my endeavour to provide when the Finance-Act comes along. But if we are not to have that Finance Act for the next, how many months 1—five months—I shall endeavour to try to make my Amendments in the Resolutions themselves, which, of course, the Committee knows can be done. Instead of taking one proper Debate upon the Finance Bill, what do you do I You may, first of all, have an interminable series of Debates upon such Amendments as may be proposed on the Income Tax Resolution, and possibly on the Tea Resolution; then you will have them all renewed over again when you come to the Finance Act in November next.

The right hon. Gentleman the Member for East Worcestershire (Mr. Austen Chamberlain) complained of the Chancellor of the Exchequer for having indulged in very rosy predictions as to the future. I believe that those predictions are justified. I believe this country is on the eve of one of the greatest booms in trade that has ever been seen. But, at any rate, the Chancellor of the Exchequer's predictions only extended to the year. In taking that objection I wonder the right hon. Gentleman did not carry his mind back to 1903. Then the country rang with predictions. They were not rosy predictions. They were predictions of loss, ruin, and of the immediate collapse of the country. What was the formula? "Silver gone, iron going, cotton will go! "Well, Sir, cotton has not gone. The whole of these predictions have been more signally falsified than those of any prophet that ever lived. I think it illbehoves the right hon. Gentleman, whose predictions have failed for seven years, to reproach the Chancellor of the Exchequer with making predictions which, at any rate, extended only for one year. The right hon. Gentleman the Member for East Worcestershire said that when his party were in office they were always reproached with their extravagance and with increasing the expenditure. Yes, and justly so, for their increase in the expenditure, in the Debt, their diminution in the price of Consols, were almost stupendous compared with those of this Government since they came into office. Let hon. Gentlemen opposite remember that there were those then in their own party who reproached them with their extravagance and their betrayal of Free Trade. When the next election came they took a bloody revenge upon those who so reproached them. They sent down "dog-in-the-manger" candidates, who could not win the seats for themselves, but who gained enough votes to turn out those who had preached economy and Free Trade.

An HON. MEMBER

"The dogs are in the manger?"

Mr. GIBSON BOWLES

Yes, I believe kennels have since been found for those dogs for their services at the previous election. I was shocked, ashamed, at the right hon. Gentleman reproaching this Government with their extravagance. It becomes me because I reproached the Unionist Government with their extravagance. It does not become him. Let me remind him that those who live in glass houses should pull their blinds down. But, of course, we must expect that. The Opposition are bound to oppose. The late Mr. Jorrocks, I believe, held that rats existed in order to keep dogs in exercise. And the present Opposition, composed largely of the rats of Free Trade, exists in order to prevent the Government from becoming too fat and too "pursey." I will not enter at this moment into a detailed criticism of the Budget. I see things in it which seriously alarm me. I see methods and proceedings which I do earnestly hope His Majesty's Government will seriously consider. But, on the whole, it is not open to the reproach of being a more extravagant Budget, or anything like so extravagant a Budget, as those produced year after year by the party opposite.

Captain JESSEL

We have heard a good deal from the hon. Gentleman who has just sat down about rats. I should have thought that the rats were not on this side of the House, but were on the Treasury and the other benches. The hon. Gentleman, in the course of his speech, has referred to the price of Consols. He said that our Government were responsible for lowering: Consols to a much greater degree than has happened since the Liberal Government came into power. I wish, very shortly, to point out that he has forgotten two facts in connection with that statement. The one is that in 1899 the South African War took place. That was partly responsible for the fact. The Trustees Act, again, was passed, and this very much enlarged the choice of trustees' securities. The consequence was that a much bigger field was. open for those compelled to invest in Consols and stocks of that kind. There was a larger field open to them, and therefore the price of Consols was not kept up. I believe I am correct in saying that at all events during the last four years the price of Consols has fallen a great deal in comparison with the price of French Rentes, and Prussian Three-per-Cents. While we are on this point about foreign countries, I should like to refer to the great credit which the Chancellor of the Exchequer took to himself for the financial position of this country as compared with foreign countries. The real truth of the matter is that the Chancellor of the Exchequer forgets that in foreign countries a great deal of the municipal taxation is paid for by the State, and that on the other hand, as regards the loans, they are State loans. In this country the municipal loans are not included. It does seem to me that when you consider that in foreign countries, Germany for instance, where the greater part of the municipal debts are paid for by the Income Tax—that is to say that one half of the Income Tax goes towards the municipality, and one half towards the State—that a comparison is entirely misleading. If you look at our debt you will find that the municipal debt and the National Debt, added together with our debt is stupendous and amounts to over £1,200,000,000, whereas the debts of Germany are under £300,000,000. [An HON. MEMBER: "Oh, no."] Therefore I do not think that the comparison is at all a good one. There is this more to be said, that by piling up the Income Tax in the way we are doing in this country you are leaving very little reserve for a great emergency. The Income Tax has always been looked upon as a reserve to be called into play in time of war. If you are going to tap that in time of peace, it seems to me you are providing a very dangerous situation. well remember that in the 1906 election great stress was laid upon the fact that the Income Tax was going to be reduced if the Liberal party came into power. We were told that it was much too high, that the Unionist party has been exceedingly extravagant, and that there was no necessity for such a high Income Tax. What has happened since that time? Now we see not only a very high Income Tax, but a Super-tax. Personally, I do not object in the least to the Super-tax. I think it is a very proper thing for those whose incomes are so high that they can stand it. On the other hand I think that we all must agree that the Income Tax coupled with the heavy Death Duties in this country are a burden too great for that particular class to bear. There is no doubt that in time that if these Death Duties, that now produce a considerable amount—which seems to increase every year—and the taxation of these particular classes continues, that the amount received in the future will greatly diminish.

I should like to touch upon another point. That was the question put to the right hon. Gentleman the Financial Secretary by the hon. Gentleman the Member for King's Lynn (Mr. Bowles) as to why the Finance Act was being postponed till November. I am afraid he has given the right hon. Gentleman rather a difficult nut to crack. We on this side could perhaps supply an answer. But I do not think the Government will be too ready to give away the reason, though they know what that reason really is. A great deal has been said by the right hon. Gentleman the Member for East Worcestershire about the extravagance of the Government. The right hon. Gentleman drove that attack home with vigour, and in doing so he had the hearty support of Unionist Members. We view with alarm these increasing Estimates, yet we are told by the hon. Member for Blackfriars we are responsible because we take such a great interest in the Navy. Our view is this: If you do not spend money on the Navy sufficient to maintain it efficiently the virtual existence of the Empire would be endangered, and if we were defeated upon the seas the strength of the Empire would crumble away. Old age pensions are paid and various social reforms are carried out, and we are just as keen for them as hon. Members opposite, but they are carried out because we keep our Navy efficient and our Empire safe. If the Navy was once defeated none of these social reforms could be carried forward. Without a strong Navy the Empire could not be protected. It is not to such expenditure on the Navy that we object; what we object to is the way money is paid to newly created officials, and we think money is wasted in that respect.

There seems to me to be very little imagination about this Budget. It harps on the old string of Free Trade finance. Of course, you cannot expect fiscal reform from this Government. They will not look to the numerous rivulets of taxation which might flow to them. While not being felt by the people in the slightest degree, they would in the aggregate produce large sums of money. I will not go into details, and I only mention, for instance, in passing, such things as a tax on racing stakes, a tax on theatre tickets, and many other of those small things which would produce very good revenue. If the right hon. Gentleman calls for a Return of those things from foreign countries he would see that very considerable revenue is derived from them without materially injuring any class of the community. If these Budgets are continued on the old lines they will go on inflicting increasing injuries on the country. They will drive away capital, which is a very bad thing for the working classes. We hope that the Government may show some enlightenment, and follow a policy always advocated on this side of the House in the direction of fiscal reform.

Mr. LOUGH

The House must have listened with great admiration to the statement made by the Chancellor of the Exchequer. In criticising the Budget, we ought to remember the difficult circumstances in which the right hon. Gentleman was placed. He was faced with a deficit of £9,750,000. After hearing twenty Budget statements in this House, I must say I never listened to one with so much pleasure and satisfaction in circumstances of the kind. For months there have been all sorts of anticipations as to the expedients my right hon. Friend might have to fall back upon to make up this great deficit, and in the last speech delivered we heard the hon. and gallant Gentleman opposite suggest some very ingenious, but I think rather doubtful, taxes as a substitute for the course which the right hon. Gentleman has adopted.

I heard at one time that the right hon. Gentleman might fall back upon tea, and thus squeeze out another million, and I heard only yesterday there was the greatest alarm in the City because it was decided there was to be a tax on rubber. We have had no new tax at all. The rubber boom may go on so far as the Chancellor of the Exchequer is concerned. The whole House is agreed—I see it is shown in the temper of the House—that the right hon. Gentleman has got over a difficult situation in a most excellent manner, and I believe the ease of the House will be echoed throughout the country to-morrow, and we will all be glad that in an emergency of this kind we have escaped so very well. I was rather disappointed at the hon. Member for King's Lynn (Mr. Gibson Bowles), who hinted that later on he would have, some criticisms to pronounce upon the Budget. I think what my hon. Friend meant was criticisms upon the Estimates for the expenditure of the country. Taking the Estimates we have already sanctioned and passed, taking the vast expenditure of £170,000,000, we must ail credit the right hon. Gentleman the Chancellor of the Exchequer for having met it so well without putting on any new taxation. We grumbled a good deal last year at some of the taxes. We have none this year. Let us breathe for a moment the relief which that great fact gives us. Even without putting on any new taxation, the Chancellor of the Exchequer has disposed of this vast deficiency of nearly £10,000,000 of money, and not only that, but he has applied the little money that he has got to a most excellent purpose. And here I was disappointed that my hon. Friend the Member for the Blackfriars Division of Glasgow (Mr. Barnes) should have criticised the Chancellor of the Exchequer for not taking off the tax on sugar and tea and a great deal more indirect taxes. I am in favour of all that when there is money, but remember we have a deficit of £10,000,000, and I think my hon. Friend should recognise that this is not the occasion to suggest these great reforms. With the little money the Chancellor has got, he has made the best use of it. While no new taxes have been put on, the burdens of the people have been relieved. I welcome the establishment of £300,000 odd to be applied to the relief of local rates, and I want to put in a word here for my right hon. Friend. Three hundred and twenty thousand pounds is to be applied to make good the loss the local authorities have sustained from the fluctuation in the Whisky Tax. I am glad a beginning has been made towards relieving the burden of the local, authorities, and the Chancellor of the Exchequer has promised a good deal more next year. The right hon. Gentleman said, whoever might be in the office of Chancellor of the Exchequer, I hope he will pluck up courage, and that it is he who will be standing at the Table in that position next year, and for the next five years. We have not shortened the duration of Parliament yet, and I hope that the right hon. Gentleman who is going to relieve the local authorities will live to carry out the promise he has made us.

I think he has met the difficulty about the aged paupers and old age pensions in a fair spirit. It is true that many of us on this side of the House thought that the whole expenditure of this should have been borne by the Treasury, and that the local authorities should have been relieved. The Chancellor of the Exchequer has very fairly met the point. He is taking two-thirds of the burden upon his own shoulders and he is not increasing the load" the local authorities carry, and he has promised that the whole matter will be dealt with next year. That is, if you like, only a promise, but let us consider how little money there is, and we are bound to admit that he has dealt with the matter as any reasonable man could expect. I would not have troubled the Committee merely to make these observations, but because it seems to me there are one or two matters to which attention might be directed. I join with my right hon. Friends on both sides of the House who say that we ought to return to the good old practice of having the Budget as early in April as possible and as soon as possible after the financial year has terminated, and I must also say that it ought to be put through as quickly as possible after introduction, which would be of great benefit to the country. There may be something of a political arrangement in this postponing of the Budget. Many of my Friends on this side of the House are in favour of such a course being pursued, but personally I think the finance of the country is such a serious matter that the importance of getting the Budget through quickly ought to outweigh all minor and smaller considerations. I hope the Chancellor of the Exchequer will realise that after all the trades of this country—the whisky trade in Ireland and Scotland, and the tea, sugar and tobacco trades in this country—from which he raises £50,000,000 or £60,000,000 of revenue should be considered and the least he should do in his arrangements is to endeavour to produce stability and not to keep uncertainty existing in the minds of the people of these trades any longer than is necessary. I appeal therefore to the right hon. Gentleman not to allow small considerations to postpone the Budget longer than he can help, but after this Budget this year I ask him to register a vow that as Chancellor of the Exchequer he will never bring a Budget in after 15th April in future years so that we may go back to the normal and wiser practice of some years ago.

The next matter on which I desire to say a few words is economy. Every Member who has spoken has touched upon economy. The Chancellor of the Exchequer has already dropped out of the good old practice in which he was initiated when he was below the Gangway, he has fallen into the triviality that Gentlemen on the Front Bench talk when he declares whenever expenditure has increased that it is supported by the opinion of both sides of the House. Chancellors of the Exchequer are too fond of making that excuse. The right hon. Gentleman the Member for East Worcester said it in his day and his predecessor said it before him. These Gentlemen always forget what they have said in favour of economy and they only remember the appeals made on behalf of extravagant expenditure.

I will ask the right hon. Gentleman to remember that this day everybody has put in a word for economy. I do not think there is anyone in the House who could do so more consistently than myself, and I want to say a word on this point. The cause has been a little damaged by the Gentlemen who have pleaded for it on the opposite side of the House, above all the Chancellor of the Exchequer in the late Conservative Government (Mr. Austen Chamberlain). He almost made a defence for the Government, because he showed that, after all, they have only increased the national expenditure in five years by about £15,000,000 or £16,000,000. Seeing that £10,000,000 of that amount was for old age pensions, a policy on which both sides of the House was agreed, there was only in five years, according to the right Ion. Gentleman, about £5,000,000 or £6,000,000 growth of expenditure. Considering the growth of population and the growth of wealth, that might be esteemed not to be large. I am in a more healthy position than the right hon. Gentleman for advocating economy. I have always advocated it. I tried to trip him up when he brought in his extravagant Budgets in days gone by, and I have always, so far as I could with decency, put in a plea on behalf of the same cause with my right hon. Friends who are in office now. I agree the matter is extremely urgent, and I think it is too lightly dealt with generally by this House, and especially by the Chancellor of the Exchequer.

I will take an example from my right hon. Friend's speech. Speaking of the growth of expenditure, he said the expenditure had been on education and other subjects of that kind. We all agree that expenditure on education is excellent, but I suggest there is room for great economy even on education, and I beg to make that statement with some direct knowledge of the facts. I believe the administration of our education laws, both at the centre and in the localities, is capable of considerable improvement in the direction of economy. Since that great Education Act of 1902 was passed, there has been no attempt to deal with, say, overlapping of expenditure—the local authorities doing the same work as the central authority does. In the administration of national education, which now costs some £35,000,000 or £36,000,000 a year when we include both rates and taxes, there is ample room for economy. I have only taken that because it is a subject on which everybody seems to agree there must be waste and extravagance; but there is no room for this sort of conduct even in connection with education, and I believe there is great room for economy. I must say I also agree as far as I can consistently with the criticisms that have come from the opposite side about the increase of officials in some of the other Departments. We shall be overrun with officials in this country as completely as we have been in Ireland during the last generation if the Chancellor of the Exchequer does not do something to check it. There is a great deal of room in all these great administrative Department for economy. I welcomed one remark of the Chancellor of the Exchequer on this point. It has cheered my spirit a good deal. He said that in the year after next the Navy Estimates are to be reduced by a vast sum, but he made it conditional, I regret to say, on something which Germany has to do. Let me suggest to him that a good act of this kind will be all the better if we set the example. Whatever Germany does, we are so secure in our strength at the present time that there is ample room for economy in our naval expenditure. Even if we do economise two years hence it will not bring back the millions we wasted last year, we are wasting this year, and which we are going to waste next year. I have been over in Germany, and I find the same feeling there with regard to this matter. I would therefore suggest that even upon this matter on which I admit there is a great deal of national support for extravagance something might be done in the direction of economy.

If the Navy cannot be touched, why not the Army? There is a department in which we Liberals were pledged to make vast reductions. I believe the Liberal pledge was to bring the Army expenditure back almost to what it was before the war, as if the war had not occurred. The war has left us with an extravagant burden of expenditure of some £8,000,000 or £9,000,000 a year, and I am sorry to say the Chancellor of the Exchequer has not noticed—perhaps his mind has been so engaged in great sums—that the Army expenditure has crept up by a little during the two years he has occupied his high office. I would, therefore, appeal to the Chancellor of the Exchequer to see whether he cannot introduce this spirit of economy a little earlier than two years hence. We are too fond of postponing our good actions to the future. There is nothing like doing them at once. If you have anything good to do, do it at once, and do not put it off till to-morrow which may never come.

I must admit the Chancellor of the Exchequer has made out a better case than I expected for the Whisky Tax. When it was mentioned last year, I was one of the critics. I said, if it was a good tax, it ought to produce a great deal more than the Chancellor of the Exchequer expected to receive. He has had to stand, as it were, at the bar of public opinion, and he has admitted that his hopes have been disappointed, that his miscalculations were great, and that the whole thing as a revenue producing tax, has been a failure. We who criticise it in that spirit must also admit the Chancellor of the Exchequer has put in a sound plea to-day on behalf of the tax, and he would be in con- siderable difficulty now in getting rid of it. Look at the speech of the hon. and learned Member for Waterford (Mr. John Redmond) with regard to it. He said he spoke solely in the interests of the Irish trades. It is rather a bad policy to proceed in these great national matters in the interests of the trades at all. We ought to think of the welfare of the people, and, if we are satisfied the people broadly are benefited by anything carried in this House, that ought to affect our opinions with regard to it rather than the prosperity of particular trades. He spoke of the growth of temperance in Ireland. I was struck with that on my recent visit there. I saw a man wearing a badge, and I said to him, "What is this badge you are carrying?" He said, "Oh, that is my order." "What order is it?" I asked. "It is Catch-m'-pal, Sir." "What is that? I have never heard of it." He did not appear to know, so I tried to find out. I found it was the badge of one of those temperance societies which have been recently introduced, I believe, from this side of the Channel, and which are making great progress in Ireland. There has been a great growth of temperance in that country. I cannot help saying the condition of the people there shows much improvement in recent years. Owing partly to the legislation passed in this House, whisky is not so much a necessity to them as it was in past days, and I must say the Chancellor of the Exchequer made rather a good defence for what was, from the Chancellor's point of view, rather a difficult business, this Whisky Tax.

Mr. T. M. HEALY

I listened with great attention to the very able and remarkable speech of the Chancellor of the Exchequer. I notice he dwelt upon the boom in the trade of this country, and I quite agree with him that the prospects of British trade are no doubt very remarkable. But in the annual survey the Chancellor makes of trade and finance it is very curious that in this national balance-sheet no word is said upon Ireland. Can anyone pretend the trade of Ireland is booming? Can anyone pretend Ireland is prosperous? Can anybody pretend we have got any manufactures that are likely to be increased? Can anybody pretend that from year to year or from day to day anything is done to stay the tide of emigration which leaves that desolate and desolated country? No! The right hon. Gentleman naturally enough, turns his attention to England and to Scotland, and his only attention to Ireland takes the form of taxation.

I did not oppose his Budget of last year primarily upon the ground of the additional taxation upon spirits. I opposed it upon the general grounds of the taxation on land, of the Death Duties, of the taxation upon transfers, and other matters of that kind; and I expected to-day to hear from the right hon. Gentleman something with regard to the probable yield of these taxes and the method of their administration. I think we are entitled to ask him what he is doing in respect of the very remarkable provisions that have been inserted in the Statute which has just become law. My hon. Friend the Member for King's Lynn (Mr. Gibson Bowles), whose great authority I always recognise—and I must say for him that, whether he has sat on this side of the House or on that, I have always thought his speeches were fair and candid on this question of finance—has just made the remarkable statement, coming from one of his authority, that all Treasury statistics are cooked. I have been saying that for many years, but, of course, being an Irish Member, and only speaking with regard to Ireland, I could not expect that it would be regarded as more than a mere partisan taunt. The hon. Gentleman, an old Member of the Public Accounts Committee, and one who, during the time he has been in this House has probably given more attention to his Parliamentary duties than any other fifty men, has from behind the Government made the very grave statement that, in his opinion, all Treasury statistics are cooked. I have been maintaining that "with regard to the imposition of taxes in Ireland every figure you have given has been cooked. Last year there was a sort of collusion between these benches and the Government. The Government then had a majority of 300. They did not require our assistance. Yet questions were asked and answered, showing, forsooth, that Ireland was being run at a loss. And to-day the Chancellor of the Exchequer does "with regard to Ireland what is not done for Scotland or Wales or England. He takes the supposed Irish revenue and the supposed Irish Charges, and he says, manipulating these figures together, "Our taxation is so slight that we really get nothing out of it." The right hon. Gentleman will excuse me for saying that I remain of the opinion which I had last year, and I respectfully suggest that, after the confession which he has made of his error with regard to the Whisky Duty, he is not in a position of strength which would enable him to encounter any one of us who maintain the contrary position. The right hon. Gentleman says he is less in error than anyone else. I think he is more in error, and we have quoted the remark of Lord St. Aldwyn, ten years ago, to the effect that the duty on whisky had reached the smothering point.

But I am not blaming the right hon. Gentleman for what he is doing to-day, because he is doing it with the assent, for the first time, of the Irish representatives. The terrible position is this, that, when the Conservatives come into office we shall not be able to say one word in reproach to them for maintaining these taxes. Let me examine, in the first place, what was done last year in reference to this Whisky Tax. The hon. and learned Member for Waterford has made a remarkable statement—one which happens to be inaccurate—that he did not Vote against the Third Reading of the Finance Bill of last year because a crisis then existed. As a matter of fact, there was no crisis at that time. The House of Lords had already had their say. I remember leaving my work in the city of Limerick and coming over here and urging the party to vote against the Third Reading of the Bill, although we could not have put the Government in a minority at that time. They would have had a majority in spite of us of 200 or 300. The fact remains, however, that the vote was not recorded against either the Whisky or any other Irish Tax on the Third Reading. May I state what happened when the Whisky Tax came up in Committee? You will find on 23rd November, 1909, the hon. and learned Member for Waterford did not even issue a whip to his party to come and oppose the Whisky Duty. Indeed, he was not here himself to oppose it, and neither were any of the leading Irish Members, such as the hon. Member for East Mayo. The truth is only thirty-three Irish Members, out of eighty Nationalist Members, voted against it, and on that occasion the Government majority was only eighteen! The Debate went on until, at two o'clock in the morning, the party were contemptuously treated by the Government, because the Chancellor of the Exchequer moved the closure, although neither he nor any other Cabinet Minister had attempted to reply to the arguments that had been advanced. I think the Government are well entitled to say to the Irish Members and to the Irish Nation, "When I proposed this tax last year, only a mere handful of your representatives voted against it, although by so doing they would not have embarrassed the Government or put it in a minority," Therefore it is perfectly absurd for us to blame the Government for what they are doing. We have only ourselves to blame. Ireland has only its own representatives to thank for what the Government are doing. It is not merely with regard to the Whisky Tax that this is true. The Government have imposed provisions upon other industries which I, at least, have great apprehensions about. The Government—and it is right to recognise the fact—has the enthusiastic support of influential Irish Members for this Budget. It is of this same Budget that one of them said to his constituents, "God bless the Budget." That was the hon. Member for Meath. The hon. and learned Member for Waterford declared it to be a great democratic measure, and I very well remember, though I did not hear the speech, that the hon. Member for the Scotland Division of Liverpool stated in an American newspaper that the Home Secretary had written a letter of thanks to the Member for West Belfast for his enthusiastic support of the Budget on the Third Beading, and the hon. Member for the Scotland Division, in a précis of the speech, suggested that that hon. Member was a sort of duodecimo Demosthenes. I have looked at the speech to which I had not the advantage of listening. It was delivered on the Third Reading of the Bill on 27th April, 1910. The hon. Member said, "I rise as the representative of Ireland to give the Budget my unqualified Support." One would imagine, hearing the speeches of some of these gentlemen, that the only people in Ireland were landlords and distillers, and how can any Government, in view of these speeches, speeches delivered from the hearts of hon. Members from Ireland as I have no doubt they were —I say, how can anyone blame the Chancellor of the Exchequer not only for maintaining these taxes but for declaring that it would be a national crime to repeal them.

The hon. and learned Member for Waterford says he has got a crumb of comfort from the Government, in the shape of an Autumn Session. I wonder do the Irish public think an Autumn Session is a crumb of comfort? What gain is there to be derived from this Autumn (Session unless it is to give the Government a long day? I tell the Government that they need not be in the least afraid of the hon. and learned Member for Waterford. They have only to kick him about, and he will stand it. I believe last year, in one of his speeches, he declared the Government policy to be a false and rotten policy. The Government now, in my judgment, are doing exactly what any English Government would do in their place. Does anybody suppose now that, with the Conference between the two parties, when the House meets in November next the Irish party will count? As a matter of fact, it does not count to-day. It is only the Tory party that counts. Our party are powerless in this matter unless the Tory party vote with us—the hated Tories! Is it likely that next November the Tory party will come to the assistance of the Irish Members? They will do nothing of the kind. They will play their own game, and it is perfectly plain that that game is to let these taxes bite and blister the public for another six, eight, or twelve months. At the beginning of this Session, whenever there was the smallest danger of the Government being kicked out I used to see the Whips of the Tory party coming into the Lobby and keeping their own party from dividing against the Government. How is Ireland going to be repaid? The House of Lords, at the end of this Conference between the two parties, will be stronger than ever. I can tell you what is happening at the Conference.

Mr. BYLES

Then tell us, please.

Mr. T. M. HEALY

There is no secret about it. There is not a man on the other side of the House who does not know what is happening, and who does not understand what all this elaborate foolery means. They all know what will happen when the Conference is over, and that is that the House of Lords will register a Resolution, and the Tory party will agree to it—it will undertake to carry out what is part of its unwritten constitution, namely, that when this House has passed a Bill and the General Election has confirmed it, the House of Lords will not further oppose the will of the people. That will be the end of the Conference, and you will all be throwing up your hats—at any rate, those of you who are expecting baronetcies. You will be saying what a wonderful example it is of the genius of compromise, and both sides, having wasted a sufficient amount of time and having thereby fooled the Irish Members, will, in their own good time, when all these matters have been arranged, close the Conference. It is said some concessions may be made by the Tory party. What will be the concession? Does anybody suppose that Ireland will be one whit nearer Home Rule as the result of this Conference? Let us assume that the House of Lords agree to accept Home Rule, or anything else, after an appeal to the people.

8.0 P.M.

After the next General Election who is likely to be in office? The Tories will come in if they allow this Budget sufficient time to work. Then, after you have had six years of Toryism and you come to close on 1918 or 1919, the Liberals will come in, and they will have two or three years in office. They will go on to 1920, 1921, or 1922, and then they will bring in Home Rule. Then there will be another General Election, and by the time the Member for Waterford has reached the age of Methuselah he will then receive the price of having supported the Budget of 1910. Now the sad thing about all this is that again and again those of us who have watched the play of British parties have repeated to him what would occur. The National Convention in Ireland, presided over by the Member for Waterford, declared, long before the late Budget was introduced, unanimously against putting even 6d. of additional taxation on Ireland. The resolution was moved by a gentleman who, I see, has got £500 a year from the Treasury as a university professor, and who declared that it would be a crime against the Act of Union to allow even 6d. to be added to the taxation of Ireland. Yet here we are to-day, this Budget being reimposed upon us, and neither while the present Government remains in office nor when the Tories come into office shall we have one word to reproach Englishmen levying these huge additional burdens on our country. As long as we maintained ourselves as a party of protest we at least maintained that the claims for exemptions and abatements in the Act of Union could be carried out by the Government. We have abandoned that, and what have we got in exchange? The only industry in the country which was really substantial has been ruined. Why, Englishmen themselves declared being ashamed of having destroyed Irish woollen manufactures. Did they not know that these manufactures they destroyed were not to the extent of £100,000 a year? And now the Irish Members themselves allow an industry far greater in value to be destroyed with their deliberate assent.

The right hon. Gentleman having gone utterly wrong in his estimates upon the subject, bases himself purely upon the question of temperance. I want to know why he does not tax beer? If it is a good thing to tax whisky, why not tax beer? Does not beer make man drunk? Is beer a teetotal beverage like cocoa? No, Sir, the right hon. Gentleman's zeal for temperance is confined to whisky, which is not manufactured in this country to any great extent, but is manufactured largely either in Ireland or Scotland. But I did not base my attack on the Budget because of this Whisky Tax. I am here now to ask for information with regard to the Budget of last Session. The 26th Section says: "The Commissioners shall as soon as may be after the passing of the Act, cause a valuation to be made of all 'and in the United Kingdom showing separately the total value and the site value respectively of the land, and in the case of agricultural land the value of the land for agricultural purposes where that value is different from the site value." That is the Land Tax Clause. Then there is the Clause dealing with liquor licences, and these liquor licences are to be raised, while the commodity the licensees sell is being diminished. The 44th Section says? "The annual value of any premises for the purpose of any duty Charged under the first Schedule shall be determined in the same manner and subject to the same conditions as the annual value of premises determined for the purposes of a publican's licence, and the Commissioners have to keep a register showing the annual licence value of all licences." I want to inquire of the right hon. Gentleman what is being done in regard to valuations in Ireland of the land of the country and of the public-houses of the country. He made the remarkable statement on the Budget that no valuer would be sent into Ireland, because, he said, there was in Sir John Barton's office in Dublin sufficient material to determine the valuation of Irish farms—I speak from recollection—without sending in special valuers. I have been making inquiries as far as one can, and I am told there is no such material in Sir John Barton's office. What is more, it will be a very surprising thing if there was, because the valuation made by Sir John Barton is an annual one in the case of houses, and in the case of land it is a valuation of fifty years old, depending on the price of beef, mutton, wool, butter, and some other commodity of that kind—flax, I think. So that there is no material whatever in Sir John Barton's office to make a valuation for the purposes of the Budget of last year. Moreover, there is to be associated and nominated by the Master of the Rolls and the Chief Justice of Ireland a number of assessors, who are to be appointed for the purpose of carrying out this tax, and I understand that as soon as the Act was passed some couple of months ago, the judges were consulted as to who these assessors shall be.

I want to know how the matter stands as regards the right hon. Gentleman's Department. Where is the material Sir John Barton has? Can I as a Member of the public get access to it? If I cannot, are these secret documents? I will take any farm in Ireland the right hon. Gentleman likes. Take a farm in my own Constituency. If I go in to Sir John Barton and ask him, "Will you give me the material upon which you say you can tax this farm, because the Chancellor of the Exchequer says you have got the material? "will the right hon. Gentleman support me in enabling me to get that material from Sir John Barton? It is only three years since there was a Select Committee on Irish valuation. We were greatly satisfied with the methods upon which it was conducted, and now you are putting into the statute a provision that there shall be this valuation, we are entitled to know who are the assessors who are going to carry it on. What salaries they will be paid; what materials they will have before them, and what yield the Government expect to get from Ireland. So much about the Land Tax. Now I ask what is being done in regard to special valuation of public-houses in Ireland. These public-houses are already valued annually by Sir John Barton, and if any man possesses the material Sir John Barton has it. Why, then, was it necessary to put into the Budget the provision that "it shall be the duty of the Commissioners to prepare and keep corrected this register showing the annual licence value of all licensed premises "? I want to know what is being done in Dublin, Belfast, and Cork to correct that valuation of licensed premises. I want to know, as the right hon. Gentleman has stated that no Irish farmer will have a valuer sent to him, will he tell every Irish publican similarly that they will be left unvisited by any valuer in the same way as he has left Irish farmers unvisited? If not, perhaps he will tell the House why. At this stage I confine myself to asking these two questions. The Member for Waterford has declared that he will raise one of them with regard to the Whisky Duty when we meet here in the cool of November next. Of course we shall have, no doubt, a great deal of additional information as to Irish feeling, and as to American feeling also, because the hon. Gentleman as I understand is proceeding to a National Convention in America in September next, and if he can persuade the National Convention in America to copy the resolution which the National Convention in Ireland passed with regard to taxation, I would have strong hopes that it would not be so futile in its operation, because the National Convention in Ireland—though it is almost treason to mention the fact— declared themselves only a year ago as follows:—"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 calls upon the Irish party, and the Nationalist organisation to resist any such attempt with the utmost vigour." I do hope the National Convention in America in September next will confirm that resolution. If that should be done, then I presume we shall open up negotiations with the Tory party—that hideous and hateful party whose entrance into office would work such a national calamity for Ireland—I presume we should enter into negotiations with them to see if they would support us in November next in opposing the Whisky Tax. For my part I am quite willing to undertake the odious office of speaking to one of the Tory Whips in November next, provided that the Chicago Convention passes this resolution, and asking them if they will support us in turning the Government out of office. But I greatly fear that the Convention will not be asked to pass any such resolution, and that upon one pretext or another, as the Government have firmly declared their intention of passing this Budget without the alteration of a comma—that is the sacramental and sacred phrase—there will in November next be some fresh pretext for the befoolment of the Irish party.

The only other observation I wish to make is this. I would have the Irish people remember that if no opportunity was given us on the late Budget and in the previous couple of months in the Session of raising the whisky issue the fault was in those who supported the Closure Resolution which passed that duty without amendment or Debate in the course of forty-eight hours. That Closure Resolution could not have been carried without the hearty support of the Member for Waterford (Mr. John Redmond) and his friends. Whoever voted for that Closure Resolution voted for the Whisky Tax. Whoever voted for that Resolution voted against the wish of the Irish National Convention, and voted against the proposal that Ireland should be taxed in accordance with the principles found in the Act of Union, and voted against the principle that exemptions or abatements should be granted to his country, and for the principle that whenever a distressed English Ministry wants money for "Dreadnoughts" Ireland, as is not required by equity or history, should be called upon to pay for them. As I have mentioned this question of "Dreadnoughts," let me tell the Chancellor of the Exchequer, the ability of whose speech I recognise, that he made one mistake by it which I think will never be forgotten. He carried his Budget last year, and he declared these taxes were necessary because of the fear of Germany, or because of the extent of foreign armaments and the necessity of providing "Dreadnoughts." What does he say today? He says that all that scare is the merest phantom which has been exorcised and dissipated by the rubber boom. He also declares, in a very admirable phrase, that the whole scare was well organised despondency on the part of the Tory party. I hope the Irish taxpayers will remember those two phrases coming from the Minister for Finance when our country is being bled white—a country in which a million of money is of more importance than ten or twenty millions to this country—because of a scare which that Finance Minister absolutely disbelieves in.

Mr. GEORGE YOUNGER/

I have no desire whatever to prolong the Debate, but I cannot allow it to end without uttering an energetic, and I hope, perfectly courteous protest against the continuance of some of the taxes which now exist. The hon. Member for Blackfriars, and I think the right hon. Member for Islington, talked of this as a humdrum Budget. Well, it is a humdrum Budget in the sense that no new taxation is proposed, but it is not a humdrum Budget to those who have to pay the old taxes. The right hon. Gentleman was good enough to discuss, with commendations, the promptness with which the Licence Duties had been paid in Scotland, but he did not say, and I do not think he yet realises that there is a considerable balance of those remaining unpaid, because these people simply cannot find the money to pay them. As a matter of fact, the smaller houses not being seriously affected are able to find the money, but the larger and more important people having been most cruelly, unfairly and wantonly treated, have been unable to do so. I therefore desire to protest against the continuance of these taxes against which we protested not with much success last year, and I do say that on a later stage of the Budget Bill something must be said about them. Some concession, I hope, might still be made, and, at all events, there ought to be greater expedition shown in arriving at the new value on which these taxes are to be based in future than is being shown by the Department at present. A question has just been asked by the hon. Member for Louth (Mr. T. M. Healy) as to how far the authorities have proceeded with the preparation of the new register, and whether they have done anything. They have done nothing whatever in the preparation of the new register, they have not issued a single schedule to a single licence-holder in Scotland in respect of those whose Licence Duties are over £500, and who will have to pay, and yet we are within a measurable time when the next Budget taxation will have to be paid. They have a monumental task to perform, and I do not suppose that even yet the proposed schedule has been issued; and the right hon. Gentleman has admitted that is the only fair basis upon which this taxation is to be Charged, and it ought not to delayed any further. Those who are largely interested in the Whisky Tax will receive with some regret the news that no relief is to be granted from the burden which the Chancellor of Exchequer imposed. It has been a very serious tax upon the distilleries, and it has reduced their output enormously. It has done a great deal of harm, while certainly, as a financial success, it has not been conspicuous. The right hon. Gentleman says it has been a moral success, but I am not quite so sure that that moral success is quite so stable as the right hon. Gentle- man thinks. I am perfectly certain of this: that those who are drinking whisky in Scotland to-day are not getting the article which they formerly got. Perhaps they are getting less of it, and that is probably an advantage, but they are not getting the article which they formerly obtained, but a cheaper and cruder whisky, which is much more raw than that which they got before, and which, if it did produce drunkenness, produced a pleasant drunkenness. [Laughter.] I use the word advisedly—a pleasant drunkenness, as contrasted with the foul and brutal drunkenness which results from the consumption of raw and crude spirits. I believe the right hon. Gentleman does not yet understand how serious and how wanton the tax is in many cases, and I believe when he does get to understand—and he very soon will—he will be the first to desire to modify to some extent this extraordinary taxation.

Mr. LLOYD GEORGE

I think the Debate is now pretty well exhausted, and the opportunity has come for me to reply to the speeches which have been delivered. I quite realise that my hon. Friend (Mr. Younger) could not allow even this first discussion to pass without entering a protest, in addition to the many protests he uttered last year, against both the Whisky Tax and the Licence Duties, and I daresay we shall hear him again on the same subject before the Budget passes. My hon. Friend (Mr. T. M. Healy) has spoken with his usual wit, but I was rather surprised to observe his attitude towards the Conference, because his leader in Ireland has claimed it as a great act of statesmanship. It is a very sad thing to see a split in so small a party. I was rather surprised to hear him say that the only attention I had given to Ireland in this Budget took the form of fresh taxation. That is a very remarkable statement. The attention this Budget gives to Ireland is an expenditure of three millions of money, very nearly two and a half millions upon old age pensions, and about £600,000, I believe, on other matters, including land purchase, and there is a very considerable increase for congested districts, Irish universities, and other matters. So that the taxation of Ireland when it is fully developed in these new taxes only comes to about £600,000. They have not reached that figure.

Mr. T. M. HEALY

With great respect, I do not believe you.

Mr. LLOYD GEORGE

I will come to that. That is my very next point. First of all the House will take the figures, and then I will give my reasons in regard to them.

Mr. T. M. HEALY

I am not attacking the bona fides of the right hon. Gentleman.

Mr. LLOYD GEORGE

I know exactly what is in my hon. Friend's mind. For a moment we will take these figures. They are considerably over three millions. I am taking now the figures of expenditure which the Budget was introduced to provide for. I am not referring to "Dreadnoughts"; I am leaving them out of account. I am assuming that there is no money spent on new construction in Ireland, and from that point of view that Ireland has not gained a special advantage. I am referring purely to the expenditure in Ireland in respect of new matters. I have to raise taxes for old age pensions, Irish universities, Grants for education, congested districts, and Irish land purchase. Ireland contributes less than £600,000—that is, less than one-fifth of what she gets—and yet the hon. and learned Gentleman says "the only attention you have given to Ireland is to raise new taxes." On the contrary, we find £3,200,000 for Ireland and we receive under £600,000. The hon. and learned Gentleman challenges the figures, and he is good enough to say, "You admit that your estimate of the Whisky Tax was wrong, why, therefore, should we accept your statement about the figures of expenditure?" One is an estimate in advance, which depends upon all sorts of conditions that you cannot forecast, and that no one in this House can forecast, not even the hon. and learned Gentleman himself. That is a prediction—an estimate.

Mr. MAURICE HEALY

So is the £600,000.

Mr. LLOYD GEORGE

This is not an estimate. This is the money which I actually had to pay to Ireland last year— £2,300,000 for old age pensions. It is not an estimate. Cheques have been signed, and the five-shilling pieces have been paid, everyone of them. Why should that be called an estimate? It is cash down, which has already passed into Irish hands. Take this year. It is true in one sense that it is an estimate, but it is an estimate on facts which we have already got. Take the increase in old age pensions. We know when so many more pensioners come on at the beginning of the year you have to multiply that number by fifty-two five shillings. That in a sense is an estimate, but it is an estimate on the actual figures which you have. When it comes to the Congested Districts Board and Irish universities, we know exactly what they cost. These are not estimates in the sense of being a forecast. They are purely what we know the thing will cost. There may be savings, but I have not seen them very much yet. I say to the House of Commons and to Ireland that there is considerably over three millions in respect of money which I had to raise in taxes and placed in last year's Budget in order to provide. What is the good of saying the only attention given to Ireland in this matter is really to raise taxes from her? It is not true. It is misleading, and I do not think the hon. and learned Gentleman is entitled to make a statement of that kind which has no effect here, and really it surprises me that there should be anyone in Ireland who will accept it.

My hon. and learned Friend says there are some men in Ireland who have so far forgotten patriotic feelings as to say, "God bless the Budget." Why should not they? There are 186,000 old people who are on the brink of starvation. If he had done what I had to do, read reports as to the condition of some of these old people, it really is an outrage that in the British Empire people should be permitted to live in such conditions. The poverty is perfectly horrible. It is inexplicable to me how these poor people can keep body and soul together. For the first time for years they are receiving 5s. a week, which to them is comfort and happiness, and raises them above, not merely starvation, but anxiety. Why should they not say, "God bless the Budget"? What is in this Budget? There are 26,000 paupers in Ireland over seventy, 9,000 of them in workhouses. I do not know anything about Irish workhouses, but I should not think they are very desirable residences. There are 17,000 other paupers in Ireland, who receive on an average, I believe, something like 1s. 9d. a week. It is very low. In future the door may be open to the 10,000 who are in the workhouses, and we say to them, "You are free." They receive their 5s. Their neighbours can look after them, and there is 5s. a week to do it. There are 17,000 other old people, who are now receiving 1s. 9d. from the charity of the parishes, and who will get their 5s. Does not my hon. and learned Friend think that there will be 200,000 people in Ireland who will be entitled to say, and who do say, "God bless the Budget"? It is really not such an unpatriotic thing to take that view of what we are doing. My hon. and learned Friend has asked some questions with regard to other matters. He thought the hon. and learned Member for Waterford (Mr. J. Redmond) was exceedingly tractable. Well, I wish he were.

Mr. T. M. HEALY

What more could he do for you?

Mr. LLOYD GEORGE

My hon. and learned Friend is quite capable of defending himself not merely here but in Ireland. In the Irish Press he seems to have been doing it with very considerable effect since the time that the hon. and learned Member for Louth has been denouncing him. Some questions have been put to me with regard to valuations, I am not complaining, but I wish the hon. and learned Member had given notice of these questions, for I admit that I cannot carry all the details in my head. But I stand by the statement I have made that it is not necessary to walk over these Irish farms in order to get the information which is necessary for our purpose. That is the view I take. My hon. and learned Friend takes a different view of the Act. Why should he make that a matter of complaint? He made it a subject of attack upon the Government when we proposed to make these valuations, and now he is angrier than ever when he finds that we are not going to make them. I suppose if we were to take 3s. 9d. off the Whisky Duty he would make that the subject of a still more fierce attack than when I stand by the Duty. In these circumstances I can afford to leave my hon. and learned Friend to justify his attitude as best he can. There is no money to be obtained in valuing these farms. They are not the kind of farms in which we have the increment value which we mean to tax. There are no building values in the ordinary sense of the term, and we think we are not justified in adding to the expenditure in having a valuation of these farms when we have already got not merely Griffith's valuations but also the numerous official valuations which have been taken in Ireland during the last twenty years.

I should like to say a few words in reply to the right hon. Gentleman the Member for East Worcestershire (Mr. Austen Chamberlain). I do not think that at the present moment it would be desirable to go into too much detail in these matters, because we shall have next week a more or less stand-up fight upon them, but there are one or two things I should like to say. The right hon. Gentleman has challenged my Estimates, and called them speculative. He seems to think that they are all a figment of imagination. Well, all I can say is that the Estimates of last year stood the test except in the case of whisky. Not only that, but the actual receipts improved upon my Estimates, and so far from my having exaggerated the prospect, so far from my having drawn a picture out of my own imagination, the Estimates fell short of what the facts warrant. I had not enough imagination to draw a picture in sufficiently brilliant colours. All these taxes have done better than we expected except that on whisky. I admit that. I made it clear all along that it has done worse from the financial point of view, but very much better than we expected from the point of view of the general advantage of the community. When the right hon. Gentleman came to details I waited for particulars, and the only one he gave any particulars about was the Income Tax. What was his Charge? Not that I exaggerated it, but that it was put too low. That is not an exaggeration.

Mr. AUSTEN CHAMBERLAIN

The right hon. Gentleman has misunderstood my criticism. I did not make any general criticism of the Estimates embodied in this Budget. I did criticise the Income Tax estimate as being in my own opinion too low, or rather the arrears as being too high. What I criticised was the speculative account which he gave of what would have happened if things had not been as they are. That I said is pure imagination.

Mr. LLOYD GEORGE

But why is that pure imagination? If the right hon. Gentleman would only think of his own criticism it is the best answer to his Charge. I said that if the thing had gone in the ordinary course I would have collected £3,000,000 more Income Tax this year, and he himself said, "Not only would you have done it if the Budget had gone through, but you can do it even now." Well, if that is so, surely I could have done it if the Budget had gone through. There is nothing speculative in saying that there are two millions more in this year's Income Tax. As far as two out of the three millions are concerned, the right hon. Gentleman admits that it is not speculative. The only thing that is speculative is the Super-tax. Does anyone say it is speculative to state that there are two and a quarter millions which you can get in the coming year? I thought I could only collect £500,000 last year before 31st March, and that I should collect the rest this year. If you can collect the money in the autumn, you can certainly collect it before 31st March next, because I am making abundant allowance afterwards for arrears of Super-tax. In point of fact, I am underestimating what the right hon. Gentleman calls the speculative estimate. As to stamps, I have dropped one month this year, and I have put £150,000 on that. Is that speculative? The Land Tax is the only thing which he can call speculative, and I admit that, but that is only £200,000. So far as the bulk of that estimate is concerned, I have acted cautiously. I believe I could possibly collect more, but the estimate I have given is an exceedingly cautious and conservative one, and rather an underestimate than an exaggeration. The taxes have all turned out uncommonly well, and the result has been to put us in a position to meet all demands and to extend paupers' pensions. The right hon. Gentleman ended up his speech by accusing me of having made one of those vague promises which he deprecates. Why vague? The only promise I have given is a promise which the Government gave last year, that we propose to start a scheme of unemployed insurance, insurance against invalidity and sickness, and against working men breaking down, such as they have in Germany. But we propose to subsidise our scheme on more liberal terms than the Germans have done. Why is that speculative or purely imaginative? I tell the right hon. Gentleman now that on the present finance I can see my way next year to start that scheme and finance it for the last quarter of the year. There is no speculation about it. Not only that, but we have got the plan ready. It has been thoroughly thought out. We consulted the trade unions with regard to unemployment and insurance very largely, and we have consulted the friendly societies about the other, and we would have launched the scheme this year if the Budget had gone through in time. There would have been money for us. There is not the faintest doubt on my mind, and if I am challenged I am prepared to give the figures to show it—that as far as any human foresight can possibly forecast the future next year we shall be financially in a position actually to start these great schemes of insurance which would do more, I think, to protect the working classes from some of the everyday anxieties and worries and miseries which befall so many millions of them than any scheme that has yet been introduced.

That is not speculation. That is not in the realm of imagination. It is in the region of actual finance which we have got in hand. Therefore the right hon. Gentleman need not be alarmed about that. If we make promises to the working classes about old age pensions which Parliament after Parliament will never carry out that I should regard as monstrous, and there, in truth, the words "reckless promises" might come in. But what are our reckless promises? We made a reckless promise of old age pensions. There are already 800,000 or 900,000 people who are actually receiving them. That is one of the reckless promises. We made another reckless promise of extending it to paupers, and on 1st January next there will be 1,250,000 of our old people marching to the post offices for their 5s. a week. That is another reckless promise which is going to be justified this year. What is the other? We made promises that we would do something about Labour Exchanges. Those are in operation, and have actually found work for 100,000 men already. Then there is another reckless promise which we made, that next year we would create a scheme of insurance against unemployment and invalidity, and find the means to finance it, and I venture to say if the Government are in office next year by 1st January in the following year there will be 15,000,000 of people being insured under either one or other of those two schemes before the end of the financial year. The right hon. Gentleman calls that a reckless promise. Very well. Let him test it by the statement I am making now. We are in a position to do it financially, and if we are in a position to do it politically then it will be done. Those are not reckless promises. They are the considered undertakings of a Government which as far as the other promises are concerned have actually redeemed them, and they are criticised by Gentlemen who promised for fifteen years and gave the people nothing. The right hon. Gentleman was very angry about a promise which I made of trade being kept and about the roseate picture which I gave.

Mr. AUSTEN CHAMBERLAIN

I did not refer to a roseate picture.

Mr. LLOYD GEORGE

The right hon. Gentleman complained very much about the roseate account I gave, and I can understand him being angry. He is in the position of a man who has an almanac to sell in which he has got every day of the year marked rain, storm, hail, snow, sleet, and when the time comes he sees a blaze of sunshine. His almanac is discredited, and he cannot sell it. It is simply an exposure of the Tariff Reform "Old Moore." He is a Jeremiah who has been found out. Naturally he is very angry about it. But I am dealing not at all with the realm of imagination, but with actual figures. Our trade is leaping up. At the present rate we shall have a record in our foreign trade —an absolute record. The home trade is bright; the revenue is responding to it. These are not imaginations. These are not Tariff Reform pamphlets. They are actual facts, which are totally different things. They are something which materialise in cash in the Exchequer. I can well understand the right hon. Gentleman being angry, and very angry. I am not surprised. But I think there is nothing more characteristic of this country than the long-suffering patience with which it has borne this constant decrying of its business, its credit, its confidence, on the part of some of its leading people, who have been crying it out to the world as a sort of decrepit old thing that is going down. My own opinion is that the patience of the people is at an end, and that there will be a real burst of indignation about it in the course of the near future, and that in the course of the next few months all these wild speeches on which Tariff Reform has been thriving and prospering during the past year will be completely things of the past owing to the enormous growth in our trade; and 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 people who live in it are all going to participate in the joy of its abounding prosperity.

Mr. WILLIAM REDMOND

I do not desire to enter into a discussion on the merits of the Budget, but I may remind the right hon. Gentleman the Chancellor of the Exchequer that he told us this afternoon he hoped to have a surplus of £800,000 to dispose of, and I want to ask him, will he give me an undertaking that he will at least take some measures to encourage the work which has already commenced of promoting a promising young industry in Ireland, namely, the growing of tobacco? The right hon. Gentleman will remember that he promised me last year he would do what he could in the matter. I would ask him now in one word to say whether anything is to be done in that direction. The right hon. Gentleman appears to be determined to go against the views of the majority of the Irish Members in reference to the Whisky Tax. I regret that, and when the time comes I am afraid he will find himself strongly opposed in regard to the matter. But he knows as well as I do that this question of tobacco growing in Ireland is not a very large one from the point of view of the Treasury, and I would appeal to him before a Vote is taken to-night to do something in the direction of encouraging this industry. The latest information which I have is that this industry is growing. It employs a larger number of people every year. It is turning out a good article, which is being commended by experts in tobacco from America and elsewhere. The industry is forging ahead. Under the Budget you have put an extra tax of 6d. per pound on that tobacco, and I say it is not fair. Whatever may be said about the tax on foreign tobacco or American tobacco, it is perfectly monstrous to put the same tax on tobacco which is grown as a result of native labour in Ireland, and perhaps later on in this country. As far as this country is concerned, I believe Free Trade is the best thing for it, but there are exceptions to every rule, and when you can produce enough in your own country, and give a large amount of employment in producing an article which is just as good as that which comes from across the Atlantic, I say that it is an absurdity to put the same burden on the result of your native labour as you put upon the article that is produced on the other side of the Atlantic in America.

I would appeal confidently to the right hon. Gentleman to do what I know he has often told us here he would like to do, and is desirous of doing, and which he can do without any outrage to his Free Trade principles—namely, in some way to increase the assistance which he has, I freely and gratefully admit, already extended to this young industry in Ireland. I only wish that hon. Gentlemen opposite who are Free Traders could come to Ireland and see the tobacco we grow there. In the county of Meath and elsewhere I could show them hundreds of men, women, and children employed in the tobacco industry, and it is monstrous that such an industry should be stamped out because, for the purpose of this Budget, 6d. per pound extra duty is put on tobacco. If that kind of thing be done, it will only assist emigration, and it is really a very serious matter, from the labour point of view. The Chancellor of the Exchequer, both publicly and privately, has shown that he has great sympathy with this industry and enterprise, and I only make these few observations in order to urge upon him, or on the right hon. Gentleman who now occupies the Treasury Bench (Mr. Burns), and who has some knowledge of the matter, that it is really a serious question in Ireland from the labour point of view, and I ask him to bear it in mind, in order to see, between now and the time when the Budget will be again considered in Committee, whether it would not be possible to still further assist this industry. I am certain it could be done without any infringement of Free Trade principles.

Mr. AUSTEN CHAMBERLAIN

I suppose we should encourage the arrangement which was made at Question Time to-day as far as the two sides of the House are concerned, that if the discussion on this Resolution is brought to a close to-night we should have a full opportunity of discussing the Budget generally on the Income Tax Resolution on Monday. I understand the Government offer no objection to that, and we shall be glad to know that no objection will be raised from the Chair.

The DEPUTY-CHAIRMAN (Mr. Whitley)

It is quite true that it is the customary procedure in Ways and Means on the Budget Resolution, and the Chairman of course is agreeable that on the Second Resolution the general Debate may be opened.

Mr. J. KING

The right hon. Member for East Worcestershire (Mr. Austen Chamberlain) has just left the House, but I should like to say that I am sorry I interrupted him with an interjection which he seemed very much to resent in the course of his speech. I beg to apologise to him and to the House for having done so, and I regret if I caused him any pain by my remark.

9.0 P.M.

I hope this discussion will not be allowed to come to a close so early in the evening, partly because of the extreme importance of the issues involved, and partly because of the practice which this House has fallen into just recently of adjourning early for no possible reason except apparently to have a longer sleep. This practice has been the subject of a good deal of criticism out of doors. The reason for these early adjournments are not so easily understood outside as they are in the House. For myself, I believe the practice to be highly detrimental to the Liberal party. I should not object at all if it were detrimental to the Tory party. I do object to the feeling that there is no interest in the House of Commons, and that there are no subjects of importance for us to discuss until this Conference, which apparently is to continue for several months, has brought its labour to a conclusion. Whether it continues for a long time, or whether it comes to an early conclusion, I, for one, feel, especially after the statement of the right hon. Gentleman the Chancellor of the Exchequer, ready to go to my Constituency and fight even harder than ever for the principles of this Budget and for Free Trade. There are still one or two Members on the Treasury Bench, and I should like to inform them that if the Prime Minister and the Government stand firm to the absolute necessities of their policy, faithful followers of the Government—and I am one, though I sit below the Gangway—are ready to support them to the utmost of their power. The statement of the Chancellor of the Exchequer has given us extreme satisfaction. I am sure everybody on all sides of the House has welcomed his statement that next year there are to be large proposals for the reform of local finance. In a memorable passage this House will certainly not forget, the right hon. Gentleman said that whoever stands in his place next year—and I pray the Lord it may be he himself who will stand again in that place—to bring in the Budget, will have to deal with the question of local finance. I expected that some one on the Tory benches would have responded to that offer. Surely the empty state of the Tory benches during all this evening, especially in view of the fact that they have told us for months and months past that this Budget is imposing a cruel, oppressive, nay, absolutely destructive tax on agriculture, is worth remembering as a sign, a silent sign, that speaks volumes. Why, even the hon. Gentleman (Mr. Pretyman) on the Front Opposition Bench, who now forms so large an element in what they call the Land Union, has not ventured to protest against the renewal of this Budget, which he and his party throughout the country have declared, and still declare, to the few fools who listen to them to be the absolute ruin of agriculture and the landlord interest throughout the length and breadth of the land.

For the past twelve months I have lived more in the constituencies than in the House of Commons, and I am entitled to call the attention of the House of Commons to the utter contrast between the conduct of the Opposition when face to face with this Budget, and their attitude and the language they use in the constituencies—their demure, nay, absolutely, I think I may say, cowardly action here to-night—in regard to what is really the people's Budget brought in for the second time. Hon. Gentlemen below the Gangway on this side gave to the Navy and Army Estimates earlier this Session, our very grudging and very unwilling support. I welcome, therefore, with the greatest heartiness, the statements of the Chancellor of the Exchequer that in a year or two we shall probably return to a normal Navy expenditure. [An HON. MEMBER: "In a year."] That is better than ever, and I am perfectly certain we should never return to it if we had the Tory party in power. I go further, and I say that if the Tory party were to come in instead of looking upon last year and this, year as high water mark in military expenditure, they would look upon them in a very few years as the low water mark. I regard this statement of the right hon. Gentleman as one of great significance and importance. I am perfectly certain it will be welcomed greatly throughout the length and breadth of this land, and I believe that it will be welcomed greatly in other countries. As the right hon. Gentleman very well pointed out at the end of his speech, we are the one Free Trade country of the five great countries which last year found themselves in financial difficulties, and we are the only one that has emerged with a surplus from that trial. That is not only a great argument in favour of Free Trade—[An HON. MEMBER: "HOW?"] I will pursue my argument in my own way, but if the House will hear me on another occasion I will pursue the arguments of hon. Members' opposite when they have the courage to get up and state them.

The statement that we are within sight of the return to the normal Navy expenditure will be welcomed not only throughout this land, but in other lands. I can tell that from my own experience. I have employed part of our recent Recess in visits to both France and Germany, and I took occasion to discuss with people on the spot their feelings of these questions. I am perfectly certain, if you take the people, not the officials, in Germany, who really have to pay, who are being pressed into the army and navy, and who would have to fight if war came, that those people will welcome the words of the Chancellor of the Exchequer with real approval and delight. I had the opportunity, some weeks ago, of attending a large meeting in one of the largest constituencies in Germany with the Member of the Reichstag for that constituency. I was extremely surprised at the large amount of his speech which he devoted to this question of the large and growing expenditure on armament. The only other subject that he dealt with was the growing and terrible burden of the cost of food due to Protection. The one good thing that he had to say of the present Chancellor of the German Empire was that he was quite convinced that the only way for the party which that Chancellor represented to maintain their power at home over the threads of government in Germany was by somehow or another reducing very soon the huge expenditure on armament, and thus being able to lessen the burden of taxation upon the people. If that is the opinion, as it is put forward, by responsible and, I think I may say, leading politicians in Germany at the present time. I think we may fairly regard this statement and promise of the Chancellor of the Exchequer, at any rate all men who love peace and amity and progress, and the development of industry and commerce, rather than the arts of war, all such men may regard with the greatest pleasure and approval the promise of the right hon. Gentleman that we are within sight again of normal Navy expenditure.

There is the question of the extension to paupers of the benefits of the Old Age Pensions Act. Some remarks have been made during the course of this discussion from which it appears that certain Members of the "House seem disappointed that the Chancellor of the Exchequer has not altered the conditions under which pensions are granted in certain hard cases which have come to light since the Act has been in operation. That surely needs other legislation besides that properly appertaining to the finances of the year. Surely it is a great testimony to the wonderful power that hon. Members opposite assign to the Chancellor of the Exchequer that they expect him in his Budget, not only to provide for the finance of the year, but also to remedy Acts of Parliament which do not come within its scope. As to the extension of the benefits of the Old Age Pensions Act to paupers. This is one of the questions which have been largely prominent in the constituencies during the last year and a half. I have been held up in my Constituency as a perfect ogre of cruelty and despotism because I supported a Government which did not give pensions right away to paupers just as much as to other people. Everybody knows that that argument was part of the stock-in-trade of the Tory party at the last election. We were held up not only as apostles of miserable and cruel parsimony, but as being absolutely heartless because the pauper disqualification was not at once abolished. For that reason I am glad that at the end of this year money will be found to pay old age pensions in all such cases. May I express the hope that when on a future occasion local finance is dealt with this benefit to the pauper pensioners may not be accompanied by the provision which is now to take effect that as the Poor Law unions benefit they must repay to the Treasury the amount of the benefit. I trust that this means will be adopted of relieving local burdens to that extent. But it is obvious that the time to do that most effectively will be when local burdens generally are taken in hand, and when that time comes I hope provisions for land valuation will be brought into effect so as to give us a fair and proper valuation for rates throughout the country. There is no scandal equal to that, borne by many individuals knowingly but silently, of the inequality of rating assessments throughout the land. When the President of the Local Government Board can collaborate with the Chancellor of the Exchequer in putting local assessments on a fair and proper basis he will confer a benefit for which we could not be too grateful.

What strikes me more and more forcibly is the way in which the Budget that was introduced and fought through in the face of great difficulty and violent opposition is now accepted as a matter of course by-Members opposite. They do not stay to hear arguments, let alone rise to make any remarks, and apparently they have gone away in the firm belief that there will not even be a Division. If my words meet with no other answer, than the silent hearing they have received from the Committee I shall at any rate feel more and more convinced that the people of England believe in the justice of the Budget, that they are ready to continue in the paths of Free Trade finance, and that the prospect? of hon. Members opposite crossing over to this side of the House is indeed very remote.

Mr. PAGE CROFT

After the some what discourteous remarks of the hon. Member opposite regarding those who do not agree with him—

Mr. KING

They were not meant to be discourteous.

Mr. PAGE CROFT

I may be allowed to say that the character of the Debate is not very surprising, seeing that there is absolutely nothing in any way new in the Budget which has been put before us today. It cannot be contended that we have in any way lessened our hostility to the most unfair and burdensome clauses of the last Budget. I think the hon. Member was mistaken with regard to what the Chancellor of the Exchequer said in reference to naval expenditure. I understood the right hon. Gentleman to say that next year naval expenditure would be considerably higher than this year. It was only his vague hope that Germany would reduce her naval proposals by 50 per cent, some years hence that could possibly have given any encouragement to hon. Gentlemen opposite, who are always talking about the courage of those who sit on this side, but who, though they believe in a small Navy, had not the courage to vote against the large increase of naval expenditure which has recently taken place. The Budget has been referred to as a marvellous proof of the everlasting benefits of Free Trade. What the Budget really proves conclusively is that the Free Trade system, when it is not wedded to Socialism, is absolutely bankrupt. The party opposite got into power on the cry of retrenchment, and ever since they have been piling up expenditure in all directions. We are now told that it is a marvellous result of Free Trade finance that we have actually got a surplus. Even the most pessimistic so-called Free Trader must admit that under our proposed tariff scheme, as I think I could prove from speeches of Members of the Government in which they have stated the minimum that would be raised by a tariff, they would have every penny they now have, and £10,000,000 in addition; then for the first time in their lives hon. Gentlemen opposite might claim to be the working man's friend and other than the taxers of food that they are at present, and might give the free breakfast table which they so frequently promise, but which they have made no effort to give in this Budget, and, as far as I can see, there is not much hope of their giving it in any future Budget. The argument that this is a Free Trade Budget is perfectly absurd. It still contains the unjust principles of the last Budget, under which one part of a class is taxed and another part allowed to go scot free. Rich people who happen to own land are to suffer, while those who make their money in rubber or by any other investments abroad escape untouched. As to the hon. Member for Waterford (Mr. J. Redmond), who coos and roars alternately, I might suggest that we are getting a little tired of his roaring. We would like to see a little action. It is difficult to tell whether he or the Prime Minister really holds the whip. I think there we have also an instance of the party opposite so greatly believing in their principles of fairness as to impose these heavy and increasing duties on one particular part of the working classes of this country, namely, those who happen occasionally to take a small amount of alcohol, whilst the proprietors of cocoa, who finance the Press of the Party opposite, are almost permitted to go scot free Those principles are not fair. I should like to associate myself with the hon. Gentleman who spoke from the higher Nationalist Benches when he said that something must be done to encourage the production of tobacco. He told us that he was a Free Trader, but he believed that in particular instances it was good to protect; and that it was good to protect tobacco in this instance. I think the hon. Gentleman is perfectly right. That is what we understand as being a scientific tariff. I can only say that I hope the Chancellor of the Exchequer will listen to his words, and will do something for this great industry in Ireland. I also trust that he may be able to greatly retrench in regard to expenditure on the workhouses, and on other expenditures which are a blot upon this country, and that he may do something towards a rational fiscal system which will not be a burden upon one particular class or upon one particular industry.

The PRESIDENT of the LOCAL GOVERNMENT BOARD (Mr. Burns)

The Chancellor of the Exchequer, before he was compelled to leave, asked me to respond for him, as I most cheerfully do, to the point raised by the hon. Gentleman the Member for Clare (Mr. William Redmond). The hon. Gentleman the Member for Clare asked the Chancellor of the Exchequer if he would adopt towards his proposal made two years ago, and last year, and renewed to-night, as sympathetic an attitude as was consistent with the money at his disposal, particularly if he had a balance as large as the £800,000 that the hon. Member referred to. The Chancellor of the Exchequer suggested to me that he had been very sympathetic in the past two years to the project of the hon. Member, and that the hon. Member might construe that as an earnest of his willingness to consider any proposal that might emanate from the hon. Gentleman the Member for Clare this year. The proper plan of the hon. Gentleman is to prepare his scheme, to prefer his claim, and send it either to the Treasury, or preferably to the Development Commissioners. I have nothing to add to that which the Chancellor of the Exchequer asked me to say except a final word. It has been suggested by the hon. Gentleman who has just sat down, and who took heart of grace from the speech of the hon. Gentleman the Member for Clare, that his great tariff scheme was based upon similar lines. By that I am to infer that his grand tariff scheme, like the tobacco, will end in smoke!

Mr. H. S. FOSTER

I rise to speak, first of all because of the challenge thrown out by the hon. Gentleman opposite that if we sat here and said nothing we must be supposed to approve of the principles of this Budget; and, secondly, because I desire to assure the right hon. Gentleman who has just sat down that he was never more mistaken in his life than to suppose that Tariff Reform will end in smoke. It appeared to me to be an extraordinary illustration that the Chancellor of the Ex- chequer gave to-night that because we had raised a large revenue by means of this Budget, because we happen to be what is called a Free Trade country, because certain foreign nations who are under Tariffs have had difficulties with their Budgets, that that was proof that Free Trade was the right system, and that a protective system or tariff was a wrong system. Of course every Member of the House knows that the two have no connection in the smallest degree with each other. We have imposed taxes, and we have been able to raise, as we always can raise so long as any money is left in this country, a large sum of money. Therefore we are able to balance our expenditure with our income, and even to show a surplus. That is no proof that the system under which we are trading is a sound, prosperous, and healthy system for our people. It is no more proof than that because the Government of a foreign country proposes some method of taxation which is not acceptable to a majority of the political parties, and is therefore not able to carry through that taxation, and is not able for the moment to raise the revenue they require to meet their Budget expenditure, that their fiscal system is wrong. That has no connection in any way with the system of tariffs under which they are trading.

The two principal items in our method of raising revenue, though it may be I am "the voice of one crying in the wilderness," I venture to say are both unsound in principle. The steepening of the Death Duties means that we are living largely upon capital. A large part of the money we raise by that means is by taxing capital, and using that capital as income, and so expending it. That process cannot go on for ever. It must permanently impoverish the country. With regard to the Income Tax, it was an accepted axiom on both sides of this House—certainly a very few years ago—that the Income Tax was a reserve power to be most sparingly used, and one on which you should only fall—so far as any heavy increase was concerned—in a great and grave national emergency. Mr. Gladstone would have looked with horror on an Income Tax of 1s. 2d. in the £, and with a Super-tax, "in these piping times of peace." The Income Tax has always been a great reserve force of the country for the Chancellor of the Exchequer to fall back upon in an emergency. We are now living largely upon that reserve power, and to that extent we are exhausting our resources.

But I rose really for the purpose of calling attention to one part of the speech of the Chancellor of the Exchequer which I, like many other Members of the House, greatly regretted. That is where he practically not only apologised to a section of his own party—whom I suppose he always goes in fear of—for the large naval expenditure, but where he suggested that that expenditure was in consequence of a scare. I think it is fair to remind the right hon. Gentleman that if there was a scare it is his own colleague, the Foreign Secretary, who is responsible for it. For it was upon the Foreign Secretary's grave statement made in this House last year, and in as solemn words as were ever uttered in this House, that this increased naval expenditure has been incurred. Was the Foreign Secretary a scaremonger? He said that this House and the country did right to consider the naval situation as very grave. He went on to tell the House and the country:— That the naval programme of the German Empire meant that we had got to reconstruct the whole of the British Navy. That is the work in which we are engaged, which we have just begun, and which is going forward. When the Chancellor of the Exchequer speaks of our having to spend a large sum next year and no longer, because the German programme will then have been practically earned out, I venture to say the right hon. Gentleman did not state that as a pledge. In the first place, there is no pledge. In the second place, the naval programme of the present Government was proposed much more by the Foreign Secretary and by the Prime Minister than by the Chancellor of the Exchequer. The programme of this Government is to see that we maintain in the future that reserve of excess power over any two foreign Powers which has been the standard of naval strength in the past. It is quite true that the German programme will be diminished unless they bring in some fresh Construction Act. But what about the Austrian programme? Austria has herself just embarked—no doubt in concert with her ally, Germany—upon a naval programme. That programme will have to be taken into account by us. I say to hon. Gentlemen opposite who are interested in social reform that it is useless to consider any question of social reform in this country unless, first and foremost, we have our naval strength so undoubted that we can pursue in calmness and peace the consideration of social reform for our people. What will become of any question of social reform if the country is suddenly to be thrown into a state of justifiable panic—as it would then be—if we were not maintaining the proper margin of naval strength, on such a basis, not only that we are safe, but that undoubtedly, unquestionably, we are so safe that no other two nations would dare to challenge us to naval warfare? I think it is misleading people, and it is endangering other questions of national safety, for anyone in the responsible position of the Chancellor of the Exchequer to stand up as he did this afternoon and to suggest that our present naval expenditure was unnecessary, and that he was an unwilling Member of the Cabinet which was indulging in this excessive expenditure. That was the real meaning of his words, if they meant anything, and they gave satisfaction to the little Navy men as they were intended, because the little Navy men will now think that they have got an advocate in the Cabinet who is of their opinion and who is being dragged along against his own will in this foolish and needless expenditure incurred in consequence of this scare. I repeat again, if there was any scare it is the Foreign Secretary who is the author of it, and he must have intended to scare his countrymen into action by the grave and serious warning which he gave them. I for one, although I object strongly to the principles of this Budget, welcome one part of it, and that is the increased expenditure we are asked to sanction for the Navy.

Mr. J. M. ROBERTSON

I gather from the speech of the hon. Gentleman who has just sat down that even if the naval expenditure of Germany in a year hence should be reduced by 50 per cent, he would refuse to consent to any reduction of our expenditure.

Mr. H. S. FOSTER

I did not say that.

Mr. ROBERTSON

The hon. Gentleman did not say anything very clearly except to indicate that he was opposed to any reduction in our naval expenditure, and he is so possessed of a feeling for the necessity of this enormous expenditure that he calls by the name of little Navy men any one who wants a little less expenditure than the enormous sum of over £40,000,000 sterling. We now have the greatest Navy that ever floated upon this planet, more than twice as strong as any other, and this did seem to be clear in the hon. Gentleman's speech, that he views with alarm and apprehension any reduction of that expenditure.

Mr. H. S. FOSTER

Under present conditions.

Mr. ROBERTSON

The one thing that gives the hon. Gentleman any satisfaction is the increase of expenditure on this already enormous Navy. That kind of speech is very curious comment upon the professions of the party opposite as to their desire for social reform. They evince, they declare, if their policy and propaganda are carried, a desire for the improvement of the working classes. It is very obvious to anyone who hears them speak that anything like useful, social reconstruction, which would better the position of the working classes, is absolutely incompatible with the enormous increase of naval expenditure. Hon. Members opposite, instead of viewing with apprehension that increase, which should be their natural attitude if they really were concerned for social reform, give away their case by saying that the one thing that would make them happy is an absolute increase in this expenditure, which is the absolute negation of social reform. The hon. Member for Christchurch (Mr. Page Croft) would add to the other difficulties an enormous increase in the cost of living. He would go in for still larger naval expenditure, and he would get it by putting on a tariff, and thereby making life more difficult for the working classes. I will not follow the hon. Member through his speech, which I listened to with close attention, and from which I gathered that ho understood the Budget was leading to Socialism. He explained that this Budget which has been claimed as vindicating Free Trade finance was really a socialistic Budget, because on the one hand it taxes persons who owned land and did not tax persons who owned rubber bonds. He implied that Socialism means taxing one class of person and exempting persons who own bonds. That is what he calls Socialism.

Mr. PAGE CROFT

I did not say that.

Mr. ROBERTSON

Perhaps the hon. Gentleman will explain what he means by Socialism.

Mr. PAGE CROFT

The principle of Socialism in this may only be the beginning, but it is an absolute fact that by the conditions you are imposing upon the licensed trade you are gradually taxing them out of existence. That is absolute confiscation.

Mr. ROBERTSON

The hon. Member seems to think that Socialism means taxing an industry out of existence. Does he mean one or all industries? I am afraid Socialism means to tax them all out of existence. Perhaps it does not mean any taxation at all. Under a system of Socialism there would be no taxable incomes. It substitutes something else. [An HON. MEMBER: "That means confiscation."] The hon. Member who complains of Socialism objects to taxes being put upon people's land and calls that Socialism, while he went on to show that the working people who consumed alcohol were also taxed. I do not know why he omitted tobacco. He complained of taxing people who had land and not taxing rubber bonds, and he talks about taxes on people who consume alcohol and who smoke, so that this Socialistic Budget hits the working classes. I think there is very little in that line of argument. I turn now to one point in the hon. Gentleman's speech with which I am able to agree. He did, I think, urge upon the Government the propriety of some alteration of the duty in regard to cocoa. In that I noticed, with very great regret, the hon. Member repeated the very base line of argument current in his party. I know he would not invent it. I might remind him that the Cocoa Duty, as it stands, is not maintained for the benefit of one or two firms who make cocoa and who happen to be Liberals.

Mr. PAGE CROFT

I did not say that.

Mr. ROBERTSON

The hon. Member did speak of some magnates.

Mr. PAGE CROFT

I beg pardon, I never said anything of the kind. I said the increased duties were put upon alcohol and not upon cocoa. That is a very different thing.

Mr. ROBERTSON

The hon. Gentleman; referred to magnates who run Liberal newspapers, and that is what I am referring to, and I regret that the hon. Member should have associated himself with that base line of argument, which, of course, as I said, he did not invent. He must be aware that there are cocoa manufacturers in this country who are Tariff Reformers, and who make a profit, if any is made, in virtue of the present duty; and he claimed this protective duty. As far as it operates it is a protective duty. How can the hon. Member pretend it is an honest line of argument that the Government maintain this duty for the purpose of benefiting their own supporters when he knows that some of the Members of his own party benefit by it? We have had public declarations from cocoa and chocolate manufacturers who are Tariff Reformers, saying they are glad to be protected and owning they profit by it. What is the case as regards the Cocoa Duty? This is one point on which I am partially in agreement with the hon. Member. The incidence of the Cocoa Duty in recent years has tended to permit of a certain element of Protection in it. That was admitted by the Prime Minister when, as Chancellor of the Exchequer, he dealt with the subject a few years ago. Perhaps the Committee will forgive me if I read a short extract from the speech made by the Prime Minister, then Chancellor of the Exchequer, in April, 1907. The right hon. Gentleman said:— First of all there is a very small duty to which I observe my predecessor in office is beginning to pay a good deal of attention—the Cocoa Duty. Mr. Austen Chamberlain: I have not asked you to take it off. Mr. Asquith: The Cocoa Duty produces, I think. about £250,000. It is a very small and not a very productive tax. I think, if you ask me the question, as the right hon. Gentleman did by implication this afternoon, there is a good deal of the flavour of Protection about the present scale of the Cocoa Duty. I shall not defend it myself from the point of view of a Free Trader, and I do not think it is defensible, but it is a very small affair and you must notice this about it. This Duty, with its Protectionist flavour, has stood the scrutiny and has been preserved, at any rate, with the connivance of Mr. Gladstone, Sir William Harcourt, Sir Stafford Northcote, Mr. Gosehen and Sir Michael Hicks Beach, who slightly increased its productive character, a string, I should think, of as good and severe Free Traders as have ever been responsible for the finances of this country. I might say that what was good enough for them is good enough for me. At any rate, I think that with that history behind the Cocoa Duty I may safely postpone, as I propose to do, the expurgation of this very small Protectionist taint, which I admit still lurks in this particular part of our fiscal system. Here is what I think the hon. Member will admit is a very candid admission on the part of the Chancellor of the Exchequer of that time that there is a certain element of that kind in the Cocoa Duty, and it is made the basis of the accusation that in maintaining that Duty the Liberal Government are desirous of putting money into the pockets of certain cocoa manufacturers.

Mr. PAGE CROFT

The hon. Gentleman is perfectly well aware that I never mentioned the word "Protection" in regard to cocoa, although I agree with what he has said that there is a flavour of Protection about it. If he will do me the honour of reading what I did say in the OFFICIAL REPORT to-morrow he will see he is absolutely distorting my argument.

Mr. ROBERTSON

I am afraid I must go on with my speech without waiting for the OFFICIAL REPORT. This line of argument, which I have characterised as base, has been habitually used. The hon. Member will not dispute that. The appeal I want to make to the Government tonight is to relieve their supporters and indeed those Gentlemen who have been assailed of the burden of this particularly base kind of attack by making the very small rectification of that Cocoa Duty that is necessary. Nothing is more certain than that the Tariff Reform cocoa manufacturers are getting their share of any profit that is being made. I may say, in regard to what was said by the Prime Minister in 1907, that the element of Protection has been growing, and the real and substantial ground for intervention to-day is in virtue of the change that has gone on in the kind of goods that come in under this Duty. The Duty tends to be a little more Protectionist every year. When Mr. Gladstone and Sir William Harcourt left it alone, the modicum of protection was so insignificant that it was really scarcely worth while the great trouble of altering the scale to get rid of it. Now, in virtue of the change in the character of the composition of the sweets or other articles which come into the country, the nature of this duty is becoming a little more Protectionist every year, but, seeing the whole of the Chocolate Duty is just about £300,000, I think hon. Members opposite will admit there cannot be very much benefit or Protection in it. If they ever live to bring in their tariff, it will not be that sort of duty they will put on.

Mr. STANIER

How much per cent.?

Mr. ROBERTSON

The amount of Protection with regard to some forms of chocolate is heavy.

Mr. STANIER

The hon. Gentleman must know it is between 20 and 50 per cent.

Mr. ROBERTSON

I quite agree the duty works out at a very high Protection, but the total amount concerned is very small. My point is that if hon. Members opposite are ever able to bring in their tariff it will not be a total of £300,000. I take it the very smallness of the amount in dispute is the main explanation of the postponement of dealing with it by the Government. You may say the whole thing is a mere bagatelle. I suppose hon. Members opposite who thought of raising £10,000,000 by a tariff —

The DEPUTY-CHAIRMAN

I am afraid the hon. Member's arguments are liable to raise an issue we have often had debated in this House, and which can hardly be raised in Ways and Means on the Budget. I hope we shall not have the whole topic of Fiscal Reform discussed.

Mr. ROBERTSON

I raised this matter because it had been raised on the other side. The question of cocoa was especially raised. I do not want to go into the whole question of Tariff Reform, but I do make the point that there is something in the Government's defence. The whole duty involved is only some £300,000, and the protective element is much less than £300,000. It is intelligible that they regard the whole thing as a small matter. But it is not a small matter from the point of view of the honour and consistency of the Free Trade movement and to those of us who have to listen to the line of argument of which I have been speaking. When we are told these duties are maintained to benefit Liberal manufacturers, we are all the more concerned for the rectification which I have reason to believe can be accomplished without difficulty. I confess I thought formerly the maintenance of the Cocoa Duty was due to a difficulty in adjusting the scale to secure anything like precise equality. After recent investigation, I have reason to think a scale could be established which would remove the element of Protection or reduce it to an almost microscopic amount. I respectfully submit it is the duty of the Government to make this rectification. They owe it to their loyal followers, to the cause of Free Trade, and I think they owe it to those very gentlemen whose names have been brought into the matter, because those leading manufacturers who are Free Traders and Liberals have repeatedly declared they wish the duty abolished. The only persons "who have defended the duty are the Tariff Reformers. The others who are impeached are the ones who say they want the duty taken off. I know of no good reason why that rectification should not be made. I have heard it argued that one result of the complete removal of the Protectionist element would be that a drawback would have to be given to chocolate manufacturers on their exports. If you tax them on the raw material, when they export you have to make a drawback on those exports. I have also heard it argued privately that there might be some loss to the Treasury, but so far as I can discover the total loss by the removal of the Protectionist element would at the outside be something like £25,000.

The Protectionist element in the taxation would not be more than 10 per cent. If you add to that the possible drawback that might have to be paid on the export when you remove the Protectionist element, it could not be more than £25,000. The total exports of cocoa last year came to about £170,000, and the drawback that would have to be paid would, therefore, be a mere fraction of that amount. The total drawback could not be more than £25,000. If the whole loss to the Treasury came to £50,000 I do not think that that is a sum which could be treated by the Government as an adequate justification of the maintenance of an anomaly which three years ago was admitted by the Prime Minister to be indefensible, but which certainly places an extremely useful weapon in the hands of hon. Members opposite.

Mr. RYLAND ADKINS

I desire to associate myself to the full with the arguments of the hon. Member who has just sat down and with the appeal which he has made to the Government. While we would not wish to deprive our political opponents of a valuable weapon, we must have regard to more mundane considerations, and I think perhaps all parts of the House will agree it is highly desirable that this protective duty on cocoa should cease to exist. It is clear from what the hon. Member has said that the amount involved is not sufficiently appreciable to disturb the finances of the country, and, therefore, there is no danger of a dislocation of those finances resulting from its remission. At the same time, it would relieve persons-now labouring under unworthy and inaccurate innuendoes, and it would make the principle of taxation to which the Government is committed an absolute principle. I think that even hon. Gentlemen opposite would be willing that this particular tax should be removed, and, under the circumstances of this present Budget, I hope the Government will see their way to meet the appeal which my hon. Friend has just made and remove this blot front the fiscal system of the country.

10.0 P.M.

Captain COOPER

I desire to say a word with regard to the position of Ireland on this Budget. The Chancellor of the Exchequer gave us a witty illustration of the attitude of the Tory and the Radical consumer towards whisky. He said that the Tory gave up drinking whisky because he was disgusted with the tax but the Radical gave it up because he was disgusted with the action of the trade in raising the price of whisky. The right hon. Gentleman forgot to notice, among the cheers on his own side, the loss which fell upon the distillers of Scotland and Ireland. I am not concerned with the Scotch distiller. He, apparently, is satisfied. But I am concerned with the Irish distiller and with the Irish farmer who grows the barley, and who is finding his market destroyed by the results of this Budget. These Irish distillers have gone on hoping against hope in the belief that the tax is to be removed. I have read in this evening's paper that Kinahan's Distillery Company has decided to close its doors in consequence of the continuance of this duty. Is not that a strong comment on the words of the hon. and learned Member for Waterford, and is it not a proof that this tax is doing more harm than good? It is undoubtedly doing a great deal of harm to Irish distilleries. The hon. and learned Member for Waterford, in his speech this evening, seemed to be anxious to find good in this Budget. Last year he denounced it. He voted against it on the Second Reading and in Committee, but, when it came to the question of the Whisky Duty, he and his party abstained from voting against the Third Reading. I have no doubt that this year he will vote for every stage of it. There is no question that there is an entente cordiale. and I hope to have many opportunities of pointing that out to the electors of Ireland. I think the Government have been ungrateful to the hon. and learned Member for Waterford. He has kept them in power, and all they have done in return has been to give him rope enough to hang himself. Ireland has always been opposed to this Budget—that is to say, the people of Ireland have been opposed to it. I am not speaking, of course, of the Nationalist representatives. I received this morning a resolution from county Kilkenny denouncing this Whisky Duty, and I venture to assert that if the hon. and learned Member for Waterford and his followers sup- port this Budget in the same way as they did the last they will be voting against the wishes of those who returned them to Parliament, and they will be inflicting a grave injustice on Ireland, while they will also be giving another proof that they are out of touch with Irish sentiment.

Question put, and agreed to.

Resolution reported; Committee to sit again upon Monday, 4th July.