TREASURY (TEMPORARY BORROWING) BILL.

HC Deb 04 March 1910 vol 14 cc1071-119

Order for Third Reading read.

Motion made and Question proposed, "That the Bill be now read the third time."

Mr. EVELYN CECIL

I want to enter my protest and to make a few remarks on the subject which has already occupied the attention of the House. I do so, more particularly, because I happen to be one of the taxpayers who proffered my taxes and received an official note in reply, to say:— It would be better for you to hold your cheque until you receive the demand note, as at present I am unable to give an official receipt. There is precisely a case such as those that have been mentioned. I had my cheque returned, and I was told that no official receipt could be given. No doubt that must have been done under orders from the Treasury. It was not until some lapse of time that I received a demand note, and, when I did, I promptly paid my tax. I am not at all sure whether I was wise or foolish in doing so. After all the Government by their action are putting a premium on not paying the tax. They simply say that "You may keep your money in your pocket and get interest upon it"; whilst the State, to whom that money is really due, has to borrow to meet its liabilities. It is, to my mind, an absurd piece of finance for the Government to borrow money at interest from those who actually owe them money. Then we hear the hon. Member for East Mayo (Mr. John Dillon) and others come to the rescue of the Government, saying that this Bill is brought in to rescue us from the strictures of the business people of this country. Could there be anything more ironical or ridiculous than to say that you are to borrow money in order to meet liabilities when that money is owed you by the very people from whom you borrow. It is the height of ludicrousness. I cannot imagine anyone who has any experience in finance recommending a policy of this kind unless they have an ulterior motive.

That brings me to ask what are the reasons for this fatuous and malevolent policy. They are not very far to seek. There are, I should say, at least two. One of them is to spite the House of Lords, because His Majesty's Ministers are irritated that the House of Lords threw out the Budget. What they want to do is to induce the people not to pay their taxes in order to create even greater confusion than there is at present in the collection of these taxes, and then point to the House of Lords and say that the blame is to be laid on them. That may sound a plausible argument on the face of it, it may even be an electioneering argument, though I doubt it, but the people who employ such methods are usually hoist by their own petard. I have no doubt, myself, that is what, in this matter, will happen to the Government. If you deliberately set yourselves to create greater confusion in the national finances, not to benefit the country in any way, but to benefit the prospects of your own party, or try to, I am sure such a policy is destined to the ultimate condemnation of the electorate. If the spiting of the House of Lords is one of the reasons why this extraordinary operation in finance is resorted to I would suggest that another very good reason is because the taking of any action in this matter by the Government will place them in a dilemma by which their party would certainly lose, even though the country would probably gain. They must do one of two things. One is they must, as we submit from this side of the House, pass the Income Tax Resolution and a subsequent Bill, instead of this Borrowing Bill, and let the other matters in the Budget stand over for further consideration. But in reply to this the Government say, if they passed the Income Tax Resolution and the consequent Bill, they are making the House of Lords masters of the situation. And it is because they have committed themselves to this peculiar proposition that they are afraid to take what is the right and legitimate and common-sense course in the emergency with which we are faced. I suppose they fear that the House of Lords will be in a position to dictate and to discriminate what taxes should be levied and what should not.

Everybody admits the situation is altogether peculiar. And if in order to save the interest which is accruing to the taxpayers, whereas it ought to accrue to the State, or be employed by the State, such means as this are resorted to, it is showing a hopeless incapacity to look at national finances from a national point of view rather than from a party point of view. The other course open to the Government if they refuse to pass the Income Tax Resolutions and Bill at once, is to submit the whole Budget immediately to this House. That, of course, is the other horn of the dilemma. The Government know perfectly well that if at this moment they were to submit the Budget to the House it would not pass. They have practically admitted it themselves; it has been openly admitted by Members of their own party; it has been insinuated by Members from Ireland. The fact that the Budget would not pass if submitted under existing circumstances is to my mind an absolute justification of the action taken by the House of Lords last December. The contention of the Government was that the House of Lords were not justified in submitting the Budget to the judgment of the country. The Lords persisted in so submitting it, and the country has returned a House of Commons which at its meeting is so undisposed to pass the Budget, that His Majesty's Ministers dare not submit it to the House, and, in consequence, to bridge over these follies and muddles of His Majesty's Government, we are brought face to face with this most unusual Bill.

I really think that the Government might in this matter sacrifice a little of their dignity and pass the Income Tax Resolutions alone just for the sake of doing some good for the country. We want the finances of the country to be treated in a statesmanlike fashion. Looking at it from that broad point of view, I do not think any impartial critic can say that His Majesty's Government are acting in a statesmanlike manner. We maintain that it is the duty of every Government, no matter to which party it belongs, to act in the best interests of the country, apart from mere party motives. It cannot be said that there is not plenty of time to do this. Every night this week the House has adjourned at an unusually early hour. The Income Tax Resolutions might have been brought in and a Bill submitted. The Government have so often eaten their own words and trimmed their promises that it would scarcely damage them much more than they are already damaged in the eyes of the country if they were to pass the Income Tax Resolutions alone, and so face a situation which is really the result of their own muddle.

The PRIME MINISTER (Mr. Asquith)

I am glad to take this, which I think a most convenient, opportunity for dealing with the charges which the hon. Member opposite (Mr. E. Cecil) and others on preceding evenings of this week have brought against His Majesty's Government in regard to this matter. That a most undesirable degree of muddle and confusion exists at the present moment is a fact which nobody can dispute. The important question is, upon whose shoulders rests the responsibility for having brought it about? I am going to state one or two very simple and undeniable facts in regard to the matter. Early in the autumn—I think, if my memory serves me right, as far back as September—I made a speech at Birmingham. That was a time when, I suppose, nine sensible people out of ten in this country never dreamt that the House of Lords would commit the unprecedented action of rejecting the whole financial provision of the year. I then took the opportunity, by way not of menace but of warning, speaking with full responsibility, to point out the disastrous results, financial and administrative, that would ensue if the whole finance of the year were en bloc rejected. Other advisers came forward holding very different language. They told the House of Lords, gaily and boldly, to reject the Budget and—I translate their phraseology into Parliamentary language—to let the consequences take care of themselves. The House of Lords were ill-advised enough to follow these counsels. They rejected the Budget, and they were perfectly reckless of the consequences which their action would entail. After that, as I think most unhappy action on their part, I took the opportunity in the last speech I made in the last House of Commons once more to point out the condition of financial confusion which would be the inevitable result—unless indeed the then House of Commons had been willing to accept the gracious offer of Lord Lansdowne that if they would take back their Budget, upon which they had spent six months of Parliamentary time, and so prune, trim, amend, curtail, and mutilate it, until it no longer represented the wishes and views of the House of Commons, but represented what we consider at any rate to be the totally irrelevant prepossessions of the House of Lords, then no doubt the finance of the year might be arranged. Any Minister who ventured in that House of Commons to make any such proposal would have been defeated by a majority of three or four to one. I do not believe that any Minister could make it in this House of Commons either, without—I will not say by a corresponding or proportionate majority—at any rate suffering a similar fate.

I pointed out, what was obviously true, unless we were prepared to take that wholly untenable course, that financial confusion must be the result of the action of the House of Lords. Have my predictions been verified or not? They were derided at the time. I was pointed to as an ignoramous who did not know what he was talking about. I was described as a false prophet. I remember during the whole course of the election constantly reading in reports of speeches of candidates of the party opposite and in their organs in the Press statements such as this: "Where is the chaos? Where is the financial confusion?" Everything was going on merrily. Taxes were being collected, and the matter was treated as one of the many Radical bogeys used to frighten the electors' imagination. I agree that some of the apprehensions which I and others had entertained, and which the House of Lords ought to have entertained, in regard to the matter were not realised. Why? Partly owing to the admirable good sense and tact of the officials, and partly owing to the common-sense of the traders of the country, that happened which no one could have foreseen, namely, that for three or four months, I will not say the whole, but that part of the Customs and Excise which depended on the Resolutions of this House last year, were voluntarily paid without anyone having any legal power whatsoever to collect them. That is a piece of good luck which at the same time reflects much credit on all concerned. But anyone acquainted with the facts knew that the real pinch would come in the fourth quarter of the financial year, the quarter in which we now are. Because that is the quarter in which the great bulk of the Income Tax would have to be collected and paid Hon. Members opposite are seeking to throw some share of responsibility for what has happened upon the Government. The whole of the month of January. What about that? What could the Government do? The whole of the month of February. Could any Government have done anything? These are two out of the three months which constitute the last quarter of the financial year. Therefore, the gravamen, if charge there be, is that we have not done something in the month of March which might have mitigated the confusion and the disastrous consequences of the ill-concealed action of the House of Lords. Let us come to the month of March. When I, on the first night of the Session, and again on the 28th February, when I was asking for private Members' time up to the 24th March and outlined the business that must come first, was there a single Member in the House who protested against what I said? Those who knew anything about the law or the facts will agree with what I then said, and what everybody knows to be the case—that by far the most urgent thing was to make the necessary arrangements for Supply. The first votes for the Army and Navy and the Civil Service were necessary in order to set the machine of government going afresh on April next. That was business that had to be done. It does not matter how much money you have in the Exchequer, or how much you have collected, if there is no Parliamentary authority to spend it. The first duty of the new House of Commons is to provide the Executive Government with that authority without which it cannot discharge its functions. We have two months of the financial year in which admittedly we could have made no provision at all. We have the third month, in which it was our business to provide for the Supply of the Services of the expiring year and for the opening Services of the next year.

But it is said every night you have risen early when the precious hours might have been devoted to the consideration of this matter. Supposing, when I asked to take away the whole of private Members' time, I had suggested that if there was time to spare after Supply was over we should take the Budget, or some contentious business. I can even now, without much exercise of imagination, hear the chorus of indignation that would have arisen from the Benches opposite. I only got my Resolution giving unanimously to the Government the whole of private Members' time up to 24th March on the promise that we should take only that business which was necessary and absolutely indispensable, and I should have broken faith with the House if I had asked them on any evening of this week to take business which did not come strictly within that category. I do not know what action it is seriously suggested we ought to have taken between now and 24th March. It is quite true that the Supplementary Estimates have not been so fully discussed this year as they have been in every year during the twenty-five years of my Parliamentary experience. It is a most mysterious, though a most satisfactory, thing to the Government to see the stream of Parliamentary curiosity running absolutely dry about seven or eight o'clock in the evening.

The hon. Baronet, the Member for the City of London, has been able some nights at any rate to dine elsewhere. How has that been brought about? Is it the administration of the Government in all these various spheres has been so faultless that it is impossible for even the most lynx-eyed and assiduous critic who sits opposite to spend the usual amount of Parliamentary time in holding up and exposing the misdoings of our administration? Is that the reason? If so, I think it is a tribute to our working. A tribute from a new House of Commons—fresh from contest with the constituencies and the country—of the administrative ability and excellence of our Government. But was I wrong in apportioning the time in the way I did it? I gave the hon. Gentleman the same amount of time, certainly not less, than in previous years has been regarded as adequate.

Mr. DILLON

It used to be regarded as inadequate.

The PRIME MINISTER

My hon. Friend is quite right. If the circumstances had been a little different the criticism would have been that we were crushing too much Parliamentary business between now and the end of the 24th March. I can hear the hon Baronet's speech, as he would point out what a monstrous thing it was, at a time when the whole of the country was anxious, and justly anxious, as to the state of our national defences, when there was serious reason for doubting whether the Navy was in a state of adequate efficiency—I seem to have heard that phrase on the platform—that at such a time we should be content with three or at the outside four days with the discussion of the Navy and other Votes. Monstrous! "It is the first business of the new House of Commons, clothed with all the independence of a fresh mandate from the people, to offer criticism."

We have heard nothing of the kind. I venture to say that we shall hear nothing of the kind. I can only hope that next week, when we come to the Army Estimates, the Civil Service services, and the Navy the week after that, we shall find ourselves protected by practically the unanimous acquiescence of all parts of the House to retire from the discussion of the subject at dinner time. The Noble Lord suggests that the Motion that he brought forward last night, and that he unfortunately was not able to press—that for that we might find some odd or end of time during these three weeks. He suggests that during these three weeks we might have brought in our Income Tax Resolutions. [An HON. MEMBER: "Saturday."] Why not sit on Saturdays? I have one very simple reply to make. I am not going to be a party, and the present Government are not going to be a party to departing from what has been regarded as the fundamental principle of our financial system for the last forty years. We regard the Budget taxes imposed not as a number of isolated things which you can dissect and separate one from the other, and which you can treat as they would be treated in the old days, each subject a separate enactment requiring the assent of both Houses of Parliament; but, following in the footsteps of Mr. Gladstone and his successors, we treat the finance of the year as one thing. I do not conceive that it is any part of our duty to take out any particular one of our taxes and give it precedence and separate treatment. The taxes of the Budget must be considered as a whole. The Bill which authorises and ultimately gives them Parliamentary sanction must also be treated as a whole. I decline altogether to single out this tax or that tax for special treatment and special decision on the part of the House.

I want to point out one more matter. We are taking the time of the House up to 24th March. The House will not resume the ordinary business until 29th March— that is to say, two days before the expiration of the financial year. You cannot consistently with these arrangements do anything if you would in the time that remains open to us—I will not say to get rid of—but seriously to mitigate or soften what I agree to be the serious and damaging results which have flown from the action of the House of Lords.

Lord HUGH CECIL

I am very glad that the Prime Minister has been able to find time to review the whole situation, and I confess the effect of his speech, to my mind, was to make me feel some doubt as to whether the true explanation of the Government's action is not that it was Parliamentary manoeuvring, as I had supposed it to be, but financial and Parliamentary incompetency; because the difficulties which seemed to him insuperable are, in fact, difficulties which may be very easily avoided. He began with the last Parliament, and, he says, like Jeremiah, ha was a prophet of evil in September, but differs from Jeremiah in merely pointing to the dangers but not really apprehending the dangers that were inevitable. When the House of Lords refused the Budget Bill a Second Reading the financial consequences of their act was precisely the same as the financial consequences would have been if the House of Commons rejected it. I made that observation a few days ago, but it had a disappointing affect. I had hoped it would have clarified the intelligence of hon. Members but it only served to inflame their passions. The hon. Member for East Mayo (Mr. John Dillon) and the hon. Member for the Blackfriars Division of Glasgow (Mr. Barnes) rose and recited all the various things they had been saying and thinking against the House of Lords for the last three months. I thought that by severe mental suffering it was possible to understand that the question of the propriety of the action of the House of Lords was one thing and the financial consequences of that action was quite a different thing.

What would have happened if the House of Commons had reacted that Budget? The financial consequences would have been the same. The Solicitor-General said the Government might have resigned. They might or they might have dissolved, as the late Government did when the House of Lords rejected it, but some temporary arrangements would have been made by Parliament to carry the country over the period of dissolution, and, so far as was necessary, until the new Parliament had made its own financial arrangements. The Prime Minister says that the suggestion Lord Lansdowne made was that the Government should take part of their Budget—should mutilate their Budget—and should then bring in a new Budget. I do not think Lord Lansdowne suggested anything of the kind. As I understood him, he suggested that the existing taxes which were already operative under their Resolutions should be carried on by statutory enactment over the period until the new Parliament adjusted matters. He suggested a temporary adjustment only. The Prime Minister seemed to think that any such arrangement would be inconsistent with the dignity of the House of Commons. I do not know from what source or from where he derives his theory of the dignity of the House of Commons. Certainly not from historical precedent or from the constitutional history of this country. There have been, of course, many money disputes between this House and the other House as to their respective financial rights, but I do not know that he will find any instance in which one House or the other has out of peevish temper allowed the public service to suffer; certainly not unless they can show that their constitutional position would have been imperilled. How would this imperil the Government's constitutional position—or, rather, the claim put forward by the Government? How would it affect the dignity of the House of Commons to enact taxes which under the authority of their own Resolutions had actually been levied for the past three or four months, and upon which both Houses were agreed? What conceivable difference would it make to the constitutional claims of the House of Commons? Such a contention as that of the Prime Minister is really absurd, and almost insane. The doctrine of the constitutional dignity of the House of Commons was simply a pretence, like so many others put forward in this connection. I may say, in passing, since the Prime Minister gave every detail of time, it would have been quite possible to have held the General Election a week earlier and thus to save another week for this Session of Parliament. However, that is by the way. The new Parliament met and it at once appeared that the strange doctrine of the dignity and constitutional propriety and self-respect of the House of Commons had undergone another modification. Now it is found a temporary adjustment is not undignified, only it must be by borrowing. On what conceivable hypothesis, on what conceivable doctrine of dignity or self-respect or constitutional propriety, is this proposal justified? Shades of Selden, Somers, and Pym, why is it to be maintained that it is proper and dignified to borrow money but not proper or dignified to collect taxes? The assent of the House of Lords is equally necessary to a Borrowing Bill. Why should not you have a temporary collection of taxes Bill? You could limit it precisely as this Borrowing Bill, or even more drastically. You could pass a Bill strictly limited to the 1st May. How would that have imperilled your case against the House of Lords? How would you be worse off? The Prime Minister says there would not have been time. Let me consider his arrangement of time. The whole of the last week might have been devoted to the business of Ways and Means; that could have been done by devoting the last week to the 31st March, including three days to be spent upon other business, to the Supplementary Estimates, to the War Loan (Redemption) Bill, and to the Consolidated Fund Bill. If you took Monday and Tuesday before Easter for the Committee stages, you would have given ample time. The right hon. Gentleman says the Supplementary Estimates have been discussed more sparingly this year than heretofore. That is a beneficial change, because the discussion of Supplementary Estimates is sometimes of the most wasteful kind—they are all common matter. None of the Supplementary Estimates this year raise important issues; the discussions have been, therefore, necessarily brief, and might have been briefer still. It would have been perfectly possible without any undue pressure to have taken the whole discussion upon Monday and Tuesday before Easter, and by Wednesday, 30th March, you could have concluded your financial business. By that arrangement the whole of this week could have been devoted to the business of Ways and Means. What Bill, therefore, would you have taken? You might have brought in your Budget. It would, at any rate, have had the advantage—which I know the Prime Minister attaches very little importance to—of carrying out the faithful assurances he has given to the country. The Prime Minister said this was to be his first act, but the Government are like an impecunious ruler—they pay their way by repeating depreciating assurances. I hope we shall have no more of that brass money put into circulation. It would have been quite easy to take the Budget through on that plea, and that would have fully satisfied all the constitutional claims of hon. Members opposite for the dignity of the House of Commons. What would have happened? The Budget would have been rejected, but the blame for that would not have been upon the House of Lords, but it might have been with the Irish party, and it would lie fundamentally with the Irish electors and the poorest part of the population, who do not like a Budget which so foolishly pretends to be a Budget favourable to the poor. If you do not like to risk your Budget it would have been perfectly possible to bring in some temporary adjustment, such as I have suggested for collecting the taxes over a temporary period ending, say, on the 1st of May, or any other convenient date, until you could get a more permanent settlement.

It cannot be contended that to borrow money temporarily is right and proper, and no sacrifice of the dignity of the House of Commons, and that to collect your money temporarily would be a wrong and would be a sacrifice of the dignity of the House of Commons. Such a contention is on the face of it absurd. To borrow money is wasteful of public resources, and besides that it involves the consent of the House of Lords. It involves altering the Budget by a comma, or rather more than a comma, because the Sinking Fund clause is actually taken out of the Budget. It involves all the objections of the Prime Minister, who only maintains them when it suits his purpose. On the other hand, the Government might have taken the preliminary Resolutions—they might have taken the Income Tax Resolutions and other Resolutions without any difficulty. It constantly happens that there is an interval of three or four weeks between the Resolutions of the Budget and the Second Reading of the Finance Bill. There would have been nothing unprecedented in such a course, and the financial situation would have been regularised.

So that in every branch of the Prime Minister's argument he is found to be unsound. It is not true that it would have been any injury to the dignity of the House of Commons or to its self-respect if the Government had brought in some measure for the temporary adjustment of the finances of the country after the last election. It is not true that there would have been any difficulty in adjusting the finances during the present Session, and the whole argument of the Prime Minister is unsound. What are we to infer? That the Government are so intent upon their political tactics that they do not care what inconvenience the country is exposed to. Indeed, I think they positively enjoy it, because they think by throwing dust into the eyes of the public they will cast the blame for what has happened upon the House of Lords. We have had enough, and more than enough, of this subordination of the public interest to party tactics. I am glad to see that the Chancellor of the Exchequer is already converted and repentant. Everything has been done in the course of the present Session with a view to carrying through by a cunning manoeuvre rather than by a straightforward declaration the policy of the Government which is ultimately to be developed. The Government might have brought in their Budget, or they might have adjusted the finances of the country temporarily, but they have refused to take this course. Let them, by all means, go on as they began. Whatever this country likes or does not like, I am sure it does not like shuffling with great questions. [An HON. MEMBER: "What about Tariff Reform?"] If the Government go on as they have begun, explaining away assurances, disappointing expectations, and multiplying excuses, but not developing any coherent and rational arguments in defence of their proceedings, surely they can only expect that blinding catastrophe which the Home Secretary has already foreseen, and they will abundantly find in time that this country loves honest politicians and an honest policy.

Mr. JOHN DILLON

I never had a more refreshing experience than to hear the Noble Lord (Lord Hugh Cecil), with that eloquence of which he is a master, denouncing the Government for their subordination of the public interest to party tactics. Those of us who remember the Noble Lord in the Parliament before the last will be able to appreciate and measure the sincerity of that declaration, because never in the whole of my experience, extending over more than twenty-five years, have I seen party tactics pushed to so shameless an extent as was done by the Noble Lord and his party. We have been told by the Noble Lord, and by the hon. Member who initiated this discussion, that the Government have been guilty of the most shame ful recourse to party tactics, and all forms of dishonesty by pretending that the necessary financial business now upon the Paper was sufficient to occupy the attention of the House. I have listened to the discussions in this House for a long time, and I have no hesitation in saying that under ordinary circumstances these benches would have rung with denunciations of the Government for having dared to cram into so short a time so much financial business as we are now called upon to deal with before 24th March. We all thoroughly understand the action of hon. Gentlemen above the Gangway, because they have entered into a conspiracy of silence in order to prove that the financial business is not sufficient to occupy the time allotted. I am afraid this conspiracy of silence has come too late. Why did hon. Members above the Gangway not take this objection when the Prime Minister's Motion was before the House? Why is it that not a single hon. Member sitting on the Opposition Benches, after listening to the speech of the Prime Minister, raised the point that the necessary financial business foreshadowed was insufficient to occupy the time of the House? What would have been the logical consequence of such a course? It would have been that the rights of private Members would not need to have been sacrificed. But after agreeing to the sacrifice of those rights, hon. Members now turn round and say it was a mistake, and we ought to have de fended the rights of private Members. I will explain what has happened. We heard just now from the Noble Lord a denunciation of the Government for their ineptitude and absolute want of leadership. I have been reading denunciations of the leaders of the Unionist party in the "Morning Post," and that is what has stirred these benches to activity. The "Morning Post" is the official organ of the Tariff Reform party—

Mr. STANLEY WILSON

No.

Mr. DILLON

Do you repudiate that?

Mr. STANLEY WILSON

Yes; I deny it.

Mr. DILLON

I say it is the official organ of the party, and it has aroused all this activity, this belated activity, because it is entirely too late. Now hon. Members above the Gangway are beginning to find fault with their leaders because they did not take action before. That is the real secret of all these Debates; and I say I have never witnessed a greater exhibition of uncandid and insincere tactics. The motive of the Noble Lord (Lord Hugh Cecil) and hon. Members here, as he told us, is to put an end to financial confusion. They want the Budget brought forward to put an end to financial confusion, and they tell us it is to be divided. They want the Budget brought forward, because, under the lash of the "Morning Post," they think they have made a great mistake in not having voted against the Government on Monday week, and they cling now to a desperate hope that by getting hold of the Budget they might defeat the Government. That is the whole measure and extent of their interest for the Budget. But, says the Noble Lord, if you will not recall the Budget, not for any party tactics at all, but in order to clear up the financial con fusion which is so distressing to the Noble Lord, why will you not put aside your dignity and pass an Income Tax Resolution and regularise these other taxes? In other ways, why will you not play the game of the House of Lords and go back on the whole financial policy of Mr. Glad stone and accept defeat—

Lord HUGH CECIL

A temporary Bill would be no violation of the financial position. It is just the same as a temporary borrowing Bill.

Mr. DILLON

I say it is nothing of the sort. Borrowing is one thing and taxes another thing. They are two and distinct things; and, if the action of the House of Lords has compelled this system of borrowing, that is quite a different thing from telling the House of Commons to agree to break up the taxes Bill into a number of Bills, so as to enable the House of Lords to impose their will upon the country. That is a thing to which I am sure no Liberal party will consent, and, if any Liberal Government were weak enough to propose it, they would be brought to book by their own party. I think, therefore, the Liberal Government and the Liberal party need not be afraid of these tactics. They are only an exhibition of the total want of the leadership of the party and the confusion and alarm into which the Opposition army have been thrown by the events of last week.

1.0 P.M.

Mr. BASIL E. PETO

I certainly should not have ventured to address the House after a brief period of three weeks on such an intricate question of Parliamentary practice and tactics just explained to the House by the hon. Member for East Mayo (Mr. Dillon), although at the same time I think new Members, like myself, have certainly had an unrivalled opportunity of studying this subject in the last three weeks were it not for the fact that for 30 years before I entered this House I was intimately connected with a business community of this country. The Prime Minister, a few moments ago, kindly gave testimony to the common sense of the traders of this country. It is from that point of view that I want to say a few words to the House. The Income Tax has continued to be paid owing to the common sense of the traders of the country where-ever it could be paid and wherever payment would be accepted. Other taxes, too, have been also paid through the common sense of the trading community, and I venture to think that the people throughout the country who have got to earn their living in any capacity in the trades and industries of the country, whether as wage earners or as employers, directors or managers or clerks, will be absolutely unanimous on the point that they are disappointed, grievously disappointed, indignant, righteously indignant, at the change of policy of the Government which has taken place during the last week or ten days. The business community has been doing their best to pay the taxes which they knew would be required for carrying on the Government of the country, and they expected, until the other day, that the very first business of the Government would be the regulating of the collection of the revenue necessary for the country. We are now told this is postponed until an absolutely indefinite period, until all kinds of other things have been put through and until we have had the consummation of these Parliamentary tactics.

There are two reasons put forward which will be weighed by the business community. One has already been alluded to in this Debate—the dignity of the Government. That reason, I think, was put forward by the Chancellor of the Exchequer the other night. He said it would be inconsistent with the dignity, and I think also the honour of the Government to bring forward proposals to collect the revenue of the country. Instead of that we have this Bill giving them gigantic borrowing powers. There is no question, so far as the Income Tax is concerned, that it would not entirely satisfy the financial hunger of the Chancellor of the Exchequer; but there are millions, I believe thirteen, at the present time due which could be collected either within this last quarter of the year or, if this is impossible, within a very few weeks, possibly. The 24th March has been emphasised a great deal, but every week we go on, whether in this financial year or the next, makes the matter more difficult, and more serious for the country. Income-tax payers have got their sovereigns ready, and they are anxious to shower them into the lap of the right hon. Gentleman. They are not only ready, but as ripe as cherries on the tree, and he will not shake the tree or open his mouth. We do not suppose this £13,000,000, which will grow into £20,000,000, would satisfy the whole of his financial craving. We know he requires a great deal, owing to the absolute failure of the Finance Bill, for the purpose of raising all the necessary revenue, but surely it would be something to collect these millions which are waiting for collection instead of having such a gigantic increase in the borrowing powers of the Government.

There is, however, another reason quite inconsistent with this one of the dignity of the Government. I think the hon. Member for Waterford (Mr. John Redmond) the other night made it perfectly clear what was the real reason of the change of policy. He told the Government explicitly that in the Budget they have a weapon, and he called upon them not to throw it away. They have grasped in their hands, at the dictation of the hon. Member for Waterford, this national Irish weapon, this shillelah, with which they propose to beat out the claims of all who stand in opposition to them in carrying out their autocratic will which they claim to have a mission from the country to put into effect; I think the trading community of the country will see perfectly plainly through these party tactics, which, as a new Member, I admit are frankly very confusing; but I think those outside who have not had to attend the Debates in this House, but have merely been able quietly in their own business places to read the reports of what has taken place, will perfectly understand the reason for these gigantic borrowing powers, and will understand that it is not a matter of Parliamentary practice which interests them at all, but that they had a right to believe that the best would be done with the time at the disposal of the House, and that the very first business would be collecting the greatest amount of revenue possible, and due at the present time. The Prime Minister told us of his prophecy in September last with regard to the chaos—the financial chaos—and the deadlock which would be created by the action of the Noble Lords in another place. He has admitted very frankly there has not been as much chaos as he expected. What was prophesied has not come off, but now we find that, by insisting on borrowing for the needs of the country instead of raising the revenue they can raise, the Government are intent on creating chaos and manufacturing a deadlock for their party purposes instead of considering the interests of the country. I think we are perfectly justified in raising this protest, even though it is a little later than I, as a private Member, would have liked, but as far as I am concerned I feel sure that I am exonerated from any share in not having jumped into the breach at an earlier date. I have taken the very first opportunity I have had to say a word on behalf of plain business people in this country who expect the nation's business to be conducted on business lines, and not with a view to the promotion of party interests.

Viscount CASTLEREAGH

It was very interesting to hear the hon. Member for East Mayo supporting with his voice a tottering Ministry until it suits his purpose and the purpose of his party to overthrow it. I wish the hon. Gentlemen opposite joy in their supporter; they can tell me perhaps how long it will be possible for them to place reliance on him—a reliance which I presume they hope to place for some time yet to come. The answer which the Prime Minister gave at the beginning of the debate is one which hardly meets the case; indeed, I think it was entirely inadequate. It is obvious that the termination of the business of this House on the three evenings which have preceded this, has proved conclusively that the contention which has been attempted to be put forward, that pressure of business alone prevented the Prime Minister taking the step which certainly opinion in the country and on this side of the House expected to be taken. That has been put on one side, and it has been made perfectly clear in Committee of Ways and Means that it would be possible for the Government to have taken a step which would have regularised the finances of this country. But they have decided to do otherwise. It is impossible to deny that at the present moment we are in the midst of financial difficulties. It is asserted on the other side of the House that those difficulties have arisen owing to the action which was taken in another place in regard to the passing of the Budget. I do not propose to go into that question at the present moment. This is not the occasion to do so, but whether it be true or not I say there is no justification whatever for the action of the Government, either by custom or precedent, in accentuating the chaos which at the present moment exists. I have put a question on the Paper with a view to eliciting from the Chancellor of the Exchequer the actual amount of the cost which will fall upon the community owing to this extended system of borrowing which is being made use of for the purpose of defraying the expenditure of this country. A Member of this House is, of course, always at a great disadvantage with the permanent officials. I have ventured to ask the Chancellor of the Exchequer to tell us approximately the cost thrown upon this country owing to this extended system of borrowing, and I venture to predict that whatever the answer may be, whether the cost be heavy or not so heavy as some of us think, it will show that the country will have to pay a great deal in excess of the value which we at any rate put on the dignity of individual Members of the Government. There were two courses open to the Government, the first and most obvious one, was that they should pass the Budget into law. The question naturally arises where is this Budget? It appears to me it is lost in the recesses of the Treasury overwhelmed by the rhetoric in the country of the Chancellor of the Exchequer. If there is any truth in the assertion that the people of this country have a burning and passionate desire for the passing of the Budget into law, it surely was the duty of the Government at the earliest possible opportunity—and that has gone by—to bring in the Budget and to do their best to give it legislative authority. They have not adopted that course because they know perfectly well that they cannot pass the Budget, and that there neither was nor is any foundation for the assertions which they scattered broadcast all over the country. There is another course which it was perfectly open for them to take. They could have brought in a Resolution for the purpose of legalising the collection of the Income Tax, and so alleviating the present financial difficulty. But they are not proposing to take that course, and I therefore say that the whole action of the Government—that every step which they have already taken in this Parliament, is merely part of a party manoeuvre. They have been guilty of exploiting the interests of this country for the purposes of that party manoeuvre, and I can only add that there is more truth now in the words which were used some 300 years ago by Bacon, that: Nothing doth more hurt in a State than that cunning men pass for wise.

Mr. JAMES HOPE

I have heard many humorous things in this House in my time, but I confess I have heard nothing more humorous than the suggestion of the hon. Member for East Mayo that the Noble Lord the Member for Oxford University has been guided by the "Morning Post" in the action he has taken. I do not know what may be the power of the "Freeman's Journal" in Ireland, but certainly we in this country want no exhortation from any organ, however distinguished. If one thing has been proved by the Debate to-day it is that if the Government wish to put the matter of the Income Tax right it is in their power to do so. It is admitted that a Resolution, to be followed by a short Bill dealing with the Income Tax, might be got through without opposition if the Government wished, and my hon. Friend the learned Member for Edinburgh University (Sir Robert Finlay) only two days ago gave an assurance that such a Bill would not be resisted, and that it would not be debated at any great length. I think he went so far as to suggest that it would pass in silence so far as hon. Members on his side of the House were concerned.

Mr. DILLON

And is he now the Leader of the party?

Mr. HOPE

I might retort, Does the hon. Member for East Mayo lead all the Irish Members? As to the suggestion that all the finances of the year must be brought together in one Bill, I venture to say that, although the Prime Minister declared that that had been the unbroken practice for forty years, it has only really been unbroken since 1894, and in that sense it is not even the practice now, because, while the taxes of the year may be included in one Bill the financial provisions for borrowing are treated separately. Still the practice of uniting all the taxes in one Bill has only held good since 1894. It is said that is a powerful weapon to embarrass the House of Lords, but I do not believe it necessarily is, because the House of Lords have full power to divide a Bill, even though it may be a Finance Bill. It is quite true that they have never claimed the right to vary or increase the incidence of taxation, but if you study the Debates of 1861 it will be seen that the House of Lords never abandoned their contention that they have the power to divide a Finance Bill and send it back what they pleased. That is maintained by the speech of Lord Derby in that House, and personally I very much regret, although it would have come to the same thing in the end, that the House of Lords did not take that course last year. But is it necessary to have a separate Bill? Why cannot you proceed by Resolution, to be confirmed afterwards by a clause in the Finance Bill? Surely it will come to the same thing? There was a Debate the other day as to the exact legal force of a Resolution, and it has been admitted as a legal practice that a Resolution is brought into force, if it is brought in in view of subsequent confirmation by a Bill, but the Bill which confirms it need not be a Bill which only confirms that Resolution.

I suppose we are this year to have a Finance Bill, and surely a clause of that measure will deal with Income Tax. Therefore, if a Resolution is brought forward now, and we have the certainty that there will be a Finance Bill, and that it will contain a clause dealing with Income Tax why not take your Resolution and begin to collect upon it now? I know that it is said there is some difficulty, but, as a matter of fact, if you pass that Resolution and begin to collect, is there any sensible man who would decline to pay—is there any sensible man who would lay himself open to a long action in the law courts and to costs if he knew that Parliament would affirm the action of the Government in asking for that Income Tax from him? It is clear that there would be none, or very few, who would be so foolish, and they would be open to have penalties imposed upon them. It is obvious that we are in a difficulty with regard to this Bill, and that is why I regret that we did not have a Debate on the Motion of my Noble Friend and myself the other day. It is obvious that it is necessary that this money must be got. It reminds me of the old saying, rent recte, si possis, sed quocunque modo rent. The money must be got, but this is the wrong way of getting it. It must be got, and therefore we are not prepared to Vote against the Bill, but it remains for us to put on record the opinion that to borrow the money when you may have it for the asking is a proceeding which is hardly saved from being criminal by its grotesque absurdity.

Sir HENRY DALZIEL

I confess I have great difficulty in understanding the position of the Noble Lord the Member for Oxford University (Lord Hugh Cecil) and his colleagues on the other side of the House to-day. Why it is only a few nights ago that a proposal of the Government was placed before the House and a sketch of business was laid before it, and not one single Member on that side of the House ventured to dissent from the policy of the Government. The right hon Gentleman the Leader of the Opposition accepted the policy of the Government on behalf of his supporters, and I regard this action of the Noble Lord as a great act of disloyalty towards the Leader of the Opposition, because he was in his place the other night, and he heard that right hon. Gentleman accept the policy as to the arrangement of business which the Government are now carrying out. Why did not the Noble Lord get up then and there after the Leader of the Opposition? Why now when an arrangement has been made and is in progress of being carried out—why now does he come forward in the absence of the Leader of the Opposition and indirectly condemn him for supporting the arrangement which has been made by the Government? We know there are many reasons why the Noble Lord should adopt the attitude which he is taking up at the present time. He regards the Leader of the Opposition as undecided in his action, and with no definite principles of public policy. He thinks the Tory party can only be saved by the deposition of the present Leader of the Opposition.

Lord HUGH CECIL

dissented.

Sir H. DALZIEL

The Noble Lord perhaps imagines that at last he has got the Leader of the Opposition in favour of Free Trade. Unless he does I am forced to the conclusion that the Noble Lord is content to support a Protectionist Leader of the Tory Party. But this we cannot get away from, that in spite of the action of right hon. and hon. Gentlemen opposite the Noble Lord has been able to return to this House, and therefore he owes no gratitude to any Members on the other side for any support which they gave him at the recent election. Therefore I conceive he takes great delight in challenging on every possible occasion the Leadership of his party and the policy which they adopt. Another reason which I think probably the Noble Lord has for his present attitude is, that while he does not like the present Budget he likes less the intended Budget which would be brought forward by the right hon. Gentleman, the Member for East Worcestershire (Mr. Austen Chamberlain). I think he prefers the Budget to the Tariff Reform Budget to be brought forward by the right hon. Gentleman.

Lord HUGH CECIL

If the hon. Member will do me the honour to read the speeches I made elsewhere he will see that I took just the opposite view.

Sir H. DALZIEL

I have read very carefully the speeches of the Noble Lord, and I always read them with very great interest, and there is one phrase which always remains in my mind, and that is that "if the English people dislike anything it is that anyone should shuffle with a great question of policy," and therefore I cannot accept the explanation of the Noble Lord without further explanation as to why he prefers a Protectionist Budget, of which we have heard such brilliant speeches in condemnation, to the Budget of the Chancellor of the Exchequer before the House. What is the position of hon. Members opposite? I think that their party appears to be utterly and wholly demoralised. I view with grave concern this absence of discipline in the Conservative party, and I should hope that before long they will be able to adjust their differences. But what is the position that they have taken up to-day? Almost every speaker has condemned the Borrowing Bill of the Government; even the Noble Lord condemned that. Why does he not vote against it? Why is he going to give silently his support to the Bill if it is such a bad measure as he and his Friends would appear to think?

Lord HUGH CECIL

It is better than nothing.

Sir H. DALZIEL

If it is a bad Bill, why does not he use his influence with the House of Lords in order to get it rejected? If it is going to bring all this disaster to British finance, it is their duty to reject the Bill; to vote against it here and use their influence in another place against it. Then we have the statement from another hon. Gentleman opposite as to what ought to be done with regard to certain provisions of the Budget. He told us he hopes that it will go to the House of Lords and it will pass there. When did hon. Gentlemen obtain authority to speak on behalf of the House of Lords that hon. Gentlemen opposite can pledge the action of the House of Lords? It is a most extraordinary state of affairs. I consider that the Government are justified in never again giving the House of Lords any opportunity for giving another insult to the House of Commons. Notwithstanding any assurance which may come from that side of the House, I hope they will not place themselves in the position of allowing the House of Lords to deal them another insult such as they did at the end of last year. The position of the Noble Lord in bringing forward this Income Tax provision is very extraordinary. Why does not he bring forward the Spirit Duty, the Whisky Duty, or the Death Duty—does he imagine that the people who have to pay the increased Death Duties are very anxious to pay the money earlier than would otherwise be required? To select this one provision out of the Budget and imagine that the House of Commons is going to take it seriously is to make a very great draft on the credulity of the House of Commons and the public. I therefore hope the Government will adhere to their position and make such arrangements as are possible with regard to the future, and I believe they will have the support of their supporters in this House and in the country.

Mr. STANLEY WILSON

I wish to add my protest to those which have gone before. I regret the necessity for the passing of this Bill into law, but we do not object to it passing, because we recognise that the Government have got to have money to carry on the work of the country, and therefore we agree to it, while we think the methods they are adopting are extremely bad. The necessity for the Bill is brought about entirely by the action, or rather inaction, of the present Government. The Prime Minister has endeavoured to fix the responsibility upon the House of Lords. Everyone knows that the whole responsibility for the present financial situation rests entirely on the shoulders of the present Government. What was the pledge the Prime Minister gave before ever the General Election was fought? The first business of the new Parliament would be to pass the Budget into law. But the Government made another pledge. They pledged that they would pass it into law without the alteration of one single comma. The fact of the matter is that the Government will not recognise the fact that at the General Election the verdict of the people of this country was against their Budget.

Sir H. DALZIEL

Then why do you want us to go on with it?

Mr STANLEY WILSON

I think the Government ought to have recognised the situation they were faced with. They ought to have cut out the controversial portions of their Budget, recognising the verdict of the country, and carried the rest of it into law. Then we should not have been faced with the situation that we are faced with now. [An HON MEMBER: "Why?"] Will the hon. Member not recognise that the verdict of the people is against this Budget? [An HON. MEMBER: "Which part?"]

Mr. SPEAKER

I will call on the hon. Gentleman, if he wishes to speak, at a later stage. It is unusual to interrupt in this way.

Mr. STANLEY WILSON

By this Bill, instead of passing their Budget, they proceed to get themselves the right of borrowing money right and left. They refuse to legalise the collection even of the Income Tax, which would bring in a considerable sum of money to the depleted coffers of the Exchequer. The Government are making the very greatest mistake they ever made in their lives. Why are they doing it? They say they have no time. Everyone has referred to the fact that for the last three nights we have gone home in time to have dinner in our happy homes. I do not object to that at all. I have been quite long enough in this House to look upon it as rather a pleasure to be able to leave and dine comfortably at one's own home. But at the same time it is not in the interests of our country that we should do so at the present moment. Who is responsible for the situation which exists? The Prime Minister says the House of Lords. We say it rests upon the Chancellor for the Budget which he introduced last Session. We have been accustomed to having as Chancellor of the Exchequer a serious politician, a man who, since I have been here, has always added to the dignity of the office. Can anyone say that the right hon. Gentleman, by the speeches he has delivered in the House and in the country, has added to the dignity of the office that he holds? He has been described in another place by a supporter of his own as half pantaloon and half highwayman.

Mr. SPEAKER

The hon. Member is not entitled to go out of his way to introduce offensive personalities.

Mr. STANLEY WILSON

My introduction of the Chancellor of the Exchequer into my argument was because I considered it is his methods in the country and in the House which have brought us face to face with the situation which we are faced with, and in that way I was criticising his attitude, and I was also quoting the speech of Lord Ribblesdale, a supporter of the right hon. Gentleman in the House of Lords. I believe the people of this country will realise the situation that the Government have brought the country face to face with.

Mr. ANEURIN WILLIAMS

On a point of Order. May I ask, is not the hon. Member bound to withdraw an expression which you have described as an offensive personality?

Mr. SPEAKER

The hon. Member was quoting an expression used in another place. If it had been an original expression used here I should probably have called on him to withdraw. It is one which was made considerable use of at the last election, and is very familiar. What I was doing was deprecating the hon. Member's introducing it irrelevantly on this occasion.

Mr. STANLEY WILSON

The Government and the Chancellor of the Exchequer have played ducks and drakes with the finances of the country for one purpose alone, to gain what they think is a tactical party advantage. Whether they will gain it or not I do not know, but I do not believe for a moment they will. The situation that the country is faced with is an intolerable one. They have the remedy easily at hand, and no right-minded Government would allow it to continue for a single instant.

Mr. GIBSON BOWLES

I observe that a mutiny has broken out on the other side, and that none of the leaders of the party are here to countenance the mutineers. Encouraged probably by the history of the Fourth party, the Noble Lord (Lord Hugh Cecil) appears to be organising another Fourth party to coerce his nominal leaders, and it may be that the second portion of that history will repeat itself, that the leader created by the Fourth party will abandon it, and that the mutineers themselves may be left without any of the rewards to which their conduct might entitle them. The disorderliness of the mutineer, which is inseparable from him, has appeared to some extent in the Debate this afternoon, but not on the part of the Noble Lord opposite (Lord Hugh Cecil). The Noble Lord always occupies high moral ground. I can say so because, in the Parliament before last, I occupied it with him. But he has, I think, a little forgotten on this occasion, or perhaps he is unconscious of the fact, that that high moral ground is also ground of the most immoral tactics. At the same time, if he is not aware of that, when he pleads for immediate attention to financial affairs, he forgets the situation that might arise. Suppose the Government were allowed to introduce the Budget or the Resolutions forming part of the Budget—for there would have to be many Resolutions, the Income Tax Resolution alone would not suffice; there would have to be nine Resolutions—one for every one of the nine taxes already collected—I am not quite sure that when the moment came the Noble Lord himself would vote for them. Then when the Bill which must be founded upon them—for the Resolutions without the intention to bring in a Bill would amount to nothing—I am not sure that the Noble Lord's consistency would carry him into the Division Lobby in its favour. If it did, I have still some doubts about hon. Gentlemen from Ireland—I am not sure that they are converted to the Budget they so much objected to last year, and I am not sure that those lines to which the Noble Lord invites us to turn our attention would gain the votes of those hon. Gentlemen. If the Noble Lord will look into the situation he will see that what he is proposing is that the Government should put their heads into a noose which will be drawn, I do not say by himself, when he proposes to bring in one Resolution first of all. There must be nine Resolutions, and they must be in the Bill, and he must be conscious that from these Resolutions and that Bill the Government could not be certain that they would emerge with success. But why this impatience on the part or the Noble Lord for Resolutions and the Budget? It is not shared by hon. and right hon. Gentlemen on the Front Opposition Bench. There is not one of them here now to support the eloquence of the Noble Lord. If he will wait for a very short time, he will have Budget enough. My expectation is that when the Government in the beginning of April address themselves to the final settlement of the financial situation the Noble Lord will complain of their proceedings, just as he complains now of their want of proceedings. The situation, I admit, is difficult. The situation is very grave indeed. I myself should be glad to see such Resolutions as the Noble Lord wishes for, and a Bill founded upon them, and if for no other reason than this, that the finance of this country is founded on what I have on a former occasion called "annuality." The year begins and ends, and there is an end of it. The finance of one year has in our system no part or lot with that of another, and if once you are driven to impair that principle, there is no doubt that very great confusion will arise—confusion of a sort which is at present unsuspected. It will be using one particular year's Budget machinery for another year. The machine was not constructed for that purpose. It will be like using a pumping machine to pull a railway train, and I think the difficulties will be great. As I have said, the Noble Lord will very soon have Budget enough. Consider what must happen. It will not be one year's finance that will have to be considered; it will be two, for when, on or about the 1st April, we start on the Budget, this financial year will have ended and another begun. The right hon. Gentleman, the Chancellor of the Exchequer, it would seem, will be brought to bed of twins—one the posthumous child of 1909 and the other the child of 1910–but they will have to be nursed and brought up together. I fear that there is no distinct escape from that difficulty. Last year's Budget, in so far as it is capable of being continued, will have to merge in next year's Budget. The Noble Lord is not here, and many of the other mutineers are not here, but I would ask again what I have asked before: Is anybody here prepared to say and to take an engagement that in this House and the other House Resolutions of the sort suggested will be accepted, and that the Bill founded upon them will be accepted? If that is the intention of the party opposite, if they are truly so anxious to further the financial designs of the Government and save the country from financial chaos, it would be very simple for the Leader of the Opposition to get up on some day that he found it convenient to be here and to pledge the Opposition to pass the Resolutions and the Bill. It would be equally easy for the Leader of the Opposition in the other House to give a similar pledge. Then we should be able to talk to the Noble Lord and to attach some importance to the proposal of the mutineers. But the Leader of the Opposition is not here, and the Noble Lord has no assurance to give us, and under these circumstances I really think that the Government would be imperilling themselves and their finance if they were to venture themselves on the high moral ground occupied by the Noble Lord.

Lord BALCARRES

I want to ask the Chancellor of the Exchequer a question or two about the technical action of his Department at the present moment as regards the Income Tax. Income Tax of 1s. 2d. in the £ is at present being collected by his Department, and it is being compulsorily deducted from the salaries of Civil servants. From this it is clear that the Government intend to levy the tax for 1909–10. I think they are perfectly correct in that. While the Government are enforcing payment of this tax on their own servants, they are declining to attempt to enforce payment from the public at large.

Mr. BYLES

I know that I am paying Income Tax.

Lord BALCARRES

The hon. Gentleman is not being compelled to pay Income Tax. I will assume that the hon. Member derives his income from Consols or from commercial concerns where the money is deducted at the source. The Bank of England is collecting Income Tax compulsorily, and those who receive their dividends from the Bank cannot recover the sum from the Bank. The London and North-Eastern Railway Company and Lloyds Bank are deducting 1s. 2d. in the £. The question I wish to ask the Chancellor of the Exchequer is, Why do his officials refuse to send to persons who desire to pay their Income Tax demand notes? I will give the case of an estate with which I am personally familiar. The custom on that estate is to pay Income Tax on a particular week of a particular month. All the arrangements for annuities and the different accounts of the separate departments of the estate are made with relation to a particular week. I put a case in which the estate agent has said, "I wish to pay my Income Tax," and the officer of the Government has refused to send him a demand note. There are thousands, perhaps millions, of money going to waste in consequence. We are to-day proposing to borrow many millions of money from the people who owe all that money to the State, and who want to pay it, and to whom it is inconvenient not to pay it. Yesterday we were told there was to be a Finance Bill. The hon. Member for King's Lynn (Mr. Gibson Bowles) just now was rather doubtful if there was to be a Finance Bill.

Mr. GIBSON BOWLES

I have no doubt at all. I suggested that there would be two in one.

Lord BALCARRES

Finance has got to be dealt with, but the question is whether it is by one Finance Bill or two. Does the hon. Member know?

Mr. GIBSON BOWLES

I think it will be two in one.

Lord BALCARRES

I do not want to go into any controversial point, but the greatest inconvenience is caused to the public at large. I put the case of a man who wants to pay his Income Tax and is not allowed by the Chancellor of the Exchequer. It is really a ridiculous farce to borrow all this money when there are thousands of money waiting to come in, which it would be a convenience to the Government and to private individuals to pay. The hon. Member for King's Lynn says that we cannot guarantee these Resolutions passing. My right hon. Friend the Member for East Worcestershire has pressed this point on three different occasions this week. The Chancellor of the Exchequer knows that this party have admitted under protest the 1s. 2d. in the circumstances, and that this amount has got to go through, and the sooner its collection is authorised the better. During the coming financial year the Chancellor of the Exchequer has got to collect twenty-eight pence in the £. I think he will admit that probably I am correct in saying that he will be fortunate if the last of the twenty-eight pence in the £ realises a sum of £1,500,000. Is not it possible, at any rate so far as those who are really anxious to pay are concerned, to give them a chance of paying the money into the Exchequer before the present financial year ends? It may involve a sacrifice of self-respect on his part, according to his friends, but it will be a service to the Exchequer and a convenience to the individual, and it will be for the good of the country and the business world generally.

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

The Noble Lord has asked me some questions. I am not quite clear as to the character of the complaint which he has made against the action of the Government. Is his complaint that the Income Tax is deducted from the salaries of Civil servants?

Lord BALCARRES

It is the disparity of treatment of different people that I referred to.

Mr. LLOYD-GEORGE

When it comes to the case of the Bank of England, I assume that it is put in the same position, and admittedly the Governors of the Bank have taken the only possible course, not merely in their own interests, but in the interests of the dividend holders, by deducting the sum at the present moment, seeing that Income Tax at 1s. 2d. is inevitable, whatever happens to this Government or any succeeding Government, because no Government could possibly carry on without the imposition of the 1s. 2d. Income Tax. Therefore the complaint of the Noble Lord is that we did not take steps to collect this sum of money from the people in the country who are very anxious to send in their cheques. I can assure the Noble Lord that there is nothing to prevent our receiving cheques for Income Tax from people in any part of the country, and I shall be glad if this Debate will have the effect of indicating clearly that the Government have no objection to receiving Income Tax from Income Tax-payers who are anxious to pay. So far from objecting to payments, I should, on the contrary, welcome every penny sent in, whether on account of Income Tax or any other tax, or even by way of voluntary contribution from men who are anxious to part with their money to support the Government of the country.

Lord BALCARRES

My complaint is that officials of the Inland Revenue are refusing, after receiving written requests, to send in demand notes.

Mr. LLOYD-GEORGE

The demand note, after all, is an indication that you are making a demand which is enforceable. I can quite understand the officials of the Inland Revenue saying, "We are not going to send in a demand note," because that says that unless you pay by a certain date proceedings will be taken.

Lord BALCARRES

I received a demand note in London, but what I am referring to happened in Lancashire. In my own case I wrote asking for the demand note, and saying that I would send my cheque by return of post. It illustrates this disparity of treatment which is making the revenue suffer.

Mr. LLOYD-GEORGE

I understand that the Noble Lord received a demand note?

Lord BALCARRES

In London on a written request.

Mr. LLOYD-GEORGE

Do I understand that the Noble Lord really sent in an intimation that he was prepared to pay? To every person who is prepared to pay we will give all facilities. Certainly there is no objection to receiving money, but we could not accept the responsibility of sending out a demand note which contains an intimation that you have got to pay by a certain day or otherwise the law will take its course. We cannot send out a demand note of that kind, because we are not in a position to enforce it. We should be prepared to receive Income Tax from any person provided it is voluntarily paid Toy those who ultimately undoubtedly will be required to pay it.

Sir ROBERT FINLAY

Are the Government receiving from the companies and other persons who are deducting Income Tax at the source the sums which they have so deducted?

Mr. LLOYD-GEORGE

I do not think so. I should rather like to get notice of that question, but I believe not. I believe what really happens is this. I am certain with regard to the vast majority. In the case of some of them they may have transmitted the money which they have collected, but I am not quite clear. I believe not. I know that as far as the majority are concerned they are retaining the sums in hand for their own protection. It is the company that is liable to us, and not the individual. The company, for its own protection, retains the 1s. 2d. out of the dividends. That is quite a proper proceeding, and for that reason, when these Resolutions are carried in the House of Commons, I do not anticipate any great difficulty in collecting a very considerable proportion of the Income Tax.

I come to deal with one or two points of the Debate. What is really the object of all this pressure which has been brought to bear upon the Government? I do not think the Noble Lord has been quite candid with the House, if I may say so. He comes here and poses as a man who is anxious to protect the business community of the country from confusion and chaos owing to the fact that the Income Tax Resolutions were not carried. He knows perfectly well that is not the object. I make the same observation to the Noble Lord who supported it (Viscount Castlereagh). What is their object? They are under the impression that if we submit the Resolutions to the House of Commons at the present moment we might not be able to carry them. [An HON. MEMBER: "NO."] That is in their minds. What would happen? It would increase the confusion, and that is what their motive is.

Viscount CASTLEREAGH

If the right hon. Gentleman attributes that motive to me, may I say that his interpretation of my views is entirely erroneous?

Mr. LLOYD-GEORGE

Then the Noble Lord is actuated purely by an anxiety to carry the Budget? Is that his object?

Viscount CASTLEREAGH

I think I said that, as far as I knew, the Budget was lost. What I ventured to put forward was that a Resolution should be carried indicative of a Bill for the purpose of legalising the collection of the tax.

Mr. LLOYD-GEORGE

How can you legalise the collection of the tax without the Finance Bill being passed? The Noble Lord himself said that he regards the Bill to legalise the situation as lost, and for that reason he presses us to go on with it. In what respect, then, does the Noble Lord contradict my suggestion in regard to motive? There is only one thing to legalise the tax. You can pass the Resolution, and what gives validity to it is the fact that there is in the background a Bill which you must carry in the House of Commons, to which you have to get the signature of the King, and you put it on the Statute Book of the realm. That is what gives validity to the Resolution. The Noble Lord says that if we pass the Resolutions he will oppose the Bill which gives them validity. [An HON. MEMBER: "No."] Would he vote for the Budget? If not, he is going to support one Resolution, knowing perfectly well he will vote against the Bill to give validity to it, and therefore increase the confusion. The contention which I submit to the House is a perfectly sound one, that the Noble Lord and his Friends are pressing this upon us, not in order to determine the confusion, but to increase it, because if the Bill is thrown out, what happens? Of course, the Government goes out. I presume there will be another Government, but then the other Government would equally fail with its Finance Bill. What would happen would be this: You would carry on the confusion from week to week, from month to month, and ultimately, I presume, the country would have to decide again. But that takes time, and the whole of the money would have to be refunded. The Noble Lord comes down here and pretends that he is doing all this in the interests of the business community. They are really doing it in order to increase the trouble and quadruple the confusion. I say it is a pure piece of Parliamentary hypocrisy to make this pretence. The Noble Lord the Member fox Oxford University is in a very curious position. He does not approve of any taxation. Hon. and right hon. Gentlemen opposite say they disapprove of the Budget because they have their own ideas of putting a 2s. tax on corn, and their own methods of raising revenue.

2.0 P.M.

The Noble Lord does not approve of that. He approves neither of Tariff Reform plans nor of Free Trade plans, and that is what is called getting rid of the confusion. He would have no taxes at all. He would recall the old method of benevolences. Any man who likes to pay, or any man who does not like to pay, that is nothing. That is the way he gets rid of financial confusion in the country. He asks, "Why do you not proceed with your Budget?" Why did he not ask that on Monday? If he has any influence at all, it is not with this Bench, but with the Front Opposition Bench. Why did he not on Monday make a distinct offer to this Bench that the Budget would be put through, not in the course of a single sitting, but after the Supplementary Estimates have been disposed of at nine o'clock at night? This Bill, which has been the subject of a Parliamentary election, and is of such very great importance, as the Noble Lord knows, that the fate of the Government depends upon it, he thinks ought to come on after the Supplementary Estimates, in the tags and intervals of Parliamentary time, at half-past seven or eight o'clock after these Motions have been discussed.

Mr. JAMES HOPE

The Noble Lord only referred to a single Bill legalising the Income Tax.

Mr. LLOYD-GEORGE

Now we know exactly what it is. It is not financial confusion they are wanting to get rid of; not at ail. What they want is that the House of Commons, having won privileges by a great Parliamentary controversy of fifty years ago, should now in 1910 abandon them. We are not to advance to get rid of the Veto, but we are to surrender what we have already won. The Noble Lord said something about the petulance of the Front Bench and observed that we were only considering our own individual dignity. Not at all. The hon. Member for Sheffield (Mr. James Hope) has made it clear that it is a matter of the most gigantic proportions. I wonder whether they have taken the trouble to read an article by one of the ablest writers on their own side, entitled, "The House of Lords and the Budget in the 19th Century." He sets forth what was the meaning of Mr. Gladstone's victory in 1861. What happened then? Up to that time the financial proposals of the Chancellor of the Exchequer were in separate Bills. For the first time, in order to circumvent the House of Lords, he embodied them in one Bill. What did that mean? I will just read to the House what it means, and then ask whether this is merely a matter of personal dignity of Members, or even the dignity of the House of Commons. This is what he says:— He embodied all the financial proposals of the year, including the rejected Paper Duty, in a single omnibus Bill. He challenged the House of Lords to accept or reject, it as a whole. It was a bold and held to be a somewhat impudent challenge, but it was justified by success. The Lords, after all, had a perfect right, denied by none, to concur in taxation. This right was deliberately abrogated, as far as the action of one branch of the Legislature can abrogate the powers of another, by the tactics of the Chancellor of the Exchequer. That was his intention; that he claimed as his achievement. The House of Lords for its misconduct was deservedly extinguished in effect as to all matters of finance. That is the interpretation placed by a very able Conservative writer upon the achievement of 1861. Up to that time the Lords had a concurrent right of taxation, but by the action of Mr. Gladstone, supported by the House of Commons in 1861, that right was abrogated. Why? Because if the whole taxes were put into one Bill the House of Lords could either reject the Bill or accept it, but they could not cut out part of it. It was understood that that was tantamount to abolishing their right to interfere in finance. Does the Noble Lord think that we are so innocent or simple enough to go back after achieving a great triumph of that sort, and surrender it. He wants to know what it really means. Let me recall language used by a noble relative of his, the late Lord Salisbury, on the Finance Bill of 1894. He said you cannot reject a Money Bill because you cannot change the Executive Government, and to reject a Money Bill and leave the same Executive Government in its place would create a deadlock from which there is no escape. That was very largely due to the fact that Mr. Gladstone for the first time put all those Resolutions in one Bill, and then the House of Lords could accept or reject the Bill. If we were now, merely for the sake of gaining some Income Tax, to surrender that right I think we should deserve impeachment at the hands of the House of Commons. It is idle to say that this is a mere matter of finance, that it is merely a matter of the dignity of Ministers, that it is even a matter of Parliamentary tactics. It is a matter of the most vital and essential moment to the constitutional relations between the two Houses, and what is the good of the Noble Lord trying to ignore that fact. He knows it and he is doing it purely as a sort of move in a very paltry tactical game, so that we are to be done out of the great privilege we won, and he himself would be the first to acknowledge if we did that we would have surrendered that right. The hon. Gentle man (Mr. James Hope) admitted quite clearly, he is always candid and he is very often ingenious too—at any rate, he has been perfectly frank—

Mr. JAMES HOPE

About what?

Mr. LLOYD-GEORGE

I know he is rather sorry now.

Mr. JAMES HOPE

I ask the right hon. Gentleman to tell me what I have been candid about.

Mr. LLOYD-GEORGE

I think the hon. Member begins to realise that he made a more serious admission that he was quite prepared for.

Mr. JAMES HOPE

What admission did I make?

Mr. LLOYD-GEORGE

I am going to refer to it. When I began to criticise this question of the Income Tax, and when I said you could not possibly bring in the whole of the Budget and discuss it at intervals, the hon. Gentleman said nobody wanted the whole of the Budget, and that they wanted an Income Tax Bill. That is the admission.

Mr. JAMES HOPE

It is only a bare statement of fact. Our only object was to expose the absurdity of the Government in not getting money which they have for the asking.

Mr. LLOYD-GEORGE

I do not know where the absurdity of the Government has been in this matter, but something much more important has been exposed, the tactics of this manoeuvre, and I thank the hon. Member for doing so.

Mr. JAMES HOPE

There was no manoeuvre in it beyond showing the Government up before the business community.

Mr. LLOYD-GEORGE

I know exactly what the hon. Gentleman wants, but I will deal with his admission. As he says, it is only a bare statement of fact, a very bare one. We have now got it in its nude, in its naked proportions, exactly what the hon. Gentleman and his Friends want. He wants a separate Income Tax Bill, which means that we should surrender the very weapon by which Mr. Gladstone so skilfully overcame the power of the Lords, and wrenched from their hands the only vestige of power they had with regard to finance. We are to surrender that now without striking a blow. We really owe a debt of gratitude to the hon. Gentleman, not for the discovery of anything we did not know, but for avowing it with such simplicity and candour to the whole country.

Mr. JAMES HOPE

I do not deny it.

Mr. LLOYD-GEORGE

I am quite willing to take it in the words of the hon. Gentleman, that it is a bare statement of fact—a very bare statement of fact. What they want is a separate Bill for the Income Tax. I should like to ask a question of the Noble Lord, Would he include the Super-tax in that?

Viscount CASTLEREAGH

Certainly.

Mr. LLOYD-GEORGE

Are all hon. Members opposite agreed that the Super-tax should be included. Will the hon. Gentleman who has just spoken put on the Super-tax?

Mr. PETO

It is merely a matter of personal opinion, and as this year is practically expired I consider whatever Income Tax is proposed that the Income Tax as proposed by the late Finance Bill should be brought in as a single Resolution, including the Super-tax.

Mr. LLOYD-GEORGE

We have got two hon. Members who will vote for the Super-tax. Then there is a very serious split in the party. I am not sure that I will get the support of the hon. Member for Sheffield (Mr. James Hope) for the Super-tax.

Mr. JAMES HOPE

Yes.

Mr. LLOYD-GEORGE

I am really making progress. It is not waste of time.

Mr. JAMES HOPE

The right hon. Gentleman will find it a little difficult to get machinery to collect it in the next three weeks.

Mr. LLOYD-GEORGE

I agree those are some of the things they agree with in principle, but they say there are practical difficulties, and therefore on that ground, though the hon. Member may say that he agrees, yet he thinks the practical inconvenience is so great that he will vote against it. I do not think I can rely on his vote. I want to know what the offer of the Opposition is. The 1s. 2d. Income Tax has been offered to me, and I should like to know—

Viscount CASTLEREAGH

On a point of Order. Is the right hon. Gentleman entitled to cross-examine all the Members and obtain information to assist him?

Mr. DEPUTY-SPEAKER

The right hon. Gentleman is quite entitled to ask any hon. Member who advocated that this Bill should be brought in whether they approve of the Super-tax.

Mr. LLOYD-GEORGE

I really want to know. As a matter of Parliamentary convenience, as we might be able to carry the Budget through in the course of an hour by general consent, I might even include my hon. Friend the Member for Clare (Mr. W. Redmond).

Mr. W. REDMOND

Oh, no.

Mr. LLOYD-GEORGE

Anyhow, he will not object to the Super-tax.

Mr. W. REDMOND

No.

Mr. LLOYD-GEORGE

So I am getting on. I am getting money. I ask the hon. Member for the City (Sir F. Banbury), who represents, from the Super-tax point of view, a very important community, will he also vote for the Super-tax?

Sir F. BANBURY

When I have heard the arguments in favour of the Super-tax advanced I will extend to them my consideration.

Mr. BOTTOMLEY

On a point of Order. If the right hon. Gentleman is entitled to cross-examine Members of the Opposition, or in other parts of the House, in the course of his speech, are they entitled to the benefit of re-examination at the hands of the late Attorney-General?

Mr. LLOYD-GEORGE

I only want to know, as it is so very important. This is a sort of Parliamentary offer, not officially, I observe, but purely by a sort of fractions and segments of the party scattered here and there. But whenever I try to get general assent to any proposition I cannot get it. Even the hon. Baronet has a reservation. Although I have every confidence in my arguments, I am not sure that I should be able to convince hon. Members opposite even by irresistible arguments. But there are other taxes. Would hon. Gentlemen opposite vote for the Licence Duties, for instance? Would they vote for the Land Tax?

Mr. T. L. CORBETT

Ask your allies below the Gangway?

Mr. LLOYD-GEORGE

Here is an hon. Member who comes from the temperance part of Ireland. He is always very careful to hold up the flag of temperance except when it would help the Government. He always in the abstract supports the Licence Duty and the Whisky Duty, but takes great care never to vote for them if it would be of the slightest use to the Government to have his vote.

Mr. T. L. CORBETT

I have voted again and again with the Government against my party on these questions, as the right hon. Gentleman knows very well.

Mr. LLOYD-GEORGE

Was there ever such a justification for my Budget? It finds not merely supporters on this side of the House, but converts on the other. And this is the Budget the country has pronounced against! Very important parts of it are receiving support from hon. Members on the other side. There is great justification for putting the Budget off for a few weeks when it is making converts in this House so rapidly that in a short time we shall be able to carry it with the universal acclamation of the whole House except the hon. Member for the City of London (Sir F. Banbury). Hon. Members know perfectly well that it would be quite impossible to carry the Budget as a whole in the interval at our disposal. I do not say that that is the only objection. I am not going to make any pretence. There are other fatal objections to the suggestion, but the objection of time is itself fatal. Let hon. Members look at the business outlined by the Prime Minister. The Noble Lord the Member for Oxford University (Lord H. Cecil) says that the Supplementary Estimates are of no consequence. What are they for? First, there is the question of Labour Exchanges. Does anyone imagine that the great experiment of Labour Exchanges, made for the first time, would have been passed without a ward of comment unless there was some reason for the silence? It would have been the most legitimate thing in the world for hon. Gentlemen opposite to have asked for information as to what had been done, what the schemes of the Government were, and what money they were going to spend on accommodation. Not a single syllable was spoken. That is not the usual method of an Opposition. It is purely a translucent device to put the Government, as they imagine, in a difficulty. Then there is Somaliland. Somaliland used to take up a good deal of time. It is a matter of very great importance. But very little was said on that. Then there was a Supplementary Estimate of £650,000 for the Navy. We have heard a great deal in this House and out of it about the contingent "Dreadnoughts." During the last General Election there was a great agitation conducted by a sort of alliance between hon. Members opposite and the extreme Socialist party; there was an attempt to get up a German scare. Here we have an Estimate of £650,000 for the Navy, and the whole thing passes in about an hour, after a few perfunctory humorous remarks from the Noble Lord the Member for Portsmouth (Lord C. Beresford). That is the great Navy question. "Our whole existence as an Empire is at stake." "We are on the point of being invaded." "We have no Navy to protect us." These are the Estimates which the Noble Lord dismisses as of no importance.

Viscount CASTLEREAGH

Is it not within the recollection of the right hon. Gentleman that the Noble Lord was called to order repeatedly?

An HON. MEMBER

The Senior Member for Portsmouth (Lord C. Beresford) was told that these matters could not be discussed on the Supplementary Estimate, and that he would have to wait for the Navy Estimates.

Mr. LLOYD-GEORGE

At any rate, a sum of money spent on the contingent "Dreadnoughts" could have been discussed. Is there anyone with experience of the House of Commons who does not believe that had it not been for some ulterior motive the Supplementary Estimates would have been discussed for hours and hours? They have all been set on one side. Yet these are the Members who talk about tactics on this side of the House, and say that we are sacrificing everything to party tactics. Hon. Members opposite have not a word to say about these questions. Why? Because they think it would put us in a bit of a difficulty and enable them to make a little party advantage. This is the fourth Debate on the same subject in which they have made the vilest imputations against His Majesty's Government.

Mr. T. L. CORBETT

Is it in order for the right hon. Gentleman to charge Members of the Opposition with having made the vilest imputations?

Mr. DEPUTY-SPEAKER

It depends upon what the imputations were.

Mr. T. L. CORBETT

"Vilest imputations" was the phrase used by the right hon. Gentleman.

Mr. LLOYD-GEORGE

I will show what I mean. Here is what the Noble Lord the Member for Oxford University (Lord H. Cecil) said: "The Prime Minister attaches no importance to his assurances." Does the hon. Member call that anything but a vile imputation? I cannot conceive a meaner imputation against an honourable public man. What does it mean? It means that the Prime Minister of England attaches no importance to his word. That is the suggestion. I think the Noble Lord ought to be ashamed of making such charges. It is very difficult to describe them in Parliamentary language. Noble Lords both here and outside bring charges against public men, but the moment they are hit back they become so squeamish, so delicate, and they say, "What language!" With the language which has been used both here and elsewhere by Noble Lords about Ministers and Members on this side there is nothing to be compared in recent political history. I have never complained of any language which has ever been used against me. I claim the right to hit back! But the moment that is done, why, of course, "you should not use language of that kind to Noble Lords." You can say about a great lawyer who is honoured by every member of his profession, by both parties, that he is telling lies. You can say about the Prime Minister that he attaches no importance to his words. That is language that is courtly! And lordly! It is language worthy of the English nobility! But the moment we retort, then, of course, it is the language of the gutter! There is nothing too offensive to say about it. If opponents are really going into action, they must expect these things, and they must not get so jumpy. Hon. Members opposite desire, purely as part of the Parliamentary game, to snatch by a handful of the House of Commons, the weapon which we have already won. We are going on till we have won the whole of the privileges and rights of the people.

Sir ROBERT FINLAY

I am sure that I express the feeling of every Member of this House when I congratulate the Chancellor of the Exchequer on the way in which he has drawn every conceivable red-herring across the trail of the discussion which is so very inconvenient to his Government. I never heard a finer performance in that way. I do not propose to follow out each separate discussion which he endeavoured to stop. It would be an endless task, and I have very little doubt that you, Mr. Deputy-Speaker, would call me to Order very soon if I attempted to do so. The Chancellor of the Exchequer thought fit to say that the Noble Lord the Member for Oxford University, in bringing forward his Motion, was guilty of a piece of Parliamentary hypocrisy, and that the whole thing was "a paltry tactical game."

Mr. LLOYD-GEORGE

nodded assent.

Sir R. FINLAY

The Chancellor of the Exchequer says he thinks so. I think I should advise that he had better reserve such epithets for use nearer home. We have been asked—and what I am going to say I shall say in a very temperate spirit, and shall confine myself to what I conceive to be relevant to what is now before the House—we have been asked: "Why do you not vote against this Borrowing Bill if you think it is a bad one?" Borrowing may be a most disagreeable necessity, but if that necessity has come he would be a madman who refused to recognise it. What we complain of is this: That this Government should by their action have created this necessity. I venture to say that the Noble Lord, the Member for Oxford University (Lord Hugh Cecil) was doing perfectly right in calling the attention of this House, and still more, the attention of the country, to the attitude of the Government. The Chancellor of the Exchequer read to the House a sentence from a magazine article, which he said proved that the right of the House of Lords to veto financial legislation had been definitely put an end to by Mr. Gladstone's action in 1861. I venture to say that a more complete travesty of the situation was never put forward in this House. What was done by Mr. Gladstone in 1861 was simply this, that in order to render it more difficult for the House of Lords to exercise their undoubted right of veto with regard to Finance Bills, he proposed to combine a great many Bills in one Budget. The process was not complete, as has been pointed out, until the year 1894. Then, and only then, you had one Bill, and one Bill only, for dealing with financial matters. But to say that action taken of that nature, which, still recognising the existence of the right, was intended to ensure that the House of Lords should exercise it only under circumstances of a very exceptional character and of great gravity—to say that action of that kind put an end to the existence of the right, is, I venture to say, a most extravagant statement.

I should not be in order in following the Chancellor of the Exchequer into the discussion which he partially opened as to what the rights of the House of Lords in financial matters are. We shall have abundant opportunity on future occasions to discuss it. But we are told by the hon. Gentleman the Member for East Mayo that it is a sacred and immutable principle that there never is, under any circumstances, however great the emergency be, one Finance Bill dealing with a separate matter. I venture to say that that is carrying the action of Mr. Gladstone in 1861 to a perfect absurdity. It may have been perfectly right that the action taken in 1861 to ensure that, before exercising their right to veto, the Lords did consider gravely whether their action was adequate, proper, and right for them, under all the circumstances, to refuse their assent to a Bill to become law, did ensure that. But to say that that principle is of this nature, that it is established as a great constitutional doctrine, that you are to allow the money of the taxpayers to be wasted by refusing to introduce a Bill dealing with a particular finance matter in deference to the supposed sacred principles is, I submit, an absurd perversion, and a complete travesty of the doctrine introduced by Mr. Gladstone. A separate Bill would not even be necessary. All that you would want would be a Resolution dealing with the Income Tax, which is the urgent matter in hand, and any Budget that we ultimately pass would, of course, lend the sanction of the law to that Resolution. And what I want to call the attention of the House to is this: The Chancellor of the Exchequer amused himself, and I am sure I have never, in any court in which I have been, heard anything more amusing than the cross-examination which he thought fit to administer to a good many hon. Members sitting on this side of the House—the questions were very amusing and the Chancellor of the Exchequer thoroughly enjoyed himself—as to what their action would be in regard to the Income Tax Resolutions. But what I am going to put to the House is this: That everyone knows that any difficulty with regard to the passing of such Income Tax Resolutions has been created by the arrangements of the Government with the hon. Gentleman the Member for Waterford (Mr. John Redmond) and the party which he leads. I do not apprehend that the Government believe they would experience any difficulty from hon. Members on this side of the House in passing a Resolution in some shape which would have met the requirements of the present time. What really prevented the Government from introducing a Resolution was the attitude of the hon. and learned Member for Waterford; he would not allow them to do it. That is the reality of the matter and all this talk and cross-examination is merely intended to blind the eyes of the country, when the responsibility for the real situation that exists lies between the Members of the Treasury Bench and the Leader of the Irish party. No one denies, I think, that a Resolution with regard to the payment of Income Tax would be a very valuable weapon in the way of enabling money to come into the Treasury. The Solicitor-General spoke the other day upon this subject, and spoke with very hesitating and uncertain sound as to what the effect of such a Resolution would be. I wish to point out one respect in which it is beyond all question that it would be of the greatest possible value.

We have got the admission of the Chancellor of the Exchequer that the money which is being deducted by companies and others who deduct Income Tax at its source when paying dividends on shares, annuities, and so on, is not being paid over to the Government. Why not? It is familiar knowledge to anyone who has looked into this subject—that the Income Tax Acts provide that in all cases where Income Tax has to be deducted at the source the person paying is bound to make the deduction of any Income Tax which is payable, but that presupposes that there is some Income Tax which is to be enforced for the current year, and unless you have the Resolution of this House passed the whole action with regard to these deductions becomes absolutely irregular. That is why the Government are not getting this money. The companies and others are retaining the amounts that they supposed will be due as Income Tax. As to the legality of their action, they may settle that with those to whom they are responsible. But what is important for the country is that the Government are not applying to get it; they absolutely refuse to take the steps which would enable them to get the vast sums of money which is in the pockets of those companies. Surely it is right that the country should realise what the Government are doing, and how, in pursuance of their arrangement with the hon. and learned Member for Waterford, they are creating an artificial necessity for borrowing which would not exist but for the tactical exigencies of the present Government.

There were two things to which the Chancellor of the Exchequer alluded in his speech. One of these really calls for serious reflection. He said the Government would welcome voluntary contributions. I suppose we are all familiar with hospitals and other institutions which announce that they are entirely supported in that manner. I think that the Chancellor, from what he says, must be seriously considering the propriety of putting up in front of the Treasury, on a board, "Supported entirely by voluntary subscriptions." An advertisement of that kind might attract the attention of a benevolent public, and might supply the deficiency which the Chancellor refused to supply himself with in the usual manner. What is the difficulty about this matter? It all rests with the hon. Member for Waterford. We have heard of a great many deputations of late. Deputation after deputation has waited upon the Government from various branches of their supporters and allies. What effect each deputation has had upon the many changes of policy that have taken place must be left as a matter of conjecture. I am sure that the Government must be weary of receiving deputations, and I would suggest, by way of varying the programme, that they should send a deputation to the hon. and learned Member for Waterford, and ask his leave to do what the exigencies of the financial situation require. I am perfectly certain if such a deputation had as its spokesman the Chancellor of the Exchequer his persuasive eloquence might possibly soften the hard heart of the hon. and learned Member for Water-ford. The hon. and learned Member for Waterford is perhaps made of sterner stuff than the Members of the present Government, but he may feel that in his strength he might be merciful, and that his dominance is so established that he could afford to be magnanimous and allow the British Government to bring the finances of the year into order. We are face to face with this combination for the purpose of effecting a vital change in the Constitution of this country, and to keep that combination together the finances of the country are to be allowed to go into disorder and money is to be borrowed when you could get it for the asking. I cannot help suspecting that the Government have at the back of their heads the idea that they may go out of office without having passed the Budget at all, and it is perfectly plain what they mean to do is to say that the financial confusion thereby occasioned would be the fault of the House of Lords. I do not think that they would succeed in inducing the most ignorant elector to fail to recognise that it is the deliberate action of His Majesty's Government which has seriously aggravated and created the difficulty which at present exists with regard to financial matters. The Government know perfectly well that any difficulty that exists is due to their alliance with the hon. and learned Member for Waterford and the terms of their alliance with him. If that is at the back of the head of His Majesty's Government, they are maintaining the part of the petulant gambler, who, when luck goes against him, upsets the table. They want to leave the financial mess they have created to others to try and put right. I protest against such action, and I say that while any Government holds office it is their duty, as trustees for the taxpayers of this country, to conduct the finances of the country upon sound business principles, and not to subordinate every principle of sound finance to the necessity and exigencies of a squalid Parliamentary intrigue.

Mr. BERTRAM G. FALLE

I have heard several new Members ask the indulgence of the House on the occasion of their first speech, and I would also like to do so, especially as I follow so finished a debater as the Chancellor of the Exchequer. The right hon. Gentleman made the charge that we did not discuss Naval Supplementary Estimates because of some ulterior motive. I can assure the right hon. Gentleman that the motives on these benches were absolutely honest. Our only object is to secure the efficiency of the King's Navy and the security of this country. I think for the right hon. Gentleman to assert that we have ulterior motives is hitting back in the style which would be permitted in no ring in the country. On these benches we put the Navy before party politics of any kind. As for the Supplementary Estimates, we did not discuss them because we were told the Debate had to be strictly limited. Otherwise we should have been able to satisfy the right hon. Gentleman in that respect, and when the Navy Estimates are brought before this House I do not think the Chancellor of the Exchequer will have any reason to complain.

Mr. J. S. AINSWORTH

It must not be supposed that the hon. Member opposite has been speaking on behalf of the electors of Scotland. If the hon. Member had been before a Scottish constituency I am sure we should not have heard him use the phrase "ignorant electors." I do not say we have no ignorant electors in Scotland, but the average intelligence amongst Scottish electors is immeasurably higher than it is in any other part of the United Kingdom, except possibly in Wales. In Scotland for 400 years we have had the best education in Europe. At every election in Scotland the candidates are well heckled. I think if hon. Members opposite had stood for five or six weeks before the electors of a Scottish constituency, and had been asked every possible question under the sun, their views would have been very different. We have been asked to pass a special Resolution affirming the Income Tax, but surely those who make this suggestion are not acquainted with the usual procedure. In financial matters we begin with Resolutions, and they are gathered together in the Budget, and this settles the collection of those taxes. They go to the House of Lords, and afterwards obtain the Royal Assent. Those Resolutions have immediately on passing this House the force of law, and taxes are paid under them. That is in accordance with the custom of the Constitution, but now that custom has been broken. It is no use passing such a Resolution now. If you passed such Resolutions you would have to wait in order to get the assent of another place, and therefore a Resolution passed in this House has no longer the same value. If you passed an Income Tax Resolution, how do you know it is going to go through the House of Lords? [An HON. MEMBER: "How do you know it will go through the House of Commons?"] Perhaps hon. Members opposite will excuse me for saying so, but in my opinion, with a view to advancing the interests of their side, they have chosen to support the House of Lords in this breach of the custom of the Constitution. ["No, no."] Can hon. Members who cry out, "No, no," point out a single instance where it has ever been known that the House of Lords has interfered before with the financial proposals of this House? [An HON. MEMBER: "Yes, in 1861."] What was established at that time was that all financial Resolutions should go up in one Budget, and now we are being asked to send up Resolutions legalising each tax separately. Therefore, to talk about passing a Resolution legalising the Income Tax at this stage is absolutely beside the mark. I regret that the Leader of the Conservative party has endorsed the action of the House of Lords in this breach of the privileges of the House of Commons, and I am sorry that Conservative candidates at the last election have adopted the lead of the-Leader of the Opposition. In Scottish constituencies the electors understand perfectly clearly that they can elect any Member they choose, and they know perfectly well that any Member of the House of Commons can be made Prime Minister. Consequently, they feel that the House of Commons is an absolutely representative body, but as regards the House of Lords, what power have they over the proceedings of their Lordships?

Mr. DEPUTY-SPEAKER

Order, order. The hon. Member is getting very wide of the question before the Chair.

Mr. AINSWORTH

I will put the whole thing in one sentence. The Scottish elector thoroughly understands the proceeding to establish taxation now. He knows the House of Commons is his House and that any interference with its privileges is an interference with his own privileges.

Mr. DEPUTY-SPEAKER

That is precisely the point I told the hon. Member was not in Order.

Question, "That the Bill be now read the third time," put, and agreed to.

Bill accordingly read the third time, and passed.