NEW CLAUSE.—(Death Duties.) (Hansard, 5 August 1912)

§ Mr. STEWART
As this is the only Clause which refers to the much-spoken-of question of Consols, I hope the Chancellor of the Exchequer, even at this late hour, will be willing to consider any scheme of a helpful character which may be laid before him. The concession asked for is only that people, on paying Death Duties, should be able to pay up to a one-tenth part in Consols at par. The mention of the word "par" may raise a smile among certain hon. Members opposite, but I would remind them that a series of articles appeared in the "Daily News" last January, in which a scheme was propounded to redeem the whole of our Consols at par in sixty-two years, by applying £19,000,000 annually for that purpose. The Chancellor of the Exchequer may have in his mind the objection that if you accept in payment Two and a Half per Cent. Consols at par you lose a certain amount of your collection in cash. There are, however, advantages which would compensate for that. The great virtue of the thing would be that you would make a market for Consols. Everyone would want to buy a few Consols then.
At the present time there is only one buyer in the Con sol market, and that is the Government broker. A large number of small buyers would make a much better market than having one buyer. I can quite understand that there are orthodox objections to my proposal, but we and that the position with which we are confronted is an exceptional one, and I think, if the Chancellor of the Exchequer can see anything that would be beneficial in this scheme, he will not be 2875 put off it by being afraid to disturb the waters of departmental autocracy. I submit that as the Government are the greatest holders of Consols in the country, if the price were steadied they would be in that way the greatest gainers. It is admitted on all hands that the continual drop in Consols is a very serious matter, and I am credibly informed that even after the £5,000,000 were voted to the extinction of debt, that the price of Consols fell to a lower point than ever before, and that private bankers came in and bought Consols which they did not want, so as to stop the drifting away of our national security. If you provide, under this scheme, for the setting apart of a sum of, say, £10,000,000 annually for the redemption of our capital liabilities, the application of that sum, with the diminishing amount required for the payment of interest, would bring our debt down to within reasonable limits in the course of a few years, provided that peace is guaranteed in the meantime. I can well understand the Chancellor of the Exchequer saying that he has no means of finding the money; but my answer to that is that last year he had a surplus of 6½ millions, and he has not taken one penny off the taxes.
Therefore, I think we can fairly claim that if the taxation of the 1909 Budget is going to produce the fruition that its author expects of it, there will be a very handsome surplus which he can devote to this particular purpose. This new Clause would have this effect, that Consols would become acknowledged as a real debt, instead of a deposit which is never redeemed. We have the example of our neighbours in France redeeming a certain amount of their debt at par, and there is also the example of the Germans. My suggestion is merely a reproduction of the principle you have already in accepting payment in kind. Under your new Land Tax Clauses, I understand that you take houses and fields, if people want to pay you with that sort of security. A little introduction of the same principle, that is followed by our foreign neighbours in reducing a certain amount of their debt at par, would lift up the whole position, and this little leaven would tend to leaven the whole lump. I think we ought to adopt some such scheme for the reduction of our capital debt The Death Duties are deducted from the means of the individual, and represent a diminution of his capital, and I submit that they ought, in 2876 a small degree, to be devoted to the reduction of our capital debt. I hope the Chancellor of the Exchequer will see his way to accept this Amendment as a means towards effecting a desirable end.

§ Mr. LLOYD GEORGE
I confess that this seems to me to be rather a fantastic proposal. It is in effect a method of reducing the Death Duties. I have listened very carefully to the argument of the hon. Member to see if he had only read arguments in favour of the reduction of Death Duties, but I have listened in vain. I cannot possibly accept such a Clause.

§ Mr. STEWART
At this late hour, I will not argue the case further.