§ The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George)Before the announcement of the Second Vote of Credit I read a good many forecasts in the papers as to the expenditure on the War, and I was very much struck by the fact that they were all underestimates, and that the public until this figure appeared had no idea as to the costliness of 349 the undertaking. But the Prime Minister yesterday gave such figures as could consistently with the public safety be given of the details of that expenditure; therefore it will be quite unnecessary for me to dwell upon the Vote of Credit or the sum of money which it is necessary for me to ask in submitting proposals to the House by way of raising the necessary money. The expenditure is higher in proportion to the forces in the field than the expenditure in any other country. There are two or three reasons for that. However, I am not sure that it is generally realised how many men we have under arms at the present moment. We have at least 2,000,000 men serving the country under arms at the present moment, and, if the next million is enlisted, as I confidently anticipate it will be, in the course of the next few months, there will be 3,000,000 men under arms. It is forgotten too often that, in addition to a very considerable Army, we are maintaining a huge Navy as well. The separation allowances to our troops and to those serving in the Navy are on a more liberal scale than those of any other country in the world. I hesitate for a moment to give the actual figure, but the estimate, roughly, is that, when the million men are added to our Army, the separation allowances will cost something like £65,000,000. In addition to that, the pay of the Army is considerably higher. There are two or three other items of expenditure which make the cost of our forces, both on sea and land, higher in proportion to the number of men incorporated in them than probably in any of the other belligerent countries.
I submit to the Committee to-day proposals not merely covering that huge expenditure up to the end of the financial year, but also for the shortage in the revenue directly attributable to the circumstances and conditions of the War. The Budget Estimate of the revenue was £207,146,000. Up to the time when war was declared there was every prospect that that Estimate would be fully realised. Since then there has been a drop in the revenue not nearly as considerable as one would have feared, but by the end of the year I anticipate that the Treasury will 350 be short of £11,350,000. I therefore estimate that the revenue on the present basis will produce £195,796,000. The estimated expenditure on the basis of the estimates actually presented before the outbreak of War was £206,924,000. To this must now be added the abnormal expenditure due to the War of £328,443,000. That means that we have to find before the end of the financial year a total sum of £535,367,000. If the revenue which we anticipate will be collected by the 31st March is deducted from that amount, that will show a deficiency of £339,571,000. The question is how that is to be met. Of course, it is far and away the largest sum that Great Britain has ever had to meet in the course of a single year. No war has been as costly. The cost of no war has even approximated to the cost of the present War. The largest amount spent by Great Britain on war in a single year before the present War was £71,000,000. The Bevolutionary and Napoleonic Wars cost in the aggregate £831,000,000; that war was spread over twenty years. The Crimean War cost £67,500,000; that was spread over three financial years. The Boer War cost £211,000,000; that was spread over four financial years. The first full year of this War will cost at least £450,000,000. We are continually increasing the number of men, and therefore the rate of expenditure increases.
4.0 P.M.
It is obviously out of the question to raise the whole of this sum of money by taxation. The first question I should like to ask the Committee to consider is this: Is it worth while raising any, and, if so, what proportion by means of taxes? If we do not tax and tax heavily, it will be a serious departure for the first time from the honoured traditions set and hitherto maintained by this country in every single war in which it has ever been engaged. Let us examine one or two of the precedents. The first great precedent to which I shall call the attention of the House is the precedent of the French wars at the end of the eighteenth and the beginning of the nineteenth centuries. The total cost of those wars, as I have already stated to the Committee, was £831,000,000. The 351 amount raised by loans came to £440,000,000. The amount raised by Pitt and his successors out of taxes came to £391,000,000. The next precedent is the precedent of the Crimean War. The total cost of that war was £67,500,000. Of that, £32,000,000 was found by means of loans, and £35,500,000 was raised by means of special taxes during the war. I should also like to call the attention of the Committee to another very important consideration—the comparative wealth of the country during the French wars of the eighteenth century and its wealth at the present moment. Mr. Pitt, in introducing his Income Tax, I think it was in 1798—just about the end of the eighteenth century—estimated the income of the country at £102,000,000. I think that was the income of Great Britain alone. As a matter of fact, Income Tax was paid upon a sum of £57,000,000, so that either he overestimated the amount of income which was available, or perhaps there may have been some evasion.
§ Mr. CHAMBERLAINThe collection was bad at first.
§ Mr. LLOYD GEORGEYes, the collection was bad at first. Let us assume that Mr. Pitt's figures were correct. Allowing for evasion, and bearing in mind that industrial wages were very low, even in comparison, the total income of the country at that time could hardly have been £250,000,000 a year. At the present time it is estimated to be £2,300,000,000. Everything was taxed — income, alcohol, food, light, auctions—everything that the ingenuity of Chancellors of the Exchequer could think of. The revenue raised for war and ordinary purposes ranged from £50,000,000 to £70,000,000 a year. That means that at one stage, one-fifth of the national income; at another, one-fourth; at another, between one-fourth and one-third, of the total income of the country was taken for public purposes. If we rose to the heroic level of our ancestors we should be raising to-day a revenue of between £450,000,000 and £700,000,000, and no borrowings would be necessary. May 352 I also point this out, that had Mr. Pitt not set that noble and heroic example, and had it not been followed by his successors, we should to-day have been devoting the proceeds of a fourpenny Income Tax to pay interest in respect of money which he found out of taxation, which otherwise would have been borrowed and have been added to the National Debt; and since that day, between £1,500,000,000 and £2,000,000,000 would have been paid upon that amount, because it would have crippled and depressed his borrowing powers. Mr. Gladstone, in considering the same problem on a much smaller scale than the one, I am sorry to say, with which I am confronted—it was during the Crimean War—made use of these words. After referring to the example set by Mr. Pitt and the principles laid down by him, he went on to say:—
These, then, were the convictions which Mr. Pitt and the successors of Mr. Pitt entertained of their duty to their country. This was the idea that they had of their obligations to posterity. Do you suppose that in those days, when the Duke of Wellington was crowning the British arms with fresh laurels from year to year, your fathers did not think they were fighting for the advantage of posterity? Did they not think they were fighting for our advantage—for we were posterity to them—when they made such efforts to meet those tremendous charges by sacrifices of their own? Why cannot you do that in 1854 which your fathers did in 1798? What were their means as compared with ours?It is equally true to-day. I could adapt that last phrase, and say, "When Sir John French and his armies are adding fresh laurels to the military story of this country, why cannot you do that in 1914 which your fathers did in 1798 and in 1854? What were their means as compared with ours?" The arguments then used by Mr. Pitt, afterwards by Mr. Gladstone, afterwards by Lord St. Aldwyn when he was Chancellor of the Exchequer, are just as applicable to-day. It must be remembered that heavy increased taxation may be inevitable as the result of the War. There will be the interest on Sinking Fund, there will be the increase of the pension list, there will be the inevitable increase in separation allowances, and the less raised during the War by taxation the heavier the taxes after the War is over. It may be asked, Why should we begin now?353 By the indulgence of the Committee I should like to address a few observations to hon. Members upon that point. I am not going to presume to express an opinion about the duration of the War. There is no man, however equipped and however competent, who can express an absolutely reliable opinion upon that subject. There may be accidents which will shorten the War. There may be accidents that will lengthen the War. It depends upon questions military. It depends upon questions political. It depends upon subtle human considerations that are outside the purview of both. I am therefore not going to express an opinion. We are fighting a tough enemy. We are fighting an enemy that cannot submit to any terms we can accept—to any terms we can prudently accept—without a smashing defeat. Let us bear that in mind when we are making our calculations. Therefore if there is any doubt about the length of the War, I am bound, as Chancellor of the Exchequer, to assume a longer period rather than a shorter period in making my plans. It would be unwise to do otherwise; it would be imprudent and show a deplorable lack of foresight.
That is the basis upon which I am proceeding, and if I assume in the course of my arguments that the War is going to take a long period, it is not because I have formed any estimate upon the subject, but because I think it is wiser to do so when you are laying your financial plans for the future. We should be all the stronger to get through, long or short; and whether long or short we have to settle once and for all the great questions that for generations have been the cause of irritation in Europe. I should like first of all to give one figure to the Committee in justification of the proposals which I shall submit for taxation. The first is this: If you take the loss of revenue and interest together upon the money we have borrowed for the War, I shall in my proposals have to find this year about £16,000,000, while next year £50,000,000 will have to be found for interest and loss of revenue. I am taking all assumptions into account, and the fact that you will probably have next year a million or two 354 millions of men who will have left this country. To that extent the revenue will be deprived of some of its support. No one suggests borrowing for any of these purposes. That would be profligate finance. It would be cowardly finance in the extreme.
The next consideration I want to put to the Committee is this: By far the greater part of the money raised, whether by loan or otherwise, for the purpose of this War, will be expended in this country. I should not like to express an opinion as to how much, but I should say at least four-fifths will be spent in this country. Immediately after the War there must be a period of reconstruction, not merely here, but in Europe, when enormous demands will be made on the manufacturing resources of this country. During the War, and during the period of reconstruction, there will be practically no competition in the neutral markets of the world except from America. We shall, therefore, practically command those markets, because America certainly cannot supply the demand. Therefore, when I am taking those two periods into account, I think we can look forward" to something like four or five years when the industries of this country will have the artificial stimulus which comes from these abnormal conditions. When that period is over, we shall be face to face with one of the most serious industrial situations with which we have ever been confronted. We shall have exhausted an enormous amount of the capital of the world which would otherwise have been available for industry. Our purchasers both here and abroad will be crippled. Their purchasing power will have been depressed, and—let us make no mistake—Great Britain will be confronted with some of the gravest problems with which it has ever been faced. Why do I say that? For this reason: Because I want to impress upon the Committee with all the earnestness at my command that it is desirable that the nation, during this period of inflation, should raise as much money out of taxation as it can be induced to contribute. Every twenty millions raised annually by taxation during this period 355 means four or five millions taken off the permanent burdens thereafter imposed on the country. We shall certainly need all that relief to face the period which we have got in front of us. With wisdom, sagacity, and foresight, we shall come through it, but let us think about it in time, and lay down our plans accordingly. If the right hon. Gentleman the Member for West Birmingham is Chancellor of the Exchequer in those days, if he will allow me to say so, he will thank me for listening to his first wise appeal, and for turning a deaf ear to his second suggestion, which was not quite as wise. I think his first instinct was the sound one, I think it was the courageous one. It is the one to which I am going to listen.
Taxes will have to be imposed to meet permanent charges as a result of the War. I hope there will be a great reduction in the cost of armaments as the result of the War. I should regard the War as having failed in one of its chief purposes unless it led to an all-round reduction in the inflated cost of armaments, but even then, for the first few years after the War, we must anticipate heavy increased charges for interest for Sinking Fund, for separation allowances, and for pensions. I wonder whether the right hon. and hon. Gentlemen realise that if the War proceeds for any long period the pension list will be increased probably by £10,000,000 a year. It is easier to raise taxes in a period of War and to lower them in a period of peace than it would be to raise even lower taxes in a period of peace. War is the time for sacrifice in nations. They are in the spirit of sacrifice, and that makes a difference. It is a time when men know that they are expected to give up comforts, possessions, health, limb, life—all that the State requires in order to carry it through the hour of its trial. It is a time of danger, when men part willingly with anything in order to avert evils impending on the country they love, and I am perfectly certain that when there are millions of our countrymen volunteering to risk their lives, men who cannot volunteer are not going to grudge a fair 356 share of their possessions. It is not merely a time of sacrifice, it is a time for the temper of self-denial, it is a time to ask the nation to make sacrifices. People who cannot go and give their lives are anxious to do something else to assist, and I am perfectly certain I should be committing an unpardonable blunder against the highest interests of this country if as Chancellor of the Exchequer, however disagreeable the task may be, I did not take this, the earliest possible opportunity, for submitting proposals that would enable people to contribute something towards carrying on the War in which the honour and life of their country is so deeply involved.
It is not easy to refer to what other countries are doing. Russia is taxing and taxing heavily in that wonderful spirit of heroism and self-abnegation which Russia is showing all round, and which is the marvel of the whole world. It is not merely that she is taxing and taxing heavily, but she is doing that at a moment when she is prohibiting the sale of a commodity which is bringing in tens of millions to her pockets. It is one of the greatest acts of national heroism which I think any country has ever displayed in the face of great danger. Other countries are not in the same condition as we are. The oversea trade of Germany and Austria is completely cut off by our Fleet; nine-tenths of their overland trade is gone; they are deprived of their raw material; they are deprived of a good deal of their food supplies; their exports are practically gone; not an unimportant part of French territory is still, unfortunately, in possession of the enemy. This country is absolutely free from the invader. Not only that, but our oversea trade is carried on practically without any interruption. We have lost a certain amount of lucrative business on the Continent, but the markets of the world are open, not merely for the trade we used to carry on, but for the trade the enemy used to carry on before the War. I am quite alive to the danger which the right hon. Gentleman the Member for West Birmingham pointed out of the possible effect upon the loan. But after anxious consultation with those who have 357 been advising me—and I do not think that anyone has ever been privileged to have had a better or more sagacious set of advisers than those who assisted me throughout the whole of this great crisis—the right hon. Gentleman opposite, the Member for West Birmingham, if I may say so, is one of them, and one of the most sagacious—but in this respect I should point out that, at any rate, the vast majority of them are of opinion that the readiness to tax ourselves for the purpose of paying some part of the burden of war, in their judgment will strengthen our credit and give increased confidence that we are not going on by the easiest method of borrowing, but that we are going to carry on the very best traditions of the finance of this country by taxing ourselves for the time being.
And as to the effect on trade, the Government propose to levy no taxes that will interfere with any productive industry. You can always find excuses and reasons against either levying or paying taxes. "This is not the time, this is not the way, this is not the method, this is not the amount, and these are not the persons or classes who ought to pay." It is always disagreeable. The function of the Chancellor of the Exchequer upon these occasions is the least picturesque and the most perilous of all the combatants. He is simply a coal-heaver; he is filling the bunkers of the battleships and cursed by everybody as a nuisance; but still it is a very essential function, and my appeal to the Committee—it is not necessary, I am sure—is that we should show courage. It does not require very much courage to tax ourselves, to give part of our income to fight the enemy, but let us show that we civilians of all classes are perfectly prepared to take our share of the burdens of this War. It is for these reasons that the Government propose to submit to the House of Commons proposals for raising a substantial sum by means of taxes. On the ground of policy, as well as of justice, it is inexpedient that a great war, involving national honour and existence, should be financed by contributions levied upon any section—upon a minority of the population. It is peculiarly a case for every 358 class, every condition, every grade, to bear their share of the burdens. I shall therefore submit proposals which will bring in, so far as we are able, all classes of the community.
I now come to the first of them. Naturally, the first resort of every Chancellor of the Exchequer in these conditions is the Income Tax. As far as the ordinary Income Tax is concerned, I propose, that although the rate of the tax shall be the same, this year as next year, so far as the proposals of the Government are concerned I propose that this year the new rate shall be charged from the 1st of December, and therefore only in respect of one-third of the year's income. I propose that in respect of unearned income, that a man shall make an additional contribution of one-forty-eighth of his income towards his country's needs this year—I will give the actual figures later on—and next year that he should pay one-sixteenth. In respect of earned income, the income which is charged at 9d., I propose this year that a man should contribute an additional one-eightieth of his income towards the cost of the War, and next year three-eightieths. After what I have said about Mr. Pitt and the contribution he levied in his generation that does not sound very heroic. I shall point out later on that as far as the small incomes are concerned it does not amount to that. Putting it in another way, it looks more formidable. I propose that the Income Tax should be doubled.
§ Mr. CHAMBERLAINDoes the right hon. Gentleman propose 2s. 6d. in the pound on unearned income?
§ Mr. LLOYD GEORGEIf the right hon. Gentleman will allow me I will come to that.
§ Mr. CHAMBERLAINI cannot follow the one-forty-eighth.
§ Mr. LLOYD GEORGEI did not mean the right hon. Gentleman should follow it just yet. I want to bring the Committee gradually up to it. I therefore propose that as a basis the Income Tax should be doubled, but that this year that should only be collected in respect of one-third of the 359 income. That would mean that this year the Income Tax would be levied at the rate of 1s. 8d., 1s. in respect of earned income on the 9d. class, and 1s. 8d. for the rest; next year at the rate of 1s. 6d. and 2s. 6d., and the same thing will apply to the Super-tax. Let me show exactly what that means. With regard to small incomes it looks much more serious than it really is. For instance, take an income of £200, that means that the earned income will be contributing one-four-hundredth part of that income and the unearned income will be contributing one-three-hundredth part. It is 3d. in one case and 4d. in the other on the basis of the deduction of a considerable abatement. It is upon £40, and not upon £200. In addition to that it must be borne in mind that where you double the Income Tax you double the abatement in respect to children always, because that abatement is not on the basis of the rate of the Income Tax but upon the basis of £10 deducted from the assessment.
Therefore the abatement in respect of children will be double when you are doubling the Income Tax rate. The reason why the scale is different, why we do not impose the whole benefit of this new scale, and practically postpone it until the beginning of the next financial year is that, first of all, we recognise that when war was declared a third of the year had already passed. Men had already made their arrangements for their scale of expenditure, and it was very difficult for them to adapt themselves immediately to the new conditions. The second is this, that during the first year there will be a greater hardship in respect of those whose incomes have been swept away altogether by the War. We hope to be able to make certain arrangements to meet some of the very worst cases, and when we come to the Income Tax Resolutions—I shall not propose any Income Tax Resolutions to-night—we hope to be able to set forth in greater detail the proposals which we intend making for meeting the very worst cases where, owing to the War, practically the whole of a man's income has been swept away. The amount which the 360 Inland Revenue expect to collect this year will be from Income Tax £11,000,000 additional, from Super-tax £1,500,000, a total of £12,500,000; next year from Income Tax £38,750,000, from Super-tax £6,000,000, a total of £44,750,000 increase. So much for Income Tax.
Now I come to the taxation upon the classes which are not included in the Income Tax scale. Indirect taxation always presents great difficulties. It is borne unequally; it is often not according to-the means but according to the habits of the taxpayer. A man may be out of employment at the time, still he has to pay, and that comes hard upon particular industries. That is inevitable with any indirect taxation you can possibly think of. The Government have tried to seek some means by which they could raise money from the non-Income Tax paying classes, without imposing anything in the nature of a direct tax upon commodities. We naturally thought of the proposal which has been made from time to time, a tax upon wages. That would undoubtedly mean that a man would be paying upon what he actually received, and according to what he received. Well, now I am sorry to say that after very lengthy consideration we felt ourselves bound to dismiss it—for the time being—and for these reasons: there would be difficulties of dealing with changing rates of wages, with casual labour, with outworkers, with piece-workers, with half-timers, of whom at present you have a very large number; there is the difficulty to employers of working any system of card collection, except on a flat rate. There was the question of variation for married people and people with children. It would have been obviously unfair to charge the same rate upon a man with a large family as upon a bachelor. Then came the difficulty of how the employer was to collect the amount and so discriminate between one and the other.
§ Mr. JOHN WARDYou should tax the bachelors alone.
§ Mr. LLOYD GEORGEWell, there would be the same difficulty with an employer in that case. Then there is the 361 case of the non-insured person not in the employed class—the small shopkeeper, the man who is occasionally employed, but at other times is his own master. To attempt to collect a small Income Tax upon the hundreds and thousands, and possibly millions, of that class was a prodigious task, which we could not contemplate doing within the course of the next four or five months, and we feared that the cost of collection would be quite out of proportion to the revenue derived. We therefore very reluctantly came to the conclusion that we must resort to the old method of raising taxation by means of indirect taxes upon commodities. We had all sorts of suggestions, the usual suggestions for fancy taxes, most of them irritating and all of them unproductive. We dismissed these. Therefore we had to resort to the very limited list which the experience of successive Chancellors of the Exchequer indicated as the only sources out of which you could raise any considerable revenue in time of national need and emergency.
The first of these is beer. Considered as a tax on alcohol, beer is charged at the present moment at an absurdly low figure as compared with any other alcoholic beverages. I will give one figure to the Committee in order to prove this. Beer brewed at the standard gravity—I shall have a word to say about standard gravity in a minute—of 55 degrees, will, after fermentation, contain from 9 to 10 per cent. of proof spirit, say 9 per cent., or something like three and a quarter gallons of proof spirit to the barrel. Charged as spirit, this would pay £2 7s. 10d., but charged as beer it pays 7s. 9d. [HON. MEMBERS: "Put it up!" and "Put it down!"] No one would, of course, dream of taxing beer on the spirit basis at this rate, but it does indicate that beer, as alcoholic liquor, is at present taxed very low. I am sure the Committee will not run away with the idea that all beer contains from 9 to 10 per cent. of spirit, as much of the beer consumed is brewed at gravities much lower than the standard. People who drink beer and who do not consider they are drinking intoxicating liquor will be glad to know that light beers 362 contain only from 5 to 7 per cent. of proof spirit—just a little above ginger ale. Slight additions have been made from time to time to the Beer Duty, but there is one vice common to all these additions — they hit the trade hard, but they have been very difficult to pass on to the consumer because they have been too small. The trade has at last, by a good many devices and expedients, all of them honest and some distinctly beneficial to the public, saved themselves from ruin. The gravity of the beer has been lightened, and the public has become accustomed gradually to drinking lighter and leas alcoholic and much more salubrious beverages, and the health of the community has undoubtedly improved in consequence. But it is quite clear that the trade are at the end of all their expedients in that respect, and that no amount of scientific resource would enable them to absorb a very considerable tax without passing it on to the consumer. Therefore we must make up our minds that if a duty is to be imposed upon beer it must be one that the publican and the brewer can, and, I may say, ought to, pass on to the consumer, because it is right that the duty should be a duty imposed upon the consuming public, and not upon the trade.
I have had considerable inquiries made as to the form in which the public take their beer. I left my right hon. Friend the Home Secretary (Mr. McKenna) to prosecute these inquiries, and he assures me that they generally drink in half-pints. The greater part of the demand is one for glasses and half-pints. They are not the same thing, although probably some of the public may think they are. A glass is not a measure at all. It is just what the publican makes it in order to save himself from the Chancellor of the Exchequer, and it varies according to the Chancellor of the Exchequer for the time being, but it is somewhere about one-third of a pint. It is a valuable commodity for the money, but it is not a half-pint. My right hon. Friend has had 120 public-houses visited in a single evening, and there at the public bar there were 4,386 glasses, 10,443 half-pints, and 1,500 pints 363 called for. It is perfectly clear from that the bulk of the drinking is in half-pints. [An HON. MEMBER made an observation which was inaudible.] Oh, no! I am quite prepared to believe that of a thin beverage like beer, they would want more than a half-pint in these trying times. That means that if we are going to impose a tax which the publican and brewer can pass on to the consumer, it must be in some current coin of the Realm that can be put on the half-pint. That measure cannot be varied. The glass might be varied. If we had put something, say, in the form of a halfpenny, on the pint you may depend upon it that the halfpenny would get on to the half-pint and that the revenue would get no share of it. The brewer and publican, in fact, would be driven to put it on in that form to save themselves. Therefore we take that basis, and that is the basis upon which we propose to proceed—a halfpenny the half-pint. Every half-pint that a man drinks he will be contributing to the carrying on of the War. I commend that to my hon. Friend the Member for Northampton. I therefore propose that the Beer Duty should be increased by 17s. 3d. per barrel. This will allow the retailer to charge an extra halfpenny for half-pints, but it will leave the brewer and the publican a fair margin for waste, for bad debts, for interest, and for a fair profit on turnover. May I also point out that the lighter the beer the larger the margin, and that has been the policy of the House of Commons in order to encourage the drinking of lighter beer.
There are one or two concessions which are proposed to be made to the retailer and to the brewer. I now come to the concession which we propose to make to the retailer. There has been a curtailment of hours under the Scottish Temperance Act, which is a permanent Act, and under the Intoxicating Liquor (Temporary Restricting) Act of this year. The Scottish publicans have petitioned the Exchequer to take that into account in the levy of the Licence Duties. They petitioned, I think, that there should be a reduction of one-seventh in respect of the two hours 364 knocked off. In this country there has been a considerable curtailment in the drinking hours in London, and some of the more important and more populous centres, and I think the demand of the retailer is a perfectly fair one. If you are going to restrict by law the facilities for drinking, I think there ought to be a reduction in the Licence Duty charged by the State in respect of that restriction, and we propose practically to take the standard which the Scottish publican has laid down. We propose that the publican should be allowed one-fifteenth of the Licence Duty payable by him for every hour of curtailment sanctioned by the Home Office up to a maximum of one-fourth. Of course, you take into account the number of months in the year for which the curtailment operates, and if it is only five or six months we do not make the same allowance as if it were a curtailment in respect of the whole year.
There may be an exception made in the case of great camping centres, because, although in these camping centres there has been a great curtailment of hours, the amount of custom has necessarily increased, and increased very considerably. It would be unfair to give a reduction to them which is extended to publicans who are losing custom in consequence of the War, when their custom has increased considerably in consequence of the War. That has been put to me very strongly by the War Office, and we are considering the form of the exception we may propose in the case of these camping centres. I think that will commend itself to the Committee as being a very fair proposition. That concession this year to the revenue will cost £450,000, and next year £550,000. I will just explain to the House why there is so little difference between the two. It is because the licensing year is not coterminous with the financial year. The licensing year commences in England, Wales and Ireland on the 1st October, and by far the larger part of the duty is payable in two moieties in October and February. Hence, on 1st February next, the publican will receive an allowance up to the 30th September next. In this way the 365 cost of the concession is nearly as great this year as next. The Scottish licensing year, I think, begins on 29th May.
I now come to the concession we propose making to the brewer. It is with regard to the payment of duty. We realise that the brewer will have to advance a very much more considerable sum of money for the purpose of paying this duty than he had in order to pay the old duty, and, therefore, that a larger sum of money will be lying dormant and unproductive than under the old system. At present the charge for duty on beer is made up at the close of each month, and the duty is payable not later than the fifteenth day in the month following. A considerable quantity of beer is actually consumed before the duty is paid. In view of the much larger sum to be found to meet the duty charges, it is proposed to give a month's credit in future, and duty will be payable not later than the middle of the second month following the month of charge. So far as the revenue is concerned, this will mean that in the first year no duty whatever will reach the Exchequer during the first month following the imposition of the duty. This will be an important concession, and will give substantial assistance to the brewer at the time of the change.
§ Sir G. YOUNGERDoes the right hon. Gentleman propose to give the brewer any assistance to finance the transaction? It will be hundreds of thousands in some cases.
§ Mr. LLOYD GEORGEThe hon. Gentleman will see that there is a considerable margin between the halfpenny proposed to be charged, and which will undoubtedly be charged, on every half-pint, and the amount which will be collected by that halfpenny in respect of the balance, and we are of opinion, particularly having regard to these concessions, that margin will be ample to repay the brewer for financing the transaction, especially when we extend the credit. We also propose to make a concession in respect of export beer, and this will give very considerable relief to the trade in exporting beer, which, I believe, is an increasing trade. The export of beer requires some consideration under a system of high Beer 366 Duty. No beer is brewed in bond, so that the drawback of duty can be claimed only when beer is exported. With a low duty, the question of advancing the duty on export beer is not of much consequence, but it must be admitted that it is a different matter when there is a very high duty on beer. It is proposed to allow brewers and exporters, if they so desire, to bond beer intended for export, so it will be unnecessary for them to advance the necessary capital under those conditions for the payment of the duty. In such cases the drawback will be paid on the deposit of the beer in bond, and the brewer will benefit to the extent of the interest on the capital which would otherwise be locked up in the duty while the beer was maturing. I understand that these beers are kept for some time in order to mature. The brewer will also get more drawback, in that no duty will be paid in respect of the natural waste which occurs during the maturing of the beer. This concession will place the exporter in a distinctly better position than he is at present, and this at the expense of the revenue. The export trade for beer has for some time been showing a very considerable advance.
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I have announced the two concessions, and come to the amount of the probable receipts. This year I anticipate receiving from this increase in duty £2,500,000, less a reduction of Licence Duty of £450,000. That would mean a net amount of £2,050,000. In 1915–16 I anticipate an increase in duty of £17,600,000. This is on the basis of a substantial decrease in consumption, due not merely to the effect of the increased duty, but also to the curtailment of the hours under the Scottish Act and under the Act of my right hon. Friend the Home Secretary, and to the fact that there will be 2,000,000 men abroad who were in England last year, some of them helping the revenue; and, also, as I have pointed out, to the anticipated decrease of consumption owing to the increase in price. If you deduct from that the reduction of Licence Duty, £550,000, that will make a net receipt next year of £17,050,000.
§ Mr. CHAMBERLAINCan we have the estimated decrease in consumption owing to the different causes?
§ Mr. LLOYD GEORGEYou mean the aggregate. I cannot give it in respect of particular items. It is 35 per cent. Taking all these into account, we anticipate a reduction of consumption of 35 per cent. I should like to review one or two other commodities which naturally press themselves upon cur consideration. One of them is spirits. I have already pointed out that on 3¼ gallons of proof spirit whisky would pay about £2 7s. 10d., whereas beer, with the new duty, will only pay 25s., so that whisky will still be much more highly taxed than beer. In 1909 we imposed a very heavy duty upon spirits without any corresponding duty on beer, and the trade reeled for some years under the blow; so much so that, for the first year at least, so far from receiving anything from that increased duty, we lost money by it. Inasmuch as we are raising taxes for the immediate necessities of the time—for the conduct of the War, I am advised that to attempt to raise money by means of putting on a considerable additional duty on spirits would be futile, and that you would not get your revenue, but, on the contrary, might lose by it. Therefore, I cannot afford at the present moment to press the House of Commons to repeat the experiment of 1909. Another tax which has been pressed upon us is one upon wine. Let mc say this about wines: at the present moment they are producing something like a diminishing revenue. At present we are collecting no duty on German wines. Even in a full year German wines only contribute £84,000 out of a total of £1,127,000. Any duty upon wines at the present moment would be a heavy duty upon commodities which come to us either from the Colonies or from countries in close alliance with us. For instance, out of £1,127,000 received from wine, £405,000 comes from Portuguese wines, £315,000 from France, and the only other considerable item is one of £214,000 from Spain. Then there is £47,000 from Australia, and £21,000 from other British 368 possessions. It therefore comes to this, that, at the present moment, it would be undesirable for diplomatic reasons, and it would not be very productive, to increase the duties upon wine, especially as we are increasing very substantially the levy upon the wine-drinking classes of the population by increasing the Income Tax.
We are taxing those who drink beer and, naturally, I have been devoting my attention to the elusive teetotaler. I can assure you he is as difficult to catch as was the "Emden," but I think I have got him. It is a great mistake to imagine that you get him by taxing mineral waters. It is a perfect delusion. He is the last man to drink mineral waters. The teetotaler never drinks soda water, although he is proverbially supposed to do so, and to tax it would only be another way of taxing those who drink whisky. Three-fourths of the mineral waters in this country are drunk by consumers of alcohol, and half the rest are drunk by children. One's only chance of getting at the teetotaler is by taxing tea. [An HON. MEMBER: "Cocoa!"] You would not get very much out of that. Let me say one word about tea. Since 1836 all tea has been charged at the same rate. All sorts of suggestions were made for a graduated scale, according to quality, but that was given up because it was found to be utterly impracticable. The uniform rate began at 2s. 1d. per 1b., with 5 per cent. added from 1840 to 1853. It was reduced to 1s. 10d. in 1853, and to 1s. 6d. in 1854. It was raised to 1s. 9d. at the Crimean war. It was reduced to 1s. 5d. in 1857, to 1s. in 1863, and to 6d. in 1865, where it remained until 1889, when it was reduced to 4d. In the first Budget after the outbreak of the Boer war it was raised to 6d.; in 1904 it was further raised to 8d., and since then it has been reduced gradually, until it is now 5d. The consumption has increased enormously in recent years until I think we drink more tea per head of population than any other country in the world except Australia and New Zealand. It seems to have an excellent effect on the fighting qualities of the population. There has recently been an increase in the price owing to the great increase 369 of consumption in foreign countries, and also owing to the fact that a good many tea plantations have been converted into rubber plantations. But quite recently prices have been going down, according as the market has adapted itself to the new conditions. I regret having to propose an increase of this duty. If I could find any other way of levying a contribution upon every class of the community I would certainly adopt it as opposed to this particular duty. Sugar it is impossible to tax because the supply is limited, and the only way in which to secure the supply is practically by the Government stepping in; therefore sugar, for the moment, is outside the range of really taxable commodities, and I am driven to propose an additional duty of 3d. upon tea; in fact I propose to put it at the same level as in 1904. During this year—there have already been some forestalments—I hope I shall get £950,000, and next year £3,200,000, because I anticipate a decreased consumption of 5 per cent. due to the increase of the duty.
The Committee will be very glad to hear that I am at the end of my tax proposals. I now come to the Sinking Fund. The charge for the debt was fixed by the Finance Act, 1914, at £23,500,000. Of this sum under ordinary conditions £16,741,000 would represent interest and management, and £6,759,000 would have been allocated to the repayment of capital. Owing to the very considerable sums of money which have already been borrowed for War purposes on the credit of Ways and Means, interest and management will amount to £17,580,000, and that leaves only £5,920,000 for capital. Under the National Debt and Local Loans Act, 1887, none of the interest on the New Debt created under the provisions of the War Loan Act of 1914 can be paid out of this charge, and the natural step would be to suspend the payment of the whole £5,920,000. But unfortunately I am not in a position to do that. Out of the New Sinking Fund £1,000,000 is specially ear-marked for the redemption of the instalment of Allotment Bonds which fall due in April. It is the last part of a loan of £10,000,000 in part repayment 370 of the South African war borrowing, under the Act of 1905, redeemable by ten annual drawings. To interfere with this last instalment would be very undesirable and might be regarded, perhaps, as a breach of faith towards the holders. I am sure the Committee will feel that it is very much better that that £1,000,000 should go to its original destination. As to the remainder of the New Sinking Fund, I propose to suspend it. This will set free £2,750,000, which can be applied towards covering the interest on the New Debt which will fall outside the first charge. Now comes the question of what we are to do with the Terminable Annuities. These might also be suspended, and there is a good deal to be said for it, but there are two good reasons for not suspending them this year. The first is, that already over three-fourths of the money has already been issued, and, if we suspend the remaining portion, we should cut off one of the sources by which the National Debt Commissioners obtain the cash which they can relend to the Exchequer for financing land purchase, local loans and telephone extension. In a year like this they will want every penny of this money. The same reason appears to preclude absolutely the suspension of the capital portions of annuities under Naval Loans, military works, Post Office and other buildings. If, then, the course suggested is adopted, the amount issued in respect of fixed debt charge will be reduced from £23,500,000 by £2,750,000 to £20,750,000.
The account so far will stand thus:—New taxation, £15,500,000; suspension of Sinking Fund, £2,750,000; total, £18,250,000. That leaves me still with a deficiency to be made up of £321,321,000. There is only one way, I regret to say, of meeting that, that is by means of a War Loan. We have already borrowed £91,000,000 by means of Treasury Bills—£1,000,000 issued before the War and £90,000,000 after the outbreak of War. Of this total amount, £38,500,000 falls due before the end of the financial year, 31st March. A further £45,000,000 falls due in April and May, the balance of £7,500,000 falling due in September. Assuming that the Treasury Bills are renewed at their maturity—and that may 371 be determined upon according to the conditions at the end of a financial year it would be a mistake for the Treasury to make up its mind upon that point so many months in advance—the net amount of further borrowings to meet our requirements to the end of the financial year would be £230,321,000. It is necessary to borrow that in order to carry us on to the end of the financial year. Now comes the question, a very important question and a very anxious question, whether we should borrow to the end of the financial year or attempt to raise an amount which will carry us on beyond the end of the financial year. There is, of course, one obvious argument, and only one obvious argument, in favour of borrowing to the end of the financial year, that is, the smaller the amount the easier we can raise it at the present moment.
But there are strong and overpowering reasons in favour of raising a sum of money which will carry us beyond that. One of those reasons is that the instalments must be spread over four or five months, and it is undesirable to have recourse to borrowing on Treasury Bills while the instalments upon the great loans are in process of being paid. The other is, that it is desirable to raise an amount that will carry the War forward, finance all the Services which are necessary to carry the War forward, not merely to the end of the financial year, but for some weeks beyond that, because at that time we shall certainly, I think, be in a better position to form an estimate as to the prospects of the War, assuming that it has not come to an end. We shall be well into the summer; the winter will have been well over, and there will have been great decisions taken. Therefore we have decided—and I think we have taken the right course—to raise a sum of money which will enable us to carry the War through without a further appeal to the public up to the month of July next year.
The precise form of the loan has also given us a good deal of anxiety. Whatever form it finally assumes, you may depend upon it that there will be some 372 people to whom the other form would have appealed more, and, perhaps, with reason, because there are good sound reasons in favour of both these forms. In one thing there is perfect unanimity. After consulting practically every financial interest and those competent to give me advice, I found they were all agreed that it was hopeless to try and float a loan under present conditions—at any rate of interest less than 4 per cent. There are two ways in which this can be done: one is by issuing stock at par at 4 per cent. interest. That, I agree, is a simple and direct method, intelligible to everybody. Probably that is the reason why it did not commend itself to the financiers. I know there is some division of opinion, but I am sorry to say the overwhelming body of opinion which I have gathered has taken a different view. The disadvantages of that course are that there is no guarantee to the investor that, in the event of the prolongation of the War, his capital will not depreciate seriously. That is the view which is taken, and banks and other institutions will be very reluctant to part with a considerable portion of the capital, deposits, and the accumulated funds left with them and place it in an investment, the value of which might depreciate considerably if the War lasted a long time. That is why, financially, the majority of those who advise me have come to the conclusion that in spite of the simplicity and directness of its appeal that was not the best form in which to issue the loan to the public.
The second form is an issue below par at 3½ per cent. and redeemable at par at a comparatively early date, the discount on the issue and the guarantee of repayment at par at a certain date being equivalent to a guarantee of interest at 4 per cent. The advantage of that would be quite obvious to the Committee. The guarantee of repayment at par at a given date and at an early date is security against depreciation. It means, on the contrary, that so far from its depreciating as you approach that date, however long the War may last, when it is redeemable at par your security will appreciate. That is infinitely 373 better from the point of view of the banks and the great institutions, and it has also this advantage, that a stock gradually appreciating in capital value to the date of redemption lends itself more readily to the purposes of credit facilities, which are likely to be increasingly important, not only during the duration of the War, but during the period of reconstruction which follows the War. We have therefore come to the conclusion that the issue of stock of that character would be, on the whole, more advantageous to the investor and to the State. The loan will therefore take the form of a 3½ per cent. security, to be redeemed by the Government at par on the 1st March, 1928, or, subject to three months' notice, at any time between 1st March, 1925, and 1st March, 1928. The issue price will be fixed at 95 per cent. The point of our securing an option to redeem three years before the termination of the full period is that there may be—no one can tell—a period of cheap money. It is not at all an impossible thing, and by no means impossible at the end of ten years. It is at the end of ten years that I propose the option should be exercisable. It is quite within possibility that there may be a short period of cheap money, and the State ought then to be in a position immediately to take advantage of it and redeem at par, so as to reduce the percentage of the security. That is why we propose that option. The prospectus will be issued this afternoon and will be immediately distributed through the Bank of England to all banks and money order offices in the United Kingdom. Applications will be received from the public through the same channels, or through any stockbroker, or through the banks in England, Scotland and Ireland. We have already had £100,000,000 offered firm. I think we owe a debt of gratitude to those whose patriotism has already responded so very liberally to the appeal which has already been made.
§ Mr. LLOYD GEORGEThe total amount of the loan will be £350,000,000 at 374 95 per cent., and the applications will be received in the way I have mentioned. A deposit of 2 per cent. will be required on application, and 3 per cent. on allotment, and the balance by instalments of 10 per cent. at intervals of fourteen to seventeen days, the last instalment being payable on 26th April. The instalments may be paid in full on or after 7th December under discount at a rate of 3 per cent. The issue will take the form of inscribed stock or bearer bonds at the option of subscribers. Inscribed stock will be convertible into bonds at any time without charge, while bearer bonds will be exchangeable for inscribed stock at any time on payment of a fee of 1s. per bond. On these terms the yield to the investor, allowing for redemption at par on 1st March, 1928, will be exactly 4 per cent. We considered very carefully the question whether investors could apply for smaller amounts than £100, but the advice we received on that point was against the experiment. It has been tried repeatedly, not merely in this country, but abroad. The result has not been satisfactory as far as the aggregate is concerned. The effect is very largely to deplete the Savings Bank. That does not help the Government at the present moment.
It is far better for us that we should induce the support of the banks in placing the Loan than that we should appeal to the small investor who has invested either in the banks or in the Savings Bank, by giving a security of something which is less than £100. It is something which rather appeals to the public, but does not mean very much in the cash that comes to the till of the State. I have, further, a very important announcement to make which will give a special value to this investment. I am in a position to state that the Bank of England has patriotically agreed to give me important credit facilities in connection with the new Loan which will have the effect, not only of bringing enormous relief to the pressure of the money market which the raising of so large a sum would otherwise create, but of making the security itself a most valuable investment to the whole financial and mercantile community. For a 375 period of rather more than three years, that is from the date of the issue of the Loan until let March, 1918, the Bank of England will be prepared to make advances against the deposit of War Stock or Bonds, without collateral security, of amounts equal to the issue price of the stock or bonds deposited without margin at a rate of interest 1 per cent. below the current Bank Rate.
§ Sir A. MARKHAMWill every other bank have that right besides the Bank of England?
§ Mr. LLOYD GEORGEI think my hon. Friend is mistaken. It is not a right but a very great concession which is made by the Bank of England.
§ Sir A. MARKHAMI ought to have said duty, because all the banks have received facilities from the Government.
§ Mr. LLOYD GEORGEI can only make the announcement on behalf of the Bank of England, and they are prepared to give these facilities to the public, and my hon. Friend realises how very important they are.
§ Mr. SAMUEL ROBERTSWill the right hon. Gentleman state how many days the option will remain open after today of taking part in the Loan?
§ Mr. LLOYD GEORGEThe list of applications will be closed on or before Tuesday. 24th November. They will be open until Tuesday.
§ Sir EDWARD COATES"On or before" means that if you have a very large number of applications you will close your list, otherwise if you leave them open for a week you might have several thousand millions applied for, or you might have withdrawals.
§ Mr. LLOYD GEORGEI can see the point of putting in the words "on or before," but the idea was to leave it open for a week. The words were inserted to prevent the possibility which the hon. Baronet has pointed out.
§ Mr. THEODORE C. TAYLORDo we understand that the Bank of England will for the next three years advance £95 on 376 one of these bonds in spite of the fact that the market price for the time being might be 92? In other words, does the Bank of England guarantee that the price for the next three years shall be 95?
§ Mr. LLOYD GEORGEThis is the notice the Bank of England will issue. "The Bank of England will be prepared for a period of three years, say until 1st March, 1918, to lend on War Loan, 1925–1928, taken at the issue price, without margin, at 1 per cent. under current Bank Rate." I do not know that it is even necessary to appeal for the patriotic support of those who are in a position to invest in this War Loan. It is of enormous importance to this country that the money should be subscribed, not merely in order to enable us to get cash to carry on the War, but for the, moral effect of it. The enemy knows that perfectly well. After taking the most elaborate precautions to see that the whole of the loan was either nominally or really subscribed—the great loan they have issued—they took also the most elaborate precautions to advertise the fact throughout the whole of the civilised world. They knew thoroughly the effect that that would have. I do not think it is necessary to point out to my fellow countrymen that the same considerations will apply to this country. It is a loan to help the country to fight the battle for its existence—to fight a battle which lends value to every other security which we have got. Victory means value, defeat means depreciation. It is an excellent investment, because the credit of Great Britain is still the best in the market, and after this War it will be a better investment than ever. There will be no more loose and malevolent talk about the decay and downfall of the British Empire. Never have her sons displayed as great valour and skill in her defence; never have they displayed as great an eargerness to rally to her standard in the hour of her danger. The vast majority of her citizens cannot, owing to age, or infirmity, or physical disability, share the toils and dangers of those who are risking their lives—those valiant fellow countrymen 377 of ours—in the field, but they can display the same readiness to render all the help in their power to their country in her need. Then, not only will the Empire win a great triumph in this trouble, but, what is more, the spirit now shown by her people of all ranks and races will be a guarantee that the victories won by her in the future will surpass even the great achievements recorded among the glories of her past.
§ Mr. CHAMBERLAINI do not think I ought to let the statement of the right hon. Gentleman pass without a word of comment. It is a statement on an occasions for us to offer to say as little as have listened to it have felt that he has spoken in the spirit which we should desire a British Minister to feel at such a crisis, and we all of us are anxious to make his difficult path as smooth as we can, and in any observations which it may be necessary in the course of these discussions for us to offer, to say as little as possible that is embarrassing to him and nothing that is harmful to our country. On this occasion, and I hope on later occasions, I shall say very little, but there are one or two observations I should like to make at once. First, as regards the question of how the expenses of this gigantic conflict are to be met. The Chancellor of the Exchequer has, I think, been under the impression that there was a much greater difference of opinion between himself and me than actually exists. Never for one moment did I, or any of my Friends, suggest that we should go scot-free of taxation during the currency of the War, and still less that, on the plea that we were fighting a war for posterity, we should discharge on to posterity the whole financial burden of it. I agree that such a policy would have been unworthy of us as citizens. It would be unpatriotic, and it would be improvident. It would be to fail in the discharge of our duty to those who follow us just as distinctly as if we failed to hold our own and play our part in the field. The whole difference between the Chancellor and myself, if difference there were, is a difference of a few months. I thought 378 that it would have been wise for him to make his proposals a few months ago. I do not make that a charge against him, for I can quite understand that he might reply to me that at that moment the Government and himself, and every public office, were so overwhelmed with work that he could not get all the attention that he required for such large proposals.
But my idea was that if you had made these large proposals at that moment, they would have come upon the country in the midst of the first shock of the War as a part, and but a small part, of all that was involved in the opening of this great struggle, and I thought that by this time the effect of them would have passed away, so far as such things can pass away, with the first shock of the outbreak of war—that trade would have steadied itself to the new conditions, and that everyone would now be pursuing his business, be that business what it may, of a warlike or a peaceful character, in the light of—if I may use such a phrase—it can only be used with great qualifications—in the light, so to speak, of settled conditions. I thought it was desirable for him to make his proposals three months ago for that reason. I doubted whether it was desirable to make them at this moment, but I never thought of suggesting that he should postpone them for more than another three months or so until we came to something more like the normal Budget time. I will not argue the question with the Chancellor now. On the advice which he has received he has decided otherwise. I think there would be no advantage in my laying before the Committee considerations which might have been alleged in favour of a different consideration, and which could not now alter the Chancellor's course, and might only suggest doubts as to whether it was the best course that could have been followed. I am content, therefore, to say that the whole difference between the Chancellor and myself was a difference of a few months. I never suggested—it would have been impossible for me to suggest—that the whole weight and burden of the financial sacrifices of the War should have been borne by posterity.
379 If, subject to that small qualification, I agree with what the Chancellor considers to be his duty under the present circumstances, I do not take exception to the spirit in which he discussed the taxes which he might impose, or to the principles which he laid down for his own guidance and that of the Committee. The Budget which the right hon. Gentleman proposes could not be, and we could not expect it to be, exactly the same Budget that perhaps any other Bench of Ministers would have proposed, and certainly not exactly the same as might have seemed most suitable in the circumstances to my colleagues and myself. But I do not want here, any more than at other stages, of what I say to raise even the faintest echoes of controversies which divided our parties, and to which we shall come again, though we leave them sleeping for the time.
As regards the taxes which the Chancellor himself has announced, I am bound to say that I think, even within the limits of economic doctrine by which he and his colleagues are bound, it is a misfortune that we should be confined for the purpose of raising our revenue to so few fruitful channels, and that we should have to extract so large a sum from each of them. I do not take exception to the general proposals the right hon. Gentleman has laid before us in regard to Income Tax. Every Income Tax payer has expected to be called upon for a large sacrifice, and every Income Tax payer, I believe, who has means will be glad to make his contribution to the common expenditure in this great emergency. But I think we ought to state quite fairly and fully what the Income Tax payer's contribution is. I was puzzled by the proportions of income which the Chancellor of the Exchequer gave, and I think that feeling certainly was shared in other parts of the House. I believe I now understand them, though of that I am not confident. But, if I do, let me say at once that they are not figures to be quoted as the contribution made to our taxation by the Income Tax payer as such. They are an additional contribution imposed upon him by the War. I hope the Chancellor of the Exchequer will see that that 380 is put in the report of his speech. I think he omitted to use the word "additional."
§ Mr. LLOYD GEORGEIf that is so, I should have done it, but I certainly was under the impression that I said the contribution which I propose to be levied for the purposes of this War was so much.
§ Mr. CHAMBERLAINThere is no controversy between us.
§ Mr. LLOYD GEORGEI certainly have it on my notes
§ Mr. CHAMBERLAINNeither I nor my colleagues so understood it, and it was only by working out the sum backwards that we arrived at that explanation of the right hon. Gentleman's observations. It will be seen therefore that the contribution of the Income Tax payer in a normal year, when these new taxes are in full bearing, will be in the case of unearned income one-eighth per cent. of the total, and in the case of earned income three-fortieths per cent. of the total, Then the Chancellor of the Exchequer turned to beer. I agree that if you turn again to the trade in alcohol, you must do so on the understanding and with the intention that the sum which you take as revenue shall be collected from the consumer as he consumes the article. The imposts on the trade have been raised to such a point that they could not by any other means than by a direct charge on the consumer support further burdens. That being so, I think the Chancellor of the Exchequer is right when he said that there is no use making the basis of his tax anything less than a halfpenny on the half-pint. When we come to discuss these matters in detail, and when we have had an opportunity of getting perhaps some more information than we have at present, I think it will be found that the Chancellor of the Exchequer has overestimated the amount of revenue per barrel which the halfpenny on the half-pint to the consumer can properly be made to yield. I was glad to hear the Chancellor say that he felt it was nothing more than fair to the publicans to take into consideration the reduction of hours in the Licence Duty they have to pay, and to hear him mention at least one other concession to a portion of the 381 trade, but I beg Members and the Chancellor of the Exchequer himself to keep an open mind upon this question, as I wish to have, the matter discussed at the proper time without any heat, and always having in our minds what is going on at a very short distance away from us. I want hon. Members to keep an open mind as to what the effect on the trade is going to be of so tremendous an increase of taxation as the Chancellor of the Exchequer proposes. Let me put it in this way: The Chancellor estimates that the result of his proposals, together with other circumstances adverse to that trade, will involve a decrease in consumption of 35 per cent. next year.
§ Mr. LLOYD GEORGENot the halfpenny on the half-pint.
§ Mr. CHAMBERLAINThe halfpenny on the half-pint, plus the other circumstances adverse to that particular trade—the absence of drinking at home and the curtailment of the hours—will produce the 35 per cent. reduction of consumption. I ask any manufacturer or trader to say what would be the effect on his profits of a reduction of 35 per cent. in his turnover. That is the way in which you have to examine the fairness of your proposals for the compensation of the publican and the brewer, and if it be judged in the light of evidence that could be brought from that point of view, I think the Chancellor of the Exchequer might perhaps be convinced that he is not leaving a sufficient margin to meet the extra strain thrown upon the trade. The Chancellor, as he said, had to raise something by indirect taxation from those who do not consume alcohol. Indirect taxes are never, taken singly, very perfect instruments for adjusting the burden to the capacity of the shoulders to bear it. You may make your system of indirect taxation more equable by increasing the number of your duties, but, of course, it does not at all represent the facts, as we know them, to say that having taken a contribution from those who drink alcohol and beer, you will now turn to the teetotaler and take his contribution in the form of a duty on tea, because most of those who drink beer drink tea, and therefore whilst nominally taxing the teetotaler, 382 as the Chancellor said, you are, in fact, retaxing the drinker of alcohol to the same extent, or almost to the same extent, as the drinker of tea. In the bulk of these cases you tax the family consumption, and the family consumption of tea will not be very different, I think, in the two cases, in those cases where tea taxes are the important part of the contribution of the individual or the family to the revenue. I am sorry that the Tea Duty has to be put up to this point. I am especially sorry that it should be necessary to do it at the present time for a reason akin to one of those which the Chancellor of the Exchequer adduced for not meddling with the wines. The great bulk of our tea comes to us from India and Ceylon, and in the circumstances of the case this burden must necessarily in the main be borne by the consumer, and any reduction in consumption of this article affects the position of the Indian producer. I am sorry that it should be necessary to do this at a time when we are rejoicing that the Indian troops are side by side with other soldiers of the Empire in the trenches in France. But unless the Chancellor of the Exchequer was able to take a much wider sweep, not perhaps so immediately profitable but more permanent, enduring, and endurable, I do not know that he could have done very much better than turn to tea as one of the sources of his revenue.
6.0 P.M.
I say no more on any of these subjects at the present time. I have pleaded for a fair consideration of the various difficulties and hardships that must arise both in regard to the proportion of the Income Tax, and I think especially the Super-tax, in relation to which the Chancellor has indicated that he will make some proposals of amelioration, though he has not yet told us what they are. I ask for fair and generous consideration for the hard cases that must arise, and I say no more about them at the present time. As regards the Chancellor's treatment of the Sinking Fund, as far as I follow it I think that it was perfectly correct and wise. My only regret is that the Sinking Fund which he has available is not larger than that 383 which our peace operations have left us. I could not, even if I felt inclined to do so, set my opinion against the advice of those much more experienced than myself whom the Chancellor has already consulted. I should have had an inclination towards a slightly different proposal from that which he has decided. But the proposals which he has announced to us to-day, he tells us, have been taken after consultation with all those who are most competent to advise him, to whom he at all times has access on such occasions as these; and of this I am quite certain, that he can look to the patriotism of the people of this country to make this issue a great success. I have not the smallest doubt that it will be a most popular issue, not only because of the terms upon which it is offered, but even more so because of the purpose for which it is raised. I am sure that throughout the country everybody who is able to do so will desire to take some portion of this loan, as the discharge of a public duty and for the satisfaction of his own conscience, and the Chancellor of the Exchequer need have no doubt as to its great and overwhelming success.
§ Mr. CHIOZZA MONEYOn the last occasion a White Paper was issued showing what the Income Tax proposals meant, and indicating the contribution of each class of taxpayer, and I would suggest to the Chancellor that a similar Paper should be issued in reference to the taxes which are now proposed.
§ Sir ERNEST LAMBThere is a point of paramount importance in reference to the New Loan which I think should be cleared up, and that is as regards the advance from the Bank of England. I would suggest for consideration whether some addenda should not be made to the undertaking by the Bank as regards a minimum rate of interest, because, if the Bank Rate, at present 5 per cent., were, during the coming three years, to sink, say, for the purpose of argument, to 4 per cent., borrowers would be able to get an advance from the bank at a lower rate than they would be receiving from the Government as interest on the loan itself, 384 and thus make a profit on the deal. It either means, it seems to me, that we have to face a permanent Bank Rate for the next three years of 5 per cent., or else, if the Bank Rate is going to be reduced below 5 per cent., that borrowers are going to get advances at a lower rate from the Bank than the Government will be paying on the War Loan. I do not want to enlarge on that point, but I think that the Chancellor of the Exchequer will see that, unless some minimum is arranged in advance, we shall have that difficulty, as subscriptions will be given on the strength of what the Chancellor said in the House to-night, and what the Chancellor said to-night is not on the prospectus. That is the difficulty. He read out the form of the Bank of England, and unless this point is covered subscriptions will be coming in to-morrow on the strength of that form read in the House of Commons tonight, and something should be done to safeguard the position before the people subscribe on the faith of that statement.
§ Mr. T. C. TAYLORI would like to know whether Members of Parliament will be allowed to apply for this stock without vacating their seats? It seems that they were not allowed to do so during the Crimean War, but I suppose that we have now got a House of Commons that is able to apply for stock. I would also ask what allowance the Chancellor of the Exchequer has made in his estimate of Income Tax for the fact that a certain rate of Income Tax will produce a smaller amount, and, if so, what will be the percentage? In the case of beer he gave us an estimate of something like 35 per cent. reduction. The larger rate of Income Tax charged will have a tendency to cause assessments to be reduced, and I should like to know whether he has made any allowance for that. In reference to the question of my hon. Friend (Sir E. Lamb) I cannot see that there is any hardship to anybody in being charged 1 per cent. less by the bank than if they borrow on these bonds. There are all the other banks in the world with the bonds to borrow from. I have never seen myself a more patriotic and more splendid offer by the biggest 385 bank in the world, behind the Government of the richest and strongest country in the world. I had hoped that the bank, or somebody, was going to do the brokers' work perhaps for nothing. It is almost equal to that. The Bank of England is practically guaranteeing the market price of this stock to be 95 for the next three years, because there is no stipulation made apparently that the borrower shall have any other security at all, so that anybody with this stock can take it and borrow from the bank up to the full amount and skedaddle. It appears to me that a man without means can go to the Bank of England and practically sell his stock for this price and disappear from the country. So that it is actually guaranteeing the market price of the stock for the next three years. I think that that is a point which is well worth rubbing in.
§ Sir GEORGE YOUNGERI should like to know what the procedure to-night is going to be. Naturally I shall have a good deal to say when I get the opportunity about one of the proposals made tonight, and I hope that I shall say it in the same moderate and kindly way as the right hon. Gentleman the Member for West Birmingham. I presume that the Chancellor of the Exchequer is going to take the Resolution to-night?
§ Mr. LLOYD GEORGECertainly.
§ Sir G. YOUNGERI do not propose to discuss it now, nor do I propose to divide against it; but I desire to tell the Chancellor of the Exchequer that I assent to the passing of that Resolution to-night under protest, and I disagree with the whole of the fabric on which he has built up the statement which he has made to the House to-night in reference to the Beer Duty. I am willing to recognise that he approached this subject with a perfectly fair desire to safeguard the trade, but from a knowledge of the actual facts I can say that the result is not going to be so, but that it is going to impose a very serious burden on them and a burden which I am afraid they will not be able to bear and continue to carry on their trade. I simply say now that I submit under protest, and with great respect I 386 ask the House to keep an open mind on the subject until the facts of the case are put before them, so that they may know whether or not the Chancellor is not taking too much of this extra halfpenny from the Exchequer, leaving far too little to finance the operation.
§ Sir A. MARKHAMI would like to know if my right hon. Friend can say whether, in the Estimates which he has made for Super-tax, he has taken into account the fact that the income will be based on that of the preceding year? My right hon. Friend knows that the operation of the War has in some cases, as he very truly said, swept men's income entirely away. I happen to know a case of a man who had a very large income which has entirely disappeared. Nevertheless, as I understand, under the proposal which the Chancellor of the Exchequer has made to the House to-night, that man would be assessed on an income of nearly £100,000, although he has now got no income at all.
§ Mr. LLOYD GEORGEindicated dissent.
§ Sir A. MARKHAMMy right hon. Friend made no statement on that point.
§ Mr. LLOYD GEORGEI made a most distinct statement as to the case of men whose incomes have been swept away. I said that I have proposals to make in respect of cases of that kind, and when the Resolution has been moved I shall explain them.
§ Sir A. MARKHAMMy right hon. Friend has referred to the case in which the income has been entirely wiped out, but having regard to the fact that incomes as a whole have been diminished in many industries the proposal would not mean a Super-tax of 5s. but in many cases it would mean a Super-tax of 10s. in the £. If it is the object of the Chancellor to impose a tax to that degree it ought to be made perfectly clear that that is the amount of the tax. I can give many cases where the tax of the preceding year will amount to double that which he is taking. With regard to the statement which he has made in reference to the Bank of England making advances, in the first place I do not think that it is quite fair to the other banks 387 that the statement should be made. As I understood, my right hon. Friend has said that the Bank of England were prepared to guarantee to everybody who bought stock that they would advance the full face value of the stock, the issue price of which was £95, without any collateral security whether the stock depreciates or not. Has there been any arrangement made with the Bank of England, in consideration of their giving this guarantee of the face value, and 1 per cent. below the Bank Rate, that they are to be relieved of paying for the notes which the Chancellor of the Exchequer is allowed to issue in respect of the deposits. All the banks are allowed to take up notes equal to 20 per cent. of their total deposits, the total amount of which, I believe, is £1,200,000,000. Has there been any arrangement made by the Chancellor of the Exchequer as to those notes in respect of those banks, because if so they are paying 5 per cent. at the present time. As a bargain the banks have done very well out of the matter. I am not complaining of the arrangement made with the banks as one that is not favourable, taking everything into account. I want to make it quite clear to the House that every effort possible should be made to take up the loan, and I am sure we will all do our best to get it taken up. But we, Is business men, want to know, and to make it clear to business houses, that we can obtain from the Bank of England during the next three years advances on this War Stock at 1 per cent. below the Bank Rate.
§ Mr. LLOYD GEORGEI am very much obliged to the House for the tone and spirit of the discussion of the proposals now before it, and I will now confine myself to answering the few questions put to me by the various speakers. The right hon. Gentleman the Member for West Birmingham (Mr. Chamberlain), in the exceedingly temperate and fair speech with which he followed my statement, pressed the Government to keep an open mind upon one or two points, in particular the question of whether 17s. 3d. duty levied upon beer leaves a fair margin 388 to the trader. I shall certainly apply my mind to that subject, but I can assure him and the hon. Member for Ayr Burghs (Sir G. Younger) that it is not our desire, by means of this duty, to hit the trader. It is simply a means as far as we are concerned of levying a contribution upon the consumer, and if the hon. Baronet is able to prove to us that we have done anything by that method which would bring ruin or injury upon the trader—
§ Sir G. YOUNGERSomething very like it.
§ Mr. LLOYD GEORGECertainly, so far as I am concerned, and so far as the Government is concerned, though that is not our view, I shall keep an open mind upon the subject.
§ Sir G. YOUNGERNo doubt that is your spirit; it is only want of knowledge.
§ Mr. LLOYD GEORGEI am quite prepared to take as much upon mo as is compatible with safety, or rather with sobriety, if the hon. Gentleman will convey to me such items of information on the subject as are necessary to enable me to arrive at a just conclusion on the matter. I can assure him that I shall apply my best mind to the consideration of the problem with a view to seeing that absolute fairness is done to the industry in which he is interested. I am quite aware of the difficulty, which is this: The man who deals in light beers will have a very considerable margin. That is not true of the man who is dealing in beers of a heavier grade, and I believe the difficulty arises in that particular case. I think the hon. Baronet will admit that, on the whole, we have not been unfair to those who are dealing in the lighter beers, for there is a very considerable margin there. The question put to me is whether we are quite fair to the more substantial beers, and I shall keep an open mind on that question. The right hon. Gentleman has also pressed upon me the consideration of the Super-tax payer, and my hon. Friend the Member for Mansfield (Sir A. Markham) has reinforced his plea. It is true that in terms I referred to the fact of a man's income having been swept 389 away, but what I mean is the case of a man whose income is threatened to be destroyed by the War, and what percentage of his income should be ground for special consideration. That is a question to which, I admit, we are not in a position to give an answer at present. It is one of the questions we are considering. It is quite clear that you cannot sweep away the whole of the three years' average. If you were to do that you would destroy the whole basis of the Income Tax.
§ Sir A. MARKHAMThe Super-tax is based on the preceding year.
§ Mr. LLOYD GEORGEIt is based, again, on the three years' average; it may, or may not be, but, at any rate, we will consider that point, and we shall probably give an appeal in cases where a man is able to prove that his income has been swept away owing to the conditions of the War. My hon. Friend the Member for Northamptonshire (Mr. Chiozza Money) asked a question with regard to the White Paper. I have a very long list of figures, which I might have read to the House, but it is very difficult for hon. Members to grasp figures which are read out, especially complicated figures. Therefore, instead of reading them out, I thought, on the whole, that it would be the better plan to put them in the form of a White Paper, which will give my hon. Friend exactly the information for which he asks. It shows, so far as the smaller incomes are concerned, that the additional burden, taking everything into account, is not so severe as it may appear.
§ Mr. CHIOZZA MONEYWill the right hon. Gentleman consider the necessity of an allowance with regard to the three years' average?
§ Mr. LLOYD GEORGEThat is one of the things which will probably be considered. Another question which my hon. Friend put to me is whether Members of Parliament would be in a position to apply for this Loan without vacating their seats. I think they ought to be allowed to apply in the case of this great national and patriotic Loan, and to contribute in proportion to their means.
§ Mr. CHAMBERLAINThey always have been.
§ Mr. LLOYD GEORGEI think it is better, however, to put the matter beyond any doubt at all. The hon. Member for Ayr Burghs asked a question with regard to our procedure. To-night it is absolutely necessary to take the Resolutions in regard to beer and tea. On Thursday I hope we shall be able to take the Income Tax Resolution, and so get a general Debate.
§ Sir G. YOUNGERIt is not really necessary to take these Resolutions; there is no anticipation about it.
§ Mr. LLOYD GEORGEThat is not so, really.
§ Sir G. YOUNGERI ought to know something about it.
§ Mr. LLOYD GEORGEAnd so ought I to know. I have suffered a great deal as Chancellor of the Exchequer from forestalments of one kind and another. I think, on the whole, we had better be on the safe side. I am advised that we stand a chance of losing very considerably every day by the postponement of this Resolution. The figures which have been given to me are quite considerable. I now come to the anouncement of the Bank of England. That is an announcement which they are making on their own responsibility, and they are in a better position to explain it than I am. I have simply read to the House of Commons the announcement which they have made. They are perfectly convinced that no risk attends it, and it is certainly a great advantage to the State—an enormous advantage to the State. My right hon. Friend is very sanguine if he expects a lower Bank Rate than 5 per cent. during the currency of the War, or even immediately after the War, because there will be enormous capital absorbed in all sorts of enterprises, and I shall be very much surprised myself if we are in a position to get such a low Bank Rate as my hon. Friend anticipates. But at any rate the Governors of the Bank of England have considered this matter, and I have given simply his announcement to the House of Commons; they are favourable terms to all those who make application 391 for this loan. I am exceedingly grateful to the Committee for the way in which they have met these proposals. I can assure the right hon. Gentleman and the House that our only desire in the proposals we are putting forward is to do our best for the country in this very trying position. I know perfectly well that nothing will do more harm at the present moment than any appearance of one taxpayer trying to shift the burden on to another, and each and all trying to get out of their responsibility. The readiness and the alacrity shown by every class of the community during the whole of this time, not merely to shoulder the burdens imposed upon them, but to seize the opportunity of doing something, is, I think, one of the most hopeful signs of the times, and it is a sign of the times which I hope will be seen not derely during the War, but equally during the time to come after the War. I am perfectly certain that, however obnoxious heavy taxes of this kind must be to any section on which this House chooses to impose them, the burdens will be manfully and cheerfully borne.
§ Mr. CHAMBERLAINMay I ask, with the assent of the Chair, under the arrangement which the Chancellor of the Exchequer has suggested, that if we pass the other Resolutions to-night and resume the discussion on the Income Tax Resolution on Thursday, we shall then, on that Resolution, be able to travel as widely as we like within the ordinary limits of a Budget Debate?
§ The CHAIRMANYes, that will be so.
§ Sir F. BANBURYMay I ask that when the Income Tax Resolution is submitted that it will be drawn in such a way that it will be possible to move an Amendment to bring back the Clause which was in the Income Tax Acts up to five or six years ago since 1842, and which provided that if a man's income in the year had not come up to that which he had returned, that then he might claim exemption for that part of it? A provision of that kind would meet the desire of the Chancellor to meet those cases where people's incomes had been swept away owing to the War.
§ Mr. LLOYD GEORGEI hope the hon. Baronet will not try to limit the Debate by way of moving Amendments.
§ Sir F. BANBURYNo, not at all
§ Mr. LLOYD GEORGEThere will be an opportunity later on of moving an Amendment of that kind. I would rather that we should have our general discussion on Thursday or Friday.
§ Sir F. BANBURYI had no intention of any kind of moving an Amendment in order to limit Debate. I would be perfectly willing to move it whenever the Chancellor desires. All I am anxious is that there should be the opportunity to move it on some day.
§ Mr. LLOYD GEORGECertainly.
§ Mr. J. M. HENDERSONI would like the Chancellor of the Exchequer to make this point clear. By the 1907 Finance Act you were bound to the three years' average unless you could show "special cause." Thus the trader or merchant, or anyone concerned, who had a bad year could claim exemption if he could show special cause. It has been very difficult to establish what "special cause" is to the satisfaction of the Commissioners, and I should like the Government to make it quite clear that this War would be taken as a special cause. If I get that assurance, that will meet the whole of the case.
§ Mr. T. M. HEALYThe Chancellor of the Exchequer has displayed a certain amount of nervousness and anxiety at the possibility of criticism with regard to this Budget. I can assure him that so far as those who take the views I do are concerned, that there will he none. We did attack his Budget in former years, because his Budget was politics. This is not politics, it is dire necessity, and accordingly he will find that instead of any obstruction being put in his way, there will be a most helpful spirit. I am very glad to congratulate him on the admirable speech which he has made to-night. I desire to make one small point. The Dublin publican pays 10s. per year which no other publican in the United Kingdom pays. I have made several efforts to get it abolished. I was 393 told I was out of order on the Budget of 1909. Now that the hours are so much reduced in Dublin, and while this beer tax will undoubtedly lessen the consumption to a very large extent, and will have a very serious effect upon the general body of the population, though I believe it will be cheerfully paid, I do think the right hon. Gentleman might look into this very small tax which distinguishes Dublin publicans from others, namely, this 10s. tax, and make this the occasion of doing away with that impost.
§ Mr. LLOYD GEORGEI will look into it,
§ Mr. DAVID MASONI referred in a previous speech to the right hon. Gentleman the Member for West Birmingham (Mr. Chamberlain) and as to his attitude in regard to the question of taxation versus loans. I would like to say that subsequently I had the privilege of having a conversation with that right hon. Gentleman and he assured me that he was always in favour of the principle of taxation as bearing part of the costs of this War. I congratulate the Chancellor of the Exchequer on his courage and on the very clear and lucid speech to which we have just listened. He has appealed for a patriotic response for this loan. I think I may assure him that he need have no fear on the subject, and apart altogether from the patriotic aspect, I believe the new loan will be regarded by all those who have any slight knowledge of finance, as a most excellent investment.
§ Sir RICHARD COOPERI feel I must take this occasion of submitting to the Chancellor of the Exchequer a very simple point with regard to the Income Tax, and which I do not think I would get any consideration for when we get to the Resolution. It would be a particular advantage to a number of people, particularly at the present time, and in my belief it is a matter of equity when Income Tax is levied that the people on whom it is levied should have the opportunity of paying it, as they do the local rates, namely, in two instalments. With the tightness of money and with a heavier Income Tax it is a serious difficulty to ask people to pay in one sum, and it would be, I think, a very 394 small concession on the part of the Government if they could arrange to have the Income Tax payable in two half-yearly instalments. I venture to ask the Chancellor to give his consideration to that matter for the public good. I understand we are in order in debating the proposals of the Chancellor. I do feel myself that there is a great deal of danger if it is permitted to go forth to the public, and they are allowed to get the idea that the additional contribution out of Income Tax is represented by the remarkable fractions given by the Chancellor of the Exchequer. Am I not right in saying that the Chancellor would be perfectly correct if he limited those fractions to the proportion of Income Tax paid by a person with £200 or £300 a year? Is it not equally true for me to say that the additional tax on account of the War that will be paid by people with higher incomes will not be one-fortieth or one-eightieth, but one-eighth? I am speaking of the ordinary Income Tax plus Super-tax, which now comes to 2s. 9d., and if doubled 5s. 6d., so that a person with a large income will really be paying 5s.
§ Mr. LLOYD GEORGEYou mean those with over £100,000 per year?
§ Sir R. COOPEROr with £50,000 or £60,000 a year. My mathematics may be very bad, but it seems to me if a man is going to pay in Income Tax and Super-tax 5s. in the £, that is one-fourth of his income.
§ The CHAIRMANI observe an hon. Member reading a newspaper, which is a disorderly practice not allowed in the House.
§ Sir R. COOPERMy only desire was that there should not be any misapprehension as to what proportion people with large incomes are contributing and for this reason: I would support the Chancellor of the Exchequer in demanding a great deal more than one-fortieth or one-eightieth of a man's income as a contribution to this War. I entirely agree with the sentiments he expressed so well, that when so many of the young men are going out to the front and giving their service 395 to the country, and probably sacrificing their lives, the least we can do, who stay at home for one reason or another and cannot give our services in that way to the country, is to make whatever sacrifices are in our power. If the Chancellor of the Exchequer's figures as to the proportion were correct, then all I can say is that I do not think his proposals with regard to Income Tax go far enough. I quite recognise the wisdom of the principles which he enunciated, that we should not be heaping up burdens for posterity. If the Chancellor's proportions are right, then the man with a £100,000 should have more taken from him and can well afford to make the sacrifice, just as the younger men give their services and their lives for the country.
There is one other point I feel it my duty to mention, because there is probably no man in this House who in the past, quite conscientiously, found more fault with the Chancellor of the Exchequer, and especially with certain portions of his social legislation. Speaking now as a business man, and whilst we are discussing the general situation of our national finances, I want to say what I believe, and what I heard most people in the country say, and it is this: In the early days of this War those of us who were receiving large sums of money and paying out large sums of money were full of the gravest anxiety as to where we were all going to be. The steps taken by the Chancellor of the Exchequer at that time gave the very greatest satisfaction to a large number of people, and in my humble opinion he rendered very valuable service to the country, and not only to the people who are receiving very large sums of money but to the large staffs of people of all kinds, including the workmen that we are responsible for employing. I have said very unpleasant things on the platform, and I expect to say a good many more, but I do think one ought to take the opportunity, when the right hon. Gentleman has rendered that service, of acknowledging it. There is a lesson though, I think, to be learned. Whilst I readily give the Chancellor of the Exchequer full credit for the 396 manner in which he has protected the national finances of this country, may I say he has taken a very wise step by consulting people who knew what they were talking about. That is generally foreign to him. It has been foreign to him in smaller matters in the past and in social legislation. It is true that in the case of the Insurance Act he went to Germany after he had enunciated the basis of the Act.
§ Mr. LLOYD GEORGEI am sorry the hon. Gentleman introduced that subject, but as he has, I may state I went to Germany, but I took two years before I introduced the insurance scheme in this country.
§ Sir R. COOPERMay I ask the right hon. Gentleman if I am incorrect in stating that he, and the heads of Departments of the present Government, have gone more out of their way during these last three months than ever they did in their history before. I know they have. I do know a little of what goes on. I do approve of the principle, and I hope it is going to be followed more and more, not only in matters of national importance, but as well in matters of domestic-legislation.
§ Mr. RAWLINSON(indistinctly heard): I desire to ask the Chancellor of the Exchequer a question, because some hon. Members seemed to be in doubt on the point. It is in reference to the paper from the Bank of England which he read. I understood its meaning to be that at any time during the next three years, roughly speaking, anybody could take one of these War Loan securities, Bearer Bonds, or whatever they may be, for £95 to the Bank of England, and receive £95 in return. Will he then borrow that sum from the Bank, and will he be under a personal liability to repay it? Some hon. Members seemed to think that it was practically a purchase. [HON. MEMBERS: "No."] As long as I understand that all that it means is that a person shall be able to borrow the money on his own responsibility—
§ Mr. LLOYD GEORGEindicated assent.
-
c397
- LOAN. 69 words c397
- TEA. 87 words cc397-8
- BEER (CUSTOMS). 240 words c398
- BEER (EXCISE). 127 words c398
- BEER (SPECIFIC GRAVITY) TABLES. 39 words