HC Deb 23 June 1925 vol 185 cc1399-437
Mr. TREVELYAN THOMSON

I beg to move to leave out the Clause.

Of all the concessions made in this ill-balanced Budget this is the least justifiable and the least helpful. It was not asked for, it certainly was not expected, and at a time when trade and industry are passing through a period of unparalleled depression, when there are 1,250,000 unemployed, when the ordinary taxpayer is at his wits' end to meet the calls that are made upon him, it seems to me a gratuitous insult to the rest of the community to single out the Super-tax payer for this great concession. One would have thought a man well above the poverty line, enjoying £2,000 a year or more, could have waited until more pressing and more necessitous cases had been met. Whereas the income of the more fortunate members of the community, those who pay Income Tax and Super-tax, have been rising, the incomes of the lees fortunate, the wage-earners, have been falling. The Income Tax assessment has increased during the last two years by £130,000,000; at the same time wages have fallen by £500,000,000. Yet this is the time of all others that has been chosen to give to those who have rather than to those who have not. The Super-tax payer to-day is relatively better off than before the War. In 1913 there were 14,000 Super-tax payers at the limit in force then of £5,000 a year. That number increased last year to 27,000, or nearly double. The gross taxable income for Income Tax was £1,000,000,000 in 1913, and has grown now to £3,000,000,000, showing that the rich are getting richer while the poor are getting poorer.

The extra relief granted to Super-tax payers amounts to £347 in the case of a man with £7,000 a year; a man with £10,000 a year gets a relief, in his Supertax alone, of £572; and the man with £15,000 a year gets a gift of £822. Surely there has been a strange conception of the relative needs of the taxpayers. The man with £500 a year, struggling along with a family to keep, gets a paltry relief of £6. This is an illustration of the old saying that "Unto him that hath shall be given." We find this principle accentuated in the relief given to the direct as compared with the indirect taxpayer. In this year £42,000,000 is given in relief of direct taxation, but there is practically no relief to indirect taxation. Since the War £200,000,000 has been given in relief of direct taxation, as against £50,000,000 for indirect taxation. That is given as the reason why some adjustment should be made to give more relief to the direct taxpayer as against the indirect taxpayer and it is said that this is necessary because the indirect taxpayer is contributing only 37 per cent. as against 63 per cent. by the direct taxpayer. Surely the true test ought to be the ability to pay and therefore there is no virtue in the 50–50 theory. We are told that this reduction will stimulate trade but the great bulk of the Super-tax payers do not come into industry at all and under these circumstances how they can possibly stimulate industry I fail to understand. The great mass of this money is drawn by the rentier class as rent, mort gages, interest on debentures and ordinary preference shares.

It is suggested that this reduction will help to increase the reserve of capital, but after last night's Debate I think even the Chancellor of the Exchequer will be convinced that that theory does not hold water, because he said it has not been proved that we are in need of more capital, and what we need is not more capital but more orders. That is quite true, because in the North you find shipyards idle not because they have not the capital but because they have not the orders. Blast works and steel works are standing by not for want of capital but for want of orders. How are you going to relieve industry by this concession to the Super-tax payer on the theory that he will have more money to put into trade, when even at the present moment so much capital is lying unemployed?

How can this relief to the Super-tax payer possibly be a relief to industry because the Super-tax does not enter into the cost of production and it is paid after the profits are made? The trades which are most in distress are those where there is no work being done and no profits being made, and you are not going to relieve those trades by making this concession to the Super-tax payer. A concession might be made in regard to the charges which fall on industry, such as unemployment benefit and pensions, and yet instead of seeking to relieve industry in this way the money is devoted to a reduction of the Super-tax. The sum of £20,000,000 will be required as a charge for pensions, and if the Supertax had remained it would have been much easier to meet the charge for pensions, instead of which the Government are placing a further burden on industry. If the Treasury could have made some grant-in-aid of the rates that would have been a much better policy, and it would, at any rate, have been some stimulus to trade. At the present time our shipyards are idle because they cannot stand the charges placed upon them by the local rates, and if the Government had made a grant-in-aid of the rates it would have done much to stimulate trade. At a time like the present, when industry is so depressed and the unemployed are so numerous, to single out the richest section of the community for this special benefit will not help towards a revival of trade, nor will it help the other heavily-burdened taxpayers in the struggle they are having at the present time.

Mr. BATEY

I beg to second the Amendment.

Those who come from the North of England are very much affected by this Budget, and before the Bill goes through we want to enter our protest against what we regard as an extremely bad Budget, and the blackest part is the £10,000,000 which is being given to the Super-tax payers. Whilst we regard this as the blackest part, I think it would be difficult to find any Bright parts in the Budget because altogether it is an extremely bad Budget. I have seen no less than three Budgets introduced in this House, and, in my opinion, this is by far the worst of the three. Even the Tory financial proposals of 1923 were a much better Budget than this, and I think the present Budget can be properly described as a real bobby-dazzler introduced to dazzle the people of this country and really gives them nothing.

I have two chief objections to the reduction of this Super-tax The first is that it gives relief to rich people who do not need it, and the second is that the present is a most inopportune time to give the Super-tax payers relief when the working classes generally are suffering so much poverty. Not only does that apply to the working classes generally, but it applies even more to the class which I represent in this House, the mining class in the North of England, who are to-day in a worse position than ever I have known them. The bulk of the mining class are now right down in the pit of poverty. In my county we have 60,000 men out of employment, and if you form a rough calculation in regard to those 60,000 men it is fair to assume that we have in the County of Durham in the mining district something like 200,000 people who are living at the present time either on Poor Law relief or else upon unemployment and insurance benefit. Most of these people are miners out of work, and they are drawing unemployment insurance benefit, but we have thousands who are not even getting unemployment insurance benefit because the Government have taken steps to so tighten the Regulations that they have simply cut off thousands of men in the County of Durham from this benefit, and they are now in receipt of Poor Law relief. Not only are these men who are out of work in a poverty-stricken condition, but we have a large number of men who are working for extremely small wages, and are not much better off than the men who are out of employment. I have in my hands here four pay notes of men in employment, and I got them only last week-end. One of them got parish relief during the miners' lock-out in 1921, and he was ordered to pay 15s. towards the repayment of that Poor Law relief. After that sum had been deducted and another 5s. for other payments, that man for one week's work had 14s. 9d. left. He received 14s. 9d. for the twenty-third week this year. For the twenty-second week the man had 32s. 6d. to take, after working five days, and with the payments I have mentioned he was left with 14s. 9d I know a lot of people who would not go down a coal mine and come straight back without working for 14s. 6d., and yet this man worked) five days a week for seven hours a day, and after doing that he had the handsome sum of 14s. 9d. left. For the twenty-second week his earnings were 23s. 6d., for the twenty-first week 23s 6d., and for the twenty-fourth week 23s. 6d.

In the name of these men who are in this poverty-stricken condition, we enter our protest against this Government giving relief to the Super-tax payers. I think we are entitled to remind the Financial Secretary that a return was issued showing that there were 89,000 Super-tax payers in this country, and that after they had paid Super-tax on £177,000,000, they had still £10 per day each left. When people have £10 per day each left after paying Super-tax, we consider that if there was £10,000,000 to give away it should not have been given to these wealthy people, but it should have been given to the working classes who need relief and help so much at the present time. The Chancellor of the Exchequer said one of his objects in reducing this tax was to stimulate trade, but how does this granting of £10,000,000 to the Supertax payers relieve industry?

8.0 P.M.

It certainly would have helped the mining industry, and we are most emphatic in saying that if the Government, instead of giving this £10,000,000 to the Super-tax payers, had devoted it to the mining industry, it would have been a great benefit to the coal trade. The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) once said that in the mining industry there were three horses, one was the miners, the other the coalowners and the third the royalty owners. Under this Budget the only people connected with the mining industry who will get any benefit at all will be the royalty owners, and they are just the class of people who do not need any help. As a matter of fact, the return for the coalfields, for the quarter ending March, shows that coalowners in the County of Durham were paid for that quarter 6.64d. per ton as royalties, and when we remember that some of the great royalty owners in the North of England, like the Duke of Northumberland, are drawing £82,000 a year, we have no hesitation in saying that it is a wicked thing on the part of the Chancellor of the Exchequer to give £10,000 to these rich people, while he simply leaves the working classes in the condition in which they are. Why did the Chancellor give this £10,000 to the wealthy classes of this country and leave the working class in their present poverty-stricken condition? Did he give this £10,000,000 to the wealthy people, simply because they are the class that gives financial support to the party on the other side? It seems to me that has been one of the main reasons why the Chancellor has given this £10,000,000 to his own friends, in order that his own friends might give more liberal support to the Tory funds in the future.

The miners have a greater claim to the £10,000,000, for the reason that the Chancellor of the Exchequer said he was budgeting to receive £9,000,000 as reparation. If the Chancellor is going to receive that amount in reparation, then it ought to have been given to the miners rather than to the other class, because the great cause of the ruin of the coal industry of this country is reparation, and when anything is received as reparation from the German Government, I submit that the miners have the greater and prior claim to the money. But the Chancellor, instead of relieving the miners and helping the mining industry to get on its feet, has laid a new burden on the industry in connection with the pensions that will amount in the county of Durham to £260,000 a year. Nearly one-half of the coalfields are closed at the present time, and the adding of this £260,000,000 simply means the closing of most of the remaining coal pits. Taking the whole of the coalfields of Great Britain, it means putting an additional burden of something like £2,000,000 upon that industry.

This is not the time to put additional burdens on the mining industry. This is the time when, if there is any money to spare, it should be used to help that industry. The condition, not only of the mining classes, but of the working classes generally in this country, is such that the Government ought to aim at relieving the working classes generally, rather than the wealthy classes. In 1923, no fewer than 61,000 people in this country died in Poor Law institutions. The Government ought to have come to the rescue of this class of people, and I want, on behalf of the miners of the North of England, and the miners' representatives in this House, to enter my emphatic protest against giving this £10,000,000 to the rich classes of this country.

Mr. SPEAKER

I think the hon. Member has taken rather too wide a range by way of illustration of the Super-tax, and I hope other hon. Members will not follow him.

Mr. GUINNESS

The hon. Member who moved this Amendment dealt with such subjects as the growth of wealth, the number of Super-tax payers and the claims to relief of other classes, which, I venture to submit, do not arise on this particular proposal at all. Hon. Members opposite are never weary of making out that this Super-tax alteration is a relief to the rich. They make out that we had a certain balance at our disposal, of which we have disposed in this way, instead of giving it, as the hon. Member for Spenny-moor (Mr. Batey) thinks we should have done, in helping the coalmining industry. Of course, it is the business of any Opposition to bring forward alternative proposals for dealing with any Budget surplus, but it is necessary in this connection to remember that this Super-tax alteration is not dealing with a normal Budget surplus in any sense. This has been brought forward as a definite rearrangement of taxation in particular ranges of income. It is limited to those classes of fortunes which are paying an equivalent increased amount in Death Duties. It is quite true we cannot exactly adjust the increases and decreases to make it absolutely certain that every individual will come out the same, but what we have done is to take particular ranges of income, and particular ranges of fortune for death duties, and to equalise the remission of burden in the one case with the increase of load in the other.

It is very remarkable that hon. Members opposite deliberately ignore that definite basis on which the whole of this proposal rests. In these Debates they avoid ever mentioning them, though they must fully realise that the two proposals hang together. You have only got to look at the tables to see that we have carried that out, that we limit our increase of Death Duty to a figure where the decrease of Super-tax ceases to operate. The hon. Member for West Middlesbrough (Mr. T. Thomson) said that this proposal would not help industry. We believe it will help industry, for the reason that the man who has made money, the man who is earning money by his brains and his efforts, is more likely to control that money wisely, and to invest it to the advantage of industry, than the man who has not made that money, but inherited it as a windfall, Therefore, we say it is better to relieve the individual during his lifetime, and to put upon him an exactly equivalent burden at his death, and we have done that deliberately, because we believe it is in the national interest that people should have the control of their income to a larger extent in their lives, not for their own benefit, because their fortune will bear the same load eventually, but because we believe that in that way we shall secure investments out of savings, and wiser investments than under the present system.

The hon. Member alluded to something which I said in a different connection yesterday, about no evidence having been brought forward that, generally speaking, industries were suffering from lack of capital. He was quite justified in what he said, but I made the limitation "generally speaking." The whole point of my argument yesterday was not that industry was in need of capital, but that, in supplying industry with capital, you must not do it without discrimination. You must not assume that all industries throughout the country are in need of capital, that we must give a flat rate of remission of taxation on whatever they devote to reserves, but that we must find some more discriminating method than the Clause of yesterday. We do believe, however, that saving is necessary. We do believe that some of our industries are in grave need of capital. [An HON. MEMBER: "Which one?"] Undoubtedly a great many industries do need capital.

Mr. WHEATLEY

Can the right hon. Gentleman mention an industry that is short of capital because the capital is not in the country now?

Mr. GUINNESS

No, but I can tell the right hon. Gentleman of lots of industries that need capital, as is evidenced by applications I see weekly to the Trade Facilities Committee, industries which—unlike those great War industries which extended their plant beyond the present necessity—can only get started if they can get an adequate supply of capital at a price within their capacity. I am afraid this is getting away from the Clause, and that I am transgressing in the way that Mr. Speaker warned us we must avoid. I want to remind the House that this is not a remission of taxation out of a Budget surplus. It is a readjustment of burdens in the same ranges of income as the increased load that is being thrown upon them.

Mr. DALTON

Am I mistaken in thinking, that whereas estates of over £1,000,000 are not going to pay increased Death Duty, incomes of millionaires are going to get relief in respect of Super-tax?

Mr. GUINNESS

Of course, the machinery of Super-tax is such that it does not coincide exactly with the graduation for the purpose of Estate Duty, but as nearly as possible the balance is exact. It is true that there are variations—

Mr. DALTON

My particular point was correct?

Mr. GUINNESS

Certainly, and, of course, the largest estates will get other concessions. It is applicable to the whole range of all incomes; but we have done our best to adjust the balance—

Mr. DALTON

It is a pretty poor best!

Mr. GUINNESS

The hon. Member, no doubt, is an expert on scientific taxation, but I do not know that anyone on his side of the House has ever given us the slightest light on that subject. They have never looked at it from the point of view of balancing the benefit of taxing a man heavily during his life or taxing him equally heavily on his death. If they can find a better way of adjusting this balance after which we are striving, surely it is their duty to put it forward. It is not, if I may suggest it, an effective method of criticism to ignore the whole basis on which this proposal is brought forward and to treat it as if it were something entirely different.

Mr. BROMLEY

I hope, though I fear with very little chance of realisation, that the Chancellor of the Exchequer may accept this Amendment. I fear that all appeals will fall upon deaf ears, but I think it my duty to intervene in this Debate to add my protest against the relief of the burden of Super-tax payers, in the present state of this country. The Financial Secretary has pointed out that it is a readjustment, and we are prepared to accept that, but I suggest that it would have been a far more humane and just readjustment had this £10,000,000 per annum been removed, say, from the taxation on foodstuffs. That would have been equivalent to an advance in wages to the working people and the lower middle-class people of this country, but, instead of that, the readjustment has been made to assist people with incomes of over £2,000 per annum. I do not want to gibe at people who are in that fortunate position, but I do suggest to the Financial Secretary and to the Government that they are people who could have waited for relief for some little time.

If the country were in something like a normal state, it would be quite fair, in any budgeting or taxation under this system, to which some of us object, to share the benefits all round; but some of us are anxious to see a more Christian and less scrambling system than the present one. We recognise, however, that, while it is here, in normal times, it may be quite fair to share all round what relief may be given, but this is a time when hon. and right hon. Members on the Government benches are appealing to trade unionists and to the working people to be reasonable, to give up something in the interests of industry; and, while so much terrible suffering exists, and there are so few of us in this House who can really realise it—even we on these benches can hardly realise all the sufferings of our people who are unemployed, who are in poverty and distress—I do protest against a Budget being brought forward by representatives of the well-to-do party which eases the apparent burden—because it is not a burden—of Super-tax payers. If hon. Members opposite realised, and if the Government realised the psychology of the working people, they would never dare, hoping for peace in the future, to ask the working people to suffer further reductions on the top of the hundreds of millions in wage reductions that they have suffered, while keeping the taxes on their foodstuffs and adding taxes on their little bit of finery and artificial silk, and at the same time making a present of £10,000,000 per annum to wealthy Super-tax payers.

I join issue, and always shall, with the suggestion that relieving this taxation is going to stimulate industry. I deny it. I represent a constituency of clever, highly skilled workpeople who are absolutely broken. The railway companies are dismissing men, the shipyards are almost empty, the steel works are closed, some business people are going bankrupt, shops are closing; and I suggest that the wealthy Super-tax payer who gets relief and has money to invest is not going to help these small shopkeepers. His investment will most likely be in world-wide profitable investments, such as in Shanghai, which is causing trouble at the moment, or in India for the manufacture of cotton cloth to undersell our own Manchester operatives. If this benefit had been spread over the working people's wages they would have spent it in a potential home market that never appears to be within sight of the well-to-do people, which would have kept these small shopkeepers going, and would have kept trade in this country by creating a call from the working people. I deny that to give this benefit to extremely wealthy people is going to help the business of this country, because it will most likely be invested abroad. That is the reason why I am adding my protest to the volume of, I am afraid, hopeless and useless protest and appeal to the representatives of the well-to-do in the present Government, to realise that they are creating in the minds of the working people a psychology that they may regret.

May I point out that to request the working people to lose wages and give them up cheerfully, while wealthy people are relieved, is equivalent to increasing the income, whether earned or unearned, of the well-to-do people who receive this relief. Their wages are put up at the same time that we are appealed to in the interests of the country, to lower our wages. The day after to-morrow the great railway companies are calling us all together, and I shall be there, amongst others, to ask us, I believe, to suffer a reduction. If some of us object we shall be called wild men and unreasoning trade unionists; but how can I, for one, representing highly skilled men working in one of the most responsible occupations in this country as far as human life is concerned —how can I, while Super-tax payers and Income Tax payers are getting an advance in their wages by the present Budget, say to the people whom I am trying honestly to represent that I have been sent to ask that they, while receiving no relief, shall have their wages reduced? My duty, the day after to-morrow, will be to say, "No." The 60,000 or 70,000 people I represent have suffered losses, have suffered reductions in wages, while other people have had relief. Here is a further advance in the wages of the well-to-do, and in the same breath we are asked to suffer this.

While well-to-do people are getting this advance through the machinery of government that they control for the time being, I am not going to agree. What will be said then? I shall get my old character back again. Well, I am rather proud of it. I am rather proud of standing up for the people who have made me what I am and without whom I am nothing—my own people from whom I have sprung. I do not want to prolong the agony, because I believe that, as I have said, our protest here will be in vain, but I want finally to call the attention of the Government to this very important fact, that they do not appear to understand or about which they do not care—namely, the psychology of the workers—when they are giving £10,000,000 per annum to wealthy people, plus other Income Tax relief, and at the same time they are asking working trade unionists to suffer reductions. If we cannot conscientiously ask them to do so, then we shall be attacked in the Press—not that we trouble about that, because, while our consciences are clear and we are doing our duty, that cuts no ice whatever. Now I have a chance of putting it through this sounding board of the nation, and I would appeal to the Chancellor to accept the Amendment, to let the well-to-do people wait a little longer, and then there will be an appearance of sincerity in asking the working people to suffer further in their wage deductions.

Captain GARRO-JONES

I do not know whether or not it is too late for us to vote for the acceptance of this Amendment, but it is not too late for us to get at the real reason why this relief is being given to Super-tax payers. We have had various reasons. The most peculiar of all is the attempt that has been made by the right hon. Gentleman to associate this reduction in Super-tax with the increase in Death Duties. I could have understood that if, accompanied with this reduction, there was some guarantee offered by the Chancellor of the Exchequer that although he was now reducing the Super-tax he was going to increase the Death Duties. The present position is this. He has reduced the Income Tax this year, but before these men die we shall find that he has reduced the Death Duties as well. [An HON. MEMBER: "He has said so!"] He has not actually said so, but he has indicated that that is his intention. He said there was no room for adjustment in the Death Duties except in a, downward direction. If that is the case it is obviously the intention of the right hon. Gentleman, if he touches the Death Duties of wealthy men possessing over £2,000,000 at all in the future, to reduce them, and I think it is an utterly untenable position to take up to try to associate these two taxes and to excuse the one on the ground that at some future time he will make an increase in the other. I want also to associate myself with the remarks which have been made from these benches, and by hon. Members above the Gangway, that there could not have been a more inopportune time than this to grant relief to Super-tax payers. The miners are being asked to live on starvation wages. The railwaymen, including directors, by some unusually magnanimous gesture, are consenting to make reductions all round in their remuneration, and every class of the community is being asked to make sacrifices, and at a time like this they come along and take £6,500,000 of taxation off shoulders which in all honesty have never felt it in the last 10 years.

We have heard a great deal about sacrifices on behalf of the country. Men are appealed to to work longer hours in order to save the country in a time of industrial depression. I am not saying anything about the claims that have been made to men to give their lives for the country. We need examples of men who are prepared to live for the country. At present they are standing on the brink of their industrial difficulties, pleading for some aid from trade facilities, hesitating to risk what capital they have got. There is no need for new capital in industry as the Financial Secretary said. What there is need for is for some men of enterprise who will use the capital there is in those industries and risk it. Would it not be a splendid spectacle if the Financial Secretary could point to some great capitalists and say, "Look at them. They are taking these risks, trading with Russia, or some other country, without any guarantee of interest or return." At present the capitalist is trembling on the brink before he goes in for any venture at all. I should like to see a spirit of greater enterprise shown by them, thus giving an example of men who would live for their country—wealthy men as well as poor men. On these grounds, and especially on the ground of the futility of the Financial Secretary's plea that the Estate Duty and Super-tax can be linked together, I hope every fair-minded Member of Parliament will vote in favour of the Amendment.

Mr. MONTAGUE

The Financial Secretary to the Treasury says we on these benches ignore the compensatory nature of the Budget proposals. I think I am expressing the ideals of those who sit upon these benches when I say the reason why we so largely ignore the compensatory nature of these Clauses is that we are not very much concerned about it. There is a certain amount of money to be raised in order to meet the national expenditure. That money has to be raised from very rich men, or very poor men, or both—the rich men and the poor men in different proportions. Our objection—and it is a very vital point in the whole of this Budget, at any rate to my mind and one that we are justified in concentrating our attack upon —to the £10,000,000 relief to Super-tax payers is that it directly relieves people who have less need of relief than large numbers of other people, and that is a sufficient justification for us. I have been very much interested in the lame excuse of the Financial Secretary for the remission of Super-taxation. We have heard right through the Debate a great deal about the necessity for enterprise and initiative in industry and the advantage the remission of taxation upon high incomes gives to industry by releasing capital for investment and enterprise and initiative. The speech we have just heard also laboured the point about enterprise. Industry, and, therefore, employment, which is underneath all the argument which has been brought forward, do not depend upon enterprise and initiative primarily. The old idea that is expressed in the speeches of the Chancellor of the Exchequer and other Conservative Members—an exceedingly old one—is that rich men find work, that only by the multiplication of riches, and, therefore, the multiplication of a wages fund—an old economic heresy—will it be possible to find work for the people of the country. It reminds me of a piece of doggerel verse, written by a very clever person many years ago. It went this way: Dives feasted daily and was gorgeously arrayed, Not because he liked it but that it was good for trade. That others might have calico he clothed himself in silk And surfeited himself with cream that they might have more milk. In short, out of sympathy with the deserving poor He did no work himself that they might do the more. That seems to me to be the idea at the back of the economic arguments which have been advanced in favour of remission of taxation to super-wealthy people. Initiative and enterprise are not the first stone in the edifice of industrial development. They are the result, and not the cause, of demand and of the real health of the nation industrially.

May I, by way of illustration, point to the laudatory articles which were written on the death of Lord Leverhulme a month or so ago? We had in all the newspapers articles to the effect that he was a great organiser of labour who found employment for large numbers of working people. That statement was entirely absurd, and it is precisely the basis of the arguments which are brought forward with regard to this point. Lord Leverhulme did not find work. If he had never been born the people of this country and other countries who buy soap would certainly not have used a bar of soap less simply because he had not been born. Not in the slightest degree is the question of the investment of capital the primary cause of providing work. Lord Leverhulme was not a maker of soap but a seller of soap, and he sold soap and made his fortune because he was able, by advertising and good organisation and so forth, to get hold of business, and if he had not got hold of it other firms would have done. No one washes twice over because there is a Life-buoy soap to be bought. There is a certain definite market for soap. There is a certain definite market for food and clothing. The reason why capital is shy of investing in this industry or that industry is because people are not buying things, and because they cannot afford to do so That is the secret. Instead of our talking about finding work by the investment of surplus wealth waiting for investment, we want to begin by the principle of finding markets, and one of the best possible markets that we can find is the home market, which has been depleted by the low wages of the people in this country. The whole idea of finding work is an absurdity. No business man goes out of his way to find work that it is not necessary to do. No wife in her domestic affairs goes about the house trying to find work. That is absurd. What we have to do is to solve a very clear and definite problem, and that is how to feed, clothe, educate and house a population of 45,000,000 of people. When we have succeeded in doing that—

Mr. DEPUTY - SPEAKER (Captain FitzRoy)

The hon. Member is going rather beyond the subject of the Amendment.

Mr. MONTAGUE

I apologise. I rather hinted at the possibility of my doing that. I am exceedingly sorry that I have offended to that degree.

Mr. LANSBURY

Is it not a fact that the Chancellor of the Exchequer has defended this remission of taxation on the plea that it would assist in the development of industry, and are we not entitled to reply to that by saying that it will do no such thing?

Mr. DEPUTY-SPEAKER

Up to a certain point that is true, but the hon. Member was going a little beyond that.

Mr. MONTAGUE

I have indicated the ideas that I had in my mind in regard to the basic economics that are involved in the proposals in this Clause, and the general arguments that we have had from the other side in defence of the relief of the Super-tax payers. It comes back to this, that what industry wants, first and foremost, is not capital initiative or enterprise. That would be forthcoming when you have the markets and you can show profit in the selling of goods. Not until you can show that profit and that it is worth while will capital, however much its surplus wealth is relieved from taxation, provide the initiative and enterprise. I join my protest with that of others from these benches against the wicked proposal to relieve from taxation people who have more money than they know how to spend, usefully or otherwise, whilst there is so much appalling poverty and whilst the results of unemployment are causing the demoralisation of so many of our people.

Mr. ROSSLYN MITCHELL

The Financial Secretary to the Treasury has stated that the men and women on this side of the House never weary of making out that the Super-tax alteration is a relief of the rich. I hope they never will cease to make out that every reduction of Super-tax is a relief of the rich, and that it is an addition to the possible luxury of the rich at the expense of the absolute necessaries of the poor. I hope that the men and women on this side of the House will never cease to protest against any action taken by any Government which will widen still further the tremendous gulf that exists between those who are comfortably and extra comfortably off, and those who are struggling day by day against poverty. I hope the men and women on this side of the House will never cease to protest and warn the people of this country of the danger that must arise in any community where there is a perpetual and ever-increasing aggregation of wealth in the hands of a few and an ever-enlarging body of poor at the basis of the State.

Looking back over the rise and fall of great nations, I can see no cause which is so demonstrably proved for the collapse of great social organisations as the fact that by the gradual process of the transformation of wealth from wealth in goods, which can be enjoyed, and which have to be re-created, to wealth in credit power, which is represented by no goods, there has been a gathering in the hands of a few of a power which not only destroys the productive life of the community, but gives into the hands of those who hold it the destinies of all those who are subservient to them, because of their lack of that wealth or that credit. It has been said that this reduction of Super-tax is not a relief of the taxation of the rich, because it is counter-balanced by a new set of Estate Duties upon the estates of the rich. You cannot divide up the people into such comfortable groups as that. The Super-tax is paid by people who are rich relatively in annual income. It does not follow that they are rich in the accumulations.

The returns sent out by the Inland Revenue show an amazingly small number who pay Super-tax upon incomes which are the result of their direct earnings, and a very astounding number whose incomes, upon which they pay Super-tax, flow to them not as the product of their energy, skill or industry, but as the product of the accumulation of savings made either by themselves or other people. It is not true to say that a reduction of Super-tax is counter-balanced by an increase of Death Duties. In the first place, if this reduction of Super-tax is going to be of any use to the friends of hon. Members opposite, it must be a reduction which is going to be enjoyed over a number of years. So long as the people enjoy the reduction in Super-tax, their estates are not mulcted in the increased Death Duties. It is only when they have ceased to be able to enjoy the reduction in Super-tax that the Government is going to get what they call a counter-balancing amount from the Death Duties. This reduction in Super-tax is not counter-balanced by an increase in Death Duties. It is counter-balanced by an imposition of other duties. It is counter-balanced by the imposition of a new tax upon those things which are just the means of raising the poor from the verge of absolute necessaries into the realm of small comforts. It would almost seem, judging from the manner in which this Budget has been presented, that hon. and right hon. Gentlemen opposite had made up their minds that as soon as the poor folk of this country began to reach the stage when they passed from the daily grind something must be done to them to keep them in their place. I remember some 20 years ago in the West of Scotland in one of the most lovely islands in the world, a man who had saved all his life built a house, and in planning this house he provided for a bathroom with a bath. The proprietor of that island refused permission to him to have a bathroom in his house on the ground that the people of that class of life did not require a bath or a bathroom in their houses, and it is very much the same with this Budget.

Mr. ERSKINE

Could you give the name of this landlord?

Mr. MITCHELL

I will give the name of the house, the proprietor, the island and everything. The house is called "Shanghai."

Mr. ERSKINE

Chinese.

Mr. MITCHELL

Yes, and many an hon. Gentleman who sits on the benches opposite is very proud to be reminded of services rendered in China. The house is in the district of Kilpatrick, next to Blackwaterfoot in the island of Arran, which lies in the Firth of Clyde, the owner of the land was the Duke of Hamilton, and the man who built the house was a man of a longer lineage than the Duke, named Bannatyne. It is been said that the reduction of Super-tax will benefit the consumer. May point out that there is a very great difference between an increase in the income of those who have £1,000 a year and more, and an increase in the income of those who have merely £100 a year. The person with the smaller sum is one whose life is very much decided by what happens from one Friday to another. All that is received on Friday is expended by the following Friday, and almost all that is received on the one Friday is expended between that and the following Friday upon goods which are absolutely consumed and have to be recreated to meet the demand for the week following by the same people. But when people get to the stage of having £400 or £500 or £1,000 a year, all their money is not expended week by week. There is a certain margin, a reserve, and to that extent, and as the margin increases so does the proportion of the weekly demand for consumable goods decrease. I see from the Inland Revenue returns that the wages in this country in 1920 amounted to over £900,000,000 a year. Three years later they had fallen by £600,000,000. That meant that in 1923 £600,000,000 less was earned and therefore spent week by week on goods which were quickly consumed and had to be recreated, and consequently had to employ people in the recreation of them. I find that at the same time the incomes of people who pay Super-tax, far from being diminished by 66 per cent., as was the case of the wage earners, had increased by something like £170,000,000 a year.

Mr. W. GREENWOOD

Do I understand the hon. Member to say that the amount of wages paid in 1923 was only one-third the amount paid in 1920?

Mr. MITCHELL

The returns of the Inland Revenue show that the wages—

Mr. PERRING

It is the Income Tax payers.

Mr. MITCHELL

Of the wage-earning Income Tax payer. I am sorry if I have misled the House in any way.

Mr. GREENWOOD

The hon. Member is not speaking of all the wages?

Mr. MITCHELL

No. The income of the wage-earning Income Tax payer had been diminished by £600,000,000. The wage-earning Income Tax payer is the person of whom I am speaking. He uses his means week by week in buying consumable goods, which are consumed during the week by himself and his family. He does not buy goods which last a very long time. If he does buy things which last, unfortunately most of them are of a shoddy nature which are not very permanent, and have to be recreated. But the Super-tax payer, with his additional £170,000,000 a year, does not use that in consumable goods which have to be recreated. He spends it on luxuries. Anyone who comes from the North and has begun to look at London must feel not so much envy of the rich, but rather a pity for those who think that wealth which has been created for their use by other people should be so utilised by them as to degrade them and degrade all whom they employ in feeding their pleasures. This atmosphere of pleasure without conscience and wealth without work is destructive not only to the people who presumably enjoy it, but very degrading to all who are engaged in making that form of pleasure for their use.

The Chancellor of the Exchequer, when he was advocating a totally different cause, once said that the home market represented five out of six parts of the total trade of this country, and it is the home market in which the wages of the wage earners are consumed, and industry to the extent of five parts out of six is dependent upon the expenditure of the wages of the wage earning people. Much as we may challenge the motive of his statements, the Chancellor of the Exchequer at least very seldom leaves himself open to challenge on the question of accuracy. He says that five-sixths of the work of this country arises from the home production of goods which are consumed in the homes, and therefore by diminishing the Super-tax you are giving more money to people who cannot consume it, and do not consume it, and you are depriving people who would consume the goods week by week, and so increase employment, of the means of dong so. It seems to me the meanest possible thing for right hon. Gentlemen on that side of the House who have never known in their minds or in the minds of their wives one moment's anxiety about what they shall eat or drink or how they shall get the clothes which they wish to wear—they are men in whose lives the question of where the money is to come from does not exercise one moment's anxiety or trouble.

I would not speak like that if I were not in the same position myself. Where there is the position that the things we need, the things we want and desire, are all obtained for us by the mere signing of a cheque, when we know that no person in our family ever has to worry about necessaries or ordinary comforts, and perhaps has to argue only as to the wisdom of luxuries, whereas among other folk, the very heart and bosom of the nation, you have women whose lives are a perpetual struggle and anxiety to make ends meet—it seems to me the meanest thing possible for men in that position in life, representing other folk in a less favourable position in life, to use their power for the purpose of obtaining the status and prestige which even their wealth could not buy for them, and then to deprive others of the small comforts and pretty things of life, to take from them £7,500,000, to take away the little daintinesses of their womenfolk and hand it over to add to an already very large superfluity in the hands of the wealthy.

The Chancellor of the Exchequer has always said throughout these Debates, "I want revenue." He cannot have been speaking the truth when he said that, or he would not deliberately have denuded himself of the revenue which came from this Super-tax. It is not that he wants revenue; it is that he wants to readjust the basis of taxation, so that the poor, who have always, in the long run, to pay all the taxes through their labour, shall pay now without knowing that they pay through indirect taxation, in order that he might go back to the rich and those who are comfortably off and say, "You see what we have done for you. Next year, when your tax demand comes in, you will find that you have been relieved of £7,500,000, and, therefore, industry will prosper and commerce will flourish." It is a very serious thing to speak about a political action as mean, but I know nothing meaner than to increase the poverty and the sorrow of the poor for the benefit and the luxury of the rich.

9.0 P.M.

Mr. W. GREENWOOD

I would like to say a few words about the reduction of the Super-tax and the alteration of the Death Duties. I can do so with very great freedom, because the first does not interest me and the second never will, and I do not think it will interest even my descendants. I disagree entirely with the arguments of the last speaker, that there will not be any improvement in employment because of the changes that have been made by the Chancellor of the Exchequer. The argument of the Chancellor of the Exchequer, that more money will be spent by those who have this relief in Super-tax, and that this will result in more employment, is very sound. It is a sound policy to encourage people when they are alive rather than to worry a great deal about what they are going to do after they are dead. Personally, I would rather have a live mouse than a dead lion. Members of the House will agree, at any rate, that whilst taxation has been very heavy indeed, many people have had to look around and see where they could economise, and in that economy they have been compelled to bring about unemployment. The reverse applies—that if there were a saving in the payment of taxation they would again look round and see where the could spend money in order to find employment.

One hon. Member said that no employer would find work for the sake of doing so. How does he know? [HON. MEMBERS: "By experience!"] Hon. Members may have experience, but they have not all the experience; there is a little bit left to someone else. They think that they have not only all the experience but all the virtues. They are not in that position exactly. At any rate if they wish us to believe in their sincerity, they ought to give us credit for being sincere also, for we are just as anxious to see an improvement in the conditions of the poor — at any rate I feel so—as any hon. Member who sits on the Labour benches. I would rather be the gardener or the chauffeur of a millionaire Socialist or someone like him—someone like the right hon. Gentleman the former Minister of Health—than be an out-of-work cotton spinner. I hope that if the time should come when I have to look for a job, I shall be able to go to some of my wealthy friends on the Labour benches and ask them for work. Instead of agreeing with the argument of the Socialists, that there will be no more work found because of this revision of taxation, I regret very much indeed that the Chancellor of the Exchequer has not done more, because I firmly believe it is because this direct taxation has been crushing not only industry but those engaged in it for the last few years, that our position with regard to unemployment is as bad as it is, and immeasurably worse than that of any other nation in the world. Hon. Members on the Labour Benches say that we do not understand. The hon. Member who spoke last said that no one on the Government side knew anything about the hardships that had to be undergone. Again I say, how does he know?

Mr. R. MITCHELL

I never said any such thing. I said that you do know it but you do not feel it.

Mr. GREENWOOD

I do not wish to misrepresent my hon. Friend. I listened very carefully to his speech and with very great enjoyment, and I agreed with a great deal of it. I imagine that his ideals and mine are not very far apart. Our only difference would be as to the method of setting about the improvement of conditions. I understood him to say that Members on this side knew nothing about the pinch of necessity, and that all they had to consider was which luxury they should buy or which they should do with out. I think that is a fair representation of his statement?

Mr. R. MITCHELL

Yes.

Mr. GREENWOOD

Again I ask hon. Members, how do they know? No man knows better how the shoe pinches than the man who is wearing it. It is all very well for hon. Members above the Gangway to suggest that all those on the other side are living in the best of all possible worlds and they themselves are the only people who suffer hardship. How do they know? When we say we believe that a reduction in direct taxation would bring about an improvement in the conditions of the people and reduce unemployment, we are just as sincere as they are when they say that this reduction is mean and is simply a sop to the rich. I do not agree with that view. Three or four years ago hon. Members who were then sitting on this side of the House and who are not here now, members of my own trade, were making money and doing well, and hon. Members above the Gangway then raised questions about the dividends which were being made by the cotton mills and said it was a shame that these dividends should be made. I ventured then to say that it was better to have the mills making dividends than to have the people out of work and the mills making losses. The position is changed now. Those mills are now making losses; men who were in a good position then are not in as good a position to-day, but hon. Members above the Gangway are still dissatisfied. Unemployment is ten times worse than it has ever been before, because those mills are not doing well, and hon. Members should realise that when employers are doing well those who are employed are doing well, and it is a great mistake to assume that masters in industry must of necessity do badly in order that those who work for them should do well.

Mr. WALLHEAD

From what one has heard in the course of these Debates one would assume that there was virtue in spending by rich but not in spending by the poor. I suggest that the arguments of the hon. Member for Paisley (Mr. Rosslyn Mitchell) is quite accurate, and that the spending of the poor finds a proportionately larger amount of employment than the spending of the rich. An hon. Member opposite shakes his head. A week or two ago, in connection with a recent Court, I saw a notice of the fact that the train of a lady's dress cost £200. I cannot imagine how the train of the dress could be worth £200, no matter what the material was, unless it was made of pure gold, but I can imagine that £200 spent on working girls' frocks would find more employment than the making of the train. We argue in favour of the proposition that the spending power, the consuming power, should be given to the poor instead of to the superlatively rich, and that is why we oppose these schemes of taxation. The hon. Member for Stockport (Mr. W. Greenwood) has just referred to the bad times through which we are passing. Judging by the White Paper published by the Treasury at the presentation of the Budget, to talk of bad times is ridiculous. I have put this question before, and I put it again. Is it not the fact that the rich are richer this year than they were last year, in spite of all the talk about bad times? Hon. Members who dissent from that view must not have read the Chancellor's statement, because the right hon. Gentleman argues that if the Super-tax were left as it was, if no remission and no increase were made, he would receive as a result of the tax £7,000,000 more than the Chancellor received last year.

Mr. H. WILLIAMS

What about the average?

Mr. WALLHEAD

That is just what I am talking about. If last year the Supertax realised £62,500,000 and if the Chancellor estimates that the same tax this year would realise him £70,000,000, somebody must be richer than they were before.

Mr. WILLIAMS

Does the hon. Member understand the operation of the three years' average?

Mr. WALLHEAD

My argument about the Super-tax is not concerned with the three years' average.

Sir H. CROFT

Surely the hon. Member will admit that the Super-tax estimate in connection with the Budget of this year does not refer to this year's profits but the last year's.

Mr. WALLHEAD

The point to be realised is that in spite of bad trade, in spite of the fact that we have tremendous and appalling poverty, in spite of the fact that the penury of the people is deepening, there has been this increase which the Chancellor has estimated. I admit that the increasing poverty is not regretted alone by members on these benches but is regretted by all Members of the House. No one wishes to see this kind of thing, but it is a fact that the penury of the people is deepening day by day. I have been this week-end in my constituency, where 9,000 men and women are signing the unemployment roll. They are not unemployed because they are "wont-works" and wastrels. They are industrious, hard working people, out of employment because the pits have closed, and the pits have closed because they are not paying, and not for lack of capital. [HON. MEMBERS: "It may be."] No, that is not the urge. The urge is that the pits do not pay. That is the statement made. Yet here the fact emerges from the Chancellor's own estimate that a small handful of people have aggregate incomes which must be £22,000,000 more than they were in the previous 12 months, because he only takes one-third. That is something of which we have a right to ask an explanation.

The consuming power of the wealthy is in no need of being increased. It is large enough. Where a. greater consuming power is wanted is on the part of the great mass of the people. It is wanted in regard to the wearing of workaday boots, suits of clothes, shirts, blouses and skirts, in regard to improved food and improved house furniture and floor coverings for the cottage—because drawing rooms can become a little shabby and the world will be none the worse, but let the kitchen suffer and all the world suffers. That is what we protest against in the proposals put before the House by the Chancellor of the Exchequer. This Budget proves that there is a determination on the part of the wealthy people to maintain their hold and to keep what they have got, regard-lees of the sufferings of the mass of the people. I have heard a great deal about the increase of taxation. It troubles me but little. I believe the money we spend communally and collectively in the shape of taxes is the cheapest money we spend. The amount of tax does not really matter. What does matter is what we get for the taxes that we spend. I am less concerned with the full amount than I am with how the money is expended, and the worst of the whole business is that the money that is being taken from the poor by this method of broadening the basis of taxation is being spent upon unworthy things. There ought to be a reduction in the expenditure on armaments. There ought to be no expenditure on Singapore.

Mr. DEPUTY-SPEAKER

The hon. Member is wandering from the point.

Mr. WALLHEAD

I apologise, and I will come back to the point, which is that all this talk about the necessity of relieving the rich is not borne out by the facts. According to the Chancellor's own statement, the facts point to the rich being richer than they were, while admittedly the poor are becoming poorer. Our industry is struggling under a burden which it cannot carry, and the first sufferers in industry are the workers, who are mainly responsible for carrying along the industry of the country. That is the thing that we, on these benches, must continually insist upon, even as Shakespeare might say, with "damnable iteration." We shall continue to iterate this statement, whether hon. Members opposite like it or not.

Mr. JOHN BAKER

I, too, want to enter my protest against the reduction of the Super-tax, and suggest to the Financial Secretary to the Treasury that when he says we do not take into account the adjustment which the Chancellor of the Exchequer is trying to make in this Clause, he is in error. It is because we have taken into account what the Chancellor of the Exchequer is trying to do that we are opposed to the Clause. He is trying to make an adjustment of taxation, and is putting burdens upon industry, and industry is breaking down under those burdens. I am not arguing that all employers, merely because they are employers, are millionaires and have not any common sense. I happen to know some employers, and they are having a very bad time. I want to suggest that the Chancellor will not find Super-tax payers amongst those who have money invested in either the coal trade, the iron and steel trade, or the engineering and shipbuilding trades of this country, and it is because of that maladjustment that the right hon. Gentleman is trying to make that I, for one, oppose the Clause. He suggests taking £7,500,000 off this year, and £10,000,000 next. In the same Budget he is putting taxes on the sugar of the poorest of the poor and taxes on the clothing of the poor, and he proposes taxing the weekly wages of everybody who works for wages for the provision of pensions and other things. That, I say, is an adjustment which is not in the interests of the people of this country. It is not in the interests of the poor, assuredly, and I, do not believe that it is in the interests of the wealthy either, because that taking of the burdens off the back of the wealthy and shoving them on to the poor can only go so far, when the poor will object.

I have felt, when we have been discussing this question of Income Tax and Super-tax, that here was a glorious chance for the rich to show their real patriotism and help the poor, not with talk, but by relieving their burdens, but we find hon. Members opposite, whether or not they are going to get any advantage out of this Super-tax Clause, voting for a reduction in their own Income Tax and the imposition of new taxes on people who, as the hon. Member for Paisley (Mr. Rosslyn Mitchell) said, have extreme difficulty in making both ends meet. I do not want to use the language he did, and say that this is one of the meanest things I know, but it certainly appeals to me as being mean for me to sit here to-night, getting the benefit from a reduction in Income Tax, and voting for that, which I did not do, of course, and knowing that another citizen of this country is going to have extra burdens put upon him. Then we have had the most extraordinary reason I have ever heard for doing a thing like this. We are told that industry needs capital, and that these people who are going to get relief under these taxes will invest the money in industry. Apparently, the Chancellor of the Exchequer and his worthy colleague appear to think that, if they do not reduce these taxes, industry will not get capital, and that it is a fit and proper thing to relieve a rich man of taxes so that he can invest the money he is excused from paying at a profit to himself.

Personally, I do not think that is a wise thing to do, I do not think it is a reasonable thing to do, and I do not think it will go into the industries of this country that need helping the most. I wonder which hon. Member, on either side of this House, would invest money now in the iron and steel trade, in the coal trade, or in the engineering and shipbuilding trades, with a very few exceptions, if those industries were appealing for capital. In the "Times" this morning may be seen the report of a big; industry, with £9,000,000 of assets, that lost £500,000 last year, and can only pay a preference dividend by taking money out of reserve. Is that where the money is going, when these wealthy men can take their money into Government secured loans at from 5 per cent. to 7½per cent? I do not think it will go there.

Sir WILFRID SUGDEN

Where are the 7½ percenters?

Mr. BAKER

Here is an hon. Member of this House who has never heard of the Hungarian, and German, and Austrian loans, and the loan that is out this morning for synthetic ammonia. If you only had time to analyse it, that is a beacon of light illuminating the situation into which this Government is driving the country. Last year, if the Government in office offered to secure a loan, they could raise money at 4½ per cent

Mr. DEPUTY-SPEAKER

This is out of order.

Mr. BAKER

I am sorry I am out of Order. When an hon. Member on this side was arguing that the rich were wealthier now and last year than they were before, he was interrupted, and Members wanted to ask questions, and did not believe it. Our information may be wrong. We only get it from the best statisticians in Britain and the Board of Trade and the Inland Revenue. I am quite prepared to think that the Inland Revenue can never be right if that will suit Members opposite. The Inland Revenue are the people who collect taxes and they record what they collect. They also record the incomes of the people who come under supervision. At the end of the year they publish a document and tell us what it is all about. Their estimate of the income for last year is £3,800,000,000. Sir Josiah Stamp, who, I believe, knows what he is talking about on this matter, estimated that the national income for 1920 was round about £4,000,000,000. Others have given estimates, but that estimate I think is a conservative one. That indicates a reduction in income for last year over the best year this country ever knew of £200,000,000. The Board of Trade publish statistics— and, after all, their statistics are our only guide—as to what is happening with regard to wages, and they tell us wages are down £518,000,000 a year below what they were in 1920.

If those figures be true, and it is those figures we are guided by, I, too, am of opinion that the incomes of the wealthy were higher in 1924 than they were in 1920, and they were higher by £300,000,000. There is no need to relieve those people of taxation in the hope of helping them. They do not need help. They are quite capable of looking after themselves. One of the difficulties of Members opposite is—and I can quite see their point of view—that if they ever hear a man or woman on these benches talking they believe we are getting at the wicked capitalist, and they do not realise what is taking place in their country, that the capitalist himself is getting just as much into the hands of the financier—which is a separate group altogether—and the industrialists, too, are just as much getting into the hands of the merchants, as the workman is in the hands of any of them.

Mr. WESTWOOD

I want in a word to enter my protest against these pro- posals of the Government, not because I believe my protest will have any more influence than the protests already lodged. I am one of those who believe that if we who claim to represent the working classes expect nothing from the Tory party we will not be disappointed. That is exactly what we will get in connection with all this argument and debate. I am satisfied that so far as the Chancellor of the Exchequer is concerned in giving this gift to the Super-tax payers he has been merely carrying out the old truly typical Tory policy of looking after their own friends. He has repeatedly pointed out in speeches when he was a Liberal that the Tory party always would look after the rich. When he has got back to the fold, the first thing he has done is to justify his statements in connection with the Tory party. There has not been a single argument from the other side justifying this remission of taxation to Super-tax payers because of any hardship being borne by them at the present moment. No one can justify this remission of taxation because of any hardship so far as the Super-tax payers are concerned.

The hon. Member for Stockport (Mr. W. Greenwood) has submitted the most amazing argument in favour of this proposal. He has argued that, in giving back something to the Super-tax payer you allow him to save, so that there would be a chance of increase of capital in this country and an increase of employment. Unemployment is not rampant in this country to-day for lack of capital. If it is, members of the capitalist class stand condemned as the greatest treason-mongers the country has ever known. If it is true, as is argued, that unemployment is rampant because of lack of capital, then you stand condemned for having loaned to the Germans £12,000,000, and you stand condemned for having loaned to the Greeks £6,000,000. The only reason you did lend that capital was because you could get your 7½ per cent. In the money that has been invested in that particular loan, £50,000 will bring income to the one who invested it of over £2,000 a year, and now you are going to relieve him of the taxation that he otherwise would have borne.

I want to enter my protest against these proposals because, combined with them, you are proposing to increase the taxation of the miner. The miners to-day are, in many instances, living on 28s. a week. You are going to increase the taxation on them by your proposal by 4d. per week. They are starving already. You are going, in the interest of the class to which you belong, to ask them to accept deductions in wages. Wages to-day are only 9s. 4d. per day. At the same time, you are going to reduce taxation to those already receiving £6 a day, because the Super-tax payers are receiving £6 a day income as a minimum. For these reasons I enter my protest against those proposals. I am not sorry you have done this. You have only justified all we have said at the last election. We will be justified in going to the country and saying you are the rich man's party. Robbing the rich at the expense of the poor. [Laughter.] Sometimes slips do happen, and the slip you have made on this occasion, in robbing the poor to make the rich richer and robbing the poor because they are poor, will give us scores of seats at the next election.

Sir H. CROFT

I only want to intervene for a few moments. I keep on finding myself getting more and more in agreement with some of the more outspoken and extreme members of the party above the Gangway. The last speaker, I think, did very great justice in calling attention to the fact that very large sums of money had been invested in Germany, Greece, Hungary and other countries while there is distress in this country. There is a great deal to be said for what he has mentioned. In these days, when we should be thinking by day and dreaming by night how we are going to cure the unemployment problem, there is a good deal in what the hon. Member said that is worthy of the notice of the House. Referring to the speech of the hon. Member for Merthyr (Mr. Wallhead), here again I am rather inclined to share his view. I am not at all sure that if you took a ballot of all those who are included in the net of Super-tax and Death Duties in this House that you would not find a very considerable majority who would sooner continue to pay Super-tax rather than have this great increased burden put upon Death Duties. I presume the object of the Chancellor of the Exchequer was to try to free as much liquid money for spending at once in those difficult times. That is the only justification for it. If I had a free vote on this question, I would say it is far preferable to continue to pay this Super-tax rather than to indulge in a capital levy at death, as is proposed with the increased Death Duties

There is one point which I think hon. Members of the Opposition have forgotten all through this discussion, and that is that it must be a help to the recovery of this country that you should reduce taxation all round. I remember that at the time of the great People's Budget, when that Budget was introduced by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George)—none of us understood at the time that the title meant that the people would suffer from it—the right hon. Gentleman the Member for Colne Valley (Mr. Snowden) laid down this principle that all taxes imposed were ultimately borne by the working classes. When you come to work that out it must obviously be true. Therefore, if the Chancellor of the Exchequer sees his way to reduce taxation in any form it must ultimately be for the benefit of industry and for the workers in industry.

The Chancellor of the Exchequer was twitted by hon. Members above the Gangway with the fact that this money, to be remitted to the Super-tax payer, is money that is really wanted for industry. That is as I understood it. But the whole of this remission of Super-tax, so far as I know, will, in the case of any thrifty, cautious person, and must go towards insurance against the increased Death Duties which the Chancellor of the Exchequer so unwisely, in my opinion, is imposing. I think, that is, and must be true. His only object, as I said before, appears to be to try to bring as much money in to spend in the country at the present time. I imagine that is why he has taken this course of increasing the Death Duties and of allowing money immediately to circulate more quickly by the remission of taxation. If that is so, I hope it will have its effect. But I say once more, that I believe that if there was a free vote of those who are in the position of having to pay Super-tax and Death Duties that they would, I am convinced, by a large majority, say that they would sooner the Budget should stay as it was last year rather than change as it has this year.

Mr. BROAD

The contention put forward by so many hon. Members that the Super-tax payer is a poor, very hard bit individual, and that because he is so hard hit the industry of this country is in a very bad condition, is one that, I think, cannot be sustained nor can the proposed reduction of the Super-tax; and it has its answer in the last Report of the Commissioners of Inland Revenue. If it were not for this Report, I might even be induced to believe that it was a fact that the Super-tax payer is very hard hit indeed. Let me take these figures. Super-tax for the last four years has been paid on an income of £2,000 a year. I take the year 1920–21. I find that on the basis given that the total amount paid for Super-tax was £55,618,000 during that period. Since then we have had a very bad time with trade, and the workers' wages have been reduced to a very great extent. The purchasing power of money has altered considerably, and yet these poor, hard hit Super-tax payers, taking the same basis of taxation as before, £2,000 a year, have paid, or have to pay £61,746,000, which is a very substantial increase indeed. When I hear, as it appears to me, the contention of my hon. Friend the Member for Stockport (Mr. W. Greenwood) that this extra money, in the hands of the wealthy, would enable them to buy things and so set people to work, I think of the old maxim, "That it is the luxury of the rich that provides work for the poor." That is not sound doctrine. It is the low standard of living of the poor that allows the luxury of the rich.

When I hear hon. Members who are engaged in industry, whether coal, iron, or anything else, talking about bad trade and how trade is being lost all round, I ask myself how is it that the national income, according to the returns of Income Tax payers and Super-tax payers, is increasing year by year, and I further ask myself: is there not some connection between the two? Is it not a fact that the dead-weight debt of the credit holders of this country, who have a mortgage on the life and labour of the country, is crushing the life out of our industry and out of our workers? Let me take other figures from these Returns of the Commissioners of Inland Revenue. I find that the total income on which tax was paid in 1920–21 was £2,661,000,000 and in the present £2,300,000,000. This would appear to be a decline of over £300,000,000 on the total income of the Income Tax payer. There is a sub-division in an earlier column which shows what proportion of that total Income Tax was paid by the wage earners. I find that in the year 1920 there was £825,000,000 of taxable income of the wage earners. In the last year for which we have the figures the figure was £300,000,000, showing a reduction in the wage earners' income of £500,000,000. The wages of the wage earners have declined. The incomes of other people have got bigger, and this in a time of profound trade depression! Yet we are told we must seek fresh markets, and that we must have lower wages and longer hours of work. I am wondering whether, perhaps, the great cause of the decline in our industry and the fact that so many of our industrial businesses cannot be worked at their full efficiency and, therefore, find the cost of production greater than it might otherwise be, is not due to the fact that we have largely destroyed our home market by the reduction of the wages of the workers. This is after all the prime market that we have. We could see the thing coming in the year 1919, when the Conservative policy of deflation by the Government of that time, in conjunction with the big bankers, set about bringing down prices and bringing about unemployment deliberately to bring wages down first and foremost, so that prices could be brought down. When that policy had been in operation about 12 months we had close upon 2,500,000 unemployed in this country and the present Prime Minister—

Mr. SPEAKER

The hon. Member is getting a very long way from the matter before the House. I would ask him to keep to the Amendment.

Mr. BROAD

It has been argued, Mr. Speaker, that the remission of the Supertax will give an impetus to industry, and I was submitting as an alternative to this policy that of increasing the purchasing power of the people generally. I was just saying what the present depression in and decline of our industry was due to. I should like to finish, if I might, just the one point, and I should like to show that at the time when there was 2½ millions of unemployed in the country us a result of the policy then in operation, that the present Prime Minister went to Liverpool to meet Mr. Harvey, the repre- sentative of the United States. In a public speech he congratulated the country on the fall of wages. He said: The wages concessions are generally speaking being made very satisfactorily. It has been a difficult thing, but the fall of wages has come along very well. It is not by the relief of the great Super-tax payers, but by restoring the purchasing power of our people that the industry of this country is going to recover. If our businesses are to be placed on a more efficient basis, with, a reduction of the cost of manufacture, that will not be done by a reduction of the home market, but by increasing the purchasing power of our people.

Mr. SPEAKER

I would like to point out to the House that it is my desire, as I indicated at the beginning of the proceedings, to select an Amendment on Clause 22 and an Amendment on the Schedule, but it will not be possible to do that unless the House be ready to make some progress.

Captain BENN

May I point out to you, Sir, when you are making up your mind as to the admission of the Amendment on Clause 22, which one of my hon. Friends will move and many of us desire to discuss, that we ourselves have contributed only two speeches to this Debate, and that our contribution is finished. I hope, therefore, you will not allow our Amendment to suffer on account of anything that may happen.

Mr. SPEAKER

It was a request that came to me from both parts of the Opposition to have a discussion on Clause 22, and I hope the House will allow me now to put the question.

Mr. DALTON

On the question of the allocation of time, may I point out to you, Sir, that many of us on these benches, as is indicated by the large number of those who have risen to speak, regard this as being the most important Clause of the whole Finance Bill, and although we are not anxious to be parties to any violation of any agreement that may have been reached, I do submit that we ought to have a very large proportion of the time allotted to the discussion of this particular Clause.

Mr. SPEAKER

I did not rise until the discussion had occupied twice the length of time that was understood when the representatives of the hon. Member were discussing it with me. It was suggested that this would take an hour, and the discussion has now been going for mere than two hours. That is the reason why I ask the House to allow me to put the Question now.

Question put, "That the words proposed to be left out stand part of the Bill."

The House divided: Ayes, 253; Noes, 139.

Division No. 204.] AYES. [9.49 p.m.
Acland-Troyte, Lieut.-Colonel England, Colonel A. Lougher, L.
Albery, Irving James Erskine, Lord (Somerset, Weston-s.-M.) Luce, Maj.-Gen. Sir Richard Harman
Ashley, Lt.-Col. Rt. Hon. Wilfrid W. Erskine, James Malcolm Monteith Lumley, L. R.
Astbury, Lieut.-Commander F. W. Everard, W. Lindsay McDonnell, Colonel Hon. Angus
Astor Viscountess Fairfax, Captain J. G. McLean, Major A.
Atholl Duchess of Falle, Sir Bertram G. Macnaghten, Hon. Sir Malcolm
Baldwin, Rt. Hon. Stanley Falls, Sir Charles F. Maitland, Sir Arthur D. Steel-
Balfour, George (Hampstead) Fanshawe, Commander G. D. Makins, Brigadier-General E.
Barnett Major Sir Richard Fielden, E. B. Manningham-Buller, Sir Mervyn
Barnston, Major Sir Harry Fleming, D. P. Mason, Lieut.-Col. Glyn K.
Beckett, Sir Gervase (Leeds, N.) Forestier-Walker, L. Merriman, F. B.
Bellairs, Commander Carlyon W. Forrest, W. Meyer, Sir Frank
Berry, Sir George Foster, Sir Harry S. Mitchell, S. (Lanark, Lanark)
Bethell, A. Frece, Sir Walter de Mitchell, W. Foot (Saffron Walden)
Birchall, Major J. Dearman Fremantle, Lt.-Col. Francis E. Moles, Thomas
Bird, E. R. (Yorks, W. R., Skipton) Gadie, Lieut. Col. Anthony Monsell, Eyres, Com. Rt. Hon. B. M.
Blades, Sir George Rowland Galbraith, J. F. W. Moore, Lieut.-Colonel T. C. R. (Ayr)
Blundell, F. N. Ganzoni, Sir John Moore, Sir Newton J.
Boothby, R. J. G. Gates, Percy Moore-Brabazon, Lieut.-Col. J. T. C.
Bourne, Captain Robert Croft Gibbs. Col. Rt. Hon. George Abraham Morden, Col. W. Grant
Bowyer, Capt. G. E. W. Gilmour, Lt.-Col. Rt. Hon. Sir John Moreing, Captain A. H.
Brass, Captain W. Goff, Sir Park Morrison, H. (Wilts, Salisbury)
Brassey, Sir Leonard Gower, Sir Robert Morrison-Bell, Sir Arthur Clive
Bridgeman, Rt. Hon. William Clive Grant, J. A. Murchison, C. K.
Briggs, J. Harold Greene, W. P. Crawford Nail, Lieut.-Colonel Sir Joseph
Briscoe, Richard George Greenwood, William (Stockport) Neville, R. J.
Brittain, Sir Harry Grenfell, Edward C. (City of London) Newman, Sir R. H. S. D. L. (Exeter)
Brocklebank, C. E. R. Grotrian, H. Brent Nicholson, O. (Westminster)
Brooke, Brigadier-General C. R. I. Guest, Capt. Rt. Hon. F. E.(Bristrol, N.) Nuttall, Ellis
Buckingham, Sir H. Guinness, Rt. Hon. Walter E. Oakley, T.
Bull, Rt. Hon. Sir William James Hacking, Captain Douglas H. O'Neill, Major Rt. Hon. Hugh
Bullock, Captain M. Hanbury, C. Pennefather, Sir John
Burman, J. B. Hannon, Patrick Joseph Henry Penny, Frederick George
Burton, Colonel H. W. Harland, A. Percy, Lord Eustace (Hastings)
Campbell, E. T. Harrison, G. J. C. Perkins, Colonel E. K.
Cassels, J. D. Hartington, Marquess of Perring, William George
Cayzer, Sir C. (Chester, City) Harvey, Major S. E. (Devon, Totnes) Pielou, D. P.
Chadwick, Sir Robert Burton Haslam, Henry C. Pilcher, G.
Chapman, Sir S. Hawke, John Anthony Pownall, Lieut.-Colonel Assheton
Charteris, Brigadier-General J. Headlam, Lieut.-Colonel C. M. Preston, William
Chilcott, Sir Warden Henderson, Capt. R. R. (Oxf'd, Henley) Price, Major C. W. M.
Christie, J. A. Henderson, Lieut.-Col. V. L. (Bootle) Ramsden, E.
Churchill, Rt. Hon. Winston Spencer Heneage, Lieut.-Col. Arthur P. Rawson, Alfred Cooper
Clarry, Reginald George Henn, Sir Sydney H. Rees, Sir Beddoe
Clayton, G. C. Henniker-Hughan, Vice-Adm. Sir A. Reid, Capt. A. S. C. (Warrington)
Cobb, Sir Cyril Herbert, S. (York, N. R-,Scar. & Wh'by) Reid, D. D. (County Down)
Cochrane, Commander Hon. A. D. Hogg, Rt. Hon. Sir D. (St. Marylebone) Remer, J. R.
Cockerill, Brigadier-General G. K. Hope, Capt. A. O. J. (Warw'k, Nun.) Rice, Sir Frederick
Colfox, Major Wm. Phillips Hope, Sir Harry (Forfar) Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Conway, Sir W. Martin Hopkins, J. W. W. Roberts, Samuel (Hereford, Hereford)
Cooper, A. Duff Hopkinson, A. (Lancaster, Mossley) Robinson, Sir T. (Lancs., Stretford)
Cope, Major William Horlick, Lieut.-Colonel J. N. Ropner, Major L.
Courthope, Lieut.-Col. Sir George L. Howard, Capt. Hon. D. (Cumb., N.) Russell, Alexander West (Tynemouth)
Cowan, Sir Wm. Henry (Islingtn. N.) Hudson, Capt. A. U. M. (Hackney, N.) Salmon, Major I.
Craig, Capt. Rt. Hon. C. C. (Antrim) Hudson, R. S. (Cumberl'nd, Whiteh'n) Samuel. Samuel (W'dsworth, Putney)
Craig, Ernest (Chester, Crewe) Hume, Sir G. H. Sandeman, A. Stewart
Croft, Brigadier-General Sir H. Hurd, Percy A. Sanders, Sir Robert A.
Crook, C. W. Hutchison, G. A. Clark (Midl'n & P'bl's) Sanderson, Sir Frank
Crooke, J. Smedley (Derltend) Inskip, Sir Thomas Walker H. Savery, S. S.
Crookshank, Col. C. de W. (Berwick) Jackson, Lieut.-Colonel Hon. F. S. Scott, Sir Leslie (Liverp'l, Exchange)
Curtis-Bennett, Sir Henry Jacob, A. E. Shaw, Lt.-Col. A. D. Mcl.(Renfrew, W.)
Curzon, Captain Viscount Jephcott, A. R. Shaw, Capt W. W. (Wilts, Westb'y)
Davidson, J.(Hertf'd, Hemel Hempst'd) Jones, G. W. H. (Stoke Newington) Shepperson, E. W.
Davidson, Major-General Sir John H. Kennedy, A. R. (Preston) Simms, Dr. John M. (Co. Down)
Davies, Maj. Geo. F.(Somerset, Yeovil) Kidd, J. (Linlithgow) Sinclair, Col. T. (Queen's Univ., Belfast)
Davies, Sir Thomas (Cirencester) King, Captain Henry Douglas Slaney, Major P. Kenyon
Davison, Sir W. H. (Kensington, S.) Knox, Sir Alfred Somerville, A. A. (Windsor)
Dawson, Sir Philip Lamb, J. Q. Spender Clay, Colonel H.
Dean, Arthur Wellesley Lister, Cunliffe-, Rt. Hon. Sir Philip Stanley, Col. Hon. G.F.(Will'sden, E.)
Dixon, Captain Rt. Hon. Herbert Little, Dr. E. Graham Stanley, Lord (Fylde)
Doyle, Sir N. Grattan Lloyd, Cyril E. (Dudley) Stanley, Hon. O. F. G. (Westm'eland)
Drewe, C. Locker-Lampson, G. (Wood Green) Steel, Major Samuel Strang
Edmondson, Major A. J. Locker-Lampson, Com. O.(Handsw'th) Storry Deans, R.
Stott, Lieut.-Colonel W. H. Turton, Edmund Russborough Windsor-Clive, Lieut.-Colonel George
Strickland, Sir Gerald Vaughan-Morgan, Col. K. P. Wise, Sir Fredric
Stuart, Hon. J. (Moray and Nairn) Waddington, R. Womersley, W. J.
Styles, Captain H. Walter Warner, Brigadier-General W. W. Wood, Rt. Hon. E. (York, W. R., Ripon)
Sueter, Rear-Admiral Murray Fraser Waterhouse, Captain Charles Wood, E.(Chest'r, Stalyb'dge & Hyde)
Sugden, Sir Wilfrid Watson, Sir F. (Pudsey and Otley) Wood, Sir Kingsley (Woolwich, W.).
Sykes, Major-Gen. Sir Frederick H. Wells, S. R. Wood, Sir S. Hill- (High Peak)
Templeton, W. P. Wheler, Major Sir Granville C. H. Woodcock, Colonel H. C.
Thompson, Luke (Sunderland) White, Lieut.-Colonel G. Dairymple Worthington-Evans, Rt. Hon. Sir L.
Thomson, F. C. (Aberdeen, South) Williams, Com. C. (Devon, Torquay)
Thomson, Sir W. Mitchell-(Croydon, S) Williams, Herbert G. (Reading) TELLERS FOR THE AYES.—
Tinne, J. A. Wilson, Sir C. H. (Leeds, Central) Major Hennessy and Captain Mar-
Titchfield, Major the Marquess of Wilson, R. R. (Stafford, Lichfield) gesson.
NOES.
Adamson, Rt. Hon. W. (Fife, West) Hamilton, Sir R. (Orkney & Shetland) Robinson, W. C. (Yorks, W. R., Elland)
Adamson, W. M. (Staff., Cannock) Hardie, George D. Saklatvala, Shapurji
Alexander, A. V. (Sheffield, Hillsbro') Hayday, Arthur Scrymgeour, E.
Ammon, Charles George Hayes, John Henry Shaw, Rt. Hon. Thomas (Preston)
Attlee, Clement Richard Henderson, Rt. Hon. A. (Burnley) Short, Alfred (Wednesbury)
Baker, J. (Wolverhampton, Bilston) Henderson, T. (Glasgow) Sinclair, Major Sir A. (Caithness)
Barker, G. (Monmouth, Abertillery) Hirst, G. H. Sitch, Charles H.
Barnes. A. Hirst, W. (Bradford, South) Smillie, Robert
Barr, J. Hudson, J. H. (Huddersfield) Smith, Ben (Bermondsey, Rotherhithe)
Batey, Joseph Jenkins, W. (Glamorgan, Neath) Smith, H. B. Lees (Keighley)
Beckett, John (Gateshead) John, William (Rhondda, West) Smith, Rennie (Penistone)
Benn, Captain Wedgwood (Leith) Johnston, Thomas (Dundee) Snell, Harry
Bowerman, Rt. Hon. Charles W. Jones, Henry Haydn (Merioneth) Snowden, Rt. Hon. Philip
Briant, Frank Jones, Morgan (Caerphilly) Spencer, G. A. (Broxtowe)
Broad, F. A. Jones. T. I. Mardy (Pontypridd) Stamford, T. W.
Bromfield, William Kelly, W. T. Stephen, Campbell
Bromley, J. Kennedy, T. Sutton, J. E.
Charleton, H. C. Kirkwood, D. Taylor, R. A.
Clowes, S. Lansbury, George Thomson, Trevelyan (Middlesbro. W.)
Cluse, W. S. Lawson, John James Thorne, G. R. (Wolverhampton, E.)
Compton, Joseph Lindley, F. W. Thorne, W. (West Ham, Plaistow)
Connolly, M. Livingstone, A. M. Thurtle, E.
Cove, W. G. Lowth, T. Tinker, John Joseph
Cowan, D. M. (Scottish Universities) Lunn, William Trevelyan, Rt. Hon. C. P.
Dalton, Hugh MacDonald, Rt. Hon. J. R.(Aberavon) Varley, Frank B.
Davies, Rhys John (Westhoughton) Mackinder, W. Viant, S. P.
Day, Colonel Harry Maclean, Neil (Glasgow, Govan) Wallhead, Richard C.
Dennison, R. March, S. Walsh, Rt. Hon. Stephen
Duncan, C. Maxton, James Warne, G. H.
Dunnico, H. Mitchell, E. Rosslyn (Paisley) Watson, W. M. (Dunfermline)
Edwards, C. (Monmouth, Bedwellty) Montague, Frederick Watts-Morgan, Lt.-Col. D. (Rhondda)
Edwards, John H. (Accrington) Morris, R. H. Webb, Rt. Hon. Sidney
Fenby, T. D. Morrison, R. C. (Tottenham, N.) Welsh, J. C.
Garro-Jones, Captain G. M. Murnin, H. Westwood, J.
Gibbins, Joseph Naylor, T. E. Wheatley, Rt. Hon. J.
Gillett, George M. Oliver, George Harold Whiteley, W.
Gosling, Harry Owen, Major G. Wilkinson, Ellen C.
Graham, D. M. (Lanark, Hamilton) Palin, John Henry Williams, David (Swansea, E.)
Graham, Rt. Hon. Wm. (Edin., Cent.) Paling, W. Williams, T. (York, Don Valley)
Greenall, T. Parkinson, John Allen (Wigan) Wilson, R. J. (Jarrow)
Grenfell, D. R. (Glamorgan) Pethick-Lawrence, F. W. Windson Walter
Griffiths, T. (Monmouth, Pontypool) Ponsonby, Arthur Wright, W.
Groves, T. Potts, John S. Young, Robert (Lancaster, Newton)
Grundy, T. W. Richardson, R. (Houghton-le-Spring)
Guest, J. (York, W.R., Hemsworth) Riley, Ben TELLERS FOR THE NOES.—
Guest, Dr. L. Haden (Southwark, N.) Ritson, J. Sir Godfrey Collins and Sir R.
Hall, F. (York, W. R., Normanton) Roberts, Rt. Hon. F. O.(W. Bromwich) Hutchison.
Hall, G. H. (Merthyr Tydvil) Robertson, J. (Lanark, Bothwell)