HC Deb 24 April 1928 vol 216 cc874-81

Motion made, and Question proposed, That the Customs duty chargeable on tea until the first day of August, nineteen hundred and twenty-eight, shall continue to be charged on and after that date until the first day of August, nineteen hundred and twenty-nine, that is to say: Tea, the 1b. … … fourpence. And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."—[Mr. Churchill.]


The position of anyone who follows the Chancellor of the Exchequer on the introduction of the Budget is always a very difficult one. On this occasion it is unusually so. The right hon. Gentleman has covered immense ground during the last three hours. I think there has been no Budget since the memorable Budget of 1909 which is likely to provoke so much discussion and controversy as the one which the right hon. Gentleman has just introduced. It would be an intolerable infliction upon the Committee if I were to ask for more than a very few moments at this stage, for Members of the Committee have listened with keen and concentrated attention for so long, and the nature of the proposals that the right hon. Gentleman has submitted do not lend themselves to immediate comment or discussion. Fortunately we shall have opportunities later for dealing with the matter in detail. My first duty to-day is a very pleasant one. I am sure that the right hon. Gentleman will believe that I am sincere when I say that I congratulate him upon occupying a happier position this year than he has done on the last two occasions; and I am sure that I speak in the name of every Member of the Committee when I offer him our hearty congratulations on the brilliant way in which he has introduced his Budget. It has not only been a great physical effort, but, like all the right hon. Gentleman's speeches, it has been a most scintillating effort.

I shall not attempt now to comment upon any of the proposals that the Chancellor has made. However, I may say this—that there have been very few surprises in this Budget. I think that every one of the proposals he has put forward had been anticipated, with perhaps the exception of the change in the Sinking Fund. That fact is largely duo to the other fact that the Chancellor of the Exchequer has himself been giving the Budget piecemeal in speeches and to deputations during the last month. We ought not to begrudge praise and credit where praise and credit are due. Therefore, where I think the right hon. Gentleman is doing a wise thing I shall commend him for his action. There are two or three things in the Budget about which, without further consideration, one may express a definite view. The first is the proposed new form of the accounts. The taking out of the remunerative and self-supporting services from the accounts of revenue and expenditure is a reform for which Members have long been desirous. I thank the right hon. Gentleman and congratulate him on having had an opportunity to carry out this very desirable improvement. The question of the fixed sum for debt charges is so very complicated that I shall not say more about it at the moment than that, as far as I can understand the figures submitted by the Chancellor of the Exchequer, I doubt whether he is proposing any addition at all to the Sinking Fund.

As to the rating proposal, everybody realises the importance of this question. I heartily subscribe to everything that the right hon. Gentleman said in the earlier part of his observations to-night. I really thought at that time that he was repeating one of the many speeches—to use his own phrase, the speeches that he gave by the yard—when he was Member for Dundee, about the taxation of land values. Without committing ourselves at this stage to support of any of the detailed proposals the Chancellor of the Exchequer has made, I can assure him that we shall give the matter our very serious consideration and support him where we think support is justifiable. I think there will be general regret in the country that the relief of local rates has to be postponed for something like 18 months. It is hardly likely that the right hon. Gentleman opposite will be sitting on the Treasury Bench at that time. There is never very much gratitude in politics, and I do not know to whom the gratitude will go, whether it will be the right hon. Gentleman for the proposal or his successor who gives practical effect to it.

A word about the Petrol Duty. Perhaps the effect that is likely to come from the imposition of this duty will be to put an end for all time to the worry which every Chancellor of the Exchequer experiences within a couple of months or so from the introduction of the Budget through the appeals that are made to him for relief from taxation. The Chancellor of the Exchequer has been pestered to reduce the tax on motor cars, and the result of all this pressure and the outcome of all the interviews is that he proposes practically to double the amount of the tax on the motorist. The right hon. Gentleman is making a slight reduction in the duty upon sugar, but I do not attach the least value to his assurance that he has received from the sugar refiners that the reduction will be passed on to the consumer in the form of reduction in price. It is really no reduction in the amount of taxation which is paid by the consumer, because the right hon. Gentleman himself stated that he was making the reduction as compensation for the increase of taxation upon the consumer in other ways.

I welcome the last item which the Chancellor of the Exchequer announced, namely, the increase in the allowance for children. One of the regrets that I had, and I had not many regrets, was that I had not the time to carry out this reform. I did, however, announce that I intended in the following year to carry out that reform. We are much obliged to the Chancellor of the Exchequer for having carried it out in this Budget, and I am certain that it will be welcomed and appreciated as a boon by a considerable number of deserving people. I would repeat the congratulations of the Committee to the Chancellor of the Exchequer upon a very brilliant achievement, by which he has added one more to his many great Parliamentary triumphs.


I propose to follow the example of the ex-Chancellor of the Exchequer, the right hon. Member for Colne Valley (Mr. Snowden) by refraining at this stage from any attempt to examine the highly important, far-reaching, and complicated proposals which have been placed before the House by the Chancellor of the Exchequer. I would like to join in congratulating the Chancellor of the Exchequer upon the lucidity and dexterity with which he presented the Budget statement. It was a very brilliant performance and one which I admire very much. It was with great delight that the House listened to it; in spite of the fact that the speech occupied over three hours there was not a single moment when anyone of us gave the slightest symptoms of being bored. I also join with my right hon. Friend the Member for Colne Valley in saying how delighted I am that the Chancellor of the Exchequer has extended what was known in my day as the brat's allowance. I refer to the allowance in respect of children. I had the honour of initiating that scheme. It has been extended very considerably by succeeding Chancellors of the Exchequer, and I am very glad that the present Chancellor has gone a little further in that direction.

The dominant and most important factor of the Budget is the proposals dealing with rating. There is general agreement that that problem is long overdue for solution and that something ought to be done. I am not criticising the Chancellor of the Exchequer that he did not attempt it before. There is a good deal to be said for his point of view that it was very difficult to do it earlier. In every quarter of the House there is a feeling that something ought to be done on a very considerable scale to relieve the burdens upon industry. Criticisms, in so far as there will be criticisms, will be directed against the methods by which the Chancellor of the Exchequer is proposing to pursue an object which is common to all parties in the House. I am very glad that he has invited criticism and that he has invited the cooperation of the House of Commons. It would be unusual for me at this stage to point out what is passing through my mind, but, as the right hon. Gentleman well knows, this is a problem to which I have devoted a good deal of attention, and he has this afternoon directed attention to a report which some of us made sonic time ago, in which we made definite proposals. When I was Chancellor of the Exchequer I was faced with the same problem, and it is one of the most baffling of problems.

If the Chancellor of the Exchequer finds that the criticisms against his method are sound, I hope he will not allow any pride of parentage to make him obstinate and stubborn in insisting upon the course which he has taken. The cash is all right; it is the question of the method of applying it upon which we may differ. His method, which will require a good deal of justification, is to confine the relief to the ratepayers who contribute one-fourth, roughly, of the rates in this country, while those who contribute three-fourths of the rates are not only to get no relief but in some respects there will be burdens added to them. More than that, there can be no doubt that this means putting off relief so far as the Income Tax payer is concerned. There is no relief in prospect for him. In so far as I understood the Chancellor of the Exchequer, he is budgeting for something which may be a deficit years hence when he has exhausted his suspensory fund. If it does not become a deficit it will be due entirely to the fact that the Income Tax payer has contributed more.

Before the House of Commons commits itself to the proposition of making three-fourths of the ratepayers pay for giving relief to one-fourth, I hope it will listen to alternative schemes, and not listen in a smiling spirit to every counter-proposition that is made. The House of Commons is the great Committee of Supply, the Committee of the realm for considering the raising and the spending of money, and the Chancellor of the Exchequer, as a Constitutionalist, has invited the House to consider the matter. He has not ruled out other possible alternatives. I hope he will consider very carefully before he weds himself to the present scheme—and I make the same appeal to the Minister of Health, who, I have no doubt, will have a good deal to do with the fashioning of this scheme—to consider whether there is not a better method of spending this money in such a way as to distribute it more fairly over all classes of the community, instead of ruling out more than three-fourths of the population while conferring the whole of the benefits on the minority. That is one of the questions which I propose to elaborate to-morrow; this is not the time to do it. I will not say that the Committee are exhausted, but hon. Members are very full of the scheme which has been presented by the Chancellor of the Exchequer and they want time to think over it. To-morrow, with the permission of the Committee, I propose to elaborate some of the criticisms which occur to me. For the moment, I confine myself once more to congratulating whole-heartedly the Chancellor of the Exchequer upon an exceedingly fine performance.


I begin by saying with what pleasure I listened to the speech of the Chancellor of the Exchequer. When I heard him detail the difficulties of our rating system and analyse the hardship which the rating system in- flicts and the harm to industry from burdensome rates, I felt that it was the sort of speech which I had been trying myself to make for six years. But I woke up from my dream. Our speeches have always begun, not so well or so perfectly phrased as the speech of the Chancellor of the Exchequer, with reference to the injury to industry. Then we have gone on to speak of the injury to commerce caused by the unequal incidence of rates, and we have pointed out that it was extremely hard for the householder in one district to have to pay rates of 30s. in the pound, while in another district another householder had to pay only 5s. in the pound rates for the enjoyment of the same social services. We have pointed out that it is not this, that, or the other class which is suffering from the effects of the burdensome rates, but that it is this, that, or the other district which is suffering. We have pointed out that the centre of this problem was not so much that manufacturers everywhere had suffered, but that in some unfortunate places all were suffering, manufacturers, commercial men, householders. That fact constitutes one of the difficulties which confronts us in connection with the housing problem. That is of the essence of the problem. It is not the ratepayers generally who are suffering, but the overburdened ratepayers in certain districts who are suffering, and that is why, as the Chancellor of the Exchequer said, industry flies from sonic localities, and it is impossible to obtain fresh industries in the depressed districts.

The scheme of giving manufacturers a three-fourths remission of rates will not do anything to bring new industries to the depressed districts. One district will still have a heavy rate while in another district a manufacturer will have only a small rate to pay. The difficulties which make it impossible for new industries to spring up in the necessitous areas, the difficulties of housing, the difficulties of transference of population will exist just in the same way under the new scheme as at the present time, because manufacturers in the necessitous areas will have to pay the disproportionate burden which exists as compared with other districts. When we analyse this problem we say that the essential part of it is the inequality between districts. Some districts are perfectly happy and do not need any relief at all, while other districts are so broken down with their rates that they cannot possibly get any further forward. The necessitous areas are, unfortunately, the areas where the burden of unemployment and destitution is the greatest. That is what is the matter with the rating system of the country. Industry flies from necessitous areas with rates of 30s. in the pound because in those districts the burden of maintaining the poor is breaking the backs of manufacturers and householders and stifling local enterprise. It appears to me a mere waste of public money to relieve one class in all districts indiscriminately. If a man is paying 5s. or 6s. in the pound in rates he is lucky, whether he is a manufacturer or householder, but if he has to pay 30s. in the pound he wants a good deal, and we are simply squandering our resources if we relieve one class independently of the actual burden borne by the individual.

Therefore, looking at the problem as a whole, the Labour party has fixed its mind on what is the matter with the overrated districts, namely, the fact that one particular burden has been swollen out of all proportion to local resources. We say that what is needed for industry and householders is to take the burden of the unemployed off the shoulders of the locality and place it on the State. That is the fundamental principle of our policy. Coupled with that, we say that the necessitous areas should receive some additional relief. What are we going to do by the scheme in the Budget? What good will it be to the people of Monmouthshire or Durham to make the county responsible? The county is as poor as the localities, and to substitute for their present income the income given them by the State, under stiffer conditions, will be to destroy the autonomy of local authorities. This is the intrinsic fault of the Budget. It looks upon classes and not upon districts. What is necessary is geographical relief. It is necessary to remove the specific burden which is breaking the back of the localities. If we spent the same amount of money more profitably, not by scattering relief all over the country whether it is wanted or not, we could do much for industry and social services in those localities which need it most. The more the plan of the Labour party is examined, it will be found more scientific, more just and a more effective way of dealing with the burden of the necessitous areas.

Question put, and agreed to.