§ Mr. CHURCHILLAn arrangement has been made that this discussion of a naval matter should now come to an end and that for a brief interval another topic, finance, should take its place upon the stage. Let me begin by expressing to the Chancellor of the Exchequer my regrets at any personal inconvenience which I may have caused to him by the discharge of my Parliamentary duties. I know how heavy is the burden upon him and how short is the interval of leisure he has before he leaves for The Hague Conference on the 6th of January, and I am sorry if the inexorable course of events has led me to curtail that leisure by 48 hours. But I must say that I think the Chancellor of the Exchequer has had during his tenure of office a very great measure of good will, consideration and indulgence from his political opponents and all other sections of the community. I do not think I ever remember a case where so many men and women of opposite parties have been willing to accord the representative of the Government all the consideration in their power. He has been aided and flattered by the Conservative Press and the Liberal newspapers and he has been applauded and encouraged from other quarters of the political scene. He has been given the freedom of the City of London, as' we were all very glad to see, and to note that it was conferred so soon. In fact, I said to myself, "It is now or never," and the only argument against it which occurred to me was that the City will have nothing left to give him after the Budget. The great Lord Bacon said in his writings:
It is an assured sign of a worthy and generous spirit whom honour amends.No one will deny the right hon. Gentleman's claim to the epithets, but one cannot help being struck by the fact that honour or good will do not seem to exercise upon him that mellowing and softening influence, that widening influence, which so often have attended them. In fact, the more he is treated with consideration and indulgence, the more honour he is shown, the more crapulous and dictatorial he becomes. It seems to me that as he does not respond to this extremely conciliatory treatment it may be well to try whether a change of treatment might not produce a more satisfactory result. If 2195 praise and courtesy only result in narrow, bitter partisanship, perhaps a little well-merited chastisement may procure some geniality. Take my own case. The great Lord Bacon, to quote him again, in his essay on "Great Place," says:Use the memory of thy predecessor fairly and tenderly; for if thou dost no …I am glad to see the Leader of the Opposition here, because I know how he likes classical quotations. I will read it again. It is Bacon on "Great Place":Use the memory of thy predecessor fairly and tenderly; for if thou dost not it is a debt that will sure be paid when thou art gone.Following that wise example, when I succeeded the right hon. Gentleman as Chancellor of the Exchequer five years ago I was careful to pay a tribute to his work, and I am glad to know that that gave him pleasure and that he has preserved it as a testimonial and repeated it in the House of Commons with gusto. The right hon. Gentleman is welcome to any satisfaction which he has received from that tribute, and he has had no cause to complain of any attack which I have made upon him either in this House or in any part of the country, or in the Debates which occupy undoubtedly a large part of the financial year. I made no comment on his great achievement in regard to the loan, or to his gift of £150,000 to a favoured few, or to his writing down British credit to a figure which I am sure he would have been wise to have avoided formally presenting, labelling, and advertising to the world. The right hon. Gentleman, no doubt, feeling the stress and pressure, is evidently anxious to throw the blame of the difficulties in which he finds himself—allow me to say that he will not find me unwilling to take the responsibility for every difficulty in which I have a share—and of any added difficulties entirely on the shoulders of his predecessor.In the course of the next few minutes I want to look a little more closely than we have hitherto done at the right hon. Gentleman's achievements and performances during the six months he has held the office of Chancellor of the Exchequer. I come, first of all, to the Hague Conference and Reparations. There the right hon. Gentleman carried on a policy which, as he rightly said, had been declared 2196 beforehand as the policy of the British Government. There never could have been any question of our accepting the Young Report as it stood, and that intention was announced to the House of Commons by me before the Dissolution, and I was supported by the Chancellor of the Exchequer and all parties. I certainly considered that the right hon. Gentleman fought a very good fight in the interests of this country, but he fought it in such a rasping manner and in such a needlessly provocative way that I think it is possible that we have lost in other directions a good deal of the apparently small gains which resulted from the right hon. Gentleman's strenuous activities. I must explain, however, that they were not positive gains. The right hon. Gentleman succeeded in not giving away so much as he was asked to give, but he did, in fact, give away—I am not blaming him for it—more than had been given away in the arrangements conducted by the preceding Government of which he himself was such an unsparing denunciator.
The one serious criticism which I make against the right hon. Gentleman's conduct of these negotiations is that he did not take advantage of the great opportunity offered us to secure liberation from certain declarations which had been made. There is the Balfour Note. The House is familiar with the self-denying clauses, which are omitted in the Treaty agreement with Italy and France, which preclude us from taking any more from Europe than is taken from us to pay our debts to the United States of America, and binds us as regards any moneys that may be paid by Russia through any revision of her debt policy which may be made, or which is entertained by the United States, to give the benefit of that to those countries with whom we have made settlements. That is the principle of the Balfour Note. When the Balfour Note was proclaimed now nearly seven years ago none of the many high authorities in the Government of that day ever expected that its terms would be realised, and certainly no statesman like the late Mr. Bonar Law, Mr. Asquith, and others I could mention imagined that we should retrieve enough ourselves to pay these obligations. We have, in fact, almost achieved that but not entirely. The right hon. Gentleman was compelled 2197 —and I do not blame him—to risk breaking up the Conference for £500,000 a year, and he was compelled to admit an impingement upon the Balfour Note. Although it may be a small impingement, undoubtedly the sanctity of that principle has been broken, and the right hon. Gentleman has consented to its being broken. There was an opportunity to obtain release from the self-denying obligations which we had made, and I should have thought it would have been quite easy at least to say to France and Italy: "Rather than break up the Conference, we will agree to the terms imposed, but it must be clearly understood that, as those terms violate the integrity of the Balfour Note, we claim release from the self-denying clauses, and, if at any time Russia settles her debts and obtains or takes some steps to achieve financial rehabilitation as she may do in years to come, and as it may be her interest to do, then the yield of that relief which may amount conceivably on the terms we gave Italy to £6,000,000, £7,000,000 or £8,000,000 a year and perhaps more, accruing to the British taxpayer should not go simply to reduce the payments of Italy and France.
Similarly, if the United States at any time chose to revise her debt policy and treat all her debtors equally—and there is undoubtedly a growing opinion in the United States in favour of equal treatment for her debtors—if that were so it would seem to be a great pity that we should not be able to gain that advantage because of these self-denying Clauses, for which, I fully admit, the right hon. Gentleman was not responsible, but for which the preceding Government was responsible, and for which I am undoubtedly one of those who have to bear responsibility. But here was a chance, here was an opportunity of getting free, and the right hon. Gentleman, fighting so strenuously as he did, seems to have overlooked this altogether, although I should like to say that I left it clearly on record, in various documents and statements which were made during my tenure of office, that it was my intention, if the slightest infringement of the Balfour Note were to become necessary, to take that opportunity for claiming release. I think that that is a fair and serious criticism. The right hon. Gentleman will have a chance of answering it, but 2198 I hope he will not simply confine himself to belabouring me, because I think it is not too late—I hope it is not too late. He is going to the Hague Conference on the 6th January, and I suggest to him that there is still an opportunity, before matters are finally ratified, to point out that the conditions of the Balfour Note have been ruptured, and that a new situation has arisen. At any rate, I trust that that may be considered by His Majesty's Government, because it is of great and real importance to us.
The right hon. Gentleman attacked my financial record, but I am, under the Rules of the House, not permitted to refer, except in a broad, general and casual manner, to matters which have been raised in the Debates on the same subject in the same Session. All that I will say about the financial record of the late Government is that it is clearly within the recollection of all Members of the House of Commons. We were proceeding on a basis of reviving trade and returning prosperity. We were reducing taxation substantially. We were looking forward to further schemes of social amelioration. We were struck down by the general strike and the coal stoppage. I can recall no instance of any more deadly blow having been levelled at an administration by their political opponents than the launching of that hideous attack, not only upon the fortunes of the Government, but upon the whole prosperity of the nation. The right hon. Gentleman seems to forget all about that. One would imagine that he had never heard of it. Where was he when the general strike was on? I think I have asked that question before. Where was he when that great event took place? He, a leading man, one of the pillars of the Socialist Party, of the Labour Party—where did he go? Why, Sir, he went into hiding. He chose the deepest hole he could find, and, in the darkest recesses of that deep hole, he remained till the fight was over, and' then he emerged to throw the blame on others, to exploit the new situation, and to lecture all sides with that impartiality and smug complacency which only finds its rival in the right hon. Gentleman the Member for Darwen (Sir H. Samuel), in his performance last night. Others had to face the situation which resulted from the general strike and the coal stoppage, and all the rest of my 2199 tenure at the Exchequer was occupied in endeavouring to cut through those difficulties without throwing new and heavy burdens on a slowly recovering country.
Whatever may be the unsatisfactory condition of the Exchequer at the present time—and I have no knowledge of what it may be at the present time, nor indeed is it profitable to speculate upon such matters until the out-turn of the year is seen and can be measured—whatever may be the condition of the Exchequer, the right hon. Gentleman has added to his difficulties by agreeing to new and profuse expenditure. He, who used to lecture us upon every penny that was spent, has already, in the short six months he has been in power, added £8,500,000—I am taking the answer he gave to a question—to the expenditure of this year. Whereas in former years I had succeeded in clawing back from the Departments £5,000,000 or £6,000,000 of money actually voted by Parliament, this year, so far from that process operating, there is a new outlet of £8,500,000 of expenditure, and, as the prospective Budget surplus was fixed only, if my memory serves me rightly, at £3,500,000, and as the conditions of the present time certainly do not look too favourable, one must say that a deficit is inevitable from that cause alone, even if it had not arisen in consequence of world causes. But about future years, what has the right hon. Gentleman committed us to? In his answer a few weeks ago he quoted a figure of, I think, nearly £19,000,000, but a great deal has happened since then. He and his colleagues have revised their view as to what should be the conditions under which unemployment benefit should be extended to persons who are in need of it, or who profess that they are in need of it. The right hon. Gentleman has sanctioned a large scheme of lengthening the period of school-time for the youth of this country, and I imagine—I have not the exact figures—that certainly the new commitments which he has made, at a time when he admits that matters are upon a very narrow basis, will amount to £30,000,000. The "Times" newspaper, which is so frequently quoted from the opposite benches—I think very rightly, because it is a most valuable and weighty support and encouraging comfort—in a leading 2200 article last week, said that the new expenditure commitments amount to £43,000,000 a year. Perhaps the right hon. Gentleman will tell us, when he rises to speak, how much actual additional expenditure he has let this country in for during his six months tenure of office.
I should like to point out that for this expenditure, although it all falls upon the Treasury, there is very little to show, and it is in no way concerned, or is scarcely appreciably concerned, with any large productive effort which would stimulate the trade and industry of the country. The right hon. Gentleman has said, in one of his moods of self-satisfaction, that it will take him three or four years to get the finances of this country back into the good state in which he left them. He was only in office for a few months on the last occasion. He inherited a surplus of £40,000,000 from his Conservative predecessor. He spent that surplus, as far as he could see, with a desire to gain for himself party election advantages, and he left a somewhat smaller surplus to his successor. Now he hopes to work back to 1924, and he says it will take him three or four years of hard work to bring himself back to that position. If he goes on as he is going now, with £30,000,000 or £40,000,000 of additional unproductive expenditure flung upon the Exchequer during six months of his tenure of office, it will take him three or four years to complete his task, and, when he has completed it in his opinion, the annual expenditure of this country will not be far short of £1,000,000,000.
I have one point with which I must deal for a moment in detail, namely, the right hon. Gentleman's continued harping upon the alleged or so-called bankruptcy of the Unemployment Insurance Fund. He declares that the bankruptcy of the Unemployment Insurance Fund is due to the policy which was pursued by me and by my right hon. Friend the late Minister of Labour, and he attributes the condition of the Fund entirely to that policy. We have a Report from an impartial authority on that subject, and I will venture to ask the House to permit me to read a very short quotation from it. This Report was published in 1927; it is the Report of the Blanesburgh Committee; and this is what it says at paragraph 63: 2201
We are now confronted by an embarrassing problem which, when we began our deliberations, did not exist. In the first place, the deficit on the Unemployment Fund was then being paid off satisfactorily. With steadily improving trade, the income of the fund was increasing and its expenditure going down. The general strike and the stoppage in the coal-mining industry have changed that situation. The resulting unemployment, as we have seen, increased the indebtedness of the fund from £7,100,000 in April last to over £21,000,000 in December, and there is no prospect that this heavy debt can be liquidated by the time when the new scheme should come into force. In the second place, these industrial disturbances have brought about a marked deterioration in the economic position of the country and have greatly increased for a time the general level of unemployment. At the end of April there were 982,000 persons unemployed; at the beginning of December the figure had risen to 1,506,000.That is the Blanesburgh Report. The first signature is that of the Chairman and the second is that of the right hon. Lady who is now the Minister of Labour. In view of the clear expression of opinion on these matters by one of his own colleagues, I think the right hon. Gentleman'.s attempt to throw the blame for the bankruptcy of the Unemployment Insurance Fund on me and my friends on this side of the House really requires some reconsideration before it is persisted in. At any rate, I leave him to settle with the Minister of Labour, when he next has the good fortune to see her, how he is to reconcile the attack which he made recently with the perfectly clear explanation she has given of the causes of the misfortune to the Unemployment Insurance Fund.2.0 p.m.
I must say I think the right hon. Gentleman in his treatment of this Unemployment Insurance Fund has perhaps not taken the course which would most conduce to the general welfare of the country. He has advertised and emphasised one cause of its bankruptcy, but even after the General Strike, even in the present lamentable condition of our affaire, it is not true that the Unemployment Insurance Fund was in a state of bankruptcy. Here is a fund which had an annual revenue of between £60,000,000 and £70,000,000, resulting from separate sources of taxation, and which had a debt of £40,000,000. But I do not think £40,000,000, or £50,000,000, would have been too heavy a charge to accumulate at the back of a Fund with such an enormous annual revenue as that. It 2202 does not even amount to one year's annual revenue. Look at our own affairs. We have a debt of over £7,000,000,000, that is to say our debt is eight or nine times our annual revenue and, therefore, if the Insurance Fund is in a state of bankruptcy, we are seven or eight times more in bankruptcy. [Interruption.] Very little is foreign debt. It may well prove—I will not put it higher, because the right hon. Gentleman has his own difficulties to solve and I know how great they are and how anxious his task is, but it seems to me that he might well have found it prudent not to deal immediately with the increased contribution of the Exchequer to the Unemployment Insurance Fund and to have left the whole situation until he could examine it as a whole with the out turn of the financial year. It may well be that the fund could have risen to £50,000,000 of debts to the State without the disclosure of a deficit in the national accounts and the consequent need of heavy over-taxation.
Here is a point that is borne in upon me by a study of the right hon. Gentleman's methods. It seems to me that he is making a case, by administrative action and by policy, for heaping new vindictive penal taxation of the kind he has spoken of before in such strident and ferocious terms, of a kind which is calculated to raise the spirit and the appetite and the ardour of his followers, and to be of use to him for political purposes and, therefore, no doubt, it would be to his interest to throw whatever burden he can find upon the Exchequer at the same time that he is adding to heavy expenditure, and then claiming that a case has been made out for another large addition to the public burden.
I come now to the last point that I am going to afflict the right hon. Gentleman with, but that is the most important of all. Yesterday he announced to the House and the country his intention to repeal the McKenna, the Silk and the Safeguarding Duties and, somewhat less decisively, the Sugar Duties. I am glad to say he does not contradict me in the interpretation I put upon his answer.
§ Mr. CHURCHILLWhat other interpretation can be put upon the language 2203 he used and the declaration he made? Surely we are not going to be told he only made that statement out of personal vanity, in order to keep these important industries on tenterhooks at his footstool, waiting upon his imperial finger, just in order to say, "You will know what your fate is when my good pleasure is declared." Surely we cannot have that. I should never have accused him of that. It would amount to a callous levity to which there is no parallel in the conduct of public affairs—these great trades all kept hanging about after a statement like that has been made and then, when the Budget comes, to say, "I am glad to announce to you an eleventh hour reprieve. We have decided not to take off the taxes this year, but, of course, I had to keep this as my Budget secret." To let personal considerations of that kind intermingle themselves with the means by which the livelihood of thousands of workmen and the conduct of important businesses are interwoven would be entirely beneath any misconduct I should ever think it right to attribute to the right hon. Gentleman. So, wishing to give him the benefit of the doubt, I take his statement at its clear face value, that he intends to repeal, at any rate, the McKenna, Silk and Safeguarding Duties. If what he said yesterday is the last word he has to speak upon this subject, if he has no further statement to make to-day, I say all these trades, if they are wise, should act from now upon the assumption that the duties are going to be repealed.
There was the right hon. Gentleman's manner, besides his words. It is within the full recollection of the House that he spoke as if he had a personal grievance against these trades, as if, because they had been protected by a tariff, they had done him some wrong and ought to be punished. The whole tenor of his statement was that it served them right, that those who live by a tariff shall fall and suffer by a tariff. I can assure him it is not the fault of the trades. They never asked for this tariff—[Interruption.] I know about this. I re-imposed the McKenna Duties without consulting these trades and the silk duties, so far from being asked for by the trade, were vehemently protested against. Messrs. Courtaulds issued a pamphlet against them. He has no grievance against these trades. If he 2204 has any spite to display or vengeance to wreak, let him do it on me. I am responsible; let him punish me if he can, but not work off these feeling of antagonism upon organisms of great importance in the provision of work and wages to our people.
"His manner" I say, but what shall I say of his motive? It is always difficult to plumb motives, and it may be dangerous to impute them. Was it only pedantry that actuated his statement yesterday? I have asked myself if it is free trade conviction. Up to a fortnight ago, I should have rested content with that explanation. Everyone knows that he has always been in the past a bigoted Cobdenite, but, after the publication of the Government Coal Bill, of which the right hon. Gentleman is one of the responsible authors, and which was rightly described from the Liberal benches—and the Liberals are impartial judges—as one of the worst forms of protection, he has certainly no right to plead his unalterable free trade convictions as a reason for his intolerance in this respect.
I accuse the right hon. Gentleman in abolishing these duties of being actuated by motives of political calculation. He is seeking to drive a wedge between the two parties of the Opposition. He is seeking to gain support for the future Budget that he will have to introduce, and, in pursuit of these purely political objects, he does not care a snap of the fingers for the fact that 20,000 more men may be thrown into unemployment. I wonder what the Lord Privy Seal thinks about it all. It seems to me that he is being given what is vulgarly called the dirty end of the stick. First of all, the definition of unemployment is extended in such a way as to swamp the register with scores and perhaps hundreds of thousands of new figures, and then a measure is taken by the Chancellor of the Exchequer in the hope of securing the political defences of his Budget, which undoubtedly is going to throw a large number of men out of employment very speedily, and which, in its depressing influence over the whole range of industry, is bound to have further indirect adverse effects.
I do not intend to detain the House any more. I had no wish to make these reflections. We are going to separate very shortly. It is not a very cheerful or bright Christmas that England is going to celebrate this year, our first 2205 Christmas under a Socialist Government. Prices have risen; the tendency of wages is to decline; unemployment has risen; there is great financial disquiet, for which I do not blame the right hon. Gentleman, but which nevertheless has a serious effect. We can see that the recovery of other nations from the Great War has been far more rapid and substantial than our own. The menace, nay, the certainty, of heavy new direct taxation hangs over the country in the New Year. Here, where the burden of direct taxation is already the heaviest in the world, £30,000,000, £40,000,000, or £50,000,000 are to be added to it at a time when Germany, the United States, and, I believe France, are reducing taxation by approximately similar amounts with the direct intention and avowed purpose of increasing their commercial competition with us.
In the Coal Bill, through private agency it is true, new indirect taxation is to be imposed if that Measure passes, and the right hon. Gentleman is just as responsible for that tax, although it may be collected by the coalowners, as he would have been if it had been imposed in the Budget. Between £30,000,000 and £40,000,000 will be added to indirect taxation. Before us in the New Year lies a vista of political turmoil, and, possibly, or rather probably, a momentous General Election. All this political strife and excitement cannot fail to be a drag upon every financial and business force which is making for the growth and strengthening of the Commonwealth. I spoke yesterday of the slow but sure undermining of our position throughout the East, which, let me say, is of vital consequence to the livelihood, to the bread and butter, of millions in this country.
It is a gloomy prospect, a bleak and gloomy prospect, and I think it is hard upon our country that, 11 years after the Great War and the great victory, and after we have done our best, paid our debts, and faced our burdens manfully and charitably, and done all that we can to bring the country together, we should have from one cause or another—the blame no doubt rests not in any one quarter—to face so melancholy a prospect. Britain has deserved better fortune and the only consolation I can offer 2206 her on this occasion is that we have at least the remedy for all our evils in our own hands.
§ Mr. P. SNOWDENThe right hon. Gentleman need not have apologised to the House for occupying such a length of time. His speech was very appropriate to the occasion. This is the season of pantomime. I have very great admiration for the courage of the right hon. Gentleman. I am sorry that I cannot extend my admiration to his wisdom and his discretion. The country, he says, remembers the financial record of the late Government, and I should have thought that that recollection would have prevented the right hon. Gentleman from raising this question this afternoon. I gladly admit the claim which the right hon. Gentleman made in the earlier part of his speech that he has always treated me with the greatest courtesy and consideration.
I will try to deal—and I will not detain the House at any great length, because I know that there are Members who wish to raise other questions—with all the points which the right hon. Gentleman has raised. He began by a reference to the Hague Conference in August last, and, after paying me a compliment, went on to complain that I had not taken full advantage of the opportunities which that Conference presented for getting liberation from the terms of the Balfour Note. This is a strange position for the right hon. Gentleman to take up. He stood here not more than eight months ago proclaiming the sanctity of the Balfour Note and declaring that under no circumstance would this country ever ask to be relieved from the embarrassments of that Note. Now he complains that I went to the Hague and did not seek liberation from these embarrassments, and we are to infer that, if the last Government had remained in Office and the right hon. Gentleman had gone to The Hague that there he, swallowing everything that he had said three months before about the sanctity of the Balfour Note, would have demanded the liberation of this country from its onerous terms.
The right hon. Gentleman said that he had stated to the House that the Government would not accept the conclusions of the Young Report. He did no such thing. What the right hon. Gentleman did say was that the Government would 2207 not accept terms which it was rumoured some months before the report was issued that the Committee were considering. The right hon. Gentleman accepts that. What the right hon. Gentleman said in the House of Commons was that the Government would not accept the terms which it was rumoured were going to be obligatory under the Young Report, but that was very different from the final recommendations of the Young Report. The Young Report gave cover for our payments to America. That is to say, it gave, including reparations and receipts from Allied debts, sufficient to meet our future payments to America, and to that extent it conformed to the terms of the Balfour Note. What I asked for at the Hague was something more than that, and it was something more than that which I succeeded in getting. I got £2,000,000 a year more than the debt cover, and that £2,000,000 a year for a period of 37 years produces £74,000,000 which will go to that extent to meet the arrears upon the American debt. The right hon. Gentleman complained about my rasping manner. If the right hon. Gentleman had adopted something of my manner in the debt negotiations he had with France and with Italy he might have made with them settlements much more favourable than he did.
I turn to other points which were raised by the right hon. Gentleman. Once again, the right hon. Gentleman attributes all his difficulties to the coal stoppage and the General Strike. The right hon. Gentleman's misfortunes from 1926 to 1929 were not at all attributable to the coal stoppage. The right hon. Gentleman's difficulties began long before that, and he himself has admitted the source of his later difficulties. He referred to the surplus which he inherited from me, a Budget with a surplus of nearly £30,000,000. I had a surplus inherited from the previous Government. The right hon. Gentleman said that I used that surplus in order to satisfy my friends and to gain popularity. What did the right hon. Gentleman do with his surplus? Of course, I will not for a moment say that in disposing of that surplus the right hon. Gentleman had his own political friends in mind; no, not in the least! He was relieving the Super-taxpayers to the extent of £10,000,000 a year. [Interruption.] It never occurred to him 2208 that these were his friends when he reduced the Income Tax by £30,000,000 a year. It never occurred to him that these taxpayers were his political friends. The right hon. Gentleman was not justified in making those remissions of taxation in 1925, and, as he himself has admitted, all these financial difficulties arose from the squandering of revenue which he knew, or he ought to have known, he would require in subsequent years. My complaint about the right hon. Gentleman's financial policy is that he has been living from hand to mouth. He has been borrowing when he ought to have put on taxation.
Take the coal subsidy. The right' hon. Gentleman provided £19,000,000 by means of Supplementary Estimates in one year. If he had adopted methods of sound finance, he would have raised that sum by additional taxation, but, instead of doing that, he robbed every reserve upon which he could lay his hands. As I pointed out the other day, the right hon. Gentleman incurred liabilities which he never met out of permanent revenue amounting to £95,000,000. That is a very moderate estimate. The actual figure is very much higher than that. His raids amounted to more than £50,000,000. I did not include in that £95,000,000 the £13,000,000 which he took from the currency note reserve. I have to make up those deficiencies incurred by the right hon. Gentleman.
The right hon. Gentleman's policy has always been that of the prodigal taking no thought for the morrow. I am convinced that the right hon. Gentleman never expected to face the House of Common with another Budget. He had got to the end of his resources, and, if he had been here next year, he would have been compelled to impose additional taxation and thus expose his defalcations. The right hon. Gentleman's financial methods have been such that had his Budgets been company balance sheets he would have found himself in the dock. A few more words about the right hon. Gentleman's financial record. I have said that he raided capital resources to the extent of £50,000,000.
§ Mr. CHURCHILLWill the right hon. Gentleman give details?
§ Mr. SNOWDENI will give the right hon. Gentleman every item if he wishes them.
§ Mr. CHURCHILLBrewers' credit.
§ Mr. SNOWDENYes, brewers' credit. His forestalments of revenue were included with raids in the speech to which the right hon. Gentleman has been replying to-day. He transferred from the Road Fund £19,000,000. He reduced the period for brewers' credit, which brought in £10,000,000. He forestalled Schedule A, amounting to over £14,000,000. He could not have that revenue twice—
§ Mr. CHURCHILLYou could not have the General Strike twice.
§ Mr. SNOWDENUnclaimed dividends, £1,000,000. Then he took into the Exchequer principal repayment of Dominions loans, which amounted to £3,000,000. He has never met the Sinking Fund obligation. He never even fulfilled the statutory figure of £50,000,000 per year which was fixed by his predecessor, the late Prime Minister. He actually paid in four years only £181,000,000 to the Sinking Fund, whereas he ought to have paid, including the addition he got from the Currency Note Reserve, £240,000,000. His deficits will have to be made up some time if the credit of the country is to be made good. There are other legacies from the right hon. Gentleman. There is the de-rating and there is widows' pensions. There again we have further instances of the right hon. Gentleman's financial methods. He acted on the principle of paying nothing to-day if he could avoid it, postponing it in the hope that his demise would occur and that somebody else would have to meet the deficiency. What did he do about widows' pensions? He began to take contributions before the pensions began to be paid, and in the early years there was a surplus of contributions over benefits.
§ Lieut.-Colonel FREMANTLERather good business that.
§ Mr. SNOWDENIs it? Good business for the right hon. Gentleman. Would it be good business for the Chancellor of the Exchequer in 1936? The right hon. Gentleman fixed £4,000,000 a year as the Exchequer contribution up to 1936 and pensions had to be paid out of the surplus which had accumulated. He fixed the sum at £4,000,000 a year for 10 years, with the result that in 1936 there would have been a jump to an average of £13,500,000 for the next ten years.
§ Mr. CHURCHILLSurely, the right hon. Gentleman will complete his statement by stating what would have been the decline in the War pensions in that same period.
§ Mr. SNOWDENI do not quite understand what the right hon. Gentleman means.
§ Mr. CHURCHILLI showed most clearly when I introduced the finance of that scheme that the growth of the Exchequer payments for the widows' pension scheme would be balanced, and more than balanced, by the run-off from year to year on the War pensions charges.
§ Mr. SNOWDENAs a matter of fact, it has not been so. The decline in War pensions has not been such as to cove, the amount which would have been required for the Exchequer contributions to meet the obligations to the widows' and orphans' pensions scheme. The result of the right hon. Gentleman's finance would have been such that in 1936 the Exchequer would have had to raise its contributions to the widows' and orphans' scheme from £4,000,000 to £13,500,000. That is part of the increased expenditure to which the right hon. Gentleman has called attention. The Exchequer in 1936 would have been compelled to increase the Exchequer contribution by £9,500,000 a year, but instead of having to do that in 1936 we are providing an additional sum of £1,000,000 each year so that it will not be necessary at any time to raise the amount beyond that annual increase. How is the increased expenditure to which the Government are committed, made up? It is made up practically entirely by meeting the shortcomings of the right hon. Gentleman.
§ Mr. CHURCHILLI should like to have particulars.
§ Mr. SNOWDENIf the right hon. Gentleman wants figures, I will give them. The increased expenditure is made up mainly by the charge for unemployment insurance. We shall have to meet in respect of 1929 some £7,500,000 for unemployment insurance, and next year the sum will amount to £14,000,000. There will be practically no increased expenditure for this year on account of the Widows' and Orphans' Contributory Pensions Act, except a small sum of £40,000, but next year the increased expenditure will amount to over 2211 £5,300,000. The other items which make up the increased expenditure of this year are comparatively small. The only one of any considerable amount is in respect of the Civil Service bonus, which amounts to £800,000.
§ Mr. CHURCHILLWill the right hon. Gentleman explain a little further how he is avoiding the jump in 1936 by his new Widows' and Orphans' Pensions grants? I understand that the Widows' and Orphans' (Contributory) Pensions Bill was to give wider and new benefits, and was not at all to meet the deficiency in 1936, which matures on the old and previously declared commitment.
§ Mr. SNOWDENWe are giving an extra sum of £1,000,000 a year in addition to the amount required for the new pensions, in order to avoid the jump in 1936.
§ Mr. CHURCHILLSo that it will be a jump from £5,000,000 to £13,000,000, instead of from £4,000,000 to £13,000,000.
§ Mr. SNOWDENIt will be £5,000,000, £6,000,000, £7,000,000, £8,000,000, £9,000,000—an additional million pounds each year. I turn now to the right hon. Gentleman's criticism of our contributions to the Unemployment Fund. The right hon. Gentleman quoted from the Blanesburgh Report of 1927, but this story did not begin in 1927; it began in 1925 and 1926, when the right hon. Gentleman reduced the State contribution to the Unemployment Fund, and reduced all other contributions. He reduced the contributions to the Unemployment Fund by £10,000,000 a year. If that had not been done, the cost of the increased calls in respect of Unemployment Insurance could have been entirely met, and there would not have been one penny of debt on the Unemployment Fund to-day. The right hon. Gentleman is not aware of that.
§ Mr. CHURCHILLYes.
§ Mr. SNOWDENNot one penny of debt would there have been on the Unemployment Fund to-day. The fact that we are to contribute next year £14,000,000 to the Unemployment Insurance Fund and about £7,500,000 to that Fund this year, is attributable to the raids which the right hon. Gentleman made upon the Fund in 1925 and 1926. I am having to bear in this respect the right hon. Gentleman's sins. I want the country to know this: 2212 that practically the whole of the increased expenditure we shall have to meet this year is not on account of our own commitments, but on account of commitments for which the party opposite are responsible, and apart from the increase in widows' pensions, practically all of the increased expenditure there may be next year is to meet obligations incurred by the Government which preceded us. If the right hon. Gentleman wants particulars, I can give them.
§ Mr. CHURCHILLI do not want to press the right hon. Gentleman now for particulars because we shall be discussing these matters again. I do not want to burden his statement with undue detail.
§ Mr. SNOWDENThe right hon. Gentleman can take my statement as being the fact that practically the whole of the increased expenditure this year with the exception of that £800,000 Civil Service bonus is due to the late Government and with the exception of the increased cost of widows' pensions practically all the increased expenditure next year will be to meet commitments and liabilities for which the party opposite are responsible.
§ Mr. CHURCHILLI dispute that.
§ Mr. SNOWDENWe will have it out later.
§ Mr. CHURCHILLYou have given nothing to the unemployed and nothing to the widows.
§ Mr. SNOWDENReally I give the right hon. Gentleman credit for more intelligence than a stranger would be inclined to give him after hearing a statement like that. He says that we are giving nothing to the unemployed. We are giving to the fund the sum which the late Government ought to have given if it had not been for the raids which were perpetrated by the right hon. Gentleman. Let me remind him again of the fact that he robbed the Unemployment Fund of a revenue of £10,000,000 a year. If the revenue had been maintained at the figure at which it was in 1925 instead of there being a debt of nearly £40,000,000 to-day, there would not have been one penny of debt and therefore any increase of benefit and all the Amendments which have been incorporated in the Unemployment Insurance Bill could have been met out of the unexhausted borrowing powers.
§ Mr. CHURCHILLThe right hon. Gentleman has used the word "robbed." May I impress upon him the fact that what I did was to reduce the contribution of the employers and workpeople and to reduce the contributions of the State. And I did so entirely when the condition of the fund fully warranted it. Those conditions were violently altered by the general strike.
§ Mr. SNOWDENThe right hon. Gentleman's observation shows his abyssmal ignorance of this question. I am not surprised at what he did in 1926 because it is perfectly evident that he grossly misunderstands this problem. The right hon. Gentleman need not be so much upset. He, not I, asked for this Debate, and therefore he must take his gruel.
The right hon. Gentleman last of all turned to the statement I made the other day in regard to the Sugar Duties, Silk Duties and the McKenna and Safeguarding Duties, and as usual he began by wholly misrepresenting what I said. I made no statement that I should repeal the McKenna Duties; that I should repeal the Silk Duties or that I should abolish the Sugar Duty. I very distinctly said that I could make no statement beyond what had already been made until the Budget. The position of the Government on this question has been very clearly stated, and it ought to be known even to the right hon. Gentleman. I have stated the position and I repeat it, that we shall repeal these duties at the earliest practicable opportunity. We shall decide the "earliest practicable opportunity," and I shall follow the invariable custom. I say invariable, but I am not quite sure if there are not exceptions because the right hon. Gentleman never introduced a Budget into this House the contents of which had not become public property some time before the Budget was introduced.
§ Mr. CHURCHILLThat is on a par with most of your statements.
§ Mr. SNOWDENThe attitude of the Government to this question has been clearly stated. The duties will be repealed if we remain in office, at the earliest practicable opportunity. We shall renew none of the purely Safeguarding Duties when they expire. In that matter we shall honour the pledge of the Leader 2214 of the Opposition, that these duties will not be renewed after the expiration of the five years. I said nothing in my statement to justify the right hon. Gentleman in saying that I announced that I was going to repeal the Duties. The right hon. Gentleman must restrain his impatience. He will know when the Budget is introduced.
§ Mr. CHURCHILLI am thinking of the trades.
§ Mr. SNOWDENI am amazed at his anxiety for the trades. Whenever did he show any regard for them? He introduced his Silk Duties without ever consulting the trade, and he knows into what a state of chaos these Duties threw that trade for a time. And have they been a success? Hon. Members opposite who are interested in financial matters have doubtless seen in some newspapers to-day the report of one of these artificial silk companies. I suppose they are aware of the fact that the shares of the largest of these concerns have dropped heavily during the last 12 months? I suppose they will take all this as an indication of the great prosperity which the right hon. Gentleman's Duties have brought to the silk industry. The right hon. Gentleman is far too ready to jump to conclusions. He jumped very rapidly yesterday to a conclusion. The moment I sat down the right hon. Gentleman rose and said:
Is the right hon. Gentleman aware that by his menacing statement he has redoubled the anxiety and uncertainty.The right hon. Gentleman made that statement within five seconds of the conclusion of my statement. How did he know that my menacing statement had redoubled the anxiety and uncertainty of these trades? The trades which are interested in these matters were not then even aware of my statement. Yet the right hon. Gentleman jumped to the conclusion that it had doubled their uncertainty and their anxiety.The right hon. Gentleman repeated in precise words a statement which he has made more than once in the course of our Debates, and that is that he attributed my attitude in these matters simply to political motives. I can quite understand the right hon. Gentleman attributing it to political motives, because the right hon. Gentleman never did anything in 2215 his political life except in the hope of deriving some political and personal advantage. The right hon. Gentleman sneers at me as a bigoted Cobdenite. When did he cease to be a Cobdenite? I know that he told us a few months ago that he was both a Free Trader and a Safeguarder. The right hon. Gentleman can accommodate himself to anything. He is not a bigoted Free Trader now; he is not a bigoted Safeguarder. The right hon. Gentleman's attitude about bigoted Free Traders reminds me of a story of a woman who was flirting on an Atlantic liner, and the man asked her if she was a married woman. "Yes," she said, "but I am not a bigoted one." The right hon. Gentleman's flirtation with Safeguarding shows that he is not a bigoted Free Trader.
I think I have dealt with all the points which were made in the course of the right hon. Gentleman's speech. I thank him for having enlivened what otherwise might have been a rather dull Debate. We always welcome the right hon. Gentleman's interventions in our Debates; we get amusement, if we do not always get edification. But, however strenuous may be the conflict between the right hon. Gentleman and myself, I want to assure him that I am very fond of him, and I really do not know how I should get on without him. Therefore, I conclude by wishing the right hon. Gentleman a very merry Christmas and a happy New Year.