§ Motion made, and Question proposed, "That the Clause stand part of the Bill."
§ Captain BOURNE
I wish to protest against a Clause of this kind being introduced into the Finance Bill. I do not think that anybody will disagree with the idea at the back of the mind of the Chancellor of the Exchequer that a certain sum should clearly go to a reduction of Debt, but a Clause of this kind is of little value, because it is impossible for one Parliament to legislate to bind another Parliament. If I thought that this Clause would be a permanent part of our legislation and that no future Parliament would disturb it, I should have no objection to it;
§ but it is open to any future Parliament and to a future Chancellor of the Exchequer, if he so wishes, to repeal this Clause in the next Finance Bill or to so word his Financial Resolutions that the Section would not operate. I think that it is purely a piece of eye-wash in order to protect the financial purity of the Chancellor of the Exchequer. It is of no real value to anybody. It is most undesirable that we should get into the habit of putting into our legislation, as has been done in many cases, Clauses which pretend to bind Parliament when in point of fact every hon. Member knows that next year there may be a repeal of the provision and that nobody is bound in anyway whatever. We are passing legislation which is of no value to anybody, and for that reason I protest against it.
§ Mr. P. SNOWDEN
The hon. and gallant Member is wrong in both submissions. In the first place, that it was not 1299 right that we should legislate for future Parliaments——
§ Captain BOURNE
I did not say that it was not right that we should legislate. I said that the legislation was not binding, which is quite different.
§ Mr. SNOWDEN
It is always open to a subsequent Parliament to repeal legislation passed by a former Parliament, but the hon. and gallant Member surely is aware that it was the law and the rule up to some years ago that the surplus should be applied to the old Sinking Fund, and it was the duty of the Chancellor of the Exchequer to obtain permission from Parliament. All I am asking in the Clause is that we should revert to the old practice. If there be a deficit, it must be made good unless Parliament otherwise determines. We are not taking away the rights of future Parliaments. What we are proposing is that the Chancellor of the Exchequer should adopt the sound financial practice of making good a deficit in the next financial year. That is the whole case in a sentence.
§ Sir A. STEEL-MAITLAND
Has there ever been any enactment in any Parliament at any time in our history by which the Chancellor of the Exchequer in any succeeding year was bound to make good any deficit of the preceding year? There never has been anything of the kind. My hon. Friend the Member for Oxford (Captain Bourne) is right. It is in this case merely a piece of financial pretentiousness. What the Chancellor of the Exchequer is doing is to try to make himself appear not only better than his immediate predecessor but than any other Chancellor of the Exchequer. It has always been known in the past that no one has budgeted for the purpose of having a deficit. I have been through Budgets for many years past and what has always happened has been that if there has been a surplus, as a rule it has been used to diminish the Debt, but in years of bad trade financial deficits have from time to time occurred, and on the whole history has shown that the surpluses have outweighed the deficits and the Sinking Fund has not suffered. There has been no need in the past, nor is there any need in the present, for such a pretence of financial austerity and 1300 virtue, which nobody else has shown before. When there has been a surplus, if it has been so used it has been in times of prosperity, when the taxation has not been such a burden on the business community; but when there has been a deficit it has nearly always been in times of bad trade, when no one wishes further to burden the business community. This Clause is entirely unnecessary, and the ordinary financial practice of the past is the best to go by.
§ Sir B. PETO
I regard this as a most important Clause, embodying a principle that is far more than a question of financial purity on the part of the Chancellor of the Exchequer. I believe that it introduces a positively vicious principle. An excess of expenditure over income is normally produced by the reason that income is not coming in to the extent that the Chancellor of the Exchequer forecast in his Budget, and the cause is bad and depressed trade. In those circumstances it is not the best way of improving trade to insist that exactly the full amount of whatever deficit there may be shall be made up from the ensuing year's income. That is to pile Pelion upon Ossa, and the finances of the country will not stand it, when trade is already overburdened with taxation. It is not a question of financial purity but of financial insanity. We have had many curious contributions from the Chancellor of the Exchequer in these times of depression and in this Clause there is embodied one more proof that the Chancellor of the Exchequer does not understand the psychology of trade and industry in this country. Not from any sense of financial purity but from what I consider sheer ignorance of the psychology of the situation, he insists, at the very time when trade can least afford it, that we should depart from the old principle which says that when revenue is coming in abundantly, because of prosperous trade and industry, we should increase the amount by which the National Debt is reduced. He says: "We will reverse the process, and at the time of greatest danger to trade we will insist on exacting the full measure from trade and industry for Sinking Fund purposes, as if trade was prosperous, contrary to the interests of the country and of employment.
§ Captain CROOKSHANK
In certain countries in Europe there exists a medal for virtue, which is distributed to deserving persons. That medal does not exist in this country, but the Chancellor of the Exchequer has designed it and is now pinning it upon his own breast.
§ Mr. CHURCHILL
If it were not for the fact that we are anxious to accelerate progress we should have to ask the Committee to divide against this Clause, but if we do not, but merely signify our disagreement by vocal expression, I hope it will be clearly understood, and on record in the OFFICIAL REPORT that we entirely disapprove of this piece of trashy humbug.
Question, "That the Clause stand part of the Bill," put, and agreed to.