HC Deb 23 April 1936 vol 311 cc421-37

The hon. Member, who, I think, has been in the House longer than I have, said this was the first time within his recollection that anything of the kind had happened. We all know that Chancellors of the Exchequer are meticulous. They are scrupulous. They keep an eye on the clock—the right hon. Gentleman did it on Tuesday—to make quite sure that no disclosure is taken advantage of by private interests outside. That is right. If this is a leakage, as apparently it is, I would ask the right hon. Gentleman—I do not want to press it too far—what steps he proposes to take to deal with it, because a leakage of this kind is of very grave importance. It means that people in the City are gambling on the nation's fortunes. That is wrong, and I hope the right hon. Gentleman will give us some assurance, seeing that the point was raised by one of his own supporters, that every effort will be made to ascertain how this leakage occurred. He knows very well that Budget secrets are held within the breasts of a very small number of people, and I am not asking him to apply the methods of the third degree, but I do ask him whether he will not, in these circumstances, do his best to find out how it is that the leakage occurred.

On the tax itself, it is said that 2d. on tea is negligible. In the report of the Colwyn Committee the consumption of tea in families with £100 a year, which is a small income, was given as 39 lbs. in 1925–26. Since then the consumption of tea in the nation has increased by about 6 per cent., which means that in the ordinary working-class family with £2 per week or under the consumption of tea per year is about 41½ lbs. At 2d. in the pound, that means about 7s. per year. That may not appear to hon. Members opposite to be a large sum, but to a family with £2 a week or less it means two pairs of children's boots per year, it may mean a blanket, it may mean doing without something in the home. This tax on tea is, in my view, one of the meanest possible kinds of tax. As the hon. Member for Hitchin (Sir A. Wilson) said, it is retrogressive. It is a tax which bears more heavily on the poor than on the rich, and it means in effect that the bulk of that £3,500,000 which the right hon. Gentleman seeks to obtain will come, not from the homes of the rich, but will come—the vast proportion of it—from the homes of the poor; and it is unfair, because we cannot afford to neglect the fact that in this country the poor are indeed very heavily taxed.

If you take people with under £5 per week—that will include almost the whole of the industrial workers of this country and many clerical workers too-13.5 per cent. of their income goes in taxation. If you take a married man with two children with an income of £6 a week, or £300 a year, his taxation is not 13.5 per cent. of his income, but 9.3 per cent., and if you take the married man with two children and £500 a year, it is not even 9.3 per cent., but 8.6 per cent., which means that in the lower ranges of income in this country the poorest are taxed the heaviest, and the right hon. Gentleman this year is going to put on their backs the greater part of the £3,500,000 which he expects to extort by the Tea Duty. Broadly speaking, indirect taxation in this country works out, I think, at about £7 per head per year. For a family of four, man, wife, and two children, that means on an average—and indirect taxation bears more heavily on the poor than on the rich—that the average family is paying between 10s. and 11s. per week, the rent of a house, a controlled house, in indirect taxation; and it is the deliberate policy of all Tory Governments to increase indirect taxation and to diminish direct taxation. It is euphemistically described as "broadening the basis of taxation," and it is the proposal which was submitted by the hon. Member for Darwen (Mr. S. Russell) who spoke yesterday.

The figures are worth consideration. If hon. Members will go back to 1923 or to the time after the War, they will find that in the days of the first Labour Government the proportion of our taxation which was indirect fell. In 1924 we were succeeded by the right hon. Gentleman the present Prime Minister, who was Prime Minister then, and year by year the proportion of our national revenue raised by indirect taxation increased. In the two years from 1929 to 1931 when we were in office it fell, but since then, year by year, it has still continued to increase. In 1913–14, the year before the War, indirect taxation accounted for 52.2 per cent. of our revenue; in 1929–30, 42 per cent.; in 1931–32, where we had left it, 38.7 per cent.; and in 1935–36, 46.5 per cent.—an ever-increasing encroachment on the standard of the life of the poor of our country. The right hon. Member for Epping (Mr. Churchill) said this afternoon, "We have recovered, but we bear the scars." In those last four years the burden of taxation on the people has been increased and their economic position and their standard of life, taking the country as a whole, have not improved. Profits have increased considerably. I have not the time now to quote them, but there has been a substantial improvement in the position of those who draw dividends. "We have recovered, but we bear the scars." Industrialists have recovered almost to where they were in 1931, and the scars have been borne by the masses of the people.

This Budget stands out in a very significant way as a war Budget. The right hon. Member for Epping objected to it being a peace Budget; he wanted a war Budget here and now. This Budget is a war Budget. We are faced now, as the right hon. Gentleman told us on Tuesday, with rising charges year by year for rearmament—rearmament against an undefined enemy and to an undefined amount. The expenditure on past wars and on future wars, taking into account the right hon. Gentleman's contribution to rearmament, amounts to 11s. 2½d. for every pound which we raise for the national revenue, for the wars of the past and the preparations for the future, and that, notwithstanding the fact that the annual charge on the National Debt due to conversion has shrunk. It means that in fact our burden for the wars of the past from which we appear to have derived no lessons whatever, and in preparations for the future, has swallowed up far more than half of every £ raised in taxation in this country, and all that we are doing for peace is three-farthings in the £, our contribution to the League of Nations. Europe to-day, having regard to changes in the purchasing value of money, is spending at least 50 per cent. more of its wealth than it was before the War, and the right hon. Gentleman and his Government are now doing their best to increase that expenditure on useless purposes.

What is going to be the result? I know that the right hon. Gentleman said, "Safety First," but the Prime Minister said it long before the right hon. Gentleman. You cannot be sure that you will get safety that way. If you were sure, it might be worth it, but nobody can be sure. I want to put to the Committee the effects of this enormous expenditure for war purposes. Al ready in this Committee there have been demands for economy in the social services and for economy in everything but armaments. As time goes on, as these five bleak years of which the Chancellor of the Exchequer spoke go on, as the annual charge increases for armaments, after he has floated the loan, which the right hon. Gentleman the Member for Epping said was inevitable, and as there is greater and greater pressure upon our national and financial resources, so will pressure increase for cutting down the social services of this country. If this race continues, the social services will be sacrificed to the needs of the Fighting Services.

In the Budget statement, the right hon. Gentleman said not one word about the Midwives Bill. It means that it is not going to cost him anything this year. But the occasion will arise when we can debate that Bill. There was not a word about that matter. A sop of £1,000,000 is thrown to the depressed areas, but there are to be millions and millions, and mounting millions for the fighting Services. This is a war Budget, with no consideration for the social services. The scale on which rearmament has been envisaged by the Government will necessitate an expenditure so large, that it can only be met by very heavily increased taxation of the rich, or by further impoverishing the poor and putting posterity in pawn. The way which will be chosen will be that of impoverishing the poor and making our sons' sons pay for the expenditure which we are to incur in the next five years.

That gloomy outlook is intolerable, but it is an outlook which is inevitable unless we achieve effective pooled security. That is the one solution of the right hon. Gentleman's difficulty. Hon. and right hon. Gentlemen opposite have spoken and accepted the situation of mounting armaments. They have fallen back on two proposals, first, more tariffs and, second, economy. The right hon. Member for Epping became almost lyrical in his enthusiasm for the new tariff policy of the National Government. Tariffs are drying up world trade. More tariffs will not improve the economic circumstances. Economies will be made at the expense of the life, the health and necessities of the masses of our people. It cannot be the right policy for hon. and right hon. Members opposite to devise ways and means of broadening and deepening the golden stream which goes into the furnace of war to make bombs and aeroplanes.

There is no one in this House who believes that that is the right policy. In his heart every Member of this House knows that the only effective economies that can be made in our great State services are in the destructive services, the fighting forces, the Army, the Navy and the Air Force. Every penny of expenditure on armaments for destructive and non-constructive services helps to twist the economic life of the nation out of its normal course. We have seen the effect of the war and peace treaties on our national economy. We have seen industry after industry lying derelict. What is going to be the effect of all this expenditure on armaments, when the money has been spent? Social wreckage again and again, in area after area, in industry after industry.

We on this side of the House admit and accept the fact that the King's Government must be carried on. Resources must be provided whereby services of all kinds can be carried on. The services of the State must be maintained. We must make the necessary provision to fulfil all our commitments under the League of Nations. That has been said oftener from these benches than from the benches opposite. It is vital that the resources of our nation should be applied to the development of our social services, which are to-day an essential part of the structure of our national life. They are part of the very blood stream of our national life. They strengthen the flow of the rich red corpuscles of the national arteries. When hon. Members plead, as they did yesterday, for economies in the social services they are not acting in the national interest. Without these services our whole social organisation is incomplete. We have to produce for the services of the State, whether military, naval or in the air, and for the social services, all that is required.

Our complaint is that the Government are living from hand to mouth, that they have no considered policy. It is not for me at this hour to act as adviser to His Majesty's Government, and I feel that my advice would not be accepted. I should be surprised if it were, and, indeed, if it were accepted I should begin to suspect my advice. But it is quite clear that the road upon which we are travelling is really a confession of our failure to deal with the problem of war and peace. The right hon. Gentleman skated over that problem which is the fundamental fact of the Budget. His whole outlook has been changed because of what the Government regard as the necessities of the situation. There is only one way in which to deal with the problem of war and peace, and somebody will have to deal with it sooner or later. It is better that it should be dealt with sooner rather than later, and the way is to kill this dragon which is trailing over the whole of Europe and making every nation spend its life-blood in armaments, instead of trying to uplift the lot of the peoples. That is common sense, and I hope that hon. Members opposite, who seem to think that there is something in armaments for armaments' sake, will realise that there is something behind all this which statesmen have failed to master. The supreme problem of statesmanship to-day is not how to raise £800,000,000, but how to make peace secure in the world.

10.28 p.m.

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain)

The Budget which has been the subject of discussion during the last two days is one of increased taxation, and it contrasts very vividly with the Budget I was able to bring in last year which was a Budget of remitted taxation. I am not inclined to disagree with the right hon. Member for Wakefield (Mr. Greenwood) when he said that the discussion this time has been dull. One would hardly expect violent demonstrations of enthusiasm to accompany proposals for increased taxation, and the fact that there have been no signs of undue excitement may be taken by myself as an encouraging demonstration of the resignation with which the Committee has received my proposals. But there is another reason why the Debates have been rather dull, and that lies in the Opposition themselves. They have been inclined to try to ride two horses, but two horses which are going in opposite directions. They have been trying to make out, as the right hon. Gentleman did just now, that the Labour party is in favour of fulfilling all our obligations under the League of Nations and of finding the resources which are necessary to maintain the defences of this country at the requisite level for that purpose. The right hon. Gentleman said that was a sentiment which had been repeated more often on the Opposition side of the House than on this side. I am inclined to agree with him. But it is only—to use a favourite phrase of the party opposite—lip-service, because the speech which the right hon. Gentleman delivered was, if it meant anything at all, a plea against Defence and against the expense of carrying out a Defence programme.

I will return to that subject a little later, but in the meantime let me refer again to an observation of the right hon. Gentleman, who mentioned—as many other hon. Members opposite have done—a sentence from a Budget speech of mine some years ago which appeared to have caught their fancy as it recalls some familiar associations; the sentence to which they referred was: I would say that we have now finished the story of 'Bleak House' and that we are sitting down this afternoon to enjoy the first chaper of 'Great Expectations'".—[OFFICIAL REPORT, 17th April, 1934; cols. 905–6, Vol. 288.] Well, great expectations were in due course fulfilled, and if now we are unable to continue our great expectations it is not because the country has not continued to improve under the policy of the Government, but because new factors have arisen which have imposed upon us new liabilities and altered the whole complexion of the situation we have to face.

This is a Defence Budget. The whole Budget is dominated by the proposals which were presented to the House in the recent White Paper. When hon. and right hon. Gentlemen opposite compare, as they have been inclined to do, the financial policy of this Government with that pursued by their own, they constantly refer—and the right hon. Gentleman who preceded me in that respect followed the example of the Leader of the Opposition—to the question of the American Debt, and they constantly suggest that a comparison between the Budgets of the National Government and those of the Labour Government is vitiated because they paid the American Debt whereas we have relieved ourselves of that liability. My hon. and learned Friend the Financial Secretary dealt with that question last night, but, as it has been raised again this evening, let me give the Committee the actual figures in order that we may once and for all see how much truth there is in the suggestion that we have benefited by the fact that we have no longer been paying the debt to America.

If we take the two Labour Budgets of 1930–31 and 1931–32, we find that they received from War Debts and Reparations during that period a sum of £54,000,000, and their payments in respect of the debt to the United States were £46,500,000, so that on balance they were £7,500,000 to the good; whereas under the National Government the total payments in respect of the debt to the United States were £32,250,000 and the receipts from War Debts and Reparations only £800,000. If the question of War debts and Reparations is to be brought into the account, the deduction to be drawn from it is exactly the opposite to that which has been drawn by right hon. Gentlemen opposite, because it is they and not we who have benefited by the differences in the payments. I said that this Budget was dominated by the question of defence.


Is the right hon. Gentleman going to leave this question of the American Debt without saying what the Government propose to do in regard to it?




I said that other iteins in the Budget had been to some extent overshadowed, in view of the great importance of the provision which has had to be made in this Budget for defence. The proposals for dealing with tax avoidance and for increasing the Income Tax allowances, have, I think, received general approval, although I have no doubt that many hon. Members will be anxious to see further the exact nature of the proposals in connection with tax avoidance which will have to be made clearer at a later stage.

With regard to the proposal to set up a new company for the purpose of giving financial assistance to small industries in the Special Areas, I must say I was a little disappointed at the comments which were made upon it by the hon. Member for Caerphilly (Mr. M. Jones). We have been told for a long time that the one thing necessary to help the Special Areas is to get small industries started in those Areas, and that the one thing that is preventing small industries from starting there is the difficulty of obtaining finance. But as soon as the Governemnt bring forward a proposal to deal with that diffi- culty, at once the hon. Member, instead of giving the proposal his hearty approval, says it is a niggling proposal and is only tinkering with the whole problem of the Special Areas. The obvious answer is that it was never suggested that this is a remedy which will deal with the whole problem of the Special Areas. It is our response to a particular request made to us, which request we have granted, and I do not think it is encouraging to find, when we do grant a request of that kind, that our response is not received more cordially than it was by the hon. Member for Caerphilly.

The hon. Member asked me whether it was intended that this assistance should be confined to productive industries or whether it would be applied to distributive concerns; also whether it would deal only with small family businesses or would be extended to businesses of a much larger character. In the first place I do not think it is proposed that the assistance should be confined to any particular form of industry, whether productive or distributive. I anticipate that the general desire will be that this financial assistance should be directed, as far as possible, to those kinds of industries which are likely to give the greatest amount of employment, and that covers also the question of small industries. As regards the much larger industries, I do not think those are industries which could be brought into this category at all. I think we may fairly take it for granted that if you were going to duplicate Billingham or establish considerable concerns of that sort, they would not require this sort of assistance and that they would have no difficulty whatever in getting the financial assistance which they required from the ordinary sources to which application is generally made.


The entry of industries into these areas is conditional upon the amount of assistance which the local authorities themselves have to give in the first place.


That is a rather different point. I cannot deal at length with the whole subject, but I have tried to answer, as best I can, the question which the hon. Member addressed to me. There was another speech, a rather re- markable maiden speech, which was made by the hon. Member for Llanelly (Mr. J. Griffiths) dealing with the Special Areas. I am sorry that I did not have the advantage of hearing that speech, but I heard it exceedingly well spoken of as a vigorous and forceful presentment of a particular case. The hon. Gentleman has just won a by-election, and probably he won it on the sort of arguments which he addressed to the Committee, but I cannot let those arguments go by without a denial. They were based on imperfect information. The gist of the hon. Member's arguments was that the present condition of the coal trade in South Wales had been brought about by the tariff policy of the Government. That is absolutely and entirely incorrect. It is not true that the tariff policy of the Government has brought about the difficulties of the coal trade in South Wales. I believe that those difficulties are great and severe. I agree that the coal trade which was formerly enjoyed by South Wales has very seriously diminished in recent years, but I do deny that that diminution has anything whatever to do with tariffs. It is due to two main causes. The first is the fact that ships are now burning oil instead of coal, and I am told that upwards of half the ships which are now being built in the world are being built to burn oil instead of coal. That is a fact which has nothing to do with tariffs.


Will the right hon. Gentleman state the actual reduction in the bunker trade in South Wales?


I believe the reduction last year was something like 500,000 tons as compared with the year before. [Laughter.] I do not know why there is this triumphant laughter. I am giving the figure for which I understood the hon. Member asked. I do not carry the whole figures of the coal trade in my head. The second reason why the coal trade of South Wales has diminished is that it has lost the trade with Italy. [HON. MEMBERS: "Oh!"] Hon. Gentlemen do not seem to be aware that the trade with Italy diminished last year by 600,000 tons, which is a great deal more than the net decrease in the exports of coal from South Wales. The reason why the coal is no longer sent to Italy is that Italy is no longer able to pay for it.


There was distress last year in South Wales.


I cannot give an undue amount of time to this subject in view of the short time left to me. There is one thing for which tariffs are responsible, and that is for the revival of the steel trade. I am surprised that an hon. Member who comes from a centre where steel works give employment to a large number of people has failed to pay attention to the fact that the revival of the steel trade has meant the employment of more men in old works, and has led to the erection of new works costing something like £3,000,000 in the neighbourhood of Cardiff, and to the reopening of the Ebbw Vale Steelworks.

Let me say a word or two about the Road Fund, because again there seems to be a little misunderstanding about what is proposed. I pass over the gibes of the right hon. Gentleman about the raid on the Road Fund. It is true that I am taking a balance which is not wanted in the Fund to-day, but I can assure him that this is the last time I shall do it. It is not the case that the Road Fund is to be abolished. I think my hon. Friend the Member for East Fife (Mr. Henderson Stewart), who put some questions to me about the Road Fund, did not, perhaps, quite appreciate the fact that the money which is spent on roads in any particular year is spent in pursuance of a programme decided on a very considerable time in advance of the year in which the money is spent. There is always a good deal of preparation to be done, which takes time, and that is the reason for the formation of a Road Fund. A programme of commitments is entered into, but the actual money is spent over a number of years. When he asked me to give him an answer to the plain question whether the change which I propose will mean that more or less money will be spent on roads in the future, my answer is that that will depend upon Parliament. What I am doing is to put the funds which are produced by the Motor Vehicle Duties under the control of Parliament. If Parliament thinks that more money than hitherto can be spent advantageously upon the roads, it will have power to allot suitable funds for that object: but if Parliament thinks that, in view of the other commitments which it must fulfil the money spent upon roads is excessive, again it will have the power to decrease the amount.

On the subject of Defence I think we are entitled to ask the Labour party where they stand. Are they in favour of putting the defences of this country in order, or are they not? They have evidently been speaking to a brief supplied to them which has caused a great number of them to say that if it had not been for the defective foreign policy of the Government it would not have been necessary to spend all this money on armaments. They have all got that story, but with one exception they have all failed to show in what respect this foreign policy was defective and how it could have been conducted, so as to save us from the necessity of rebuilding our defences to-day. The only exception was the hon. Member for East Edinburgh (Mr. Pethick-Lawrence), who told us in one sentence what the foreign policy of the Government should have been. He said the right policy would have been for the Government to prove, at whatever expense, that it does not pay to be an aggressor. What does that mean? [An HON. MEMBER: "War!"] Of course it must mean the provision of such an amount of force as will show an aggressor that it does not pay to be aggressive. That is the only possible meaning, and the hon. Member emphasised it by saying, "At whatever expense." I want to know whether that is the policy of the Labour party. Are they prepared to go to whatever expense may be necessary in order to prove to Signor Mussolini or to Herr Hitler, let us say, that war does not pay? Are they prepared to do that? [Hort. MEMBERS: "Answer!"] If they are, they cannot criticise this Budget. [HON. MEMBERS: "Answer!"]

My right hon. Friend the Member for Epping (Mr. Churchill) made a very powerful speech, and I must make my acknowledgments to him for the very handsome words which he used about the policy which I have pursued since I have occupied my present office. He refrained from criticism, although he indicated very delicately that perhaps he himself would not have followed exactly the same course in all respects. But one criticism lie made, not of the Budget but of the policy of the Government, was in respect of the pace at which we are pursuing our preparations for Defence. He found fault with the Minister for the Co-ordination of Defence for having said we were bound to work under the limitations of peace time. My right hon. Friend thinks that he ought to be bound by no such limitations. He said that there are preparatory, precautionary, emergency conditions that ought to be established now, so that my right hon. Friend the Minister for the Co-ordination of Defence might be completely free from those restrictions. What does my right hon. Friend have in mind when he speaks of those conditions? I assume—he will correct me if I am not right,—that he means that power should be taken to control all the industries of the country.


Such industries as are involved.


That would mean that you would not exercise the power over all industries, but you would have the power and could order any particular industry or firm to cease its commercial work and turn itself to war work. I imagine that you must associate with that some power of control over labour, because the principal difficulties with which we shall have to contend in carrying through this great programme will be in getting the kind of labour which will be necessary for the more skilled operations and getting that labour where it is wanted. There is no doubt that if powers of that kind were taken you could speed up the programme very materially, but I would point out to the Committee that very grave implications are bound to be associated with a step of that kind. It would mean that you would have to cease from proceeding with a great deal of commercial and industrial work that is now being carried on, and substitute for that work which would not only be less profitable in itself—because we are not contemplating commercial profits here—but would mean that orders which would have to be cancelled would go elsewhere, and in the future you might not easily regain the markets which we had set aside.

Everybody can imagine circumstances in which it might be necessary to impose those conditions and to take those powers, and the Government of the day has the very great responsibility of deciding at what moment it is necessary to take those powers. I do not, in the least quarrel with my right hon. Friend for suggesting that in his opinion we ought to take those powers now, and if some day it is found that because we have not taken them we have not been able to put the country in a sufficient state of preparation for a crisis that has come upon it, then we shall incur that heavy responsibility. But there is another responsibility which we shall have to bear if we prematurely take those powers, namely, the dislocation that we shall have brought about in the commercial system. The Government are, of course, watching the situation carefully, but what we are doing now is the most that can be done under peace time conditions, and if we have not hitherto taken those powers it is because we do not think that the situation has arrived at that point which would justify the risks necessarily associated with such a step.

I want to come now to one or two other criticisms that have been made. There is of course my hon. Friend the Member for Huddersfield (Mr. Mabane), with whom is generally associated on these occasions my right hon. and gallant Friend the Member for Ripon (Major Hills). Those two have consistently criticised my policy ever since I have been Chancellor of the Exchequer. I noticed some change, may I say for the better, in the attitude of my hon. Friend, because he began by saying that my methods were bad and the results would be worse, but he is now disposed to say that the results have been good but would have been better if I had adopted the methods which he had recommended to me. He has prided himself upon having made a more accurate estimate last year than the Estimate which I put before the Committee. I would point out that the Supplementary Estimates which we had to meet in the course of the year could not have been avoided and were not foreseen by my hon. Friend, and that if I had adopted his Estimates and had made the remissions which he desired me to make, I should have ended the year with a deficit and should have found that I had seriously depleted my tax resources. I should have had to put on again the taxes which I remitted last year. I do not think that would have been a very satisfactory method of procedure.

It has been suggested by other hon. Members that it ought to have been possible for me to avoid putting on any new taxation this year, and various methods have been suggested to me under which I could have postponed the taxation to a future year, or I might have avoided it this year. I do not think that it would be a, good thing to say to the people of this country, "I will let you off taxation this year, but you must look forward to getting it the year after to an amount which I cannot at the present time specify." I think that would have led to a loss of confidence which would not have been very satisfactory to the country. It is much better to have done as I have done, namely, to give to tie people at once the taxation which I feel is necessary, and to express the view, as I have expressed it, that in submitting to that taxation, so far as the present programme of Defence is concerned, they might hope to escape any further burden being placed upon them.

I will not deal with the question of raising the tariff, because hon. Members will easily see that if you want to get more revenue out of the tariff very often that object is best attained by lowering rather than by raising the tariff. I do not think that it would have been desirable to take the easier and perhaps the more popular course of deciding that the whole of Defence expenditure should be borne by loan rather than by taxation. I do not believe that it would be right to allow the people of this country to suppose that they can spend hundreds of millions of pounds upon Defence, or upon anything else, and pay nothing for it. When people criticise me for having put on this taxation, I say deliberately that I quite agree that I could easily have avoided it if I had wanted to. I only had to write up the Estimates of Revenue and, on paper at any rate, the Budget would balance, and no further taxation would be necessary. I deliberately put on fresh taxation because I believe that the people of this country ought to feel that they have to pay for the necessities of the situation, and, in the second place, I felt that, only if we submitted to some of the sacrifices now, could we come with a clear conscience in the future to borrow, and start a series of unbalanced Budgets.

I have spoken quite freely about this matter. I say once again that I have deliberately chosen the tax on tea, not because I believe it is popular but because I wanted a tax which would be widespread and which would cause as little hardship as possible. The tax on tea may add up to an amount of 1s. 6d. per person per year, and that cannot be considered a very serious hardship. In a very short time it will be forgotten, and in the rise in price due to the tax everybody will feel that they have the satisfaction of making their little contribution to the necessities of the country.

Question, That it is expedient to amend the law relating to the National Debt, Customs and Inland Revenue (including Excise) and to make further provision in connection with finance, put, and agreed to.

Resolution to be reported upon Monday next; Committee to sit again upon Monday next.