§ Debate on the Amendment moved by the Marquess of Lansdowne to the Motion that the Bill be now read 2a resumed (according to order).
§ THE MARQUESS OF SALISBURY
My Lords, in the very interesting speech which the noble Earl the Lord Steward delivered late last evening, he began with an observation which appeared to me rather to disparage the grave constitutional issue which your Lordships' House has now to consider, and he devoted his attention, as he said, rather to the dry facts of the Budget. My Lords, he went into great detail, but I am sorry to say that I do not think that all his facts are facts. Undoubtedly he thought they were facts, and undoubtedly they had been supplied by those painstaking gentlemen who help Ministers in distress with all sorts of information; but I think those of your Lordships, of which there are a good many present, who listened to the noble Lord are of opinion that his facts 926 required considerable correction. He seemed to think, for example, that the increment of value, of which he quoted instances drawn from various great urban communities in this country, bore no share in contributing to the taxation of the country. Of course, my Lords, if he had thought for a moment, he would have remembered that every pound which is added in the City of London, for example, to the value of land there, bears the burden of its increased rateable value to the rates, bears the burden of increased Income Tax to the Chancellor of the Exchequer, and, when the owner of it comes to die, bears the heavy burden of the Death Duties which his successor has to pay. I was not surprised, my Lords, as the noble Lord took, may I say, so imaginary a view of the facts of the case in that particular, that when he came to discuss the burden of taxation imposed by the Bill before your Lordships' House, he came to the conclusion that the increased burden was after all of a very moderate kind, not worthy of the amount of attention and trouble which your Lordships' House is giving to it on the present occasion.
I tried to make a mental calculation of the noble Lord's figures as he described them. I think he told us, for example, that agricultural land bore no increased taxation, and yet, when he began to give us an illustration and spoke of an estate which he knew intimately—an estate perhaps, I shall not be far wrong in thinking is to be found in Worcestershire, then the noble Earl, as far as I could calculate his figures, found that the increase of taxation would be thirty per cent. Well, my Lords, if you say that there is to be no taxation of agricultural land, and when the noble Lord who advances that contention instances agricultural property which he knows well, and we discover that the increase of taxation is thirty per cent. why then I think we have some standard upon which to calculate the accuracy of the noble Lord's conclusions. So he went on through realms of figures which he dealt with with his customary clearness and lucidity, and with regard to which, as far as I could make out, the increase of taxation varied between fifty and 100 per cent. This was the small increase, the insignificant increase, the Budget inflicts, which apparently the noble Earl hardly thought was worthy of the attention of your Lordships' House.
927 One other observation of the noble Earl attracted my attention. He seems to be persuaded that you can estimate the capacity of a man to bear the burden of taxation by the amount of his income. He said that a man who had £4,000 a year was not so rich as a man who had £5,000 a year, and he had, therefore, a shrewd suspicion that the man who had £5,000 a year could bear greater taxation than the man with £4,000 a year. That may be the shrewd suspicion of the noble Earl, but let me tell him that in numberless cases it is wholly inaccurate, as the noble Earl will himself recognise, if he will be good enough to follow me for a moment. A man with £5,000 a year might be a man with a large family. The man with £4,000 might be a bachelor. Which of the two is able to bear the greater burden of taxation? It is perfectly evident that the amount of a man's income is the most rough and ready test of the amount of taxation which he can bear to pay. But, my Lords, the case does not rest there. One man with £100,000 a year may live upon £2,000 a year and the remainder of his income may be invested in various works of public importance and utility. He may perhaps have lent it to the country to meet the charges for the administration of the country, or he may have put it into industrial enterprises and so ministered to the wealth and prosperity of the country. That is one way. Another man with £10,000 a year, a tenth part of the income of the first man I have instanced, may spend the whole £10,000 upon his own personal enjoyment and upon luxuries. Are we to say that the man who devotes nearly the whole of his income to public work or to industrial enterprise is a subject for greater taxation necessarily than the man of £10,000 a year who spends it all upon himself?
It is manifest, my Lords, that this theory of what is called taxing a man's superfluities and of calculating his superfluities upon the gross amount of his income is about the most deceptive criterion which we can adopt. If you want to tax a rich man because you think he has a better time than a poor man, you are quite right. I agree with you. By all means let us tax wealth; but do not let us try to arrive at the comparative amount of a man's wealth by his income. What you ought to tax is not a man's income, but rather his expenditure. Let all these intelligent 928 painstaking men on the Treasury Bench devote their ingenuity to discovering how in reality they can best tax a man's luxuries and that which he spends on himself, and they will have a far sounder criterion of taxation than the heavy increasing burdens which they heap upon the Income Tax and which they now offer for your Lordships' acceptance. Now, my Lords, whatever opinion we may have upon this heavy burden of Income Tax, and this heavy burden of Death Duties which the present Budget seeks to heap upon the taxpayers of this country, at any rate I think the great majority of your Lordships will agree that a man's wealth can certainly not be calculated by the particular investment in which he has placed his money, and that a man who has invested his money in land ought not to be taxed heavier than a man who has invested his money in anything else. That, my Lords, is of course the portion of the finance of the Budget which has received the greatest attention in your Lordships' House and elsewhere, and it is not a matter to be treated as lightly as the noble Earl treated it last night.
This particularising of a certain class of wealth has undoubtedly produced in the public mind a feeling of profound unrest, of profound distrust. I noticed that in his speech yesterday the Secretary for Scotland tried to minimise the effect which the present proposals have had upon those who are best qualified to judge of the money market of this country and of the feeling of the City of London. He had been furnished with a series of figures like the Lord Steward—I am not quite sure whether the noble Lord quite understood his own figures—but I say this with great respect to him, that he might have saved himself the trouble of describing them to your Lordships' House, because we did not want second-hand evidence on the point at all. We had got first-hand evidence. We had heard the speech already of one of the greatest authorities in the City of London. My noble friend who sits behind me, Lord Revelstoke, made a speech which created a profound impression upon your Lordships' House. He did not have to go to somebody's private secretary in order to get up his figures. He lives in the City of London; he knows every feature of the money market; and upon his great responsibility he stated to your Lordships' House what impression 929 the Budget had made upon the City of London.
I have ventured to make these observations upon the financial effect of the Budget, because I should be sorry if it should appear even that so humble a member of this Bench as myself approved of the Government proposals. But that is not the most important issue which your Lordships have to try in the present debate. What is that issue? That issue, my Lords, is this, whether or not your Lordships' House has the right and whether or not your Lordships' House has the duty to assent to the Motion of my noble friend the Leader of the Opposition and to decline to give your consent to the Finance Bill of the year. Now the noble Earl the Lord Steward did not deal with this issue last night; at least, I think he did not. If I mis-represent him, he shall correct me. The noble and learned Lord on the Woolsack did deal with it. Was it only a false impression on my part—but I thought he dealt with it with some hesitation.
§ THE MARQUESS OF SALISBURY
Then that was a mistake. But the noble and learned Lord left a good deal out. For instance, there were my noble friend's quotations from two leaders of your Lordships' House, two Liberal leaders, my Lords There was the quotation from ! Lord Spencer, and there was the quotation from Lord Ripon, both asserting the rights of your Lordships' House in this matter. The noble and learned Lord upon the Woolsack made no reference to either one or the other. He did not deny that, in the mouths of the two most respected members of the great Party opposite, the lights of the House of Lords had been asserted. Did he differ from them? My Lords, I do not think it is necessary for us to go back even so far as the statement of Lord Spencer or the statement of Lord Ripon. I wonder whether the noble and learned Lord has in his mind the debate upon the Scottish Valuation Bill this time last year?
The noble and learned Lord delivered a very important speech upon the Second Reading of that Bill. It was full of that sweet reasonableness with which we are so familiar from the noble and learned Lord. He was most anxious that your Lordships' House should pass the Second Reading of 930 that Bill, and he used the argument, familiar in his mouth, that after all the Scottish Valuation Bill did not amount to very much, that it was only the machinery of valuation, and that there could be no harm in providing that machinery. "No," said the noble and learned Lord, "the important matter will come later." My Lords, the important matter the noble and learned Lord argued was not the machinery of valuation, but the Rating Bill which would follow on that machinery of valuation, and he proceeded to try and reassure my noble friends sitting on this side of the House that they were perfectly safe in passing the Valuation Bill, because there was the Rating Bill in the future still to be considered. What words did the noble and learned Lord use, speaking on March 25 of last year? This is how he dealt with it. He was aware that in some quarters of the House, Liberal quarters, I suppose, difficulties might be suggested when we reached the Rating Bill, if we ever did. The noble and learned Lord speaking of that Bill said this, "It is a Money Bill, we are told"—the Rating Bill. Your Lordships will mark those words. "Well, if a Money Bill is brought forward, this House has always the power to throw it out." In order that I may show your Lordships that the noble and learned Lord was treating this subject generally, and that he was not confining his attention to a particular class of Money Bills, I will read the words which immediately follow. The noble and learned Lord was quite aware of the familiar distinction which is made between rejecting and amending Money Bills, and the fact that he recalled it in his observations shows that he was dealing with the subject generally. He said: "It is the question of amending Money Bills; that is a question of privilege. But as to the question of throwing out Money Bills, your Lordships have the most ample powers."
That was the view of the noble and learned Lord in March, 1908. I will leave the noble and learned Lord to explain the change which has taken place in his opinions since the time when he was so anxious that your Lordships should pass the Valuation Bill until this moment when he is so anxious that your Lordships should not reject the Finance Bill. Now, this Scottish Valuation Bill is a Bill of the greatest importance in this controversy, because it is a Bill which your Lordships dealt with in the ordinary manner which you are accustomed to apply to any legislative measure. 931 It is a Bill which your Lordships claimed the right to reject if you pleased; which you did not in fact reject, but which you did amend, and your right to amend no one called in question. Further, it was a Bill of the greatest importance. The principle of it was not, in truth, confined to Scotland. The noble Earl the Leader of the House told us in the debate that if it were passed, it would, of course, afterwards be made to apply to England. It contained within itself very important ulterior results. For example, it was defended by members of the Government on the ground that it was important as leading up to legislation which should force unwilling sellers to part with their land, and I think at the time also it was defended by members of the Government upon the ground that it afforded a ready and reliable criterion for compensation when land was purchased by the State compulsorily.
All those ulterior consequences were contained in that Bill. It was, in fact, the forerunner of a complete series of Acts of Parliament of the most important and intricate character. These qualities in the Scottish Valuation Bill of last year are, of course, not confined to that particular Valuation Bill, but are to be found equally strongly in the Valuation Clauses of the Finance Bill which is at present under discussion. Those principles—the principle, that is to say, of universal valuation, the principle which that is intended to lead up to of compelling an unwilling seller to part with his land; the further principle which it is intended to lead up to, namely the affording of a proper criterion for the payment of the State in the case of compulsory purchase—all those consequences and principles have been reaffirmed by members of the Government as being contained in the Valuation Clauses of the Finance Bill which is now under discussion. Then the noble Earl the Lord Steward quoted last night the same passage from the Report of the Royal Commission on Housing as had been quoted by the noble and learned Lord upon the Woolsack in the same speech to which I have already referred on the Second Reading of the Scottish Valuation Bill. That passage in the Report pointed out that one of the effects of the taxation of capital value would be to force unwilling sellers to part with their land.
Those subjects which the Scottish Valuation Bill contained, and which in that case 932 we were allowed to deal with, are contained in quite as great a measure in the present Bill with which we are not allowed to deal. How can that possibly be defended? How can any member of your Lordships' House—I do not care in what quarter of the House he sits—rise in his place and maintain that it is perfectly legitimate for your Lordships' House to deal with all these intricate principles, and with the clauses which are intended to carry them out, in the Scottish Valuation Bill of last year, and that your Lordships are absolutely precluded from having any say whatever to exactly the same proposals, only rather wider, which are contained in the Finance Bill of the present year? The thing is not arguable at all, my Lords. It is quite manifest, once it is admitted, as it was last year by the Government, that the Valuation Bill was an ordinary Bill capable of being discussed on the First and Second Readings, in Committee, on Report, and on Third Reading in your Lordships' House, that we are bound, if there is any logic and consistency left in public life, to apply the same conclusions to the Bill which is at present under discussion.
THE LORD CHANCELLOR
Perhaps the noble Lord will allow me to offer the explanation for which he was good enough to ask in somewhat severe terms? When I addressed the House on Monday night, the House will bear me witness that I drew the most pointed distinction between Money Bills which were mixed up with other matters, or which were isolated and separate Bills by themselves on the one hand, and Money Bills which contained the Supply for the year on the other hand. My statement on Monday night was limited wholly to the Money Bills which dealt with the Supply for the year. The noble Lord may think I am right, or he may think I am wrong, but he has no right to suggest something more than inconsistency in what I said. Further than that, I adhere to every word I said with regard to the Scottish Valuation Bill last year.
§ THE MARQUESS OF SALISBURY
My Lords, I never suggested, as the noble and learned Lord seems to think, that there was any charge in my mouth against him other than inconsistency. I am perfectly well aware that the noble and learned Lord, and it is almost impertinence for me to say so, enjoys a loftiness and integrity of character which no other member of your Lordships' House surpasses. On the contrary, 933 It is because of the noble and learned Lord's high character and his great reputation in your Lordships' House, that I felt it to be my duty to correct the impression which I think the noble and learned Lord's speech left upon us.
THE LORD CHANCELLOR
I of course most heartily accept the noble Marquess's explanation in the spirit in which he offers it.
§ THE MARQUESS OF SALISBURY
The noble and learned Lord's observations on the Second Reading of the Scottish Valuation Bill in March of last year were of a perfectly general character, because I have quoted his words accurately; and I think, in the discussions of that year, unless I am very much mistaken, noble Lords opposite were at pains to prove that in respect to the privileges of the House of Commons there was no distinction between one kind of Finance Bill and another. And I remember very well, in the discussion on the Amendments to the Old Age Pensions Bill, that an old Resolution of a corrupt Parliament of Charles II was trotted out by noble Lords opposite in order to show that we had no right to amend that Bill. This distinction, let me assure the noble and learned Lord, between the Finance Bill of the year and other Money Bills, although it might have been hinted at from this side of the House, was always repudiated from the other side of the House until the noble and learned Lord spoke the night before last. I was contending, when the noble and learned Lord interrupted me, although I do not complain of his interruption for a moment, that the precedent of the Valuation Bill of last year made it absolutely clear that the same measure of liberty in your Lordships' House which was conceded in regard to that Scottish Bill must, logically and consistently, be conceded in the case of the Valuation Clauses in the Finance Bill now under discussion.
Now, my Lords, I must say a word upon the Licensing Clauses. I am relieved of the necessity of going into the question of licensing, your Lordships will be glad to hear, except very lightly; because, in an admirable speech which my noble friend Lord Donoughmore made rather late last night, he dealt with the very point to which I wish to call your Lordships' attention. Therefore, I will touch upon it, if your Lordships will 934 allow me, in a very summary manner. The contention on the part of His Majesty's Government is that the Licensing Clauses are only a very ordinary extension of methods of taxation with which the country is perfectly familiar; that they are not in any way designed for any other purpose except that of raising revenue; and that they cannot be accused for a moment, with any shadow of justification, of infringing the privileges of your Lordships' House. But, my Lords, if that be so, if it be true that the Licensing Clauses are merely ordinary methods of taxation, how do the members of the Government sitting in your Lordships' House account for the kind of observations which were made to the country by their own colleagues after the rejection of the Licensing Bill last year? My noble friend Lord Donoughmore quoted several of His Majesty's Ministers in the admirable speech which he delivered last night. I am afraid I must repeat one of his quotations, but it shall only be one.
I want to cite to your Lordships the testimony of Mr. Winston Churchill, the President of the Board of Trade. I should like to remind your Lordships that the question which I am discussing is whether it is true or not true to say that the Licensing Clauses of the Bill of this year are or are not an attempt to evade the decision at which your Lordships' House arrived upon the Licensing Bill of last year. Mr. Winston Churchill, speaking, I am not quite sure whether it was immediately after the rejection of the Bill or not, but in July of last year—I am told that it was before, but by the tenor of the speech he was referring I to the action of your Lordships' House—used these words—"I say to our brewing friends"—the House is familiar with the refined style of the President of the Board of Trade—" when they are gathered together in deep consultation around the flowing bowl, when they are drinking the health of the House of Lords, when they are cheering for an Assembly which boasts that it will defy the will of the masses of the people, let them remember that Budgets are beyond the control of the House of Lords, and that if the licensed trade refuse the just and considerate provisions of a great temperance measure, they may easily find that they have leapt from the frying pan into the fire."
My Lords, is it not quite evident what the President of the Board of Trade meant? Why, there is not a Minister on that Front 935 Bench opposite who will deny it. What he meant when he spoke then was this: that it was no good for the liquor trade to look to the House of Lords to throw out the Licensing Bill, because if your Lordships' House did throw out the Licensing Bill the Government would resort to the Budget in order to give a harder measure even to the liquor trade by the provisions of the Budget than were proposed in the Licensing Bill itself. How can the noble and learned Lord come down to your Lordships' House on this Bill, and the Lord Steward, and all the other Ministers, and tell us that this Budget has nothing to do with the rejection of the Licensing Bill last year? Why! Ministers themselves prophesied that they would undertake the evasion of your Lordships' decision upon the Licensing Bill by putting it into the Budget. And they have done so. Why is it worth while to deny it? I cannot conceive why the noble and learned Lord and his friends spend so much time and trouble in denying a thing which is so very obvious.
My Lords, there is no accident about this. This is all designed. It is quite obvious what was going to happen months ago; and indeed anyone who listened with care to the speech of the noble and learned Lord on the Woolsack would see that it is not the rejection of this Finance Bill which troubles him. It is not the outrageous breach of the Constitution which we are told is what he cares so much about. It is the rejection of all the Bills that he objects to—not merely Bills protected by this alleged Resolution of the House of Commons' privileges, but all the other Bills which come before your Lordships from another place, and over which the power of your Lordships' House is undoubted. The noble and learned Lord assents to that; therefore it follows that the real issue is not whether your Lordships' House is or is not to have the right to reject a Finance Bill, but whether it is or is not to have the right to reject any Bill. That is the real issue. That is the issue which is really before the House and the country; and all this parade of old constitutional forms is merely so much make-believe to conceal the real issue which the Liberal Government desire to force upon the country.
Now, my Lords, that being so, let us apply the conclusion to which I have 936 ventured to bring your Lordships' House. The House of Lords is not to be allowed to amend or reject any Bill which the Commons insist upon. That is really the issue. Do any members of your Lordships' House approve of such a change? I doubt it. I doubt whether there is any man! There is the noble Earl, Lord Russell, who spoke last night. If he will allow me to say so with great respect, the noble Earl with all his ability is the victim of one or two fads. But, like other people with fads, he dislikes everybody else's fads, and there are several fads for which the Government have made themselves responsible which he very much dislikes, and he has used his power and his ability in your Lordships' House in order to try and correct those fads. If he has his way and this Finance Bill is passed, and the power of your Lordships' House to reject any Bill is thereby destroyed, he will have to put up with all the fads which come from the House of Commons.
Very well, I turn from the noble Earl to the right rev. Prelate who presides over the diocese of Birmingham. The right rev. Prelate has recommended your Lordships to pass this Bill. He is anxious for the re-adjustment of taxation. I think his ideal is the re-adjustment of wealth by means of taxation—a very dangerous doctrine, may I say with great respect, for anybody to preach; and, above all, a very dangerous doctrine to come from such a quarter without a very careful explanation of what is meant by it. My Lords, if you legalised picking pockets, that would be a re-adjustment of wealth by means of taxation. I do not think the right rev. Prelate realised, without explanation, how profoundly demoralising such an observation really is. Because, speaking with all his great authority and knowledge, he practically says to the masses of the people, who have got the power: "You have got covetous desires; gratify them; have a re-adjustment of wealth by means of taxation." That is the right rev. Prelate's ideal. But that is not what the right rev. Prelate is principally interested in. There are other things, and things for which I profoundly respect him. He wishes to see a reform of the Poor Law. He wishes for a just settlement of the education question. If your Lordships pass this Budget; if you assent to the doctrine of the noble and learned Lord upon the Woolsack, you will not be allowed to have any voice in the 937 reform of the Poor Law. The truth is that almost any public measure can be expressed in terms of the Finance Bill or of the Appropriation Bill, but most of all the Poor Law. It is all a question of rates.
Then there is the Education Bill. Let me illustrate my point. The other day there was a decision by the Courts of Law in what is called the Swansea case. That was a decision that it was incumbent upon the local authority to pay Voluntary school teachers at the same rate as Council school teachers. It is essential that that equality should be maintained, or otherwise, of course, the Voluntary school system could be swept away in a moment. Nothing would be easier than to reverse the judgment in the Swansea case by a clause in the Appropriation Bill. You would merely have to say under the Appropriation Bill that there should be a certain sum of money allocated to Council school teachers which shall not be available for Voluntary school teachers, and the thing is done. The Swansea judgment is reversed on the doctrine of the noble and learned Lord on the Woolsack, supported by the Bishop of Birmingham. Your Lordships' House would have no voice in it whatever; you would have to accept it. My Lords, this is not theory, this is fact, because it has actually happened, not in the Swansea case, but in another case. There is a provision in a celebrated Act of Parliament that no grant of public money can be made for the building of schools. The education grants by the Education Acts are devoted to maintenance and so forth, but no grant can be given for the building of schools. That is as clear as possible in the Act of Parliament. But the other day the Government wanted to reverse that, and they did. That is a fact. They put it into the Appropriation Bill. It came up to your Lordships' House. I happened to be very much interested in these matters, and I took the opinion of the highest legal authority at my disposal as to whether that was legal, that the plain words of an Act of Parliament could be reversed by a provision of the Appropriation Bill. There was no doubt of his answer. He said, "Certainly; the Appropriation Act is an Act of Parliament just like any other; it cannot be questioned; it is an Act subsequent to the Education Act, and therefore it reversed the Education Act on that point." My Lords, it came up to your Lordships' House and the matter, although 938 of importance, was not of colossal importance and we thought that it was not worth while to provoke a constitutional crisis upon that alone, and therefore my noble friend who leads the Opposition was content to enter a protest on the subject. But the moral of the thing remains, and it is not only a theory; it is a fact, that any clause in any Act of Parliament can be reversed by either a clause in the Finance Bill, or a clause in the Appropriation Bill, and that when it is so reversed, according to the doctrine of the Government, it cannot be questioned in your Lordships' House; and there is no doubt that when it passes into law, these Acts are good law, and that the whole proceeding is complete.
Now, my Lords, is not this a very serious matter for your Lordships' House? I wonder how many of those noble Lords who had thought of voting with the Government in the Division which will conclude this debate have reflected upon what their vote really meant. What they are asked to do, as I have ventured to point out to your Lordships, is to rob your Lordships' House of any share in the legislation of this country upon which the House of Commons choose to insist. My Lords, what is our claim on our side of the House? It is a very moderate claim. We do not pretend to an absolute veto on legislation. No, all we do is to say, "If you insist upon this legislation of which we cannot approve, the country shall decide between us." Mr. Winston Churchill, in the quotation which I have read to your Lordships, spoke of the Lords defying the masses of the people. Why, we appeal to the masses of the people. The truth is that the Democratic Party opposite have never understood the logic of their own position. If they believe in the people, why do they not trust the people? If they think that the ultimate source of power rests with the people, why should they object to apply to that source of power for the assent of the people to any great Act? I noticed that the Secretary for Scotland dealt with this point last night, and I think he repudiated the idea that our form of government was plebiscitory; that is to say, he held that the will of the people was not to be expressed direct, but through Parliament. Yes, my Lords; I do not differ from him on the general case. By all means let the people speak through their instruments and not directly, except upon 939 great occasions. But if you take that view, the House of Lords is quite as much an instrument of the Constitution as is the House of Commons; and the two are necessary to make the complete whole.
My Lords, we stand by appealing to the considered judgment of the people. That is of vital importance; because it may be that in a moment of mistaken excitement the people may return a majority to the House of Commons which does not express their considered opinion upon every subject. There was the case, for example, in regard to the Education Bill. That Bill was produced just after the House of Commons came fresh from a General Election. It may be that the people were a little weary of what is called the denominational controversy, and perhaps they were a little indignant at the increase of the rates which followed on the Act of 1904. A majority of the House of Commons proposed the Education Bill. Your Lordships' House took measures by amending that Bill in vital particulars to prevent it passing in the form in which it had been proposed, and we had then the advantage of the considered judgment of the people. Is there any one of your Lordships who will say that the Education Bill of 1906 was really popular among the masses of the people? When the people began to consider it, when they saw in black and white what the proposals of the Bill were; when they recognised that the awful spectre of secular education was standing at the gate; when they realised that the wishes of the parents themselves might be flouted by the operation of the Bill, they began to think that these stupid Conservatives and those simple religious men were in the right of it, that it was necessary to take steps to preserve the religious education of the people, and that it was essential that the parents' rights should be vindicated. And so the more the Bill was considered the less it was liked; yet, but for your Lordships' House that Bill would have been passed into law. In the result it seems that the considered judgment of the people is essential to the working of our Constitution. To that considered judgment we appeal; to our masters, my Lords; yes and your (the Government's) masters too, and by that judgment we will abide.
THE LORD ARCHBISHOP OF CANTERBURY
My Lords, it will be a matter of satisfaction to your Lordships, 940 in view of what we are anticipating, that my intervention in this debate will not detain your Lordships more than a very few minutes. I do not propose to enter into the merits of the controversy which this Bill raises, either as to the direct, that is to say the financial issues raised, or as to the indirect, or constitutional questions, which are implicitly involved in the vote that will be given. What I wish to do, on behalf of many Bishops who are absent and of a few who are here, is to state in the fewest possible words the position which they take, and take deliberately, in this matter. My Lords, I attach, and I know that many of your Lordships attach, real importance to the presence in Parliament of those who are not only the most ancient part of the Legislature, but are named first in the preamble to every Act of Parliament on the Statute Book—the Lords Spiritual. That the circumstances of their lives and the character of their daily work give them, of necessity, peculiar opportunties of knowing about and handling certain questions which arise, and which must arise, in every Legislature in the world is, I think, both undisputed and indisputable. If I look back along the range of the subjects in the discussion of which we Bishops have been privileged to bear a part, and sometimes an important part, during the fifteen years, to take those alone, that I have had the honour of a seat in this House, I find it to include practically all those questions—moral, religious, educational, social—with which this House has constantly to deal. They range from Poor Law Reform and Prison Reform to University or Ecclesiastical Reform, from sweating and overcrowding at home to the treatment of aborigines in Australia and West Africa and elsewhere; while in such matters as temperance and education it goes without saying that the Bishops are expected to be the mouthpiece of many thousands of people outside.
My Lords, I am satisfied as to the usefulness of that function, but I believe that its usefulness is enhanced, and that the weight attached to what is said from these Benches is augmented by the fact that, speaking generally, the Bishops have, in recent years at least, held themselves free from the ties of what is ordinarily known as Party allegiance. I am very far from denying that questions of a distinctly political character may arise, and do arise, in the treatment of which all the Bishops 941 may rightly and properly and consistently take full part, and, I think, it would be affectation to pretend that we are, not as citizens quite as well qualified as the average members of this House to form and express opinions on those questions. But I believe that, ordinarily speaking, at any rate, the Bishops act wisely in, as I have said, sitting loose to Party ties. This particular occasion, in which, so far as I can judge from some of the speeches we have listened to, it seems to be clearly decided that the Division is to have a strictly Party character, is, in my judgment and in the judgment of many Bishops who have spoken or written to me on the subject, one of the occasions on which we are right in standing aside. I will not hesitate to say that I personally—and here I speak for myself alone—regret that the Division is to have that character. But apparently, so it is. The direct issue is the question whether or not the money which is required for the expenditure—the increasing expenditure—of the country can or cannot be rightly raised in a particular way without a further appeal to the constituencies. The other grave issues, which are not obscurely involved, are indirect issues or consequences, after all.
My Lords, some Bishops are, and have always been, honourably associated with political ties on one side or the other. Your Lordships have heard speeches this week from some who might be so described; although I should be very far from saying that their speeches were of a purely political kind, and you may perhaps hear more. There is nothing more natural and right than that votes should be given in correspondence with such speeches. Again, nobody will imagine for a moment, that those Bishops who agree with me as to what is this week our duty in circumstances of peculiar difficulty desire even to criticise those Bishops who think otherwise. The reference which I have just made to social questions, and if anybody cares to look at them, the records of my own words and votes, such as they are, in this House will, I think, afford clear evidence that it is not because I and those who think with me are indifferent to the great social questions which are astir in England in connection with the life of the poor that we are taking the line we do take. I have tried to show that what we are doing we are doing deliberately, in the genuine belief that by adhering to an independent standpoint 942 we increase our power of contributing usefully to the solution of some of the greatest, deepest and most urgent problems which Parliament has continuously to consider and to decide.
THE EARL OF ROSEBERY
My Lords, I earnestly wish that the most rev. Primate, to whose weighty words we have just listened with so much attention, would throw the ægis of his doctrine of silence over myself, who am quite as dissociated from Party as any Prelate that sits upon the Bench behind him and perhaps more, I think, than some. I wish it because I never rose to address your Lordships with more reluctance than on the present occasion—partly from my sense of the awful gravity of the situation, by far the gravest that has occurred in my lifetime or in the lifetime of any man who has been born since 1832; partly from a sense of the personal difficulties that I feel in dealing with this question.
My Lords, my difficulties are two-fold. They are personal to myself and they are also difficulties connected with the line of policy which is proposed to be adopted by those behind me. Let me get rid of my personal difficulties at once, because a personal topic is apt to be less interesting to the audience than to the speaker himself. I have given utterance to opinions about this House, and more especially in regard to its relations to financial legislation, and have given them in the highest office that a subject can occupy under the Crown, which in my opinion prevent me from giving a vote to the noble Marquess, or even from giving an opinion favourable to the policy which is urged by those on the Bench behind me.
It is quite true that I attach not much weight to individual opinion. It is also true that I have observed that Ministers sitting on that Bench, when they are anxious to get a measure through this House, are apt to take a higher view of the privileges of the House of Commons with regard to finance—and I say this of both sides of the House, because we have the utterances of the noble and learned Earl, Lord Halsbury, in our minds, and also, I think, the utterances of the late Marquess of Salisbury, whose son we have heard with so much pleasure and acceptance to-night—that Ministers are apt when they are anxious to press a Bill through 943 this House, to rate the privileges of the House of Commons much higher than they are apt to do in the cooler moments of Opposition. But I do think it is due both to that political honour and consistency which every man must try to preserve by his own standard and in his own way, and also more especially due to the great office which I filled when I uttered those opinions, that I should not do anything in contravention of them to-night.
My Lords, I have heard with great interest the subject argued from both sides of the House. I have heard the authoritative pronouncement of the noble and learned Lord on the Woolsack, delivered with so much clearness and ability on the first night of our debate, though it may, to some extent, be, not neutralised, but qualified by the quotation from his speech of last year to which we have just listened. While I think it is clear that the letter of the law is certain, that by the letter of the law it is competent to this House to reject a Finance Bill—I do not think that is questioned by any authority—while it is within the competence of the House, if it thinks fit, to reject a Finance Bill, I understand that the noble and learned Lord on the Woolsack draws a distinction, not merely one of expediency, which is obvious to us all, but also one between what he calls the law and the Constitution, by which, if I rightly comprehend him, I understand he means the letter of the Constitution and the practice, so to speak the common law of the Constitution under which this Constitution is carried on.
We hear a great deal—this is the first of my marginal notes—about the immemorial practice of centuries in allowing Financial Bills to pass through this House unopposed. It is not quite unbroken, but it is practically the practice of centuries. I have one historical observation to offer on that practice, and it is this—that it is only really valid after the year 1832, because up to that year the House of Lords had in practice the control of the House of Commons, both for themselves and the classes with which they were associated, and it was not, therefore, either probable or even possible that the House of Commons should send up a Budget Bill to this House which it would be inclined to take the extreme measure of rejecting. And if we take the precedent of 1832 and take the period since, we certainly have one grave precedent in the year 1860 or 1861 which shows that the practice has not been quite 944 unbroken. I therefore say that there are arguments on the other side with regard to the practice of the Constitution which should not be lost sight of in this discussion.
My Lords, I quite admit that the Budget of 1894, for which I was Ministerially responsible, though it was highly objectionable to the House of Lords, was allowed to pass through, not without discussion, but I think without anything like a Division. But I have always suspected that the House of Lords in dealing in that way with the Budget, had not obscurely in view the somewhat precarious position of the Government, and thought that even if they allowed it to pass through they would recover in a very short time by a General Election the authority to deal with financial affairs as best might seem to themselves. Then I think there is this further remark to be made—that to abnormal measures abnormal methods of defence may be offered. Take, for example, an instance in which a Finance Bill might, if the House of Lords thought fit, be dealt with, perhaps even summarily. I take the case of the noble Earl, Lord Russell, who spoke last night and with so much ability worthy of his historic name. He expressed himself in no dubious terms in regard to our military and naval expenditure. Suppose the noble Earl, in the official position so long occupied by his grandfather as head of the Government, were to bring in a Budget or to authorise one to be brought in (because I fear in his circumstances he can never bring in a Budget himself) which lowered—in the tone of his speech last night—the defences of the country in a way in which the nation at large thought dangerous. On such an occasion I cannot but think that the House of Lords might be justified, supported by the authority of the nation, in rejecting such a financial Bill as that. That is the illustration I give of the possible exceptional measure which might demand a departure from the ordinary orthodox practice.
Now, my Lords, there is another point which I think has to be noticed in regard to the practice and not the letter of the Constitution. We are guided by maxims and unwritten axioms with regard to what is called the Constitution. There is one maxim so undoubted that we have learned—it has been burned into us by bitter experience—I mean the maxim that there is no taxation without representation in this country. The disregard of that maxim lost us the 945 United States, and we are not likely knowingly to offend against it again. What is the case with regard to the actual practice of that principle, that undoubted principle, of the English Constitution? Your Lordships are accused by your enemies of owning some enormous proportion of the land of England at this moment. Some put it at one-fifth, some at one-third, and I dare say, in the excitement of the election, as things grow warmer, you will be accused of owning the whole. But whatever your proportion may be, if it is anything like so high as it is put by persons outside opposed to your House, I think it is eminently to be regretted that so large a portion of the land, if it be large, should be held in so few hands.
But what have we to say about no taxation without representation. This one-fifth, one-third, or this entirety if you like, of the land of England held by the unfortunate people who sit in this House is to be taxed freely, abundantly, and increasingly without its having a word or a vote. I do not support those arguments myself. I am a man of peace and I have given too many hostages to fortune in regard to the position and attributes of this House to be able to unsay them on this occasion. But in listening to this discussion I have been forced to offer some qualifying reflections in regard to the extreme doctrines of the Government, to put some water, if I may so express myself, to the extremely strong Constitutional wine that we have been invited to drink. But, my Lords, however you may judge the position of the House, there is one supreme, indispensable condition of the exercise of any dormant power that it has been claimed to possess, and that is that it should only be exercised under exceptional circumstances by, so far as is known, the direct authority and with the express condonation of the nation itself. That is a doctrine which if I live to be a hundred I shall adhere to, I feel confident, with much more security and certainty than I can to some of those more official doctrines which I uttered when I sat on the Bench opposite.
I quite agree—and that is one of the public considerations which make me unable to vote for the Amendment of the noble Marquess—that the Budget is vital. I quite agree that the Budget threatens to poison the very sources of our national supremacy. I have said abundantly all that I think on that point, and I am not going to repeat it to-day. But there is something 946 which in my mind, in view of the immediate future, in view even of the remote future, is more vital to this country than the Budget itself, and that is the strength, efficiency, and security of the Second Chamber. With regard to the Budget, I do not want to deal again with that rather hackneyed subject. Having occupied the attention of an intelligent audience with it in an atmosphere in which the thermometer marked seventy-five degrees, I am not likely to be anxious to return to it now.
Although I uttered many words on that occasion, I can conscientiously say that the days which have passed over me since then have not weakened in my mind one single syllable, or made me think of reversing or recalling one single syllable, of what I uttered on that occasion. Every day that has passed over my head since then has rather increased than diminished my sense of the danger of the measure which it is proposed Parliament should adopt. There are one or two things in passing that I wish to say with regard to it. I did not say them formerly; I may say them now. This Budget has the unpleasant aspect of being both crude and vindictive. I do not say that it is crude or vindictive; far be it from me to say anything of that kind, knowing that I shall be contradicted on the highest authority and told that it is neither the one nor the other. I say it appears to the naked eye of the casual observer to be both crude and vindictive.
If it be not crude—though we are told that no Budget has received one tithe of the attention which this Budget has—how are we to explain the frequent reversals of position, the standing first on one leg and then on the other, and finally on none, which has characterised the proceedings on this most ill-omened measure? If it be not crude, how are we to account for the 250 Amendments which the Chancellor of the Exchequer himself thought it right to put down even on the Report stage? I would not say it is crude, but I will say this, to use a Tariff Reform metaphor which will appeal to both sides of this House, that never in the memory of man, in all the onerous proceedings which are charged against the great overproducing countries, has such a mass of raw material been dumped down in this country at any one time as when the Budget was introduced.
947 I know it is only to the outward eye that it is vindictive. I must say my noble friend Lord Salisbury to-night brought forward some reasons and some quotations, which made one think that even to a less passing eye than that of the casual observer it might seem to bear that character. Some might think that one part of it was directed against a considerable commercial interest, and a great many might think that the whole of it was more or less designed as a battering-ram against the doors of this House. But, acknowledging that it be not vindictive, I must be allowed to say that in the consideration of the measure by the Cabinet there must have been going on a great deal of what psychologists call unconscious cerebration when that measure was brought forward. That is not all that is to be said even at this juncture about the Budget.
The Budget has already done incalculable mischief. That cannot be denied except by some of the more Pretorian and devoted supporters of His Majesty's Government. It has already destroyed confidence in a remarkable degree. This country was not long ago the strong-box and the safe of Europe, to which every man outside this country sent his savings that they might be secure. That was an enormous mass of capital which was sent to England for security. I venture to ask—I see two great financial authorities near me—whether those millions have not already disappeared from this country? Those have been wantonly cast away. What is following? Many millions from the people of this country as well. I believe that all the great ships that go westward across the Atlantic are at this moment carrying bonds and stocks in ballast in order that they may be got away from the jurisdiction of His Majesty's Government. This want of confidence is not merely confined to the reserves of money; it has also extended to every form of enterprise. No one is able to embark in any commercial undertaking for fear of the Government coming down and taking the proceeds without sharing the losses. I think we may say, to quote a well-known speech on a famous occasion, that we find every avenue of commercial enterprise blocked up because the Chancellor of the Exchequer stops the way. My Lords, the honest truth is that already your measure has spread over the country, like one great pervading miasma or fog, the disease of want of confidence 948 and want of credit, the most fatal disease which perhaps can affect a commercial nation like ours. We had abundant evidence of that kind in the able and authoritative speech of Lord Revelstoke the other night, to which I listened with so much pleasure; and we had from my noble friend Lord Lansdowne an additional proof which struck me as almost more remarkable than anything said by the head of the house of Baring. It was with regard to the British issues during the first ten months of this year. He showed, if I remember his figures aright, that they had sunk from fifty-five millions in 1908 to twenty millions for a similar period in 1909. Can there be conceived a more disastrous proof of the immediate and ruinous effect of the Budget on all commercial transactions than such a fact, and an undoubted fact, as that?
I was not at all comforted by the consolation administered in the oracular speech of the Secretary for Scotland delivered last night. He told us that the cause was clear—that there was undoubtedly a difference of thirty-five millions between the issues of last year and the issues of this year, but the reason was obvious. The thirty-five millions difference had all gone into private enterprise; although he was unable to cite any figures in support of his contention, and I think he would find it extremely difficult to do so. He found solace for himself, but I am sorry to say he completely failed in imparting it to me. I do not know what the pundits of the City thought when they read that explanation of this deficiency, but sure I am of this—that among the many reasons we have for congratulating ourselves on the accession of the noble Lord to this House there is one new one after last night, which is that under no circumstances can he ever be Chancellor of the Exchequer.
There is one extraordinary delusion which seems to underlie the arguments of the supporters of the Budget. It is that capital is a luxury and nothing but a luxury. You spend it on motor cars or "anything," I think one speaker said; I do not know what "anything" meant. They do not seem to understand that it is a base of prime necessity of this country either for peace or for war. The noble Earl, Lord Russell, gave us a poetical description of the Temple of Mammon, by which name he designated the City of 949 London; and I think he was a little ungrateful, if I may say so, to the City of London, which formerly gave such unflinching support to Lord John Russell in times of good and times of evil. He said the Temple of Mammon narrowed the mental horizon of those who worshipped in it. If in speaking of the Temple of Mammon he alluded to the fact that up to this time this country has been the great mart for the capital of the world, that it has been an enormous strength to it in peace and a security during war, that it has owed more to capital than to anything except the character and labour of the people—if he had appreciated these facts, I think he would have used expressions somewhat more mild with regard to that apparently noxious element in our national life. When I hear the noble Earl speak about the Temple of Mammon I cannot help thinking of the Temple of Janus, and let me assure the noble Earl that whether the doors of the Temple of Janus be open or shut, capital is equally indispensable to the welfare of this country. On one point I do offer him my humble agreement. I do think that, under the pressure of the great armaments which are eating out the heart of Europe, Europe is hurrying headlong to bankruptcy. I do believe it. I do think that, perhaps not in my time, but in the time of those who are yet young, we shall see bankruptcy produced by the insane competition of armaments winch is now eating out the hearts of the people. But that is only a digression. I come back to the immediate subject of the Amendment of the noble Marquess.
My Lords, I am, as I have amply proved, hostile to the Budget. I cannot, I think, be more hostile to the Budget than I am, but I am not willing to link the fortunes of the Second Chamber with opposition to the Budget. I find no fault with the Resolution of the noble Marquess, if he thought it right to have a Resolution at all, and I do not suppose that he had much choice in the matter. No doubt the impetus of his own forces carried him forward whether he wished it or not, and of course it may be fair to argue, as has been argued, that it is not a Resolution for the rejection of the Bill, but a method for bringing about an appeal to the people for their assent or negative to the Budget. There is nothing I should rejoice at so much as any reference of that kind if there were any constitutional means of obtaining it without mixing it 950 up with other issues foreign to it, and which may greatly impair the directness and validity of the decision. If, for example, you had the Referendum in this country—and I for my part believe that you will never arrive at a final solution of the question of the adjustment of differences between the two Houses without some form of Referendum—I would gladly vote that it should be applied on this occasion.
But you have no referendum when you go to a General Election. General Elections, whatever else their merits may be, are not conducted in a Palace of Truth. Have you any hope—for I confess that my hope is slender—that a distinction between your motion and a motion for indiscriminate rejection will be considered with cool impartiality by the people of this country. My Lords, you know very well that there is a considerable body of public opinion which is extremely hostile to the existence and to the attributes of this House. We must all be aware—and if we are not aware of it then we neither listen to nor read what is said and written—that the hereditary constitution of this House does lend itself to effective, even if it be unjust, satire and criticism when the merits of this House come to be discussed by the electorate. If you had thought it well in the time when it was open—and I hope it will be soon open again—to reform this House, then you would have been able possibly to bear the strain to be put on its vitality now. But I honestly confess—and I think your Lordships will allow me to say that I have been tolerably consistent in urging that reform in and out of season—that I do apprehend the result of an appeal to the country on an unreformed hereditary Second Chamber, mixed up with the promises of the Budget. I doubt whether you are choosing the best battlefield on which to risk the attributes and perhaps the existence of this House.
Let me make one practical suggestion. It is seldom in a debate of this kind that a practical suggestion is made. Is the mention of a practical suggestion languidly cheered by some noble Lord opposite an augury of his opinion that a practical suggestion is so badly needed because of this most impracticable Budget? The noble Marquess is a lord of many legions in this House. He can carry his Resolution by a majority which I do not like to compute, 951 but which will compare favourably with some of the Government majorities in the other House. I believe that the first basis of any reform of your Lordships' House will be some form of delegation such as is practised by the Scottish and Irish Peerage, or else some such reform as that which is indicated in the Report of your Lordships' Committee giving persons of certain qualifications alone the right to vote from among the Peers, and we found that there is an unexpectedly large number of them. Is it too late to ask the majority of this House to adopt in the coming Division some such reform as that, to take only the Peers who have those qualifications, or to delegate the duty to those whom they think well fitted to act as their champions on this occasion? There are some who will swell the majority—and I make the remark without the slightest wish to convey disrespect—who will not count for a great deal when their names are called over, for reasons which I do not think are uncomplimentary to themselves, if they will allow me to say so. Some of us are very young; I wish we all were. Some of us have not, from circumstances or taste, taken any part in public life. Their names will not greatly count in a Division; but if you chose to select 150 Peers from this majority and depute to them the right of voting for your Resolution, then you will produce a list of names quite as weighty in their collective number as any similar list of names that could be collected from the House of Commons, and which would carry a far greater weight with the country when it was reckoned up and estimated than the mere numerical force which you will be able to bring into the Lobby to-morrow night. I do not suppose my suggestion is likely to be adopted, but I do think that a self-denying ordinance would not be a bad thing, and I am as certain as I am of standing here that in the country such a list would have infinitely more weight than 400 or 500 names taken without any selection at all.
My Lords, I think you are playing for too heavy a stake on this occasion. I think that you are risking in your opposition to what I agree with you in thinking is an iniquitous and dangerous measure, the very existence of a Second Chamber. I do not pretend to be very greatly alarmed at the menaces which have been addressed to us on this and on other occasions. The House of Lords has lived on menaces ever 952 since I can recollect, and yet it seems to be in a tolerably thriving condition still. But I ask you to remember this. The menaces which were addressed to this House in old days were addressed by Statesmen who had at heart the balance of the constitutional forces in this country. The menaces addressed to you now come from a wholly different school of opinion, who wish for a single Chamber and who set no value on the controlling and revising forces of a Second Chamber—a school of opinion which, if you like it and do not dread the word, is eminently revolutionary in essence, if not in fact. I ask you to bear in mind that fact when you weigh the consequences of the vote which you are to give to-morrow night. "Hang consequences," said my noble friend Lord Camperdown last night, "let them take care of themselves." That is a noble utterance—a Balaklava utterance. Nothing more intrepid could be said. But the truest courage in these matters weighs the consequences, not to the individual, but to the State, and thinks not once, but twice or thrice before it gives a vote which may involve such enormous constitutional consequences. I have often heard it said by many friends, "What is the use of the House of Lords if it cannot always vote according to its convictions?" My reply to that is that the House of Lords exercises enormous power without always voting on its convictions, and the power that it exercises was never so valuable or so much wanted as now.
The whole system of modern legislation is conducted on a principle now which makes the House of Lords absolutely invaluable to the Constitution of this country. The old idea as to Bills entertained by Mr. Gladstone and Statesmen of his stamp was to mature one or two great measures, not as this Budget has been matured, but in a very different oven, with the greatest care and circumspection, to concentrate their attention and forces upon them, and to send them up to this House in as perfect a condition as possible. Now the one idea is to produce as great an output of Bills as can be possibly produced by the overtasked Departments of the Crown, to get them through the House of Commons with as little discussion and as little inquiry as possible, and to shoot them into this Chamber like rubbish on a dustheap. My Lords, I venture to say that in the immature condition of the 953 legislation of the House of Commons you ought to watch very carefully and reserve very carefully the power that remains with you of revision and correction.
There is a question very near and dear to many of your Lordships as to which you have been able to effect in past times what has been welcomed by a large section of the people of this country. You have been able to resist the establishment of a Parliament in Dublin. I ask you to consider what will happen if you weaken your power of resistance by any unwise policy which you may adopt, or by any rash measures you may adopt, to that particular policy. Mr. Redmond the other day said—and his authority on such a point no one I can question—that the last remaining obstacle to Home Rule, the only remaining barrier to the establishment of Home Rule, is the House of Lords. Are you going to weaken that barrier? Are you going to risk that power of resistance, on a conflict with the House of Commons which will be represented on 10,000 platforms as a conflict with the people? Are you going to weaken that power of resistance by voting for the Resolution of my noble friend?
My Lords, there is one further consideration which I will venture to urge upon you. It is a practical one, and for that reason it has quite as much weight with me as any of those which I have adduced. Remember, that in hanging up or in rejecting the Budget the House of Lords is doing exactly what its enemies wish it to do. Now, I believe that in life it is a pretty safe maxim to ascertain what it is your enemy wishes you to do, and to do something very much unlike it. I confess I have no doubt, when I read the speeches delivered in various parts of the country, speeches unusual and unprecedented in my time as regards speeches by Cabinet Ministers, that they are meant to stir up and incite the House of Lords to do exactly the thing which the House of Lords meditates doing.
I confess that policy does not appeal to me. I should like a less heroic policy, which I think would have answered much better the majority of this House, but which I fear it is too late to ask the House to adopt, although I believe it to be the winning policy for those who are opposed to the Budget. I should have liked to see the 954 House of Lords pass this Finance Bill, not because I have a good opinion of it but because I have such an excessively bad opinion of it. I have such confidence in its demerits, when this Finance Bill is in action, that I should wish it to be judged by its performance after six or eight months of experience, and not by its promise as it will be held out at the polls. I believe that if you chose to allow the Budget Bill to take effect, and when the country had had a sufficient experience of its intolerable inquisitions, its intolerable bureaucracy, and, above all, the enormous loss of employment and capital which it must involve—a loss of employment which, I think, the noble and learned Lord on the Woolsack realised in his speech—and which must add enormously to the hideousness of the problem which the Budget will do nothing to solve—the problem of unemployment in this country: I believe that if you gave the country an experience of the Budget in operation you would achieve a victory when you next approach the polls which would surprise yourselves and would give you the power of revising the finance of this country by methods more in consonance with your own principles and your own commonsense. We should then have an anti-Socialist Government, a luxury which I cannot say we possess now. We should have a reformed Second Chamber, in the way not merely of purging it to some extent, and arriving at the choicest part of it by delegation and election, but also by renovating it by means of those external elements that must necessarily give strength to a Second Chamber—all that would have been achieved in the best and, in the non-Party sense, the most conservative interests of this United Kingdom. Unfortunately, that is not the line that the House is going to take. I am sorry—with all my heart I am sorry—that I cannot give a vote against the Budget on this occasion. My interest in this matter is mainly that of the Second Chamber, and I cannot stake all my hopes of its future utility and reform on the precarious and tumultuous chances, involved as they will be with many other irrelevant and scarcely honest issues—the tumultuous hazards of a General Election.
LORD ST. DAVID'S OF ROCH CASTLE
My Lords, I do not know whether the speech of the noble Earl who has just sat down has had the effect upon noble Lords opposite of cold water being thrown down 955 their backs, or not. Noble Lords opposite made complaint on the first night of this debate that the Lord Chancellor in the advice which he gave your Lordships had been guilty of something in the way of threats. That was how noble Lords opposite were pleased to interpret his words; but it has been said by the noble Earl who has just sat down, speaking not by way of threat, but by way of kindness, that the composition of your Lordships' House is open to criticism. He said that if it had been reformed it might have stood the strain of the present constitutional issue. Then he told your Lordships that you had not chosen the best battlefield; and he went on to tell you very politely that though there are a great number of Peers who are going to vote in favour of the Motion and against the Budget, and although I thought at one time that he was going to congratulate your Lordships that you were going to get as large a majority here as the Government got in the other House, he then went on to say that as a matter of fact, a great number of those Peers did not count, and that the noble Lords ought to strengthen their position by choosing 150 of their number to represent them. Well, my Lords, I think that was very unkind of the noble Earl. Then he went on to say that your Lordships were risking too heavy a stake, that you were risking the very existence of the Second Chamber, and that your Lordships' House wanted to be overhauled and reconstructed. It sounded like a spring cleaning.
But, my Lords, what reasons does the noble Earl give for his hostility to the Budget? He says that the Budget is very dangerous; that it is very crude; and that it is very vindictive. I should like to remind the House that this Budget has been under discussion in the House of Commons for six months. It has been under discussion longer than any Bill I can recollect in my lifetime, and I was for a great many years in the House of Commons. The noble Earl, however, said that the Bill was very crude and very vindictive, but what did he give as an illustration of its crudeness? He said that the Chancellor of the Exchequer himself on the Report Stage brought up 250 Amendments. The noble Earl never was in the House of Commons, for if he had been, he would have known what that meant. When a big Bill is under discussion in Committee, all sorts of people, mostly the Opposition, 956 move Amendments and the Government accept those Amendments in principle, although as a rule they are not well drafted and will not fit into the Bill as it stands; and so the Minister in charge of the Bill says that he will re-draft it, himself incorporating their Amendments as his own and bringing them up on Report Stage. That is what happened with regard to this Bill, and so far from the Amendments being a sign of crudeness and rawness, they were very largely Amendments moved by members I of the Opposition and incorporated by the Chancellor of the Exchequer as his own Amendments, in order to meet the views of the Opposition.
The noble Earl went on to say that this Budget has already done incalculable damage. He said that commercial enterprise was stopped, and that there was a great loss of credit, all due to the Budget. I should admit at once that there are people in this country who are afraid of the Budget. Can you wonder at it? [Cries of "No."] No! Because most of you have not read the Budget. But can you wonder at it when you read a speech like that of the noble Earl. He is not one of the irresponsible Members who ought not to be allowed to vote in this House; yet here is a noble Earl who holds a high voice in the country, who has been the highest servant of the Crown, making the statements that he has made in this House What does he do to encourage confidence and to encourage credit? He says millions have gone abroad, that the foreign millions are gone, and that the home millions are going. Everything has gone abroad, and he says that ships to North America are leaving our shores ballasted with bonds and stocks and shares as cargo. My Lords, that is what is said by an ex-Prime Minister of England! People will read that statement to-morrow, and although we know very well that the noble Earl is merely jesting, there are thousands of people in the country who do not know who will read that statement in the newspapers to-morrow morning, and who do not know that he is only jesting. We are all aware that the noble Earl is very fond of coming to your Lordships' House and making speeches on all sides, but after all what is play to the noble Earl may mean death to other people. There are many people who may read what the noble Earl says and who may get frightened and sell out their stocks at a loss. Many people who 957 read that sort of thing will lose by it, and of all the Party opposite, there is not a single member of this House who will be more responsible for it than the noble Earl himself.
The noble Earl who has just sat down talked of unemployment. He said that the Budget was going to cause great unemployment, and that if noble Lords would only let it pass, it would cause so much more unemployment that some day or other noble Lords would get a majority in the other House of their own way of thinking. Why cannot the noble Earl give us some statistics for that statement? There has been a good deal of talk of unemployment in this House, but after all these are the statistics. Last September, in the great staple trades of this country as returned by the Trade Unions, the amount of unemployment was 7.4. We all know when winter comes on that unemployment is apt to increase in this country, but this year it did not. In October unemployment went down from 7.4 to 7.1. If you compare the state of things before the Budget with the state of things after the Budget, it works out thus: In October this year, after the Budget, the figure for unemployment was 7.1, whereas in October last year before the Budget it was 9.5. Let that be a little check on some noble Lords who have no personal experience in the matter, and who having no personal experience might at least be content to go to the official statistics.
Now, my Lords, I want to say a few words on the subject of capital going abroad, because that is a subject with which I have some personal practical acquaintance. There has been a great deal of talk of capital leaving the country. The noble Lord opposite, Lord Revelstoke, spoke of that the other night in his speech here. I am sorry I was unavoidably prevented from being here to listen to it. However, I read it carefully in the paper from end to end, and the noble Lord, to take his last point first—and I was very much struck with one remark that he made—said that all sorts of people came to him in the City and asked him his financial opinion as to what to buy, and that they always said to him "We do not want your opinion of anything at home; we want something good to buy abroad." Why do they, my Lords? The reason is perfectly obvious. I have no doubt that the noble Lord has 958 great general knowledge of all investments both at home and abroad. On many things he is a great specialist; he is a great specialist of Foreign Government and Foreign Municipal Bonds, and if I had the happiness of being in the position of having to ask the advice of the noble Lord myself, I should not go to him to ask his opinion with regard to home affairs, of which he only knows as much as other people. I should ask him his opinion with regard to good foreign investments, in which he is a specialist. Naturally, people who are seeking advice go to the man who is best able to give them advice on a particular subject. The noble Lord was careful to distinguish between the words "Capital drawn abroad" and "Capital driven abroad," and he was right to make that distinction. But if he says, of his own knowledge, that capital has been frightened abroad because of the Budget, I should, of course, accept his statement; but it is, I think, quite possible that if his statement is made generally—when we know that people in the responsible position of an ex-Prime Minister of England have been talking nonsense about bonds being shipped from these shores as ballast—I do not wonder that there are many people who attach importance to these statements and naturally are frightened. And I venture to say to your Lordships, that if these statements had not been made, after three months experience of the administration of the Budget any bonds that had been shipped away from this country by way of ballast would be shipped back again within three months. Now, I venture to ask your Lordships what is the difference between capital drawn abroad and capital driven abroad?
LORD ST. DAVID'S OF ROCH CASTLE
I accept the correction. Capital attracted abroad, as I say, will no doubt come back again. But I want to go into this question of capital being driven abroad, because a good many people have been talking about capital invested abroad as if it was a terrible national disaster. There was a very interesting article—I do not want to inflict it upon your Lordships now—published a month or two ago in the Journal of the Statistical Society. It was a paper read by Mr. Paish, and there was a long discussion upon it. There was one thing on which all the speakers were agreed, which was, that every period of 959 a great export of national capital had been followed by a period of good trade. The statistics they worked out, I should imagine, were very difficult to arrive at; but they agreed that the figures were authoritative and more or less accurate. They said that in the seven years 1884 to 1890 British capital invested abroad—the noble Lord, I have no doubt, will call that attracted abroad—amounted to the sum of 400 millions, and that that was followed by a period of good trade. Then there were seven years in which very little capital went abroad—those seven years included the South African war, when there was great national extravagance in this country, and when money that might have been allowed to accumulate for investment was fired away in powder and shot—not a very profitable way of investing money as a rule. In those years only 100 millions were invested abroad. Then from the year 1904—your Lordships will particularly note the year 1904, because the Tory Government were in office in that year—capital had been saved up again, and there was capital to go abroad—in the four and a-half years since 1904 we have actually invested abroad 400 millions, and a good deal of it has been invested abroad during the time the Conservative Government were in office. Has the loss of that capital injured this country? Is it a thing to deplore, or is it a thing to rejoice at?
I noticed the other day that the Prime Minister in a speech he made said that capital being invested abroad was a fine thing for the trade of this country. When you talk, as the noble Lord opposite did, of capital being driven abroad and attracted abroad—I put this to your Lordships as business men—what does it matter whether it goes abroad because it is attracted or because it is driven as long as you have ample capital left in this country. I believe one of the greatest authorities in the world on capital going abroad, Lord Rothschild, will speak to-night, and I must say I am looking forward very much to hearing what he has to say on that point. I do not see him in the House at present, but I should like to hear his answer to this question whether there is any scarcity of capital in this country for any sound and decently remunerative investment? My Lords, I shall be surprised to hear that question answered in the affirmative, for my own experience is distinctly the reverse, although I would not for one moment attempt to set up my experience on such a point against 960 the experience of two of the greatest authorities in the world. I would, however, ask them this question: will they get up and say, of their own experience, that they do know to-day of thoroughly sound concerns in Great Britain where large sums of money might be invested with advantage for security's sake at a decent rate of interest; are they aware of any sound concern in this country that is wanting capital and cannot get it? I can only say that no such cases have come my way, and I believe that for any sound concern showing a chance of profit, that capital would be found for it at home and found a great deal easier than money for investment abroad. With regard to the investment of capital in this country, people sometimes talk as if there was no limit to the scope or to the amount of money that can be invested in this country and invested to advantage; but, my Lords, you must consider the difference between old countries and new countries. Our land here is not a pampas with a few people scattered about it and none of the amenities of civilisation. We have got here in existence already practically all the great undertakings for which capital can be used with advantage. What do you want capital for? You want capital for the construction of railways, tramways, waterworks, electric light undertakings, docks and harbours and great industrial works of that sort. My Lords, this country has got all those. It is supplied with them in every place where there is population enough to make them pay, and it is supplied with them very often in places which are too small for them to pay. In other words this country has got the great bulk of the capital it needs employed in order that the existing inhabitants of the country may make their living.
How can you use fresh capital in this country to advantage? I hope your Lordships will bear with me because this is a point which has been dealt with very frequently in the course of the debate. Fresh capital can only be used to advantage, first of all, when there is a great increase of population; and, secondly, when you get some new want invented. The population of this country increases at the rate of about 300,000 a year. Of course, if you were to take an agricultural field and to plant those 300,000 people down upon it you might be able to reckon after a short time what amount of capital they would require for their needs. They would want a bit of railway; they would want tramways; 961 they would want industries; and capital would be requited to establish shops and stores and factories of all kinds. I do not know how much they would want—it might be as much as £20,000,000 or £30,000,000—but that is not the way in which the people of this country require their large amounts of capital. The population of a country does not increase all in one place. There may be an increase of 1,000 in one of the bigger cities, 500 in another, and 100 in some little town somewhere else. The increment of the population is spread about, all over the country and the capital is subscribed little by little and mainly by private people. I saw a speech of Mr. George Wyndham's on this subject some time ago in which he gave something which he called statistics. No one, I think, has been able to find out where he got them, but he worked out that, over a certain period, out of £16,000,000 invested in Great Britain only £2,000,000 were invested in industrial concerns. My Lords, I do think we ought to be a little, shy of statistics by Mr. George Wyndham when we remember that we have recently been bothered in this House for some time by the Irish Land Bill owing to the fact that Mr. George Wyndham cannot do a sum. Every figure he had in his Bill was wrong.
When your Lordships remember that the increase of the population is spread about over a very wide field you must agree that the capital required for that increased population is spread about over a very wide field also. If a town, for example, increases by 1,000 people it simply means that the shopkeepers in the place—the boot-makers, the tailors, the grocers, and so on—have all added a new wing to their shops and extended their business and that the necessary capital for that purpose has come in from small private people all over the country. Therefore, my Lords, it is absolutely impossible for anybody living to arrive at any true conclusion as to the amount of capital invested at home by taking the lists of the public issues that come out in the newspapers week by week, because in the case of a foreign concern that wants capital investors in Great Britain know nothing about it and the concern can only get its money by advertising largely and explaining what it is; whereas, if it is a small local concern it can get its money locally from the people who live near by and know all about it. My Lords, there are two ways in which openings are 962 made for the investment of capital at home: one is the increase of population and the other is the starting of a new industry, and there is little doubt that new industries will be started. Some years ago there was the great bicycle industry. That found money readily enough; a great deal too readily for some shareholders. Then more recently there has been the great motor industry. Money was found readily enough for that. Those industries show, as I put it to your Lordships just now, that any concern that offers reasonable prospects of a profitable return in Great Britain can get all the money it requires, and unfortunately because people are so anxious to invest their money in this country rather than abroad a great many concerns get money to the misfortune of the public. It shows that while British investors may through their agents search the world for investments they will never neglect any opportunity of a remunerative chance of investment at their own doors.
I want to come now to the investment of money abroad, because we have been told about money being driven abroad and attracted abroad as if that were a misfortune to the country. The money that goes abroad is invested practically in two great directions: in industrial concerns, things like railways and tramways, and also in Government and municipal loans. I can speak myself with regard to industrial concerns abroad and I should very much like if the noble Lord opposite, Lord Rothschild, who is going to speak later, would tell us whether, in his opinion, the money that is lent to foreign Governments and foreign municipalities ruin or increase British trade. His opinion would be immensely interesting on that point, both to your Lordships' House and to the people of the country. I have not enough experience to speak on it myself, and I should like to hear one of the great authorities on it, but I should think that the noble Lord would probably be able to show you that in the case of foreign loans issued in this country, trade followed the loan. If your Lordships will allow me, I should like to give you some facts as to some foreign investments which I have before me and which I have been able absolutely to check myself. When we hear of this country being ruined by capital going abroad, I may say that I asked the secretary of a railway company with which I am connected to take a good large sum of money, 963 a sum large enough to be able to strike an average with regard to, because if he had only taken a million pounds it might have been said that that would not show a very good average. He therefore took a sum of twelve million pounds which had been sent abroad for railways in South America and worked out what had actually happened to it. Roughly, it came to this; and this is what the noble Lord calls money being drawn abroad, and what the noble Earl on the Cross Benches would call the ruin of the country. Thirty-three percent, of it, or four million pounds, went abroad, not in the shape of money but in the shape of materials—rails, rolling-stock, engines, wagons and so on—every shilling of it being the produce of British labour. Four per cent. of it went in foreign materials. I have not been able to check that exactly, but if I had been able to do so I have no doubt that I should find cases where those foreign materials were not bought from any wish to deal with foreigners, or because the foreigners sold a better article or a cheaper article, but because at the time the English manufacturers were so full of work that we could not buy an engine from them or a wagon sometimes for less than eighteen months ahead.
The noble Marquess said the other day that he was in favour of a tariff on foreign articles. Cheapness is not everything. A five per cent. or a ten per cent. increase on goods is not much. But what will happen here? Suppose you have Tariff Reform and put up the price of materials by, say, five per cent. What are we to do? The markets of the world are open to us. We shall have to go abroad and buy a great deal of that which is now bought at home. And we shall have to do that for two reasons; first, because our shareholders will want the concern to pay, and second, a stronger reason still, because the Government of the country where the railways are situated, if they found you buying things dearly in England when we could buy them cheap in other countries, would be down on us and say "If you can afford to fritter our money away in that manner you must reduce your rates." What becomes of the rest of the money? Directly or indirectly, probably indirectly, it has gone abroad in cash. Does that do no good to this country. First of all, the investors do not do badly, for, as a whole, these foreign railways, especially in South 964 American countries, have been a good field for British investors. But there are many other advantages. They employ people here. First, there is the staff of people in the offices, a large staff of people who are very fairly paid. Then you have openings for a great many Englishmen in these other countries. Nearly all the heads of the departments in these foreign concerns are Englishmen, many of them receiving salaries higher, I believe, than some Cabinet Ministers. They are always remitting money home, and wherever they live these men are practically agents for the recommendation of British goods abroad. The last advantage which the investment of this money abroad gives is a great one. All these concerns practically want renewing from time to time. Certainly a railway, every year, to carry on its work and its running, must buy rails and sleepers and engines and wagons and carriages, and all the rest of it, and where do they come to for these things? To this country, and they employ labour here. That money you are sending abroad which the noble Earl considers is a disaster, and which other people think is a thing to deplore—that money is what keeps your miners employed in South Wales, it keeps your steel-workers busy, and your engine and wagon builders employed. All those men are kept employed mainly, if not entirely, by this great investment of British capital abroad. Therefore, I think the Prime Minister was more than justified when he said that these great investments abroad were not things to be deplored, but were really the great cause of the building up of British trade in this country.
Before I sit down there is just a word or two I should like to say on another subject. The noble Marquess who began the discussion this evening said that the rejection of this Bill is really a democratic proceeding; it is an appeal to the masses of the people by "whose judgment we will abide." I do not know what the result of this election is going to be, and I am the last person to attempt to prophesy; but it would be interesting, suppose there was a Government majority returned as a result of the election, to hear the noble Marquess speaking in this House on the result of that appeal to the people "by whose opinions and whose judgment he will abide." But he left himself a loophole. It is to be "their considered opinion "that he means to abide by. What does 965 he mean by "their considered opinion?" I suppose he meant if they returned a judgment in favour of this House, that he would accept that as "their considered opinion"; but if they returned a judgment the other way, then that, would not be "their considered opinion," and they must be sent back to think it over for another year. But, at any rate, he said it is a democratic proposal.
It has been argued in this House that the rejection of this Budget is just like the rejection of any other Bill; that you can send it to the country; but there is this difference between sending the Budget and any other Bill to the country. You may veto a Licensing Bill; you may veto an Education Bill or any other Bill, but you do not cause a General Election. When you reject a Budget there must be a General Election. I noticed that the Lord Chancellor corrected himself in his speech the other night. He said there must be a General Election, "at least, if the Crown so decides." But you, my Lords, are well aware that the Government of the country cannot be carried on without money. These 160 millions have to be found by somebody, and if you reject the Budget the Crown must decide upon a General Election. I do not want to speak about the constitutional aspect of the question; but what has been up till now the constitutional practice about dissolutions? Dissolutions of the House of Commons have come for two reasons; by the operation of the Septennial Act, or they have come as an act of the Crown. You may gloss over it as you may, slur it over as you will; there is no doubt whatever that if this House rejects this Bill, and the people approve of its action, you have got, from this time on, the right to dissolve Parliament once a year if you like. Once a year you can reject the Budget and send the members of the House of Commons to the country. In other words, you have taken into your hands the prerogative of the Crown.
Another thing I observe that noble Lords argue. They say they do not want to choose the taxation of this country; because that is the business of the House of Commons. All they want to do it to veto unjust legislation. The noble Earl on the Cross Benches twice during his speech pointed out that different people could not bring in Budgets. He deplored the fact 966 that Earl Russell should never have an opportunity of bringing in a Budget, but he congratulated himself that the noble Lord the Secretary for Scotland could never bring in a Budget. Why could they not? If the rejection of this Budget is carried and approved of by the country, why should any House of Commons waste its time and its health for six months down below there, drawing up Budgets? It is much more simple that the action should take place where the power is. You say you only want to veto the Budget. It is just as if a doctor said to you when you were ill, "I won't choose your food for you. You shall eat what you like; but I will veto some things. You shall not eat flesh, or fowl, or fruit, and various other things." But by this power of veto he could soon get you down to thin soup and water gruel. Would it be exactly the same thing after this, if the country approves this proposed action on the part of your Lordships? Every House of Commons and every Chancellor of the Exchequer will have to get money. They will only waste their time after this in bringing in any legislation you do not like about Budgets. They will know you do not like taxes on liquor. They will know you do not like taxes on land. They will only bring up something they know you will pass. They will tax everybody except the publicans. They will tax everybody except the landlords. And they will be quite right, because the power will be in this House, and the thing will be settled on those Benches opposite. If you are successful in this proposal, you are taking to yourselves the power of taxation. The noble Earl has given you a warning to which I think you would be wise to listen. I do not think anybody on this side of the House or any friend on that side, or any adviser outside will give you such faithful counsel as the noble Earl on the Cross Benches. He more than hinted to you—in fact, he told you that you were taking into your hands a job that is too big for you. I do not know whether you will take that warning, and I do not intend to prophesy; but by this proposal of yours to-night, you are taking two things into your hands. With one hand you are grasping at one of the chief prerogatives of the Crown and with the other you are striking down the chief privilege of the people.
§ VISCOUNT MILNER
My Lords, the noble Lord who has just sat down has 967 addressed us with his usual ability and force, but he has also addressed us with, perhaps, rather more than his usual scorn for those who, like myself, are unfortunate enough to be unable to accept either his facts or his conclusions. I thought he was rather unjust in some of his criticisms of the speech of the noble Lord, Lord Revelstoke, but perhaps he ought not to be blamed for that, as he has told us he did not hear that speech. If he had had the good fortune to hear one of the most eloquent speeches delivered in this House for a long time, he might have understood it. As it is, he has addressed a long and eloquent argument to this House to prove what, I will not say no great financial authority, but no quite ordinary man like myself, has ever disputed, and what my noble friend in his speech most emphatically called attention to. He has addressed a long and eloquent argument to us to convince us that it is to the advantage of this country to invest capital abroad. Well, who has ever denied it? That was the point which was brought out perfectly clearly by the noble Lord. It is an advantage to us to invest capital abroad—as long as it is not more wanted in this country. The noble Lord has assured us that in his experience there is no such thing at the present time as a profitable British enterprise which has any difficulty in finding capital. I can only say he is extraordinarily fortunate in his experience. Even in my own very limited experience of such matters I have been brought face to face, not with one or two, but with quite a number of cases in recent times in which money was not forthcoming for enterprises in this country where, at ordinary times, I believe it would have been forthcoming.
The noble Lord tells us—and he is, no doubt, quite right in telling us—that we must not judge the total investment of capital in this country merely from the figures of the new issues. He says a great deal of capital is quietly invested, not through the stock market, but by private individuals in private ways. Perfectly true, but it is reasonable to suppose that there is a certain proportion between the capital invested publicly through the stock markets and that privately invested—that there is a certain permanent relation between the two; and if, as a matter of fact, we find that the amount of public issues undergoes a great and astonishing and unaccountable reduction, it is a legitimate 968 inference that there is a reduction going on all round in the amount of capital invested. The noble Lord was very merry at the expense of Mr. Wyndham for producing some statistics, for which he said he did not know what possible authority Mr. Wyndham could have. Well, Mr. Wyndham has the reasonably good authority of the Bankers' Magazine. His figure of sixteen millions, with which the noble Lord was not acquainted, is the figure of the English investments—that is, of the public issues during the first nine months of the present year—and I have given reasons, I think, why we may regard those public issues as a fair indication of the general trend of investment.
I should like to call particular attention once more to these figures, because they are very interesting. There has been a gradual tendency to decline for a considerable number of years in the proportion of our public investments in this country as compared with public investments abroad. By public investments I mean investments made through the stock market and not privately; I do not mean investments in the loans of public bodies. I observe that during the years 1904, 1905, 1906, 1907, and 1908 the proportion of British investments in this country to the total was respectively forty per cent., thirty-one per cent.—that was in 1905—now we come to the period of the present Government—thirty per cent., twenty-five per cent., and twenty-six per cent; after that we come to this year, with the present Budget, ten per cent. I think we may leave this point as it has been put by the noble Lord who sits behind me, and whose argument remains unshaken in any single particular by the speech to which we have just listened.
The subject which we have been discussing for three nights is one so vast, the measure before us is one so comprehensive—so many Bills rolled into one—and the ulterior issues which depend upon your decision are so grave, that it is impossible for any speaker to deal with more than a very small portion of the case. If I do not refer to-night to many of those arguments of a broad economic and political order which have been adduced in support of the Amendment of the noble Marquess, it is not because I do not agree with them, but I think I should be more considerate for the time of the House if I were to confine 969 myself to one or two points of which I have special experience.
There is one aspect of this measure which has a certain fascination for me, a fascination which most of your Lordships cannot be expected to feel. I am an old tax-gatherer, and in that capacity I feel a sort of professional interest in so huge an engine of taxation. It is fifteen years since I was called upon, in my then capacity of Chairman of the Board of Inland Revenue, to assist the Chancellor of the Exchequer in the framing of what was considered at the time a very large financial measure—I mean what has been known as the Death Duty Budget of Sir William Harcourt. That Budget had been under consideration for more than a year. It was the principal Government measure of the session; it took months to pass it, and it strained to the uttermost the capacities of the leading officials of my then Department. It also greatly taxed the time and energy of the Government draftsmen of that day, Sir Henry Jenkins—a man of very great ability, for whose memory I have the deepest respect—as well as of the Law Officers of the Crown. Yet, compared with the Finance Bill of the present year, it might be called almost a trivial measure. I remember it was severely criticised at the time for its alleged complexity and unintelligibility. I am afraid that Finance Hills always do appear complex and unintelligible to the layman. But I will venture to say that, whether those criticisms were justified or not, it was a model of simplicity, intelligibility, and coherence as compared with the measure by which we are at present confronted.
To say that is not to disparage in any way the ability of the present Chancellor of the Exchequer, or of those who have assisted him. I think that ability is manifestly very great. But he has attempted a task which really it was impossible to perform, or at any rate to perform properly in a single year. It was a simple impossibility efficiently to bring about the enactment of all these new and complicated taxes. It may be said that for the immense size and unwieldiness of the present Budget the Chancellor of the Exchequer himself is not to blame; that the multiplicity and severity of these new imposts is simply the necessary result of the great deficit for the year. I think that contention will not hold water for one 970 moment. Sums as large, or very nearly as large, as those raised by taxation in this Budget have been raised within quite recent times in the course of a single year by financial measures less complex, less controversial, and infinitely less meddlesome and harrassing than those contained in the Bill now before us. The difficulties of the Chancellor of the Exchequer were undoubtedly great, but he has gone out of his way to increase them. Is it not an unheard-of thing that a Government which finds itself confronted with the necessity of putting a burden of thirteen or fourteen millions upon the taxpayer in a single year should choose that occasion of all others to introduce a whole bevy of new taxes, not required, and not even available, for the services of the particular year for which it is already bound to provide these huge sums?
I may be told that it is necessary to look ahead, and that every Chancellor of the Exchequer has to think a little beyond the present year. Well, I admit that: But if it is necessary to look ahead, what was the justification for throwing away between three and four millions of revenue last year at the very moment when you were committing the country to an additional expenditure of eight millions a year for ever? We hear a great deal in this debate of constitutional precedent. I wonder what is the constitutional precedent for the manner in which the Government have dealt with the business of granting annually aids and supplies to His Majesty. Last year they committed the country to a vast new expenditure for which they refused to provide, while at the same time giving up a very useful source of revenue. This year they are piling up superfluous taxation in order to meet problematical future expenditure. They are putting on taxation for objects which not only have not been approved by, but have never even been submitted to, the House of Commons, much less to the country, and which exist only in the most nebulous form even in their own minds. It is these proceedings, so unusual, so abnormal, and fraught with such possibilities of future danger, which have forced us to take a line of action which, though perfectly legitimate, is certainly also unusual, and which, I believe, no man would agree to take without the greatest reluctance and regret, but which is certainly less unconstitutional than the action which has provoked it.
971 The whole immense fabric of the land taxes, costly and complicated and unworkable as I believe those provisions are, are going to give only £50,000 net this year to the Exchequer. Nay, more, two of the most contentious of these taxes—I mean the tax on unearned increment, sound in principle, though as a local and not a national impost—and the Undeveloped Land Duty, which is wholly bad—these two are actually going to cost more during the present year than they will bring in. But these are not the only questionable taxes that are to be imposed upon us which will bring in nothing this year. There is another item which is expected to yield nothing this year, but is to yield £1,370,000 next year, and rather over £2,000,000 in future years. This is the item which is euphemistically described as the "revision"—revision is a good word—of the Legacy and Succession Duties. The revision consists in raising a three per cent. rate to five per cent.; five and six per cent. to ten per cent.; and in sweeping away altogether—I greatly regret this—the exemption enjoyed by lineals and husbands and wives from the payment of the Legacy Duty, they having in the past escaped with the already sufficiently heavy payment of Estate Duty. In my humble judgment this is one of the very worst features of the Death Duty clauses, as the Death Duty clauses are among the worst features of the Budget. I fully admit that it is not this or that tax, but it is the cumulative effect of these repeated onslaughts on capital which is fraught with so much danger to the national prosperity, to enterprise, and to employment.
But I would venture to say a few words on the Death Duty clauses specially, because this is a subject with which I am peculiarly familiar. I am not going to recite particular instances of hardship, although I might give many illustrations; but it is not the personal but the national aspect of this taxation, its effect upon enterprise, its tendency to check enterprise, and diminish employment which are the considerations which cause me solicitude. Do we realise, my Lords, the Rake's Progress in which we have been engaged for the last twenty years in overstraining this particular source of revenue? When Sir William Harcourt introduced the Budget of 1894 the Death Duties stood at a little under £10,000,000. He estimated that he was going to increase them by £4,000,000— 972 from £10,000,000 to £14,000,000. As a matter of fact, owing partly to the fact that he had underestimated the effect of his duties and partly to the fact that these duties have been greatly increased again only two years ago, they now stand at £19,000,000. If the proposals of the present Budget were adopted they would stand a few years hence, if there is no under-calculation again, at £26,500,000. From £10,000 000 to £26,500,000 in less than twenty years is a rather startling advance.
But, my Lords, that is not the whole story. The ominous fact is that the well from which we are drawing so very freely is not one of increasing abundance. If you take the amount of property liable to Estate Duty as shown by the Inland Revenue returns it shows, for the last ten years at any rate, no advance whatsoever. The accumulated wealth of this country, so far as it can be judged from these figures—and I know of none that are more fairly indicative, all statistics being, of course, liable to a certain amount of error and having to be read with a certain amount of judgment—I know nowhere in our published statistics, figures better indicative of the state of the accumulated wealth of the country. But the accumulated wealth as shown in those figures is not remarkably progressive. It is alarmingly stationary. Let any one run his eye over these statistics as he will find them on page 48 of the annual report of the Inland Revenue, and he cannot come to any other conclusion than that there is no tendency shown by those figures either in one direction or the other. The accumulated wealth of the nation seems to be on something like a dead level—a very disquieting fact when we consider, on the one hand, the growth of the population, and on the other the enormous increase during these very years in the total wealth of the world.
My Lords, if this revenue is showing the vast increase to which I have just called attention, it is not because capital is increasing, but it is simply because a larger proportion of it is being absorbed by the State. That is a process which cannot go on without ultimately diminishing capital itself. It is a feature of this age that there is the greatest conflict of opinion on all questions of public finance. There is no principle, however time-honoured, which is advanced by one set of pundits, but you can easily find another set of pundits to 973 contradict it. But there is at least one fiscal principle still unchallenged, one which I will venture to put forward as still undisputed and indisputable, and that is that when any source of revenue ceases to show expansion it is bad policy to increase your demands upon that particular source unless there is absolutely no other source to which you can have recourse. Such a proceeding is clearly suicidal; in common language, it is killing the goose that lays the golden eggs.
Well, now, there is one source of revenue which we have abused so much already that an increase of rate no longer produces a proportionate or anything like a proportionate increase of yield. I refer to the Liquor Duties. It is true that the Government now say that they are very glad that the addition to the liquor duties which they have made is only bringing in half as much as they estimated. Its moral excellence—such is the argument—compensates for its financial absurdity. But even they cannot say that of the over-taxation of capital. Why, even Mr. Keir Hardie and his friends do not object to capital; they only want to abolish the capitalist. The Death Duties are popular in some quarters because they are regarded as means of transferring capital from the individual to the State, but their effect is not to transfer capital as capital, but simply to spend it. The whole question is whether we can afford to spend so much capital. My Lords, the answer to that question lies in a nutshell. May I put it in this way? If these periodic fines on capital, which is what the Death Duties amount to, are so moderate in amount that the sum taken by the State can on the average be replaced between fine and fine by accumulation, then they are a convenient and justifiable method of raising revenue; but if they are so heavy that capital cannot recover between fine and fine, then they are a wasteful and ruinous method of raising it. Now, looking at the figures, as I have looked at them over and over again, I can only say that it is evident to me, speaking as a financier and statistician—if I have the slightest claim to respect in either of those characters—that we have reached the utmost limit in this particular line of taxation which is compatible with not causing a diminution in the object taxed. If that is so, then the enormous additional burden now contemplated, twice, or very nearly twice, as great as that made by Sir William Harcourt in 974 1894, is bound to push us over the line on to the slope which leads down to national impoverishment.
There is another weighty argument against the increase of these particular duties. I have not time to go into it at length, but I will try to indicate it in a sentence or two. At the time when these duties were increased by Sir William Harcourt, there was no differentiation in the Income Tax between earned incomes and incomes derived from property. But if just, it is both equitable and financially sound, that incomes derived from property should contribute to the national expenditure at a somewhat higher rate than earned incomes. The effect of the Death Duties, which may be regarded as equivalent to an Income Tax on incomes derived from property, was to establish that differentiation. But since then we have differentiated on the Income Tax itself. Therefore you now have this differentiation twice over. I think there was a strong case when differentiation was introduced into the Income Tax for revising the Death Duties, not in that sense of revision of which I have given your Lordships an instance to-night, but in the opposite direction. But there certainly is a very strong case indeed against the present proposal to move in the opposite direction of greatly increasing them. I think that proposal is as indefensible in equity as it is unsound in finance.
I have dwelt so long on one particular point that I cannot go through the series of these new taxes. They are all bad. But they are not all equally bad, or rather, they are not all bad for the same reason. Some, like the additional Income Tax, are not bad in themselves, but I should like to have seen them kept in reserve for great, unforeseeable emergencies. I must say I look with some alarm on the tendency to exhaust these invaluable reserves in absolutely normal times. But the worst of it is that all these bad taxes are quite unnecessary. It would have been perfectly possible, in my opinion, to raise the whole of the £13,000,000, which are being raised by taxation, by import duties. Yes, not only without injury to business and employment, but with actual benefit to both. I know that the possibility of doing this is called in question, though it is astonishing to me that those who call it in question never seem to take the trouble of actually investigating what is done in this direction in foreign countries. For my 975 part, I am unaffected by these ex parte arguments, and I am prepared, at the proper time and place, to deal with them in detail. All I will say to your Lordships to-night is that I should very much like to try, and I hold that, before the country is committed to a wrong road in this matter of vital importance, it should at least have the opportunity of deciding whether it would not prefer to take the right one. I should like this House to be instrumental in giving it that opportunity.
As for the contention that in doing so we shall be transcending our powers, and that because, if we suspend this particular Finance Bill, therefore we should make it a practice of treating similarly all such Bills in future with which we do not happen to agree, it seems to me a patent absurdity. We have always had this right. We have never exercised it. But we have always distinctly reserved to ourselves the right to exercise it. That right has been admitted over and over again even by Liberal Statesmen, precisely because they recognised that there might be once in many years a Budget of such an exceptional and extraordinary character that this House could not be expected not to demur to it. That exceptional occasion has now arisen. How exceptional it is is constantly and vehemently pressed upon us by the author of this Budget himself. He never ceases to proclaim that it is not the immediate financial problem which he is so much concerned about as the social revolution which he is initiating. If his words mean anything, we must regard him as otherwise than a friend to the institution of the private ownership of land. There are those behind him who avowedly are enemies to the private ownership of anything. If we wish to maintain that principle of private ownership, if we believe that the country is not prepared for the threatened gigantic change, we cannot shrink from the conflict which is now forced upon us.
I would say a very few words in conclusion with regard to the confusion and the loss of revenue which it is alleged will arise from the contemplated action on the part of this House. The noble Marquess who moved the Amendment said that my noble friend, Lord Welby, had not made his flesh creep by his gloomy prognostications on this subject. Well, I am not surprised at that. Lord Welby is a master of finance, none better, but even all his 976 ability could make nothing of so poor a case. It seems to be forgotten that all these terrible consequences which are to arise if the Budget does not succeed in passing this House would equally have arisen if it had failed to pass the House of Commons, as other Budgets, even within our own time, have failed to pass that House. Is it therefore contended that the House of Commons has no right to reject a Budget after it has once accepted the Resolutions upon which it was founded? What is the extent of the possible mischief? It is said that the Income Tax and the Tea Duty could not be collected. Yes, that is perfectly true. There might be a short interval during which they could not be collected, or could not be legally collected. But everybody knows that whatever Government is in power they would be legalised before the end of the financial year. During the interval between the dissolution of one Parliament and the assembling of another nobody could be compelled to pay, but why anybody should want not to pay when it is perfectly certain he will be compelled to pay before the end of the financial year, I for one cannot for the life of me imagine.
§ VISCOUNT MILNER
I will deal with that point. It may be that there will be an attempt to clear a large quantity of tea—I think that is what the noble Lord is referring to—in the interval between the dissolution of one Parliament and the passing of the Resolutions by another. As a matter of fact, I believe that there would be considerable practical difficulties standing in the way of the dealers over that clearance. The practice, I understand, is for the shippers and the proprietors of gardens to warehouse the tea free on its arrival in this country. The dealers who buy it from them pay, in the first instance, only a deposit. They then leave the tea in the warehouses until they want it, drawing it out in comparatively small quantities as required. When they draw it out they have to pay the balance of the sum due by them for the tea. It would be highly inconvenient for the dealers to draw out a great deal more than they could quickly sell, because they would have to put up the money which they could only slowly recover from their customers, and at the same time they would be embarrassed in finding storehouse room other than that 977 to which they are accustomed. I do not mean to say that even these considerations would prevent them from attempting it if they saw a chance of escaping the duty altogether; but inasmuch as a record can be kept, indeed must legally be kept, of all the tea as it goes out, I do not see how they could hope to escape altogether when the tax was subsequently legalised, and, therefore, I do not believe they would be tempted to face these inconveniences.
But it may be said, How about the additional duties on spirits, on tobacco, and so forth? If this measure or a similar one ultimately becomes law, those duties will have to be paid; and if it does not become law they will no longer have to be paid, as we contend that they ought not to be. But the amount of these duties from now to the end of the financial year will in any case not be very considerable. It may be asked, what of the additional duties already paid, if they are not finally confirmed by Act of Parliament? I see no reason why they should be repaid. The importers have already transferred the burden to the consumers, and if the duties were repaid, they would not be repaid to the people who had borne the burden; it would be simply putting money into the pockets of the importers. As a matter of fact there is a good precedent for not repaying them. In 1902, when the coin duty was imposed, the, duty on maize was 5d. in the Resolution, but in the Bill it was reduced to 2½d. Nevertheless, the difference was only repaid in those cases in which it could be shown that the person paying the duty had not already recovered it from some party to whom he had transferred the maize. That seems to me a perfectly just proceeding which forms a precedent for the present case. I am not arguing that there would not be a certain amount of inconvenience, that there might not be a slight leakage of revenue. But I do say that any such inconvenience and loss will be comparatively so trivial that it cannot be weighed in the balance for one moment against the high political and financial considerations which have been adduced in this House, in support of the Amendment of the noble Marquess.
In the impressive speech to which we listened to-night the noble Earl on the Cross Benches, Lord Rosebery, while condemning the Budget in terms even more severe than I should venture to employ, nevertheless 978 urged and almost implored your Lordships not to take a course that might be fatal because of the misconstruction to which you would be exposed and the danger which such a course would involve to your Lordships' House. I am sure of those misconstructions. I recognise the danger. But, though I hardly venture to oppose my authority or lack of authority, to a Statesman whose opinion justly carries such weight with your Lordships as does that of the noble Earl, I must say that I think that the course which he recommended would be deadly to the reputation of this House in the country. If we believe, as he believes and as I believe, that this Budget if passed would indict injury of the most serious kind upon the gravest national interests, then I cannot justify to myself the course of passing it. Nor do I believe that the people of this country would think better of a body of men who, holding these convictions, did pass this Budget. To my mind the position is a very simple one. If the Budget is not an abnormally bad one, I think we ought to pass it, as we have in silence passed some pretty bad Budgets in previous years. But if in our opinion it really is abnormally bad, if it is a measure having the most far-reaching consequences of a disastrous kind, how can we allow the country to suffer those disasters which we clearly foresee? With a perfect sense of the gravity of the position, with a deep feeling of the responsibility which rests on every individual member of this House in the present crisis, but with a clear conscience and a great faith that our action and the motives which have prompted it will be justly and fairly judged by our fellow-countrymen, I shall give my vote in support of the Amendment of the noble Marquess.
§ [The sitting was suspended at eight o'clock, and resumed at nine o'clock.]
Before your Lordships adjourned you enjoyed listening to the noble Viscount whose experience in many positions of great responsibility and in connection with affairs of State give his utterances a very particular importance. But I doubt very much whether on any previous occasion he has had a task so interesting as the one which he performed with so much ability to-night. It is due to him that the curtain has been lifted, and that we are made aware of the influences behind the noble 979 Marquess who leads the Opposition, which undoubtedly have been sufficiently potent to induce him to take the very remarkable and unprecedented action which he proposes to this House in order, I will not say to refuse the Second Reading of the Finance Bill, but to postpone, at all events, its full consideration by the House until the judgment of the country has been obtained upon it.
The noble Viscount, Lord Milner, in the course of his interesting speech, made the remarkable avowal that it was, from his point of view, hardly necessary to consider in great detail the different proposals for taxation which are contained in the Finance Bill. We were not unprepared for this attitude on the part of the noble Viscount. I have in my possession an extract from a recent speech of the noble Viscount in which he said that from his point of view, the worst feature of all about the Budget was that it was intended to side-track Tariff Reform; that it was a bad solution of the financial difficulty, expressly designed to preclude the adoption of a good solution. After such a declaration as that, we could hardly expect from the noble Viscount an unprejudiced examination of the contents of the Finance Bill, and I was not therefore surprised that, after one or two very interesting criticisms of a few of its provisions, he passed from them with a statement that on the whole everyone of the proposals in the Bill was bad and was impossible as a solution of our financial difficulties; that there was only one solution of our financial difficulties, and that that was in the direction of Tariff Reform.
I would commend that observation to my noble friends Lord Rosebery, Lord Cromer, and Lord St. Aldwyn, and others who, while objecting to this Budget, as many of them do with great vehemence, have hitherto declared their absolute adherence to the great principles of Free Trade, who have never bowed the knee to Baal and have rejected what we at all events on this side consider the fallacious doctrines of Tariff Reform.
The noble Viscount really cast aside the Budget as a sort of worthless document which contained within it no feature whatever which, even subject to modification, could possibly be utilised for the purpose of establishing our financial equilibrium. After such an attitude I really think it is hardly necessary for me to follow 980 the noble Viscount in detail in connection with the criticisms he did make. But I would make this sole observation, that the noble Viscount made one remark which is of an invaluable character when we remember the various controversies that surround the whole question of Tariff Reform. It will be remembered that some questions were addressed to the noble Viscount in reference to the difficulties that would arise in the case of the postponement of the Finance Bill in consequence of the duties already paid upon certain imported articles, tea and so on. The noble Viscount gave us an explanation, which, in view of his having been head of a great department in connection with the Customs and also with the Treasury, we listened to with much interest. He made this remarkable slip—he will perhaps regret it subsequently when he remembers it—that there would be no difficulty in coming to an accommodation upon the matter because the importers of those articles have introduced the bulk of their various imports and have already passed the duties on to the consumer. Well, I welcome that declaration because at least it amounts to this, that we have one of the foremost exponents of Tariff Reform in this House admitting the contention, from which we have never for one moment swerved, that barring certain rare cases in exceptional circumstances and in minor degree all these duties ultimately fall upon the consumer and upon the consumer alone.
I am sure we have all listened with the greatest interest and in many respects with pleasure, to the speech of the noble Earl, Lord Rosebery, who has unfortunately found himself unable to act on this occasion, as, I am sorry to say, on some other occasions, with the great Party which he had once the honour of leading. We regret our differences of opinion with him, but we cannot, unfortunately, abandon our view that in this matter of the Budget we are taking the only line which is consistent with our Liberal faith, and that is the line of Free Trade, and that the Budget, whatever may be said with regard to certain of its details, at all events reposes upon the principle which, as a Party, we have always upheld and which, I trust, we shall never relinquish.
The very interesting debate which has taken place I would venture to say has been somewhat discursive in many particulars 981 because the Budget has been, in some of the speeches, the very last subject which has been considered or discussed. Now, I am going to ask you to allow me to deal for a short time with the Budget, and with the objections which have been raised to it. As I said, this Budget has been drawn on Free Trade principles. Everybody knows that we have to deal with a very great expenditure and I suppose no one will deny that that expenditure must be met in some way or other. I confess that in considerable degree I share the apprehensions which were so ably expressed by Earl Russell last night with regard to the lavish, and, in my opinion, generally wanton expenditure which has taken place in connection with our bloated armaments. I view that with alarm; I might say with quite as much alarm as was expressed this afternoon by Earl Rosebery, who said that eventually they would lead to the bankruptcy of Europe. I regret extremely that it has not been the proud privilege of the people of this country to lead the way in a policy of proper economy in these directions and that we have not been able to maintain the great traditions of the Liberal Party on the subject of economy. But be that as it may, the main question we have to consider now and at all times is how to provide for the financial necessities of the year. I observed that the noble Marquess the Leader of the Opposition, in the course of his opening speech, summarised his objections to the Budget as it is drawn under six heads. Now, five of those heads may be really grouped under one. It may be said that they were a general objection to any further taxation of land. Land was already burdened; land, I might almost say, was sacred; land must be subjected to no further taxation. Then there was a sixth objection, namely that these taxes were based upon a Socialistic fallacy.
Let me take these taxes more or less seriatim. In the first place, let me explain that while I speak of a Free Trade Budget, I speak of a principle which I conceive to be necessary to Free Trade or to Liberalism, and that is a Budget based upon the principle of equality of sacrifice. That, I conceive to be the foundation of this Budget as it must be of all Liberal Budgets—equality of sacrifice. Well, in what respect does this Budget in any way vitiate this principle, and in what other kind of respect is there any suggestion or suspicion of this charge of Socialism? Let us take the Income Tax and the Death Duties. I must remark in connection with 982 this matter that the noble Viscount who denounced the Budget root and branch, who said that every tax and every proposal in it was equally bad, seems entirely to have forgotten the existence of one distinguished Statesman who, I imagine, is his leader, and that is Mr. Balfour. Mr. Balfour has publicly given his acquiescence to, at all events, two of the Budget's methods of taxation. He has admitted the necessity under the circumstances of the increased Income Tax and of the increased Death Duties. We all know that those duties are already high. We all recognise that the charge upon us is considerable. None of us like to pay increased taxation. I do not suppose that even the richest among us, any more than the poorest, welcome any increased annual charge, but we have to bear in mind the circumstances of the case, and the necessities of the hour; and both those conditions, it seems to me, impose upon us the sacrifice which we are called upon to make, and which are comprised under the increased taxation in the Income Tax and the Death Duties. Those duties proceed upon the very principle which I have ventured to enunciate—equality of sacrifice. You have the smaller incomes paying less and the larger incomes, particularly those derived from invested wealth and not from earnings, paying more. Is that an unjust principle upon which to proceed? I confess that the Death Duties are a subject upon which many of us enter with some what mixed feelings, because those who have arrived at my time of life have no expectation of inheriting wealth and therefore it is more a question of what is going to happen with what we possess when we die, and upon that subject I can only say that those persons of the younger generation who happen to have the good fortune of inheriting whatever we may be able to leave them surely have no ground of complaint if they have to pay some contribution to the national requirements in proportion to the sums that they receive.
I pass from that to the Licence Duties. The Licence Duties deal with what I imagine must be recognised, and fairly recognised, as one of the great monopolies of the State, a monopoly which has grown up under the ægis of the State and which has grown to proportions which some of us regard with great apprehension and with grave misgivings. That monopoly is the great liquor traffic of which Earl Rosebery, at an earlier period of his career, spoke as threatening to strangle the State unless the State was prepared to strangle it. 983 And he was perfectly right. The liquor traffic has grown up under the protection of the State which has created a vast monopoly and I suppose no one in this House will deny that large fortunes have been made out of it; that immense accretions of capital have been created and have gone into the pockets of those who were so fortunate, if we may use the term, as to be engaged in it in its prosperous period. In that prosperous period no doubt large numbers of those who were engaged in this particular trade thought the opportunity good to transfer their holdings to bodies of shareholders. I much sympathise with those unfortunate shareholders. I regret the position in which they find themselves; but I say with all emphasis that it is no part of the duty of the State to intervene between shareholders, however confiding, and the consequences of their own credulity or folly. It may be perfectly true that loss will fall upon certain people in connection with this matter, but the principle itself is a just one. It is a just principle which says that the State should resume a portion of the wealth which the State too lavishly allowed to be created, and all I can say is that I, as a friend of temperance, will rejoice if the great monopoly has, to a certain extent, to draw in its horns and to further a certain restriction of the opportunities for drinking and for that intemperance which is one of the gravest evils affecting our national life. Does not that increase of Licence Duties also proceed upon the same principle of equality of sacrifice? Does it not also maintain that principle in the proposal that the smaller houses, the less productive houses, should pay the least charge for licences, and that those who have the greatest revenue and which enjoy the greatest profits from this trade should pay the largest Licence Duties? It seems to me that with regard to the Licence Duties, just in the same way as with regard to the Income Tax and Death Duties, the Budget proceeds upon lines which are just, and which, at all events commend themselves to the Liberal Party.
Now we come to the Land Taxes. With regard to those taxes it may have been observed by those who had the pleasure of listening to the speech of the noble Viscount, Viscount Milner, that in the course of that speech he gave a sort of timid acquiescence in, a half-hearted approval of, the Increment Duty, but in regard to the Undeveloped Land Tax he said it was a bad tax. He did not 984 even discuss it. With respect to the Increment Duty I would merely remark that the question of the taxation of land values is, I was going to say, almost as old as this House. At all events, it is as old as most of us remember. I had the honour of being for a great many years a member of the House of Commons, and I can hardly recall a single year in all that period when I did not receive representations, when I did not attend deputations, when I did not go to meetings, having reference to this question of the taxation of land values. There was not a year when, even on the part of the most Tory Town Councils and the most Conservative municipalities we did not receive representations all tending to this, that the unearned increment in urban land ought to be subjected to taxation.
I must make some excuse to the House if I call attention for one brief moment to the fact that during the course of this debate there has been almost unmeasured denunciation of my right hon. friend the Chancellor of the Exchequer in consequence of the speeches which he made at Limehouse and at Newcastle. I am certainly in no sense an apologist for the Chancellor of the Exchequer, who is well able to take care of himself. I am only speaking in the interests of what I may call common justice and I ask this House this simple question. What has the Chancellor of the Exchequer said in connection with these land taxes, which has not been said before? I am old enough to remember a meeting, a meeting at which I was present, of the Allotments Association, of which the President at that time was my excellent friend Mr. Jesse Collings. That meeting was addressed by a distinguished Statesman whose continued illness we all deplore and in whose sickness we fully sympathise. The subject discussed on that occasion was this very question of the unearned increment in urban land; and it gave rise to a speech from which, perhaps, the House will permit me to quote an extract. What did Mr. Joseph Chamberlain say on that occasion, in January, 1886, in reference to land taxation? He said—What does that mean? It means that at this moment the trade of the country is burdened with an annual tax of £2,000,000, which is the price which commerce pays to landlowners for the privilege of improving their property. I think myself that the time has come when this form of ransom should cease, and that it should no longer be considered one of the rights of property to go on blackmailing the public whenever their wants and necessities require them to enter into a bargain.985 I do not want for one moment to criticise the language of the right hon. gentleman. On the contrary, I cordially agreed with it at the time, as I cordially agree with it to-day. But all I would ask you is how can you turn and stigmatise the language of the present Chancellor of the Exchequer who, in no one single syllable, as far as I know, has gone beyond the declarations of Mr. Chamberlain, now the friend of hon. members opposite, on that occasion in 1886? It seems to me that in this matter, if noble Lords will excuse me for saying so, there is a great deal of cant. We have to deal, undoubtedly, with a serious situation. We have got to find money and large amounts of money under very exceptional difficulties. We have to find it at a time when, no doubt, trade is bad and when circumstances are unfavourable to increased taxation. But I applaud the courage with which the Government have tackled this difficult dilemma and have endeavoured to deal with it, as I think, on right and proper lines.
I know it is said that this Budget is going to do all sorts of terrible things. It is undermining credit; it is driving capital abroad; it is destroying confidence: I heard with great pleasure, although I disagree with every syllable of it, the excellent speech made by the noble Lords Lord Revelstoke, in which he expounded that theory with great ability and, I have no doubt, with the most absolute conviction. But I ask the noble Lord, as I ask all your Lordships, this question. Is it not a fact that quite apart from the considerations which were advanced by the noble Lord, namely the contention that various influences are at work driving capital abroad and so on—is it not a fact that the most important consideration was left altogether out of the purview of the noble Lord? Is it not a fact quite apart from every other circumstance that we have, unfortunately, to deal with the situation arising out of the fact that we were engaged not long ago—although, happily, the circumstances have so far changed that we have almost forgotten it—in a war in South Africa, in which we spent £240,000,000 or £250,000,000?
It cannot be supposed that our resources of capital can be depleted by so large a sum as that without its having an effect upon our national credit. One of the principal contentions which was advanced by the noble Lord was that there was a depreciation 986 in British securities. But is it, after all, unreasonable to expect such a depreciation when you have had this exceptional demand upon the national credit? There is also the fact that, in addition to all other matters, we had an Act, the Irish Land Purchase Act, which was passed by the late Conservative Government and with regard to which I have no criticism to offer, which made an enormous demand upon our national credit, which I believe has already absorbed countless millions and which, when it is completely satisfied will, I believe, have required from us no less than £180,000,000 or £190,000,000. In face of that obligation, only partially satisfied, and of the apprehension which is naturally due to the possibilities of further demand in that respect, is it unnatural that there should be a depreciation in British Government securities? When I am told that in the Bank parlour, the sacred precincts of which I do not for one moment suggest I can approach, great apprehension is entertained with regard to the situation of British credit, I may, as a humble investor, be permitted to say that I believe that the apprehensions of that Bank parlour are confined to a very limited circle.
I turn now to the last question and, perhaps, in the minds of some noble Lords, the most interesting. This Budget is attacked as being a Socialistic Budget. The noble Marquess who opened the debate has publicly declared his belief that the principles of this Budget are Socialistic. My Lords, we desire to make our situation with regard to this matter absolutely clear. What is meant by "Socialistic"? Of course it may be said that any programme, which embraces the sort of social progress and social reform in which gentlemen of liberal views on both sides of this House and in every other Assembly would be prepared to participate, is Socialism. But when I speak of Socialism I want it to be clearly understood that I speak of what may be called "revolutionary Socialism." By "revolutionary Socialism" I mean that class of Socialism which is identified with the doctrines of Karl Marx, and with what is generally understood as German Socialism. Happily, until this date, that kind of Socialism had but a very small foothold in this country. That was due to the fortunate circumstance that the Liberal Party in this country had always understood the obligation of advancing 987 with the times; had always felt how necessary it was to push forward social progress and social reform in order to meet the growing demands of the always extending community. The day has come when, unfortunately, we are face to face with this situation, that circumstances are going, I am afraid, to give to that kind of Socialism of which I have spoken a much larger extension in this country. That international Socialism which existed, as I say, in such small and limited circles here could not feed upon a soil which was happily impregnated with the principles of Free Trade, the principles which enabled the most humble of our fellow citizens to obtain all their necessaries of life under the most favourable conditions and at the cheapest rate. The position is now about to be changed. The issue for them is really one as between Fiscal Reform and Free Trade.
Fiscal Reform has been represented to us as something very different from Tariff Reform in foreign countries or from Protection as we knew it. We are told it is to be scientific. I have great suspicion of the term "scientific" in connection with this matter. Is there a country in the world where science is so carefully nourished, where science has such widespread application, where science is applied in so many and ingenious forms as in Germany. Germany enjoys a "scientific tariff," and I ask you who are in favour of a policy which I am endeavouring to combat, to cast your eyes over to Germany, and to ask yourselves what is the result of the "scientific tariff" in Germany? Why, the very revolutionary Socialism which you apprehend here has grown in Germany to almost portentous dimensions. The Socialist vote in Germany is growing year by year. It has grown from 2,000,000 to 3,000,000 and I am informed on the best authority that it is likely to attain no less a number than 4,000,000 or even 5,000,000 at the next election in Germany. That is Socialism bred upon Protection. I am aware that there are noble Lords opposite who say that there is something to be borrowed from Germany in the sense that there is in Germany an Income Tax which is comprehensive; and I am told that some of the Conservative Free Traders believe that a comprehensive Income Tax without any kind of exclusion would possibly terminate our financial difficulties. In Germany every citizen who earns the sum of 18s. a week pays Income Tax. 988 But what is the situation of the unfortunate German worker? There are 22,000,000 of them—I speak of both sexes—who earn less than 18s. a week—22,000,000 of these unfortunate people earning less than 18s. a week and yet it is suggested that we should cast our eyes over the water! The noble Viscount invites us to take our example from Germany and to introduce into this country a system of Fiscal Reform which means undoubtedly the embarrassment of the poor, because it means making them pay more for all they use, for all they eat; as it would also mean the destruction of the life-blood of our national prosperity and commerce. That is the policy which is recommended to us by noble Lords opposite.
"Let us have," the noble Viscount declared this afternoon, "a free hand to try a scientific tariff." I regret that the noble Viscount, even under the possible consequences of future developments, can never be the Chancellor of the Exchequer of the future; but I should think that, even if he were, his task would be a sorry one. To introduce Tariff Reform into this country, and to assume that it would in any way stem the tide of revolutionary Socialism, I believe to be an absolute chimera, and those who entertain it are doomed to disappointment.
I have only one further observation to make. The action which is suggested by the noble Marquess, the action which is about to be taken by your Lordships' House is, I assume, one which is supposed to be by those who are about to support it a highly ingenious device for attracting the electors. It is imagined that the electors will say, "Oh, what a democratic House of Lords this is. It has deferred to the judgment of the electors the final verdict upon the Budget." I conceive that there never was a greater illusion than that. It is not your Lordships' function to decide what will be the particular conclusion or the particular points which will be referred to the electors. That has always been, and will be now, the duty and the obligation of the Government of the day and of the Party which is now in power. Do you suppose for one moment that it would be merely the consideration of whether this Budget should be allowed to pass into law or not? Such a situation is impossible.
You have raised a grave constitutional question. You have flouted the almost immemorial practice of this House with 989 regard to finance. Perhaps I may be excused for reminding your Lordships of the immortal words of my great kinsman Lord Chatham, who said that the power of the purse was deposited solely within the control of the Commons. For 200 years that great principle has remained inviolate. For 200 years it has never been seriously assailed. Do you suppose for one moment that when the electors of this country are consulted they will merely give their verdict, "Aye" or "No," upon the question of the Budget. My Lords, they will give their verdict upon another question. They will give their verdict, and rightly give their verdict, upon the question whether the power of the purse is to remain permanently as it should remain, in the hands of the Commons; whether that great privilege, that great possession, which, in the words of Lord Chatham, was essential to our liberty—whether that great privilege and that great right is to be taken from them and to be transferred to this House. That will be the question which the electorate will be called upon to decide. Your Lordships cannot make the issues. You cannot propound the particular questions which the electors will be called upon to answer. I say to you, although, perhaps, I have no special claim to speak with so much frankness on this subject, that when that verdict is given it will be given in favour of two objects. It will be given first of all in favour of the principles contained in this Budget. But, above all, it will be given in favour of the commanding principle that the power of the purse, that the great privileges of the Commons, shall no longer rest upon custom, which you have broken, but shall be made certain, shall be secured by an enactment which shall re-establish on a sounder basis the present relations between the two Houses of Parliament.
I thank the House for listening to me with the kind consideration it has shown. I can only say that I hope in what I have said I have offended no member of it. At all events I have stated with sincerity and with the warmth of feeling which I entertain with regard to these high constitutional matters, the grave issue which will not be decided by your vote upon this Bill, but which will shortly be decided by the greater vote of the people of this country.
My Lords, I 990 wish to speak in support of the Amendment which has been so ably moved by the Leader of the Opposition. If I had any previous doubts on this matter, which I confess I never had, as to the policy of supporting this Amendment, those doubts would have been completely removed after having heard the strong and the forcible arguments of the noble Marquess as to his reasons for submitting this Amendment to your Lordships' House. I feel sure that the noble Marquess will receive the loyal support, not only of the majority of his followers on this side of the House, but of a great many on the other side of the House. No one can reasonably doubt that the advice that the noble Marquess has tended to us on this question, has been dictated by the most disinterested conception of public duty. I think he was perfectly justified when he asked if we passed this Budget what guarantee have we that there will not be included in future Budgets either a Home Rule Bill or a Welsh Disestablishment Bill? As your Lordships are aware, this House has of late been frequently assailed by certain violent members of His Majesty's Government who have been good enough to tell us what is likely to happen if we hesitate to pass this Bill into law. They have told us that such action would involve an appeal to the country and that the result of that appeal might mean the ending or the mending of your Lordships' House. In politics, as in individual life, the right has often to be undertaken with a scorn of consequences. But I believe the electorate generally—speaking at any rate, for the county of Kent where I think I know their feelings on this question fairly well—will approve the proposed action of your Lordships' House in submitting the entire issue to the popular vote and acting with a single eye to the good of the country and of the Empire. In fact I believe they expect us to take that action. I believe, too, that your Lordships' House will be all the more respected throughout the country for contemptuously disregarding the threats that have been indulged in against us, and that the hope of certain members of His Majesty's Government that by passing this Amendment a great storm of national indignation will be raised against us will be once more rudely disappointed.
For I cannot believe for one moment that the country as a whole is likely to quarrel with us for exercising the elementary and indispensable function of a Second Chamber. 991 I am perfectly aware that noble Lords on the other side assert that this House has no such function. I think the noble Marquess clearly disproved that idea. Surely I am justified in asking those noble Lords opposite who hold that view, to tell us what they regard as the chief duty of a Second Chamber in a democratic country. Surely it is to take care that principles such as are involved in this Budget shall not be passed into law without the people of this country having the opportunity of pronouncing their opinion upon them. I contend that the principles involved in this Budget constitute an entirely new departure from orthodox Liberal finance—a departure for which no one can truthfully say a mandate was given at the last General Election. Therefore, it appears to me that in taking such a course we shall only be giving the nation the opportunity to decide its own destiny. In the course of this debate many arguments have been brought forward against this measure. To my mind the strongest objections to it are these. First, I believe it is the only occasion when a Budget has been introduced into the House of Commons mainly for the purpose of penalising political opponents and at the same time bribing political supporters of the Government by the incorporation of a Land Bill and a Licensing Bill in this measure.
My second objection to the measure is that it has been cunningly devised as a vehicle for Socialistic revolution; for no one can deny that this measure adopts in principle the doctrines of the extreme Socialistic Party, whilst it provides at the same time all the machinery that is necessary for carrying those doctrines into effect at any time hereafter. No doubt the Chancellor of the Exchequer thinks such tactics clever. In my opinion they are far too clever to succeed, for I do not think for one moment that the country is likely to oblige him by helping forward such ingenious tactics in politics. Hitherto, the Chancellor of the Exchequer has been regarded as the custodian of the public purse and as holding that office in order to safeguard the financial interests of the country. Apparently that is to be no more. Anyhow, I believe that the country as a whole well remember the services that have been rendered by your Lordships' House in rejecting a few years ago the Home Rule Bill, and I believe they are equally satisfied with us for faithfully 992 dealing with the Licensing Bill and the Education Bill. Most of your Lordships on this side of the House, at any rate, will agree that a Budget always has been, and should be, a financial measure for the purpose of providing the needs of the year and nothing else, a measure which your Lordships' House as a rule passes as a matter of course in the same way as an auditor passes the accounts of a public company. But I maintain that this measure contains a great deal more than that. It not only contains a Licensing Bill but it contains a Land Valuation Bill and a Land Nationalisation Bill as well. There can be little doubt that the two great national problems that this country has to decide at the present moment are national defence and unemployment. The first can only be attained by ensuring that our first line of defence is kept up to the two-Power standard, which the Prime Minister said in the House of Commons on November 19, 1908, meant this—" a preponderance of ten per cent. over the combined strength in capital ships of the two largest navies." It is quite certain that this cannot be achieved if we in this country spend on new construction less than one-half of what the two next strongest navies are spending. Is it to be wondered at that many of our Naval officers have constantly been asked by Foreign Naval officers this question, "What is coming to England in letting her Navy drop off as it is and not seeing, or not wanting to see, that Germany is going on by leaps and bounds until in 1911 she will equal you in first-class battleships and cruisers?"
It will be in the recollection of your Lordships' House that when this Budget was first introduced we were told that the increased burden of taxation was owing to the increased expenditure on the Navy; but this Budget only provides, or has earmarked for that purpose £3,000,000, which is to be found out of the Sinking Fund, whilst the second contingent of four Dreadnoughts, which we are told are about to be put down, is to be charged to next year's Budget. Therefore, I think no one can say this Budget does anything for national defence.
We now come to that other national question of unemployment. I maintain until anybody on the other side can show me to the contrary, that this Budget will increase that evil rather than diminish it. No one, I think, can deny this fact, 993 that in no other great civilised country in the world does unemployment prevail to such an extent as it does in the United Kingdom. What is the reason for that? There can be no reason except that we of all the great countries in the world still continue to persist in that system falsely called Free Trade, which is primarily the cause of the working classes in this country suffering from unfair competition. Lord Curzon, in a very strong and forcible speech on this question the other day, appears to have hit the right nail on the head when he asked, "Are we never to take toll of the foreigner; are all other countries fools because they flourish by declining to follow our example? "
It is for this reason that we on this side of the House advocate a change in our fiscal policy by means of a scientific tariff, which does not mean in any sort of way Protection any more than Free Trade means free imports. I would, therefore, like to ask any member of His Majesty's Government in your Lordships' House to tell us how this Budget will be able to cure that disease from which British labour has long been suffering, namely the evil of unemployment. I ask that question because I believe it will have the opposite effect. That is what the noble Duke, the Duke of Marlborough, said last night—it will greatly accentuate the disease by the imposition on novel principles of new duties on capital. No one, I think, can deny this point, that it is upon capital and its undiminished security that the working classes must rely for their wages and employment. And as Lord Curzon said in the same speech, with which I fully agree, what the British workman wants at the present time is work. "Where is it," he asks, "in the fiery rhetoric of the Chancellor of the Exchequer?" It is the one thing that is absent. It is primarily for those reasons to which I have alluded that I believe your Lordships' House will gain rather than lose popularity in the country by submitting this portentous measure to the electors. It is for this reason, too, that I shall without the least hesitation have pleasure in supporting the Amendment of the noble Marquess.
THE EARL OF MAYO
My Lords, before I take the liberty of addressing you on the Motion before your Lordships I wish to say a few words with, regard to a speech delivered by Lord Weardale. First of all 994 I may say I took that speech as an answer to Lord Milner, who can take very good care of himself. Lord Milner being a Tariff Reformer and Lord Weardale being a Free Trader, I took that speech as being entirely framed on those lines and on those principles. But there was one thing Lord Weardale said in his speech that I wish to call your Lordships' attention to. He said that the great principle of the Liberal Party was economy. Now, we are all perfectly aware that the Liberal Party went to the polls pledged to economy. They gained many votes on that understanding. I will only speak of one measure, and that is the Old Age Pensions Act. I know in my country that is not a very economical measure. I think the Liberal Party have had to pay for the experience of Old Age Pensions as applied to Ireland, from what I read in the papers.
Then Lord Weardale went on to talk about the equality of sacrifice, and that motto ran through the whole of his speech—"equality of sacrifice." Well, my answer to that is that I think both the poor and the rich are being sacrificed under the Liberal Government's Budget. Lord Weardale said that Tariff Reform will make the poor people of this country pay more for all they use and all they eat. [Hear, hear.] Members say "Hear, hear." All they eat! Well, we have heard that before. I wonder whether your Lordships remember the speech Lord Goschen made in this House when the duty of a shilling per quarter was put on wheat. He took that duty when it was attacked and when it was said the poor man would pay more for his food, and he reduced the bag down to loaves and pointed out that it was a fraction of a farthing more which the poor man had to pay for his loaf. What then becomes of that argument? All that is suggested—I am not going to make a Tariff Reform speech—is that there should be 2s. put on corn. I will pass from that because it is not my business to deal with that question.
The Amendment before your Lordships' House is so plain that I venture to say it will be clearly understood by every elector not only in this country but in the country which I come from. The House in adopting the Amendment is adhering to the principle which it has adhered to for many years, that is, that it can refuse to read a second time a Budget and a Finance Bill. And we are fortified in this principle by the precedent 995 of Parliamentary custom. Now, I allude with all deference to the words of the Lord Chancellor. He said—Every year all the Estates of the Realm combined to pay homage to the rights of the House of Commons in regard to money Bills. The Crown itself acknowledges their power.But may I put it that the Commons, as one of the Estates of the Realm, have, on more than one occasion, admitted the right of the House of Lords to reject or even amend a Money Bill. If I pursue that subject further I should like to quote some words of a former Lord Chancellor, Lord Lyndhurst, who declared that nothing to be found in Parliamentary journals or the history of Parliamentary proceedings showed that our right to reject Money Bills had been questioned. We had no right whatever to amend a Money Bill, Lord Lyndhurst said. I should like to quote the words of one of the great Leaders of the Liberal Party, Mr. Gladstone, a name that we all in Ireland remember very well indeed. Mr. Gladstone said on May 16, 1861—The powers of this House must remain greater on the whole than those of the House of Lords, but I believe that to infringe the privileges of the House of Lords or to cripple the functions of that august Assembly would he as fatal to the balance of the Constitution as would be the loss of the privileges of this House itself.Then Mr. Gladstone again, speaking much later, in 1894, said in the House of Commons, addressing the Speaker—No doubt, sir, there is a higher authority than the House of Commons; it is the authority of the nation that must in the last resort decide.Well, what are the terms of this Motion? The terms of this Motion are that we leave it to the nation to decide whether this Budget is to be accepted by the nation or not. I should like again to address the noble and learned Lord on the Woolsack and mention some words of his with the greatest respect. He was speaking of the Constitution and the law, and he said according to law we can reject the Budget but according to the Constitution he did not think we could. And he said—The difference between what can be done according to law and what can be done in accordance with the Constitution under which we live is notorious and fundamental. The law definitely fixes rules. What would happen if all the Estates of the Realm were to carry out in freedom all the powers that the law entrusts to them? The Crown has enormous powers, which by the Constitution for centuries have not been used.But, my Lords, the powers of the House of 996 Lords have really been exercised for centuries, and they have been exercised with effect. I do not think I need pursue that subject any further, but I should like to say something further upon the Motion. The Motion is no actual rejection, as I said before, because the electors will have to decide upon this question. Lord Weardale warned us—I have often heard the warning before—to the effect that something dreadful would happen if we were to do this. We are not living in the times of 1831 when the whole country was convulsed with revolution in consequence of the Lords not passing the Reform Bill, when Bristol was nearly burnt down and was saved by the pluck and energy of a Captain of Yeomanry. We are not living in those times, and I am not in the least disturbed or frightened by those terrible threats which emanate from noble Lords opposite. In Ireland we are often threatened. We live sometimes in an atmosphere of threats, but I ask what can be fairer, and after all what can be more democratic if we appeal to the sovereign power which is lodged in the collective body of the people?
Many of us begin to think that the Government are shrinking from facing the people on this question, and I believe they fear it immensely. And the noble Lord alluded to the speeches of the Chancellor of the Exchequer. Well, he made a celebrated speech not far from here, namely down at Limehouse, and he denounced noble Lords, Dukes and other members of this House in no unmeasured terms. Lord Willoughby De Broke gave expression to a word which I thoroughly agree with when he said there was a certain amount, I think he said, of vulgarity in that speech. I do not say the whole speech was in that tone, but there was a certain amount of it. No doubt it suited the Limehouse audience. Let me remind your Lordships of a verse in the Ingoldsby Legends which I will read to you. The Chancellor of the Exchequer practically cursed the Dukes. He said on another occasion, I believe, that they were more expensive than Dreadnoughts. In one of the Ingoldsby Legends, "The Jackdaw of Rheims," the words run thus—Never was heard such a terrible curse.But what gave rise to no little surprise,Nobody seemed one penny the worse.Well, I think the by-elections are rather straws which show the way the wind blows and indicate to us and make us believe that the voters in the country are beginning rather to grasp the inward meaning of this 997 somewhat intricate Budget. I think before the writs are issued many noble Lords in this House will endeavour to make them grasp not only the intricate meaning but the inward meaning of many of the intricacies of this Budget.
I should like to allude to another matter which the noble Lord opposite made a great point of, that is the Socialistic side in the Budget. He alluded to the Socialism of Karl Marx and the Socialism in Germany. He said because there was Protection in that country Socialism had increased to an enormous extent. I may venture humbly to remark that the Socialistic wedge is being gently tapped in this country. I should like to produce a little evidence to that effect to the supporters of the Government opposite. Mr. Winston Churchill, speaking on September 6, 1909, said—The Budget was the first conscious attempt on the part of the State to build up a better and more scientific organisation of society for the benefit of the workers of the country.That is a very mild form of Socialism. Now we come to what Mr. Keir Hardie said at Saltley, near Birmingham, on September 18, 1909—Members of the Labour Party were supporting the Budget knowing it was the first step towards the ideal they had in view, the absorption by the community for the use of the community of all unearned incomes, whether from land or capital.I think the wedge was beginning to get another tap there. And then we had Mr. Keir Hardie again, but I won't quote that. But I will quote Mr. Ross Clynes, the Socialist member for North East Manchester. He is reported in the Manchester Guardian to have said—I think it is pretty well driven home here—that ' Ministers as well as the rank and file are now compelled to talk of matters which Socialists had forced to the front, and Mr. Lloyd George's Limehouse speech was famous because all its economic and Socialist items were copied substantially from the speeches of obscure street corner talkers who had been spreading the views of the Labour Party for years. As the policeman says, "from information received," I think it is a long step and a step and a jump in the direction of Socialism pure and simple.'I have only read these extracts in order to prove what the Socialists and the Liberal Party think of the Budget. I think it is quite fair that I have done so. They are supporters of noble Lords opposite and their utterances appear in the public Press from which I have quoted.
Now we are told that if we reject this Bill the whole financial provisions of the country 998 will be thrown into confusion. May I remind your Lordships what the noble Marquess said in his speech? I have not the exact words but I know the meaning of them. He said if there was any difficulty on that score he would be quite ready to meet the noble Lords opposite and the Government in passing any measure that would tide over any difficulties of that sort. We are forced to hear that the English Constitution is on the edge of a precipice and that we are about to hurl it over. But those who wish to pass this Budget have in their minds that fear which they choose to call discretion. We lay claim to discretion, too, and it is born in the Amendment before the House. I take it that it is not born of fear but of uprightness. I ask you, "Is this House so out of touch with the national spirit that we are doing something against that spirit?" I do not think so. It will be decided out of this House whether the people will accept the Budget or not, whether the country will accept Socialism as embodied in it and approved of by the Socialist Party, or whether they will adopt bureaucracy by instalment as embodied in this Bill. When I speak of bureaucracy I speak of that army of followers who will be living on good salaries and will be able to exercise on every taxpayer power of a most inquisitorial and despotic character.
Now there was something very important the Lord Chancellor said. It has not been alluded to before in this debate and I should like to allude to it. He said—In my opinion it is impossible any Liberal Government should ever again bear the heavy burden of office unless it is secured against a repetition of the treatment such as our measures have had to undergo for the last four years.Of course, it is a very easy—I would not dare to do it—to dismiss that most important statement with cheap sarcasm. But what are the measures we have rejected? The Education Bill and the Licensing Bill—two very important measures no doubt. But if the country had been behind the Liberal Government on those two questions our "cup," so often mentioned, would have been filled up long ago, and the constitutional issue would not have come now; it would have come then. But it did not come and the country has settled down very quietly to enjoy the Old Age Pensions which were given to it.
There was one speech made last night by Lord Russell, who spoke in no 999 unmeasured terms of the Budget, to to which I will refer. He spoke of the uneconomical policy of the Liberal party—the Army was too big, the Navy was too big, and too much money was spent upon them. He said the aristocrats in the Reign of Terror were not afraid of the guillotine but the knife fell none the less, and the action which your Lordships are now taking was, he believed, the beginning of the end of those understandings in the Constitution between the two Houses. He went on to say he would rejoice to see the veto of this House swept away. I am sure the noble Lord would miss his House of Lords. I am sure he would miss coming down and making those clever speeches which we all enjoy and appreciate and listen to, and I might say that in the long and protracted session, kept up by the Liberal Party now, Trafalgar Square or Hyde Park would be a chilly place to speak in if he had not this Chamber. I listened with a great deal of attention to Lord Rosebery's speech. I think we all listened to-day with the very greatest attention to him; but what came across me when I had heard the end of that speech was this—I felt it was most inconclusive. I wish the noble Earl was here to listen to what I have to say. [Lord Rosebery here took his seat.] I was saying I always listen with the greatest respect when Lord Rosebery speaks. He lectured your Lordships' House, but the result of that lecture had this effect upon me, that I did not take very careful notes of the lecturer. He denounced the Budget up hill and down dale. He has denounced it before in public; but he said he would not vote for the Amendment before your Lordships' House. I leave my Lord Rosebery there.
Perhaps your Lordships will think me somewhat indiscreet if I go on to allude to other speeches, but I must allude to the one made by Lord St. David's. I took particular care to be in the House and listen to every word of it. He dealt largely with finance. He is quite capable of doing so. He also dealt with Protection and Tariff Reform. He said men were kept employed making engines and wagons for South America, and if Tariff Reform came what would become of all that work those men made? What he said with regard to South America was all very well, but he must remember that notwithstanding his efforts in South America there is a great deal of unemployment still in this 1000 country. I have digressed, as an Irishman would say, before I have even got on to the road.
I have to put before you the case of Ireland, as it is affected by the Budget. Now the policy which has been carried out with regard to that country in finance is that the tenant has been financed by State aid, under various Land Acts, for the purchase of his farm, and the landlords have been assisted in the same manner, especially by the 1903 Act. The total sums advanced to the tenants have amounted, since the first Land Act was passed, to £62,303,490. I do not see Lord St. David's here to challenge these figures. The capital and interest, I must remind you is being paid back to the uttermost farthing. We are often told, and we feel it very much, that a great deal of English taxpayers' money has been paid over to Ireland without any chance of it coming back. I notice noble Lords are laughing. The truth of the matter is that every penny—I am talking quite seriously—is paid back, and the Treasury will get its own and get its own over and over again.
I wish now to deal with the effect of the Budget on the Irish farmer. You must remember that the Irish farmer has been made a freeholder by State aid. Now you are getting your money back. I speak of the English taxpayer. I am a taxpayer myself as much as anyone else in the House. You are getting your money back by slow degrees, but under this Budget how do you mulct this man, having made him a freeholder? The present duty on the conveyance or transfer on sale of any property is ten per cent. That is increased to twenty per cent. On conveyance on transfers by voluntary disposition the fixed duty is ten per cent. That is increased to twenty per cent. For leases the stamp duties vary according to the rent and the period of the lease. That is doubled. Income Tax does not affect the farmer very much; he is very often not rich enough to pay it. Now we come to the Death Duties. A great many farmers who will have to pay Death Duties will hardly realise what the former Death Duties were. They have had no experience of what the Death Duties were under former Acts. The Death Duties are insidious, far-reaching and unfair. The farmers are ill-prepared to meet the heavy demands for Death Duties. The payment of those Death 1001 Duties will frequently entail the immediate sale of cattle or other stock at a time when that stock is less ready for market. They may also have to hand over a portion of their lands to the Revenue Commission in payment of the liability under this Budget. Now one cannot conceive anything more outrageous to a class you are creating in that country who have been financed to become peasant proprietors, than that they should, if they cannot pay the Death Duties, have to hand over a portion of their farms, perhaps reducing them to the level of a congested holding. I commend that statement to the noble Earl who had charge of, and so thoroughly well carried out in this House, the Irish Land Bill that we have lately dealt with.
There is a fresh valuation to be taken of the whole of the United Kingdom. Every purchasing tenant, whose total assets—no allowance being made for duties, money, stock, furniture, and land crops—are determined by valuers, will have, if the estimates come to £500 or over, to pay, first a competitive value for his land, and secondly on the capitalised value of the purchase annuity. That is most unjust, and it is extortionate to charge a tenant duty on the competitive value of his farm. The general valuation of the whole of Ireland is prescribed by Clause 26, and the cost will be enormous. But what will touch the Irish farmer, and what he will resent—and I think I should feel I was right in telling him to resent it—is the sort of inquisitorial questions of the valuers which will have to be answered by him. If he does not answer them he is under a penalty, I think, of £50. We know what Ireland is, at least I do. I think the people who go and ask these questions and search for the information will not have a very pleasant time. And the man who seeks to recover the £50—well I pity him if he goes into the district.
Now with regard to the Legacy Duties. The Legacy Duties to a brother or sister are raised from the present rate of three per cent. to a duty of five per cent. I am analysing the Bill to a certain extent, my Lords. Other relations under the Bill, except those I have mentioned, are treated as strangers, and a legacy is charged at the rate of ten per cent. Now, let me summarise what the farmers will have to put up with in Ireland. A large body of them who have hitherto paid nothing will 1002 be subject to Death Duties; many others will pay a higher valuation, a higher scale of taxes, and those taxes are a special burden on Irish farmers as compared with English, or Scottish farmers, as the latter, first, are not owners, and, second, have not a saleable interest in their farms. The duty on transfers of land is doubled; whether the duty falls on the buyer or seller is immaterial because a farmer has to pay in all cases. I think I need say no more about that.
I may mention incidentally that almost every public body in Ireland has passed resolutions against the Budget and calling upon your Lordships' House to throw it out. That is something from the point of view of a Unionist, as I am, to remember. I do not anticipate that there will be, as we have been asked to believe, a revolution or that the action of your Lordships' House is revolutionary. I may be singular in my opinions; but I think Mr. John Bull will eat his Christmas dinner and kiss his wife when the time comes, and spend as merry a Christmas as the times will allow. And when the time arrives he will proceed to indulge in a General Election. What the result of that will be none can tell. Many prophecies have been made, but I am not going to prophesy. Speaking for myself and my fellow countrymen I hope we shall go back to Ireland with a little Land Bill peeping out of our pockets. I wish I had the latest edition of it. I give my vote for this Amendment on the ground that it is clear and comprehensible and eminently suited to the circumstances in which your Lordships' House finds itself. We have been forced into it by the action of His Majesty's Government. I do not fear the result. I do not think noble Lords whom I have had the honour of addressing, and who have listened to me with patience, fear the result either.
§ THE PRESIDENT OF THE BOARD OF AGRICULTURE AND FISHERIES (EARL CARRINGTON)
My Lords, Lord Weardale, in a speech which was full of vigour and enthusiasm, called attention to a point which I think was well worthy of notice. He pointed out that in the attack all down the line which has been made upon the Budget noble Lords, in their anxiety and eagerness to denounce the Budget from every point of view, seemed to have forgotten that there is such a person in existence as Mr. Arthur Balfour, and also 1003 the fact that he is the recognised leader of the policy of His Majesty's Opposition. As far as we understand the responsible attitude of the Leader of the Opposition it is this—he seems to have no very great objection to the Income Tax, the Super Tax, or the additional Death Duties. He thinks they are legitimate and irresistible, of course provided the financial difficulty is sufficient to justify them. And I think he takes credit—and justly takes credit—for the fact that in the Commons' House of Parliament there was latterly no serious opposition and no serious divisions taken against those Taxes. Very well; the objection on principle seems to be whittled down to the Liquor and the Land Taxes. As regards the Liquor Taxes I am not qualified to speak, and I shall not detain your Lordships one moment with them. They were ably explained and defended last night by noble Lords on this side of the House, and that leaves us solely and entirely with the land.
Well, the attitude of noble Lords opposite is clear and distinct. We do not cavil and we do not quarrel with it. It seems to me they say to us, "If you put a sacrilegious hand on the land, that is Socialism pure and simple, which we mean to resist to the utmost of our power." As regards land, of course we know that land is divided into two sections. There is the urban land and the agricultural land. The question of the urban land was so well dealt with last night by Lord Pentland and Earl Beauchamp that it is unnecessary for me to detain your Lordships a single moment in going over any of the old ground again. May I say a few words—I promise they will be very few—simply on the question of agricultural land? It is with that the office I have the honour to hold is so closely connected. I will first deal with the burdens which speakers in the debate during the last three nights have alluded to as having been placed by the Budget on the agricultural industry.
Perhaps I may be permitted to take as one instance the remarks of a member of Parliament whom everybody holds in the highest respect and esteem—I mean Mr. Walter Long. Mr. Long, who is a fair, honourable, and upright political opponent, gave it as his deliberate opinion in the Commons' House of Parliament that the Budget was especially destructive to land, and that its general effect would be to 1004 depreciate land as a security. I do not think he is alone in that opinion. Noble Lords on the opposite side of the House have expressed the same opinion themselves. He gave several concrete instances of the difficulties under which landowners are at present placed, and thereby implied that it was very unfair to put any extra burdens upon people who were already in a very difficult and delicate condition. He gave a concrete instance. I will name two. He said that in an estate of £900 a year, the owner was extremely fortunate if he could get £400 to put into his pocket. In an estate of £10,000 a year the utmost that the owner could rely upon would be about £4,000. That is to say, the working expenses of management and the burdens on an agricultural estate would come to something like sixty per cent. of the gross income. And some other people have gone even further than that. A great authority on agricultural matters, Mr. Pretyman, and the Duke of Montrose, have gone so far as to say that the charges would come up to seventy-five, almost eighty per cent.; and ruinous balance sheets were published in the daily Press some time ago telling the same unfortunate and miserable tale. But I maintain—and I think I can prove—that though this may be the result of the management of estates in this country, as they are at present, it cannot possibly be considered that these returns are fair returns of the real value of land. I cannot help suspecting that noble Lords who are landowners are aware of this, and that may have something to do with the extreme and violent opposition to which has been subjected the Government proposal for the valuation of land at the expense of the State.
May I take a concrete instance? I should like to refer to a book that was published in the year 1897 by the Duke of Bedford, and I think I can say, without fear of contradiction, that the Duke of Bedford is one of the best, if not the best, of all the good landlords in England. In his book, which he was rash enough to write, he calls attention to an estate called the Thorney Estate, in Cambridgeshire. It is some of the finest land in England—land which was reclaimed when the great Bedford level was reclaimed by the Duke's great ancestor, the Earl of Bedford. It is practically about 23,000 acres—one of the finest estates in England. There is no house on the estate, no mansion, no game; 1005 there is no upkeep of gardens, or upkeep of any description. He described it as an estate which did not pay its way, which was a source of perpetual expense, and which was practically unsaleable, and per se insolvent on the points of income and expenditure. We have it from him that in 1895 there was a deficit; it brought in nothing—23,000 acres of land brought in nothing, but there was a deficit of £441 upon it. Income Tax, which then was at 8d., we are told was paid on the estate, and that was £160 a year. In 1897, as your Lordships are aware, the country was fortunate enough to be governed by a glorious Conservative Government, and that Government lasted until 1905, when Sir Henry Campbell-Bannerman's Government came in. We have it on the authority of my noble friend Lord Onslow that, though agriculture was at its lowest ebb, so little notice was taken by the Conservative Government of the day that only six hours of the time of the House of Commons were devoted to agricultural questions. That was in six years. It was either five hours in six years or six hours in five years, I am not quite certain which. Evidently agriculture under a Conservative Government seemed almost so hopeless as to be hardly worth talking about. In 1905, ten years afterwards, the present Liberal Government came into power, and, as I had the honour of saying in this House some time ago, Sir Henry Campbell-Bannerman at once took up the land question in earnest.
We have been in office now for four years, and in this, the fourth year, a Budget has been introduced which, if we are to believe one-hundredth part of what we are told, is going to bring the most utter ruin and distress on the country that the mind of man can possibly conceive A most amazing thing has happened. We have been in office, as I have said, four years. In this Budget year, in this disastrous year when securities were falling to nothing, when there was no confidence, when nobody would buy and when securities were going out as ballast to different countries; in this year of catastrophe and woe and sorrow a most amazing thing happened. The noble Duke put this unsaleable estate of Thorney into market. I bid for it at once on behalf of the Crown. I suppose I shall be told that is putting in the thin end of the wedge for the nationalisation of land. Well, I bid for that property at once. I was very courteously 1006 treated, but my offer was received with the contempt it deserved. In this year I had the estate valued by the Crown valuer. I offered for this unsaleable property the fair market value that was put upon it, and my offer was not listened to for one single moment. And that estate in this year of woe, that unsaleable estate, was sold for three-quarters of a million sterling. That is the most amazing thing that can possibly be conceived. Just think what that means! Three-quarters of a million sterling at four per cent. means £30,000 a year. This estate, which, under a Conservative Government, was unsaleable and produced a deficit of £441 a year, under a Liberal Government has been sold and brings in to its fortunate owner an increase of income of £30,000 a year. Everybody knows that the Income Tax at 1s. on three-quarters of a million is £1,500 a year, to that £1,500 a year Income Tax is paid on that unsaleable estate instead of £160 as it was in 1895. It of course goes to the payment of the Old Age Pensions and that line of battleships which everybody is of opinion is necessary for the defence of the country. Yet we are told in the face of this by Mr. Walter Long that the Budget has depreciated land as a security; and not only that, we have been told this afternoon by no less a person than an ex-Liberal Prime Minister of England that this Budget blocked up every channel of enterprise and has entirely destroyed the confidence of the country.
I dare say I shall be told "Oh, this is another attack on the Dukes." It is nothing of the kind. It is simply a statement of fact. And it is not only in this individual instance that there is a rise in the value of land. Far from it, we all know that several very large estates have been sold lately. We all know that the value of land is rising and rents are rising. I was told by a friend of mine who has a large estate in Dorsetshire that if he had a farm to let now there were twenty applications for it, and farms let at £300 a year will fetch from £400 to £420 a year. There is a great demand for farms, and in Essex the value of land has advanced from twenty-five to forty per cent. in the last three years. I will give one instance, and one instance only. In 1904, 380 acres were bought for £3,600. The county council to-day have offered £6,000 for that land, and the offer has been refused. The county council wanted it for small holdings, and the owner asked £8,000. Probably it will go to arbitration, 1007 and some arrangement will be made, probably between the two prices.
Then, as for land having gone down, look at the demand there is for land all over England as regards small holdings. This is all in your Lordships' knowledge. It shows that land is going up. I am perfectly certain that in a House the members of which we are told own from one-third to one-fifth of the land of England that is a very important thing for a Minister of Agriculture to be able to say. Over a million has been spent by county councils ill the last sixteen months in buying agricultural land, and rents are going up all round. Well, I suppose from the merriment these facts have been met with in this House noble Lords opposite think I am making Party capital out of this rise in land. I suppose they would say, "No doubt land is going up, but what has that to do with you; what on earth have you and your Government had to do with this rise in land?" I suppose it will be said, "We have had better seasons and there is general improvement all round." Better seasons! I should like my friend Lord Onslow, when he meets the Farmers' Club next week, to say we have had better seasons. [Cries of 'Better prices."] We have had two bad harvests. The prices of sheep was never so low.
§ EARL CARRINGTON
There is a certain improvement in prices—[Cries of "Wheat."]—but it is absurd to say that that improvement in prices can be responsible for the enormous advance in the value of land. That is out of the question. No sensible man would try to argue that. I don't want to put the thing too high in any way, but I do say—and I am positive I am speaking the actual truth—that there is more confidence in agricultural land and in farming all round on account of the land policy of His Majesty's Government. You deny it, but we do not take any credit for this. You must remember that nothing we can do in this House, nothing that those who sit on this side of the House can do, can be without the gracious permission of your Lordships' House, so that everything we do on this side of course is through your 1008 gracious permission. As men of honour and principle you surely would not, in the interests of the country, allow us to pass measures which you think detrimental to the good of the country.
As I am challenged on this I am sure the House, which is always so good-natured to me, will allow me for a moment to state my case. Look at the Land Tenure Bill. It was entirely through your kindness we were enabled to get that Bill—the Farmers' Charter Bill—through. What does that give to the farmers? For the first time it gives the farmers security against eviction for religious, social, sporting or political reasons. Then, as regards small holdings, what have you allowed us to do? You have allowed us for the first time to have an impartial, practical, fair, and inexpensive Land Court for the determination of the rent and the price of land which is compulsorily acquired by local bodies, against which there is no appeal. That is an immense advance for good as we think, and it is entirely owing to your Lordships' permission that that great advance was allowed to be put on the Statute Book. Then as to the Housing Bill. I acknowledge your Lordships were not very much pleased with that Bill, but you have allowed it to pass. In it the same principle is allowed as regards rural houses; and the compulsory purchase of land has been recognised, in spite of the vigorous protest of a minority in Ireland.
Perhaps your Lordships may think you have gone too far. Perhaps you think we want pulling up a bit, and that may be the object of what you are doing at the present moment. I must say you have temporarily knocked on the head the Development Grant I had the honour of introducing in this House, and you are knocking on the head the benefits to agriculture which would be secured by the Budget. But although Liberal legislation has been most severely handled by your Lordships' House as regards education and temperance and other matters, I have to offer my sincere and grateful thanks to noble Lords opposite for the way in which agricultural Bills have been treated. I have had the honour to introduce in this House fifteen Agricultural Bills, and fourteen of those Bills have been added to the Statute Book, and if it had not been for an unfortunate misunderstanding and interference I think I should have carried the Hops Bill through this House and the other 1009 House as well, and then every single one of the Hills I had in three years introduced would have been passed into law.
I hope I am not detaining the House too long. May I for one moment point out what the Budget does for agriculture, this Budget which is going to ruin it? There is no additional duty on earned incomes under £2,000 a year, and I should think there are very few of your Lordships' tenants who return profits at that sum. What have we done for your Lordships? Landlords' allowances are increased from twelve and a-half to twenty-five per cent., and that can be spent on repairs, insurance, management and maintenance. Maintenance, as your Lordships know, includes replacement, and replacement is a word in the Bill which means rebuilding farmhouses, cottages and buildings, putting up fences, &c, and that is a direct incentive for landowners to rebuild the cottages on their estates and so to avoid patching up those miserable insanitary hovels which even under certain circumstances on the best and most generously managed estates, still unfortunately exist, and which are found to be so untenantable and so insanitary that they have to be pulled down by the order of the local authority. Well, there is the matter of the Super Tax—£600,000; that goes to road improvement. There are the Death Duties. For the first time, under Clause 56, they can be paid in land. Instead of having to raise money on the estate you can pay in kind—pay in land. Timber is only chargeable when sold. As regards the Land Taxes I need not take up one moment of your Lordships' time, because last night my noble friend Lord Beauchamp pointed out that none of those taxes apply to agricultural land at all. The relief of rates by the grant of half the Land Taxes and the Mineral Rights Duties amounts to a quarter of a million this year and probably would go on increasing.
When the deficit was first discussed in public the whole of the Liberal Party, aye, and the Labour Party as well, were unanimous on one point. They said "If it is wrong to tax food—and every single one of us agrees that it is a wicked and a cruel wrong to tax the food of the people—it is equally wrong to tax the land that grows that food." The Chancellor of the Exchequer was determined on that point, the Cabinet was unanimous on that point, and therefore the Budget was drawn on 1010 lines as favourable as possible to the landlords, to the tenant farmers, and to the small holders. What did the Chancellor of the Exchequer say on the 9th of June to the agricultural industry? He said—I want £16,000,000 from you. I estimate to get by extra Death Duties £480,000; in extra Income Tax I estimate to get £280,000, and with the new Super Tax in addition £120,000. I think that you—that is the agricultural interest—ought to contribute to the new taxes £880,000, but per contra—as the bankers say—I shall relieve you by giving on the other hand a relief to the Road Tax—that is for road improvements—£600,000 and for the Agricultural Development Grant £250,000; so that if you deduct the £850,000 from £880,000 you will find the extra taxation you will have to pay practically as an interest is £30,000.Well, but in the last days of June Mr. Lloyd-George went further, and he said—There are provisions in the Budget which will safeguard the agricultural interest, and I say if those provisions are not sufficiently strong I am prepared to accept any Amendment which will make that perfectly clear.The House of Commons took him at his word—a Liberal Minister's pledge is his word and bond—and the land clauses were debated for thirty-five days in the House of Commons. There was no guillotine, and there was very little of the closure. This, I think, hardly bears out my noble friend Lord Rosebery's statement that measures were shot into this House with as little inquiry as possible. Both sides, the great Conservative Party and the Liberal Party, the agriculturists on both sides, gave every assistance, and on the 30th of September the following concessions were announced as the result of deliberations. Mr. Lloyd-George reduced the extra Death Duties from £480,000 to £450,000. He then wiped out at once the whole of the additional Income Tax of 2d. in the pound, which came, as you remember, to £280,000, by giving relief to agricultural landlords under Schedule A; and to such a liberal extent did he do this that when it works out it will be found that he positively gave the agricultural landlords of this country a bonus of £95,000 in addition. These are Treasury figures, absolutely correct. He also reduced the Super Tax from £120,000 to £78,000, and therefore your Lordships will see that the total reduction brings down the additional taxation on the agricultural interest for national purposes from £880,000, as it was in June, to £443,000.
But this is not all. Your Lordships will remember that he promised to assist the 1011 agricultural interest by the Road Grant and the Development Grant—that is, by £850,000. The agricultural interest at the present moment under the proposed Budget is to pay in extra taxes £443,000. Take £443,000 from £850,000 which is given by the Government, and the agricultural interest in this year comes out £407,000 on the right side, although we had to raise £16,000,000 for "Dreadnoughts" and Old Age Pensions. Yet we are told—solemnly told by Mr. Walter Long, who no doubt believes every word he says, that the Budget is especially destructive to land and landed interest! I leave the case there. I have nothing more to say, good or indifferent. I leave the case there for the public to judge it on its merits. These figures are Treasury figures. They cannot be shaken, and they are perfectly accurate.
In conclusion I should like to say I can perfectly understand—anybody can perfectly understand—the objection to this vindictive Budget, as you may like to call it, of the vested interests, of the millionaires, of the brewers, of the urban landlords, and of the mine owners. A tax is disagreeable to everybody, and I can quite understand that even vested interests object to these taxes, and will do everything they possibly can to put the burden on other shoulders. But when the agricultural interest and the farmers realise the position that is being thrown away by the rejection of this Budget; when they realise this position—and the farmers are a hard-headed lot of men—they will not allow themselves to be led away by the unreasonable fears and sophistries of Mr. Long and his friends. They will see with us that our proposals in the Budget—all the proposals in the Budget—are just and fair, and especially just and fair towards the great national industry which I have the honour to represent. And I feel certain that the agricultural industry will not support noble Lords opposite, when it knows the real state of the case, in your attempt, by destroying the people's Budget, to precipitate a national crisis the gravity of which it is impossible to over-estimate, and the consequences of which it is impossible to foretell or to foresee.
THE EARL OF ONSLOW
My Lords, we are always delighted with the breezy optimism of the President of the Board of Agriculture, not the less because that optimism takes the form of a confident 1012 belief in the omnipotent powers for good of the Liberal Party and of the Liberal Government. The noble Earl has produced figures to your Lordships by which he has striven to show that the result of the Budget would be relief to the landowners. He has told your Lordships that the value of land was advancing by leaps and bounds, notwithstanding the fact that the harvest has not been particularly good. One or two of my noble friends asked him whether he had any information as to the effect of prices upon the value of land, but the noble Earl did not tell us how far it was the effect of the undoubted rise in the price of agricultural produce. He was content to say that he had passed fourteen out of fifteen Bills that he had introduced to Parliament, and he seemed to rest upon that foundation the increasing prosperity of agriculture. I remember some years ago when Her late Majesty Queen Victoria took part in a review of the troops on their return from the Egyptian Campaign, there was an exceptionally dense fog, but just as Her Majesty drove up to the saluting point the fog lifted in a marvellous manner, and everybody said it was due to the exertions of the Liberal Government. The noble Lord has paid the compliment to noble Lords sitting on this side of the House that we have assisted him by piloting his measures through Parliament. I think there was a vein of irony running through his remarks; they sounded like the sentiments of those careful people who do not attribute everything to themselves, but who remark, when anything happens to their satisfaction, that it was through the mercy of Providence and the oversight of the devil. The noble Lord produced some figures by which he hoped to show that the result of the Budget would be a relief to the landowners of this country. I am at a loss to see how that is to be the result, if that particular form of investment has to pay Income Tax, possibly Super Tax, increased Death Duties, increased Succession Duties, Increment Value, Undeveloped Land Duty, and Reversion Duty. It seems to me impossible to see how, under those circumstances, the Budget is going to be a relief.
THE EARL OF ONSLOW
The landlords of this country are the owners of land of different kinds and will all have to bear these taxes or some of them. It is 1013 no answer to say because there are no extra burdens put on agricultural land that landowners as a class will not have to bear additional burdens. Of course they will. Is it not reasonable to suppose that if there are opportunities of transferring the burden from landlords to tenants an endeavour will be made to do so? Those who will feel the burden more than any others in the course of a very short time would be the tenant farmers and small holders in whom the noble Earl is so greatly interested. He said nothing about the valuation proposals contained in the Budget. If there is to be no taxation levied upon agricultural land, why in the name of fortune should the Government want to have it valued at all? I want to know why it should not be quite sufficient for the purposes of the Government that a declaration should be made by a land owner that his land is agricultural land not exceeding £50 an acre in value, and that he should then enjoy exemption from valuation. This valuation will be a very severe and onerous tax. The Government now propose that the valuation should be made by Government valuers. But these young gentlemen receiving £500 a year will not have their valuations accepted by every landowner. It will be necessary to employ other valuers to test the decisions arrived at by the government valuers. I will not pursue further the question of the land taxes because the hour is late, and it is a subject with which many are more competent to deal than myself.
I should like to refer to another aspect of the question—I mean the constitutional aspect. The noble and learned Lord on the Woolsack commands the respect and admiration of all members of this House, and therefore I am very glad that we are able to accept wholly and unreservedly the declaration he made on the first evening of the debate. The noble Marquess, Lord Salisbury, said that the noble and learned Lord had on a previous occasion declared that this House had a perfect right to reject a Money Bill. If I heard the noble and learned Lord aright it was exactly what he repeated on the opening night, but he accompanied it by a further declaration that we must look also, and even more, to custom, usage, and convention. Lord Rosebery has said that we are governed more in this country by custom than by law. That is perfectly true, but who was the first to break through 1014 this custom which has been hitherto honourably observed? I venture to say it was the Government. Custom forbade your Lordships to alter a Money Bill, but it also forbade the House of Commons to put into a Money Bill anything but the provisions for the current expenditure of the year. But what has happened this year? The Government have put into the Finance Bill a Valuation Bill, which is not going to bring in any revenue, and a Licensing Bill, or, at any rate, vindictive legislation, which has for its object the extermination of the publican. If one party therefore, breaks through a well-understood practice I do not think it lies in their mouths to make complaint when the noble Marquess asks your Lordships to differ from the procedure which has been followed in former years.
Now what is the issue that lies before us? It is not a question affecting the interpretation of the Constitution, neither is it whether indirect taxation should be substituted for direct taxation. The issue really amounts to a challenge on the part of noble Lords opposite that this House has no right to determine when there shall be a General Election. This has been said on several previous occasions. It was said when your Lordships threw out the Education Bill, but we have it on the authority of one of the leaders of the Nonconformist party—Sir Robert Perks—that they never wanted that Bill, and that it was perfectly distasteful to them. No General Election took place at our dictation then. Your Lordships also threw out the Licensing Bill. That Bill may have died either in Berkeley-square or in this House, but it died "unwept, unhonoured, and unsung," and it cannot be said that your Lordships dictated a General Election then. Now this Finance Bill embodies the principle of both of those measures, in addition to the Supplies of the year. The duty of this House is a very delicate and a very difficult one. A General Election takes place but very seldom, and it is difficult to know what the country thinks of many measures put before it by the Government. Your Lordships are rather in the position of thought-readers. You have to judge as best you can whether the country is in sympathy or not with the measures placed before this House. I do not believe for a moment that the country was in sympathy with the Government either in respect of the Licensing or Education 1015 Bills. Why did not they put it to the test? The test was applied in 1895 when your Lordships rejected the Home Rule Bill, and on that occasion your Lordships proved to be very accurate thought-readers and to have accurately interpreted the opinion of the country.
The noble Earl opposite used language which I will not describe as minatory, but it was calculated to cause you to pause before taking a step further. We have been told that things cannot be as they were, and that no quarter will be given. The Secretary for Scotland yesterday said that there was a raging, tearing propaganda in the country. My Lords, there is a raging, tearing propaganda going on in the country against your Lordships' House. But what is the penalty to be meted out which may be "altogether disproportionate to our offence?" Is it that there will be a reform of this House? We have had a Committee sitting which agreed that reform was desirable. Is it that there should be some Referendum to the people other than that of a General Election? Lord Rosebery has said that he, for one, would welcome some such proposition. The Committee expressed regret that it was not within the terms of their reference. Or is it a proposal that there shall be but one Chamber and that the Second Chamber shall be swept away altogether? If that is the proposal noble Lords opposite are going to put before the country, I hope they will present it without delay, for I am satisfied that, whatever may be the views of this country about the Budget or the constitution of your Lordships' House, there cannot be two opinions that this country will not stand a single Chamber. The proposal made by the late Prime Minister really amounted to a claim that, however old a Parliament may be, it must represent in all things the will of the people. That is a preposterous position to take up. It is not the view of the great Statesmen of the past. Burke said "the virtue, spirit, and essence of the House of Commons consisted in its being the express image of the nation." Was the House of Commons of 1895 the "express image of the nation"? I think not. The intention of that resolution is that when once a General Election is over the interests of the country are to be handed over to the Ministers for the time being and no control is to be held over them by another House of Parliament.
I am not one of those who minimise 1016 the gravity of the step to be taken in throwing out this Finance Bill, but I venture to say that that step is not so grave a one as would be the demand that in a Finance Bill may be embodied matters which are not concerned with the provision of Supplies necessary for the year. This House does not set up any claim to control the personnel of the Ministry of the Crown. It does not initiate and it does not claim to alter Finance Bills. But it does claim to stand between the people and rash and vast changes, whether made under cover of a Finance Bill or in any other way—changes that may destroy the slowly-built-up fabric of our national credit, which may drive the accumulated savings of the people to other lands to provide employment for foreigners instead of for Englishmen, and which are designed to establish a system of land nationalisation that may corrupt the whole system of Government and debase the people by making them dependent on those whom they have elected, instead of upon energy and enterprise. It is because we feel that no other course is open to us that most of those sitting on this side of the House will give our vote for the Amendment of the noble Marquess; and we believe that we shall receive the support of the country in maintaining the right of this House to oppose changes which we believe to be detrimental to the country, until such time as the people shall, if they so will, endorse the action of His Majesty's Government.
§ LORD GLANTAWE
My Lords, this question is such an important one that it cannot be treated too lightly, and I will venture to detain your Lordships for a few minutes even at this late hour. This Bill bristles with a number of obligations in the shape of new taxes. Taxes at all times are very objectionable, for whatever purpose they are needed. The great need in this instance has been the large expenditure made on the Navy and the enormous expense we have incurred in Old Age Pensions. Our expenses are increasing very rapidly year by year. They are stated this year at 165 millions, and the estimated revenue at 148 millions, which means that there is a deficit of about seventeen millions to be met. When we enter into these obligations the next duty that faces us is to provide funds with which to meet them, and to my mind the manner in which the Chancellor of the Exchequer has met them is a perfectly fair one.
1017 Old age pensions are popular on both sides of the House. The necessity of making provision for the aged poor has been discussed in the country for a number of years. It was advocated by Mr. Chamberlain, whose absence from the other House we all deplore, and especially the cause of it; he was about the first to introduce this great question, but following upon that he introduced the question of Tariff Reform. Tariff Reform, according to Mr. Chamberlain's view, is the only remedy by which the country can meet all the obligations they have incurred. That question at the time created a great sensation on account of the personality of the man who brought it forward. Had it been advocated by any less notable person than Mr. Chamberlain the country as a whole would have pooh-poohed it. The best definition of Mr. Chamberlain's policy is, I think, given in the Daily Mail Year Book for 1907, and there it is given in a short space. Mr. Chamberlain endeavoured to show that from his point of view the duties he proposed to impose were such as would not cause inconvenience to any sections of the community, yet on the whole they would not affect the working classes more than to the extent of 2d. per annum. The question was fully discussed throughout the country, and Mr. Chamberlain, as you are aware, made very able speeches; he selected certain trades and illustrated them as dying trades, and as trades that would be driven to other countries because other countries levied heavy duties upon our produce and dumped their materials into this country to our detriment free of duty. As a matter of fact, almost every industry pointed out by Mr. Chamberlain as a dying industry revived as soon as it was so selected. Then there is another remarkable little table given in the book to which I have referred, and I should like to call the attention of your Lordships to it. It shows that in the twenty years from 1880 to 1900 the cost of food fell from 120 to 101, and the cost of clothing fell from 168 to 98. On the other hand, rent in London rose from eighty-seven to 100 per cent.; rent in other large towns increased from eighty-five to 100 per cent., and rent in Great Britain, excluding London, rose from seventy-nine to 100 per cent. These items show that the advantages derived from cheap food were counterbalanced by the great increase in rent. I have quoted these figures because the Daily Mail has been a strong advocate of Tariff Reform throughout.
1018 In the excellent debates we have had on the Finance Bill it is to be noted that those who object to the taxes do not suggest how the revenue is to be increased so as to meet the obligations. We have been told that Tariff Reform is the only alternative. I have been a Free Trader ever since I understood anything of Free trade. I have followed this question very closely, and have given a great deal of time to it. I have tried to look at it from an impartial point of view, especially when strong cases are made out that some industries are affected by the dumping on these shores of materials from other countres at a cheaper rate than we can produce them. Tariff Reformers tell us that it is not their intention to levy a tax on raw material. But we have to recognise that what is a manufactured article in one particular instance would be a raw material for other purposes. There is no country in the world that dumps so large a quantity of goods as we do, because we are a manufacturing nation, and without demands from other nations for goods, either of a raw or manufactured nature, it would be impossible for us to carry on our manufactures and give employment to the people in the way we do at present.
We are frequently referred to America and Germany. It is well known that the number of unemployed in both of those countries has been far greater than in this country, and that the cost of living in both countries is very much higher. I have had several letters from persons who were in my employ before they went to America, imploring me to advance the money to let them return to the Old Country. During the last two years in America the number of men out of employment has been between fifty and seventy-five per cent. greater than in this country. Trade, however, is reviving there now. The financial disturbances which occurred two years ago were of a very far-reaching nature, their ramifications seriously affected every European nation; they affected American trade very much more seriously than anything has affected trade in our country. I feel confident that we should not derive benefit if we adopted Tariff Reform; this country has been so prosperous during the last fifty years under Free Trade that I think the adoption of Tariff Reform would be most detrimental and dangerous.
Leaving that on one side, I have noticed since the present Government came into power the great difficulty of passing Bills 1019 through your Lordships' House. Whatever has been proposed has been criticised, frequently unduly, from a purely Party point of view, and not upon its merits. Take, for instance, many of the remarks made in this debate. The Chancellor of the Exchequer has endeavoured to meet the wishes of a large number of deputations that have waited upon him representing the different trades of the country, and especially the agricultural interest, and they have been met in such a way that now the Chancellor of the Exchequer is charged with having brought in a Bill that he had not fully considered. He has made concessions in order to meet the requirements of the different trades. I have given the question close attention, and the proposals are such as I can very heartily endorse. I have attended some of the meetings of bankers in the City where very strong views have been expressed upon certain questions, especially with regard to the Stamp Duties. These duties have been modified in such a way that I think now they may be considered in every respect satisfactory.
I was very glad to hear the strong speech made by my noble friend Lord St. David's, who has had a large experience of the employment of capital in foreign countries and has been largely connected with the shipping trade. We have nothing to fear in this Budget from the transfer of British capital to other countries. No money will be driven away unless it can be proved that investors will get a better return. I listened with close attention to the Chancellor of the Exchequer's speech when he introduced his Budget. I did not quite agree with some of the proposals put forward at that time, especially with regard to the tax upon ungotten minerals. I think the tax that is now put upon minerals is a fair one. Some mineral property owners act very fairly towards their lessees, but there are others who do not meet their lessees as they should do. I was sorry to hear the uncomplimentary references that have been made about Dukes. We have a Duke in our neighbourhood who owns a large mineral property. I have had to do with him both in buying land for public purposes, and also in my private capacity. I must give him and his agents the credit for having met every case in a most liberal and business-like manner. There was a large colliery in the neighbourhood owned by the Duke of Beaufort, and those who took the colliery spent a large amount 1020 of money upon it. The colliery was unremunerative for a number of years, and the royalty was 9d. per ton. Representations were made to the agent, and the Duke of Beaufort very generously reduced the royalty to one-half, and from that time the colliery has been successful and has given employment to a large number of people. That is an example by a noble Duke which many other lessors of minerals might well follow.
The tax on royalties is a very small one, and I think it ought to have been very much larger, especially when we consider that when a colliery is sunk in a district the value of the surface land, which was not previously worth more than 5s. or 6s. per acre, is advanced at once to £4 or £5 per acre. The royalty owner contributes nothing to the rates and taxes of the district but pockets all the profits, and the only contribution he at present makes is to the Income Tax. On the other hand, the lessees and the men who work in the collieries have to build their own houses; they have to pay a very high ground rent; they spend money on building cottages; they have short leases; they have to effect sanitary reforms, and to go to the cost of getting water to supply their houses; and at the end the landlord has the full benefit of the whole expenditure and the poor lessees are sent empty away. To my mind that is iniquitous. I think that the amount now claimed from the royalty owner is a small one, and I cannot help thinking that when the principle is debated you must put it under the head of what is frequently termed "the thin end of the wedge." I have no doubt that at present the amount charged on royalties is small, and not fair to those who work the minerals. I had intended to refer to other questions of great importance, but many of them have been debated. Therefore, I will not delay your Lordships longer but will conclude by saying that I support the Budget most heartily.
§ Debate again adjourned till To-morrow.