§ Debate on the Amendment moved by the Marquess of Lansdowne to the Motion that the Bill be now read 2a resumed (according to order).
§ LORD ASHBOURNE
My Lords, I regret very much that indisposition prevents my noble friend Lord Curzon being here this afternoon to continue the debate, but I hope he will have an opportunity of speaking before the debate closes. It is impossible to overstate the importance as well as the great interest of this debate. It is manifest to any one who has followed its course that every speaker who has hitherto addressed the House has been deeply impressed with the sense of his responsibility. Certain things have become perfectly plain. I have not found in any part of the House a serious effort made to question the absolute right of your Lordships to proceed to vote for the Amendment moved by my noble friend the Leader of the Opposition. No one who is alive to the Parliamentary and political history of the country has questioned the impropriety of an effort to overpower your Lordships by the process called "tacking" Bills. The quotations made by the noble Marquess the Leader of the Opposition were amply sufficient to prove the constitutional propriety of his action and of his objections to tacking, but they were only a selection from the consensus of opinion among all great lawyers and all great Statesmen. You cannot find a single leading writer on the political history of England that does not readily admit what cannot be challenged—the clear right of this House to act as in its discretion it may think right in reference to the rejection of a Budget Bill, and also the clear right of this House not to have its judgment interfered with by the process known as "tacking" on other Bills.
The only effort I have heard made in this debate to question these most obvious facts was made, or partly made, by my noble and learned friend the Lord Chancellor, but he did not seek to question what had been said by Lord Spencer and Lord Ripon a few years ago. He did not call in question a single word of those statements. All he said was that he admitted the technical right of this House, but that it was unconstitutional to reject the Budget; and when my noble friend Lord Salisbury, in his most interesting speech, gave a quotation from a speech of the noble 1024 and learned Lord which appeared in its terms entirely to admit the contention, the noble and learned Lord said that that sentence must not be taken in connection with the wider proposition, but was to be narrowed down and confined solely to the particular Bill of which he was speaking. Be it so. I have too great a respect for my noble and learned friend not to accept readily any reason he gives for any sentence he may use, but I must say that I do not understand what he means by saying this Amendment is unconstitutional unless, as my noble and learned friend Lord Halsbury pointed out, it is a phrase that is used to cover the impossibility of finding any other convenient word.
What is meant by saying that it is unconstitutional? I do not know. It is a commonplace in our Constitution that this House has the right contended for. Is not the non-exercise of this power in itself a proof of the moderation, the prudence, the caution, the forbearance with which this House acts in reference to its strict powers? I use it as a proof that this House is ever jealous to recognise and support the privileges of the House of Commons. I had the honour of sitting for many years in the other House and would be the last to say a word in disparagement of its privileges, indeed this House has uniformly shown a desire not to run counter to but to assent to those privileges. But this Bill is an absolutely new departure, the like of which is not to be found in any previous Budget—it is an absolutely new departure in the history of Budgets, and in its purposes and in its attempted policies it far transcends the scope of any ordinary Budget. It presents a variety of Bills tacked on to a Finance Bill, whose sole purpose should be the provision of revenue for the year. This Bill seeks to go far outside that scope and object. The obligation is before the Government of finding means to meet the needs which have been accumulating within the last year, and if ever there was an occasion when it would have been wise, in view of those needs, to keep to constitutional lines that would not challenge dissent, that occasion was this year. This is not a pure and simple Budget; it is nothing of the kind. I am not going to weary your Lordships by attempting to wade through the intricacies of this complicated and strange production. I shall confine myself to a few plain topics.
1025 The Chancellor of the Exchequer—a man of great ability, of some humour, and with great power of statement—said that there was never a Budget framed more deliberately. I am prepared to believe that if it gives pleasure to anybody. Certainly there never was a Budget which had been changed more violently and more rapidly. There never was a scheme of finance so deliberately framed and so deliberately abandoned. When he came to unfold his views on the Land Clauses the Chancellor of the Exchequer appeared to have an attack of Dukes on the brain. He could see and think of nothing but Dukes. There are not a great many Dukes. To look at they are not very unlike other men. Some of them are rich, some of them are not at all so rich, and why it should give special pleasure to the Chancellor of the Exchequer to go out of his way to drag a Duke into every clause and every speech passes my comprehension. The Undeveloped Land Tax—a very ambitious and far-reaching tax—does not primarily affect Dukes, or millionaires, or great landowners. They are not a numerous class, but there are hundreds of thousands of small proprietors, and it would have been reasonable in considering taxation to remember that you may be making a tremendous onslaught upon those who can ill afford any additions to their burdens. Would it not have been wise to insert in that clause some words of protection and reasonable consideration for the building and kindred trades? Would it not have been well to bear in mind what we see at the street corners in London—the large numbers of unemployed—and to realise that thousands of workmen have been cast out of employment by the wreck of the building trade owing to this Budget? How the inclusion of such a tax in an ordinary Budget can be defended I cannot understand.
Nor can I understand the inclusion in a Bill intended to provide for the finance of the year of a proposal for setting up all over England a scheme of valuation which is to last for all time at an expense which transcends for the year all the gain that is to come out of it. I was greatly struck some time ago in reading the Westminster Gazette, a very able and much respected Liberal journal, to find the statement that—The Budget must not order land to be valued which it does not propose to tax. It is hopeless 1026 to expect to get a final and complete system of valuation out of a Budget for one year.To graft that proposal on to a Finance Bill is "tacking" of the grossest kind, to which this House has uniformly objected. It was sought to be done, as my noble friend the Leader of the Opposition pointed out, in a separate Bill but a short time ago, and that Bill having failed to pass, it is now attempted to graft a great new separate department upon the bureaucracy of the nation, and to do it under cover of a Finance Bill. This, as I have said, is "tacking" of the gravest kind. The same remark may be made in reference to the extraordinary Licence Duties. The licensing question was sought to be dealt with in a Bill last year. That Bill gave great dissatisfaction. The Bill did not pass. But now the Bill has reappeared in practically a worse form in the Budget. That, again, is an example of the unconstitutional practice of "tacking." It is impossible to defend it. In the other House it was charged to be either an act of revenge or an effort to please extreme temperance reformers. If the Government go outside the ordinary methods of a Budget Bill, then they provoke and challenge criticism.
I had the honour of sitting in the House of Commons with Mr. Gladstone, as had also the noble Viscount opposite, Lord Morley. In common with other of his opponents I always had the greatest respect for his commanding powers of speech and his great statesmanship, and I read a quotation that greatly struck me in a paper recently from a speech by Mr. Gladstone in 1861. Mr. Gladstone said on that occasion—If the House of Commons attempted to abuse the finance forms for legislative purposes, the Peers might find it wise and just to fall back upon an assertion of the whole breadth of their privileges.Can any one doubt that Mr. Gladstone would never have been a party to this Budget? I do not believe he would have listened to a single proposition in it. He was a very great Chancellor of the Exchequer, he was a great master of figures and finance, but he was also a great purist as to Budget Bills, and you cannot point to a single financial speech made by Mr. Gladstone or a single Budget for which he was responsible either as Chancellor of the Exchequer or Prime Minister that did not keep within 1027 lines that were perfectly capable of defence. It shows, had Mr. Gladstone been a Peer in this House, the kind of criticism he would have passed on those financiers who have so terribly fallen away from the pure lessons of honourable finance. Mr. Haldane, the Secretary of State for War, a man whom it is impossible not to speak of at all events with seriousness, and whose military position no doubt caused him to recognise that caution was required, said lately, in reference to what is expected to take place, that the Government may have a great victory but may have a great defeat. I was amused to see that the right hon. gentleman called on his numerous friends at a luncheon to act as the stern Romans acted when Hannibal was almost at the gates of Rome. Whether he meant to convey that the noble Marquess who moved this Amendment was in the position of that Great General or not I do not know, but whereas Hannibal did not have many friends within the lines of his opponents, I am very sure that the noble Marquess has many hearty well-wishers within the ranks of the supporters of His Majesty's Government.
I have not heard every speech delivered in this debate, but I have had the pleasure of listening to a great many. I do not think that any speeches that I have heard for a long time in your Lordships' House have so impressed me as those of Lord Revelstoke, Lord Avebury, and Lord Milner. I do not profess great acquaintance with the topic they discussed, but it was impossible for anybody not to be tremendously influenced by what they said. They are all men of great ability, great power of expression, vast experience, and immense knowledge of the topic, and they all spoke each from his own point of view of the feeling of unrest and insecurity which has everywhere been caused by this Budget. Consols have fallen; prices have tumbled down; a deadly blow has been given to trade and commerce, and there has been a flight of millions—an appalling number of millions sterling—from England to a more secure haven in other parts of the world. That is an immense fact. The Prime Minister said, with apparently a light heart—although a man sometimes uses light words when his heart is heavy enough—We have Bent millions of British capital to the uttermost parts of the earth.1028 I suppose he thought that was a thing that could be accepted and cheered. What does it mean? British capital has gone to the uttermost parts of the earth, with great advantage, I have no doubt, to the development of civilization and to make legitimate profit. If it went there for an honest and legitimate purpose, it is well; but if it went there because it had no security at home, if it was compelled to go abroad to find a safe outlet, that is a matter full of grave importance to which we should give very serious thought.
I cannot close my remarks without a reference to the country to which I belong. The Irish are very clever, very intelligent, and generally know where their interests are. I do not believe that there is a man, woman, or child in Ireland at the present minute in favour of this Budget. My noble friend Lord Donoughmore the other night, in a closely-reasoned and admirable speech, showed that in a way which left no possible room for doubt. Is not that a circumstance that should be borne in mind? I do not think that you will find any great enthusiasm for it in England, in Scotland, or even in Wales, except perhaps out of a sense of personal loyalty to a Welsh Chancellor of the Exchequer; but speaking for Ireland, which is well informed as to its own interests and wants, I do not believe that any one is in favour of it. It is my pleasure to read Irish newspapers, not always of my own way of thinking, and I read in nearly every one of them now resolutions of different public bodies, all of whom are against the Budget and deploring that their Members had not acted more as they wished them to act in distinctly opposing it. That is a circumstance I do not dwell upon, but I think it is one that should not be lost sight of.
I quite admit that wealth should bear its full share in meeting the national wants. No one questions that. It is quite right that those who are wealthy should pay a much larger proportion of taxes to meet the needs of the nation than those who are much poorer. No one denies that. I know a good many rich men, and have never heard any of them express any dissatisfaction at having to bear their legitimate burden. There is, however, reason in everything. The moment that you admit the train of reasoning that you have only to rob 1029 the rich to relieve the poor it is quite possible that you may drive millions away from the country by your action, but, if you do so, you will necessarily increase the unemployed by thousands. It is easy enough by means of a Budget Bill to take capital from the capitalists of your own country and to apply it when levied as taxes as part of the income of the nation. But is that business? This is not a Budget pure and simple. It embodies many Bills and many programmes, and the House of Lords has a light to be sure that the nation knows that it is an entirely new departure. Would your Lordsips be justified in giving assent to this strange production without being sure that it was accompanied by the sanction of the nation?
The noble Earl, Lord Rosebery, yesterday made a speech such as we have heard him make before. It was able, forcible, and witty, particularly at the beginning and in the middle. He denounced in a way that none of us on this Bench could have done every item in the Budget. Our language is chaste to moderation compared with what he said of it. He had not a good word to say about any part of it. As to its framers, I will not say he denounced them, but I think he uttered a silent prayer and thanked God he was not like any of them. There was nothing very new in the early part of the noble Earl's speech. He had said a great deal of it before in Glasgow and he had prepared us for his Glasgow speech by a letter in which he denounced the whole Budget as a revolution. Then he made the Glasgow speech. He could not go much stronger. He stuck to the word "revolutionary," proving it up to the hilt, and he said last night that he adhered to every word of the Glasgow speech. I had the pleasure of reading the Glasgow speech. I did so with great interest, because it is always pleasant to read a vigorous—shall I say?—onslaught, or a free, conscientious denunciation of your political opponents; and I gathered from reading that speech, being only a plain, ordinary man, that the noble Earl earnestly hoped—he did not say he would lead the charge—that there would be brave and true men in the country who would do their best to throw out this Budget. Yesterday, not having said a word in advance indicating that he had receded from the Glasgow speech, and saying, indeed, that he did not recede from 1030 it, when he came to apply it we were not so clear as to the clearness of his mind. The conclusion was not at all the same as the beginning or the middle of his speech. At the close he did not like the Budget or its framers a bit more. He still thought the Budget revolutionary, but he was not absolutely sure if he were in the position of the noble Marquess the Leader of the Opposition that he would not for this occasion only pass the Bill and wait for a better occasion to try his hand. As an ordinary man I do not think that that was a solution that gave great guidance to those who were listening. If it is an unprecedented Budget like the Budget we have before us; if it is revolutionary; if it contains all the bad taxes that this Budget does, one would have thought that the logical consequence was that with this unwonted, abnormal, unclean thing, violating in "tacking" every constitutional principle over and over again, before it now, if the House of Lords was ever to act, he would have supported a motion as prudent and as wise as that of my noble friend, and would have declined to be responsible for the passing of the Bill until satisfied that assent was given to it by the people.
If the House of Lords is prepared in silence to pass this Budget, so unusual in its conception, so enormously out of harmony with all previous action, so opposed to every Budget that Mr. Gladstone framed, so startling in its possibilities, so far-reaching in its intentions, surely people would ask, What is the use of the House of Lords having the strongest opinions about a Bill if, when the time comes for action, it does nothing? What are we waiting for? If the House of Lords does not act now, will it ever act? I am as much impressed as any one with the magnitude of the issues. I feel as much as any one the seriousness of the debate in which we are engaged, and I feel the great responsibility which rests on every member of your Lordships' House. Every one in going through life has to face and assume, and not shrink and run away from, responsibilities. If you feel that you have something before you which should not be presented as it has been; if you entertain a strong vigorous judgment in reference to it; if you feel that it is opposed to all principle and to all precedent, that according to your light and your conscience you would not be justified 1031 in passing it without the sanction of the nation, surely, my Lords, that is hardly the time to wait for something worse in order that you may then begin to do your duty. I concur with the Amendment of my noble friend the noble Marquess, and I ask myself whether, in Mr. Gladstone's words, the occasion has not arisen for a wise and just falling back upon the assertion of the whole breadth of our privileges.
LORD BALFOUR OF BURLEIGH
My Lords, I am sure your Lordships will agree with the noble and learned Lord who has just sat down in regretting the absence of Lord Curzon from the House to-day, and no one more heartily wishes than I do that he may be able to be present early next week to take that distinguished part in the debates in this Chamber which he has done already on many previous occasions. I also find myself in agreement with the noble and learned Lord as to the importance of the subject which we are discussing to-night and in the fact that the issues with which we have to deal are very complicated, for they concern not only the merits of the legislative proposals of the Government but touch also the constitutional powers of this House. But I am not able to find myself in concurrence with him as to the practical wisdom of the course which is recommended.
I agree with the noble and learned Lord that in many respects this Finance Bill is an unfair one. I think, with him, that it introduces novel principles, and introduces them in not altogether a fair way. I agree with him that the Government have not much reason to congratulate themselves either as to the form in which it is presented to us, the history of their proposals, or their method of dealing with the problems which they have raised. There have been, since this so-called "well-prepared" Budget first saw the light, many changes of front, neither small nor unimportant. Of the first 700 lines of the Bill, I believe 530 have been altered. There were originally seventy-four clauses, and some twenty-three more have been added which contain something like 5,000 words more. It will not do for the noble Lord opposite (Lord St. David's), who spoke last night, to say that all these changes were made as concessions to the opponents of the Government. They were made on account of the fact that many of the proposals that were in the Bill when it was first introduced could not stand criticism. They were bound to die in the light 1032 of the common-sense of those who had their attention attracted to them. This is true as regards proposals concerning minerals, as regards the exemption of agricultural land from the increment duty, and many of the exemptions of dwelling-houses.
The most striking changes of front have been made with regard to valuation, with regard to the substitution of a tax on mineral royalties for a tax on ungotten minerals, and also as regards agricultural land. The Government are fond of taking credit to themselves that agricultural land is to escape the additional burdens imposed by this Bill. I think the noble Earl the President of the Board of Agriculture was very clear on that point last night. Looking at the provisions of the Bill, I think it is a fact that the increment tax would not be laid on agricultural land as we generally know it, and I admit also that there are some concessions to the owners of agricultural land in the Bill. But very little account is taken of the severity of the burden which agricultural land is bearing at the present time. It bears an enormous proportion of the burden of local administration, and, in addition, there are six matters in which the burden on agricultural land will be increased by this Bill if it passes. There will be the Increment Value Duty at the rate of twenty per cent. on the difference between the value of the land on April 30, 1909, and when it comes to be sold. There is the difference between the original site value and the reversionary value of leases. There is the Undeveloped Land Duty, where it applies, on capital site value. There will be the Mineral Rights Duty, which, if not absolutely a tax on agricultural land is on the owners of that class of property. There will be the increased Death Duties, which apply all round, and there will be increased Stamp Duties on the conveyance of leases, an increase of about 100 per cent., except on conveyances where the consideration is not over £500.
Another objection which I entertain to this Bill is that it levies taxes which are not necessary for the service of the year, and it does not seem to me to be any answer to say that the State will be put in possession of funds for future expenditure. In my humble opinion, this aggravates the change that is made, because it tends to make the Executive more and more independent of the control of Parliament. If I object to some of the contents of this Bill, I object still more to 1033 the tone and temper of some of the speeches by which it has been recommended. I have no great experience of elections but I am led to believe that the use of rotten eggs in their coarser form is largely being abandoned. But there seems to me a considerable increase in the output of what I shall venture to describe as rhetorical rotten eggs, and I do not think they add either to tile amenity or to the interest of public life.
We are asked, for the first time, to look at the origin of property. We are asked almost in the very words, to levy a fine on those who are wicked enough to possess land of any kind. In some cases credit is taken for not confiscating the whole of what is described as national property, and I venture to say that the arguments used in support of these propositions are such as to strike at the security of property and the principle of private ownership in land. I frankly admit that the Government are not responsible for the wild exaggerations of all their supporters, but some of themselves are not free from blame in this matter. I ventured some weeks ago to bring to the notice of the House, to the notice of those who sit on the Government Bench opposite, the sort of arguments which are used by the Lord Advocate in the country. I called attention to the fact that he said that—these taxes involve a principle capable of far-reaching application. What was that principle? it was this, that the land of the country, the land, that is, distinct from the buildings erected on it, the land distinct from the improvements made upon it, in truth belongs to the nation.I asked the noble Earl who leads the House with so much courtesy whether these arguments represented the views of His Majesty's Government, but I was told, as, perhaps, was right and proper, that the Government had no time to deal with abstract discussions of the kind. One would not care so much, perhaps, for what was said by the wilder spirits who are irresponsible members of the Party opposite. But I think it is hardly fair—indeed, it is most unreasonable, if I may say so—that when those who hold high positions in the Government use arguments of that kind we should not know whether or not they represent the opinion of the Government as a whole. I do not want to go too far, but I go to this length, that in my humble opinion reticence of that kind is not creditable to those of the Government, if there are any, who disagree with these arguments. If they represent the opinions of the Government they should be openly 1034 avowed; if they do not represent the views of the Government then we have a right to know that fact for our comfort and our security. At any rate, these are novel arguments and new in the months of responsible Statesmen.
If I had to appeal to any one who par excellence was a Radical, and was also an honest man, I should name John Bright, and when this sort of argument was brought to his notice be said:—If you think to relieve the nation by robbing the landowners you admit that any class may be robbed if the nation or the poor require relief.Sir W. Harcourt said—I am content to assume that a man's right to his land depends upon the same principle as your right to the coat on your back—that you have paid for it.and he went on in homely style to say,If you want to reform the land laws do not begin by ballyragging the landowners.The language is not mine, but I think I might say, if you want to be fair to an unwritten Constitution, do not begin by ballyragging the House of Lords. I have one other quotation, and it has the merit of bringing in the opinion of Mr. Gladstone, as repeated with approval by a member of the present Government. I regret that Lord Wolverhampton is not present to-night. Speaking to his constituents less than two years ago, he was discussing matters affecting Socialism and the appropriation of land as part of that doctrine, and he said he would have nothing to do with any such scheme. He reminded his audience of what he once heard Mr. Gladstone say. There was a conversation, not on Socialism as a whole, but on the nationalisation of land, and, according to Lord Wolverhampton—the old gentleman, in his quiet stern way, listened for a long time and then broke out suddenly and said ' Do you mean to pay for it or do you not? If you mean to pay for it it is folly; if you do not mean to pay for it it is robbery.'I want to know before this debate closes whether those on the Ministerial Bench agree with those statements of men who have been colleagues of some of them and whose memory is honoured not only in their own Party but throughout the nation.
It has been abundantly admitted by everybody during this debate that we should all contribute to the money which is required according to our ability. It is 1035 almost a commonplace that the ownership of land is not an adequate test, taken by itself, of ability to pay. Land is already heavily burdened, and the complication of this Bill is such that it is absolutely impossible to estimate how much is added to those burdens. To some extent I stand in a peculiar position. I am responsible for a scheme for making owners of urban land contribute more than they do now to the bearing of public burdens. To that scheme I absolutely adhere. It was arrived at after five years of careful inquiry, during some part of which I had the assistance of Lord Milner as a colleague before he was taken to those greater and more arduous duties in which he has made his name. The opinions which I then ventured to express were not lightly formed. I knew quite well that they would not go the whole length to please those who are described as in favour of the taxation of land values. I did not expect to find that the carefully guarded and I would almost say conservative scheme for which I made myself responsible was to be quoted in support of the wild theories and ridiculous proposals now enshrined in the Bill before the House. What I ventured to suggest—I shall not go into it in detail—was this, that where it could be proved that increase of value came in any way from public expenditure, special rating should be put on to recompense for that advantage. The Lord Steward, who also is not present, mentioned the Thames Embankment as an illustration in support of the proposals of this Bill. That is quite contrary to fact. The land and buildings along the Thames Embankment derive their increased value quite as much from public expenditure as from what is called unearned increment, and they are one of the most conspicuous instances in which, I think, local authorities might be allowed to derive more benefit from their expenditure than they have done. In recommending that class of scheme we carefully, in a paragraph printed in the forefront of our report, guarded ourselves against being quoted in favour of those wild theories of depriving owners of all or any portion of their unearned increment which are a feature of this Bill. It is not fair to any one who takes part in public life and is appointed to serve on a Royal Commission that what he says in that capacity should be quoted one wit beyond what it will bear by fair and real quotation; and I think no one has suffered more than I have done by being quoted 1036 in support of theories which I have not only not adhered to, but have carefully guarded myself against.
As far as land is concerned, in this Bill we have a departure in valuation of the most serious kind. All that is proposed in the matter of valuation will be based on the purest hypothesis, when it is not based on absolute conjecture. The present system of valuation is easy to understand; it is arranged on definite principles; it has worked with extreme smoothness, at all events as far as I know it in Scotland; it is under the jurisdiction of the Law Courts; and it is a most serious departure to uproot that system and put it into the hands of a body of Commissioners without giving them most precise and careful directions. I go so far as to say that the Land Clauses of this Budget are a disgrace if for no other reason than that they are hardly intelligible. You have twelve different kinds of values, including increment value, site value, principal value, gross value, full site value, total value, assessable site value, value for agricultural purposes, original site value, and original total value. Some of these expressions are defined, some are not. One of them is defined and is never used again in any other part of the Bill. Site value in Clause 2 has a different meaning from site value in Clauses 25 and 27. I will ask your Lordships to look at the different subsections of Clause 25, and it really would not be a bad puzzle for an evening in a country house to get a dozen commonsense men to sit down and see if they could really agree on an understanding of that clause as printed in the Bill.
Throughout the whole of the first part of the Bill there are special traps and pitfalls for Scottish lawyers. English expressions are used which have no well-defined meaning in Scottish law, and which, if they are to be used in Scotland, ought to be interpreted or specifically applied. I suppose the Lord Advocate was too busy elsewhere to attend to this particular part of his work. I will give one or two examples. Under Clause 14, subsection 5, the gravest doubts exist whether the legal interpretation will have the effect of giving the benefit which I know is intended in the case of Scottish estates which are mortgaged. It is one of the great advantages held out to owners of land to induce them 1037 to accept the Bill that their incomes will be considered in respect of the mortgages which are upon their estates; but I am informed by more than one legal friend that as the Bill now stands, the gravest doubt exists whether any of your Lordships who own Scottish land would get the benefit of that clause if it were passed into law. Even where an attempt is made, as in Clause 42, to have special application to Scotland, it is doubtful whether Scottish circumstances are met Land is said not to include certain things, but my legal friends express the gravest doubt whether those definitions will work out satisfactorily. Such a conundrum as this arises. Does the upper flat of one of the large buildings now so common in our towns fall within the definition of land? Has the owner of an upper flat any right of property in the site value? Has the owner any right in the solum of the ground, or only a right of support for the building which is erected? Either way, injustice will be done. If the proprietor has no right in the solum of the ground, how can the valuation be applied to his case? He will get off too easily as compared with the owners of other parts of the building. In the other case surely there is a more obvious injustice, because the reason assigned for putting on this tax is that the increase of value, a part of which you want to take, comes not from the exertions of the owner, but from the presence of the community for what it is worth, and the presence of the community does as much to increase the value of one part of the house as that of another.
I have scores of similar instances, but I am not going through them. But there is one thing I want to point out. If your Lordships at your leisure will look at Clause 23, subsection (2), you will find a most curious provision. Undeveloped Land Duty is not laid on minerals, but under the subsection to which I have referred minerals are treated as if they had no value as minerals—these are the words of the Bill—unless the proprietor of the minerals in his return furnished to the Commissioners, specifies the nature of the minerals and his estimate of their capital value.That is a suggestion that the proprietor should put a value on his minerals. Why should he do so? Is it for the purpose of assessing increment when the full value of his minerals is obtained? If so, it is 1038 possible that a future development of the Undeveloped Land Duty will come upon him unawares. After all the care which is said to have been devoted to it, the Bill is not free from difficulty, and I believe there would not be one, but a dozen amending Bills required, and some appeals to the Law Court, before a working scheme could be arranged.
But, my Lords, I desire to turn to the constitutional side of the question which is before us to-night. After all it is the more important. I agree with the noble and learned Lord, if I may humbly say so, that no one has challenged the abstract right of this House to take the course which the noble Marquess has proposed. But, my Lords, the point is two-fold. It is not only a matter of constitutional practice, but your Lordships must consider what will be the effect upon the usage which has grown up uninterrupted for a great many years. It is a commonplace amongst us that our Constitution is an unwritten one. No appeal to documents is conclusive. It is all a matter of custom, of practice, of precedent, and I am glad that it is so. But the precedents which are so freely quoted do not always fit the altered circumstances in which we now find ourselves. It is absolutely true that this House has never, in so many words, abandoned its control over finance, but it is also equally true that long usage has made the House of Commons supreme in two matters. It is admittedly supreme in its control of the Government of the day and in its control of financial matters. These two things go together and they cannot be separated. But if the other House is supreme in these matters there are limitations to its supremacy. It is supreme only for the time of its life. We may not like to admit that practically the other House is supreme in these matters. I am not saying that it is a perfect Constitution. I am not saying that it might not be improved if you were going in for a written Constitution, if such a thing were possible; but I am arguing from the facts as they appear to me and as I believe they, in essence and in truth, are admitted by every constitutional lawyer.
But it is said:—"Oh yes, the House of Commons is supreme, but the people are supreme over both Houses of Parliament, and the motion of the noble Marquess is in effect a referendum upon finance." I venture to say, and I say it with some confidence, 1039 that whatever may be the advantages and recommendations of a referendum it is impossible as a matter of practice in financial matters. Finance differs from all other legislation in this respect. If a Bill is rejected either by a vote of this House or by disagreement between the two Houses the status quo which existed before the Bill was proposed survives and remains. It is not so in finance. If you are to establish a system whereby this House or any other authority had the right of establishing a referendum as it is called—a reference to the people in matters of finance—you would spoil and destroy the control of the other House of Parliament over the Government, and you would make, I venture to say, perhaps the most momentous change in the Constitution, as it has grown up, which has been made in the whole history of that Constitution. Take it how you like, if you pass this Resolution, if you make it a precedent—I care not with what safeguard you accompany it, whether you say it is only to be done on extreme occasions or by any other safeguard—you have made a change in the practice and in the Constitution which will prevent things going on as they have gone on up to the present time.
My Lords, if you win, the victory can at most be a temporary one. If you lose you have altered and prejudiced the position, the power, the prestige, the usefulness of this House, which I believe every one of you honours and desires to serve as heartily and as thoroughly as I do myself. If you win you are but beginning a conflict. Should I say beginning a conflict? You are re-making a conflict which has gone on from year to year and from century to century until the House of Commons has attained the position which I suggest to you it enjoys by usage at the present time. In an unwritten Constitution such as ours perhaps a contest of this kind at some time or another was inevitable. For some time—I think for some years—most careful observers have seen indications that it was coming. If I may venture to say so, I think in some respects the claims of both Houses of Parliament have been put too high by their respective admirers and their supporters. I am equally against usurpation by this House of the rights and privileges of the other House of Parliament. I agree that neither is supreme over the other, and if we are to work along in the future as we have done in the past there must be a 1040 very considerable amount of give and take and compromise.
I have noticed that three somewhat important changes have been growing in our public life for some years. Party organisation has been made more and more perfect. Part either of the advantages or the penalties of that perfection is that with more or less certainty it is crushing out the independence of those who are returned to sit and vote in the other House of Parliament. We have also had an increase of appeal to that most pernicious doctrine which is called the doctrine of the mandate. It is the pride of our Parliament that those who are sent, whether it be to this House or the other, are not delegates, but representatives. They are intended to act upon their mature judgment. Partly the growth of Party organisation, partly the pressure of this pernicious doctrine of mandate is changing that. It is making men more and more into delegates and less and less into representatives. If I may venture to speak of it with respect, the other House of Parliament has changed its procedure. What is known as the guillotine is more and more resorted to. I throw no stone. Both sides have been responsible for it. The Government of which I had the honour to be a member introduced it and increased it. If you take these three things together you will find that the tyranny of the Party majority, the difficulty of dissenting from the proposals of those who are really your leaders, is being greatly increased without that most odious charge which can be brought against a man in public life that he is a traitor to what he has promised or to those with whom he desires to act.
This is illustrated very well in the pages of a very able periodical which I sometimes read. It is very much in the interests of noble Lords opposite and their Party, and its present management is evidently high in the favour of the Government, because the editor was made a knight the other day. I refer to the periodical known as the British Weekly. Here is a most instructive sentence which appeared in the issue of the British Weekly last August:—It must surely be obvious that there would never be a sufficient number of voters enthusiastic enough about any one reform to carry it in the teeth of the formidable opposition which would make itself felt. When the people vote at an election they vote for a number of reforms, both social and political. The man who cares for one may be quite indifferent about another.1041 What about the mandate when yon consider these arguments? In effect it comes to this, that you are to have no Second Chamber, you are to have no referendum, because it will interfere with the power of the party organisation to get the legislation out of Parliament whether by a system of log-rolling between different sections or otherwise, and that the particular question shall not be referred distinctly and straightly to the people. In other words, they are not to have the legislation that they want; they are to take what the party managers give them.
Then comes the question of what I called give and take. Can any one say, looking back four or five years, that there was a distinct mandate given to the present Government at the last General Election to pass everything which they have suggested to this House precisely in the form in which they have proposed it and in no other? After all, it must be a matter of conjecture whether this or that particular Bill is or is not in the form which the people would most desire. I venture to say that in this matter noble Lords opposite have tried us in the House very hard. The noble Earl the President of the Board of Agriculture, who has a way of letting little bits of the Radical cat out of the Radical bag occasionally, told us plainly the difficulties of the Government in this matter some time ago. When a certain agriculture holdings Bill was taken up he accepted some Amendments in this House, but when it came back from the other place he told us in effect that, although he was in favour of them and thought them reasonable, and the Government were in favour of them, some of their supporters in the other House of Parliament were such terrible fellows that he could not get their consent, and we should have to give way. Having regard to the consideration I have put before you, there never was a time in the history of this country when, in my humble opinion, a Second Chamber, strong, trusted, and, as it must be in the nature of the case, somewhat Conservative, was more necessary than it is at present.
I turn to my own friends and say: Are you wise at this stage, in these circumstances, to make a new claim—for it is a new claim which you are making in the Resolution which is before the House to-night? I know quite well what many 1042 of you are thinking, that in matters of strategy attack is often the best defence. I know well when I look round the House and see the faces of people with the immense majority of whom I am proud to claim personal friendship—a friendship which I hope I shall never forfeit—that the immense majority of you are taking the course which you are proposing to take in what I believe to be a spirit of loyalty to the interests for which you stand, for no self-seeking or selfish purpose of your own. I venture to say, if you will allow me, that to some extent you have been put in a false position. You have been urged to take this course by those in the public Press and elsewhere who, in my opinion, are not the wisest friends of this House, and it is from an honourable feeling that you cannot betray those interests which I have mentioned that you will vote, as I am afraid you are going to vote, for the Resolution which is before you to-night. It is almost an insult for me even to say that I know from personal consultation, as well as from his own high character, that the noble Marquess who leads this side of the House has put down this Motion on the Paper from an absolute sense of duty, and because he thinks it the right and proper course. I am no out and out supporter of this Bill. I do not like its scheme of finance; I do not admire its contents, its form, or its history; I dislike still more the arguments of some of those who support it. In many respects it is not just, it is not fair as between man and man. For the first time our finance is being founded upon class hatred and class jealousy. I say also that its principles could not be permanent without, in my opinion, fatal injury to the best interests of the country. Nevertheless, I do not agree to the wisdom of stopping it in the way and by the method which is proposed.
I object to the tactics which combine the defence of a Second Chamber with taxation of some of the prime necessaries of food of the people of this country. I do not want to introduce more elements of division than it is necessary to do. The noble Viscount who spoke late last night said he would raise from thirteen to fifteen millions by a system of tariffs. The noble Lord who is to follow me is the presiding genius of the Tariff Reform League. If either of them will tell me how that amount of revenue can be raised by any of their systems, I will promise to give 1043 the most careful and earnest consideration to the matter. If they will add to their favour by explaining how they are to get that revenue, as some of them say, by taxing the foreigner, I shall be still more obliged.
While I say that I am open to argument, I am not going to have my course diverted either by abuse or ridicule, and still less by coercion. Not very long ago an anecdote was told as illustrating the position of that body to which I am proud to belong, the Unionist Free Traders, which so aptly describes the position in which I find myself to-night that I hope your Lordships will pardon me if I repeat it. The story goes that a negro evangelist who had not, perhaps, thoroughly mastered the principles he set himself to expound announced that in life there were only two paths, one leading to death and the other to damnation. One of his audience said, "In that case this nigger will have to take to the woods." My Lords, I propose to take to the woods.[...]
Will you let me say as a last word that I think noble Lords on this side who are acting with a light heart and without, perhaps, fully studying the gravity of the decision which they are to give, but which I have endeavoured, however feebly, to put before them, are really walking into a trap which has been set for them by those who are not their friends. There never was, in my humble opinion, a time when it was more necessary to make a great effort to combine all those who are described as moderate men. Your action to-night will make that course difficult. You are going, if I may humbly say so to you, to offend the deeper conservative instincts of the country, and that feeling may be reflected at the polls. I think I understand, if I understand I honour, your opinion; I honour the action you take, believing it to be due to conscientious motives; you feel you must fulfil the expectations of your friends, that you will be thought traitors to them if you act otherwise, that you will be betraying them for the sake of saving your own skins, as I have heard it put, and no more odious charge can be brought against any body of men. As I have said, I understand, I even honour, your action. I would like to join you if I could, but my judgment is that it is a false step, alike in the interests of the country and of the House in which I have spent the whole of my political life.
§ VISCOUNT RIDLEY
My Lords, I find myself unable to follow the masterly analysis of some of the worst faults of this Budget which has been made by the noble Lord who has just sat down. I shall be equally unable to follow him in his masterly inactivity when the Division bell rings. The House will have listened with interest to the review he gave of recent developments in both Houses and in the relations between those two Houses. The House will feel that there has been a difference in legislation of recent years, that there has been a consolidation of Parties, that there has been a tendency to make the power of the caucus more great, that there has been a tendency to make the power of the Government greater and the power of the House of Commons as such less. For those very reasons, and because the use of the closure attendant upon those reasons has changed the situation in the House of Commons, it is now more than ever important that this House should exist as a sound revising Chamber.
It is not, as I understand, a consideration of the details of the taxes imposed by this Budget that has induced the noble Marquess to put this motion upon the Paper. It is the collective effect of the whole system of taxation which is involved in the Bill. Practically the measure is all aimed at one class; it aims at what is vulgarly called "taxing the rich." That the rich should pay their share and more than their share is a principle which no man in this country denies. Indeed, the Secretary for Scotland showed that the working man would be paying an increased tax of 2d. on an income of 30s. a week, whereas the man with an income of £5,000 a year would be paying 5d. in the £. That no doubt is proof that the rich man is to pay more under the present Budget. No defender of this Budget, so far as I am aware, has produced any proof to show that rich men are not now paying their full share of the taxation of this country. The taxation collected in the last ten years shows an increase of seventeen millions, and out of that increase direct taxation, which is practically taxation upon the wealthier part of the population, is represented by thirteen and a-half millions, or eighty per cent. During the last seventeen years the Income Tax, which is practically paid in its entirety by the wealthier classes, has increased from 6d. on unearned incomes to 1s. 2d. Is not this proof that the increased taxation which 1045 has been imposed for the necessities of the State within recent years has been borne in full proportion by the richer classes? Not one syllable of proof has been brought forward by supporters of the Budget to show that the rich do not pay.
Even if what are known as the rich are to pay under this Budget an increased share of taxation, the poor man does not escape taxation under this so-called "poor man's Budget." His whisky and tobacco are taxed, and his necessity of employment is more severely taxed than anything else in the Budget. The noble and learned Lord on the Woolsack admitted—I believe it is the first time that any defender of the Budget has admitted it—that this tax on capital must tend to produce unemployment. But the Budget has been placed before us a "poor man's Budget." But these taxes on capital, it is now admitted, are going to help to tax the poor man's necessity—namely, employment. Every Party in the State admits that the question of unemployment is one that needs remedying in one shape or another. No one can doubt that unemployment will be aggravated by the export of capital, so that neither the rich nor the poor escape the financial insecurity caused by the Government's proposals. Upon both of them falls the financial insecurity caused by the lack of credit which is inspired by these proposals, and the poor feel it more because the rich man, after all, has the power to invest his capital abroad, whereas the workman, whose capital lies in his labour, has a greater difficulty in finding an opening for it abroad. In the interests of both classes we should maintain as great a reserve of capital as possible for the time of stress and struggle. But with Consols down to eighty-two, the Income Tax standing at an admittedly extremely high figure—a higher figure than the Prime Minister thought too high two years ago—and a great raid being made on the Sinking Fund, likely to extend in the future, the possible reserve of taxation is already heavily drawn upon. In what position, therefore, would the rich and the poor be, in the event of a crisis, in finding the money necessary to finance the State?
The defence of the Budget is, after all, that the necessary money must be got. Why is it necessary? There are other sources of taxation open. Other countries have for years found large sums of money 1046 from the taxation of imports. Countries with a far smaller volume of imports than we have raise several millions a year. Germany obtains £7,000,000 a year from import duties on manufactured goods, and the United States obtain £38,000,000 from import duties on manufactured goods. It is argued that this state of things would be impossible here. All sorts of arguments are used, and it is said that the cost of collecting the duties on imports into this country would be from twenty-five to thirty per cent. I do not know why. Why should that be so when the cost of collection in Germany is a little over two per cent. and in the United States a little over three per cent.? We are at this moment collecting in Customs duties £31,000,000 every year. We already have in existence at every port in this country Customs' officers whose duty it is to watch every ship for the smallest evasion of our Customs laws. I submit that a small extension of the Customs staff already engaged would enable the authorities to undertake the additional work.
The right rev. Prelate the Bishop of Birmingham stated, in the course of the debate, that it would be impossible to bring such a tariff into operation under three years; but not so very long ago a Unionist Government imposed a duty upon corn—a new import duty—which was imposed at once, the revenue from which in the first year was over two millions. The point is that that duty was imposed at once without any difficulty whatever. I have made a study of the literature issued by the Cobden Club and of other publications of the Free Trade party. This literature as well as the speeches and letters of distinguished Free Traders argue that it is impossible to raise more than an infinitesimal sum by the imposition of import duties. But when it was in the interest of Free Traders a few years ago to show that every penny got by import duties was going to be a burden on the trade of the country, they were anxious to show that a large sum could be raised by import duties, and the Cobden Club not so many years ago proved conclusively that we could raise seventeen millions by means of Tariff Reform, while a member of this House who is a great financial authority—Lord Eversley—made a calculation about the same time pointing out that under Tariff Reform you might raise twenty millions a year for the necessities of the nation. It may be to the advantage of 1047 Free Traders now, when the question of revenue is to the front, to try and show that the sums obtainable would be small, but the amounts which I have quoted—they are not my estimates and I do not endorse them—show that in the opinion of men who have made a careful study of the question it is possible and practicable to raise large sums from the imposition of import duties; and as other countries do tax us, so it is reasonable that we should endeavour to tax the foreigner.
Noble Lords opposite laugh as a rule when the question of taxing the foreigner is mentioned, and the notion that we can tax the foreigner is ridiculed as uneconomic and is looked upon as nothing more nor less, in the words of Mr. Churchill, than "a gull." But no less an economic authority than John Stuart Mill has written:—A country cannot be exported to renounce the power of taxing foreigners nnless foreigners will practice the same forbearance.So that the principle is admitted to be possible. There are no doubt many who believe that it is impossible for us to raise this money; there are also a number who, while admitting that it is possible under Tariff Reform to raise a large sum of money for the needs of the State, yet find so many objections to the method of raising this taxation that they are unable to support it. I venture to say that in the proposals which His Majesty's Government have laid before us in the present Budget practically every one of the objections which can be urged against Tariff Reform will be found to exist in an aggravated form. It has been alleged, for example, that Tariff Reform involves the extended taxation of food; but at this present moment this country raises more per head in taxation on ordinary articles of consumption—food, drink, and tobacco—than any other country in the world. It raises twice as much as Germany, nearly twice as much as the United States of America per head of population, and this burden on the ordinary articles of consumption, already great, is increased by the burdens thrown upon them by the present Budget. I do not pretend that drink and tobacco are necessities of life; but that they are ordinary articles of consumption nobody will deny, and the burden upon them is increased and aggravated by a Budget which is intended to be opposed to a system which it is 1048 alleged would place burdens on food and ordinary articles of consumption. It is said that under a system of moderate duties you would have to tax raw material, and notwithstanding all the denials of Tariff Reformers, that statement is persisted in.
But, my Lords, under the Budget, by the duties on minerals you are proposing to cast a burden on raw material which everybody is agreed must ultimately fall upon coal, the most necessary of all raw materials for our industries. In placing these duties upon land, even though the burden cast immediately upon agricultural land may not be great, you are placing a duty upon the most necessary of all raw materials, Not only in the case of agricultural land, but in the case of undeveloped land you are placing a duty which will increase the cost to those who are anxious to develop land for industrial purposes. I have had put before me the case of a large landowner, not a member of your Lordships' House, but a business Company, the Trafford Park Estate. That Company acquired a large area of land for something over £900,000, and spent a quarter of a million in developing it as a purely industrial speculation on the soundest possible lines, and in the course of the debate in another place it was undertaken that that expenditure made by this Company upon the development of this property should be a development which would result in their not being charged increment duty. But in the Budget as you find it now, the provisions and exemptions made ostensibly to benefit that company have, as a matter of fact, not benefited them in the very least, because the exemption is only granted to those who made roads and sewers, and the expenditure by this company has been made on railway sidings and other similar undertakings. I mention the details of this undertaking to show that some of these land taxes in their natural incidence are not burdens on undeveloped land, but upon the development of land, and as such are a tax upon one of the most necessary raw materials of this country.
I would ask those who think that under a system of tariffs we should be invaded by a mass of corruption which it is alleged exists in the administration of Tariff Reform countries, to remember the danger of which this is one example indulged in that is involved by the present Government creating literally hundreds of new posts 1049 entirely at the discretion of a Minister temporarily in charge of an Office. I say not a word about the Ministers who have to make these appointments at the present moment under the Development Bill and the Labour Exchanges Bill and the various Agricultural Acts which this Government have passed; but I do say that it has been one of the greatest glories of this country that they have established their Civil Service by means of a competitive examination system, which is the best of all possible systems, and I deprecate the system which has grown up of late years of creating appointments which are entirely at the discretion of Ministers temporarily in charge of Departments. In this Budget there was included a proposal to take the whole of the Old Sinking Fund, and to apply that for different purposes at the disposal of the Government of the day. I think we all see that the tendency under the present Government has been, now that the control of the House of Commons is getting so much less than it was over the Government of the country, to create what was after all an oligarchical bureaucracy in the hands of different Departments, and to place more and more at their disposal the various appointments and the expenditure of national funds. That is a system which seems to me to tend more and more dangerously towards the corrupting of our political life than any system of Tariff Reform possibly could do. If it is alleged that Trusts are a dangerous feature behind Tariffs, I say that under your present system of driving capital abroad in increasing quantities day by day, you are perhaps not creating Trusts in your own country, but you are feeding plentifully foreign Trusts who have your own markets to exploit with the products of your own finances, and under your system you are encouraging perhaps not Trusts in this country, which might be benefiting perhaps in some ways England, but you are encouraging the development of Trusts in other countries which only use the British market to prey in.
I have already remarked that unemployment is definitely created and encouraged by this Budget. In that connection I remember a remark which was used by Mr. Gladstone, when he said that you ought, in considering your system of taxation, to operate on those articles which provide the maximum of employment for the people of the country. The Government 1050 by this Budget is operating heavily upon capital, which is precisely that article which does provide and could provide employment for the people of this country if only it was allowed and encouraged to be invested in the development of home industries. So, my Lords, under this Budget, which is paraded as a Poor Man's Budget, and the antithesis of Tariff Reform, and which does not contain the evils which it is alleged Tariff Reform contains, there are in reality more evils than there possibly could be under any system of Tariff Reform. On the staple articles of consumption you are imposing heavy burdens, and on the raw material of industry. In the memory of Cobden you are placing burdens day by day on production which his reforms were meant to lessen, and in the memory of Gladstone you are operating on those very articles which tend to produce the maximum of unemployment in this country. It may be, my Lords, that Tariff Reform is not the only alternative to this Budget, but I am quite certain it is the only practical alternative; and I am quite certain that it is the only alternative that you have the least chance of carrying. In this respect, many of the members of your Lordships' House are in close contact with the opinion of the people of the country, and I am sure you will be certain that it is the only alternative that has the least chance, and the only one which they will ever consider.
My Lords, I do not minimise the seriousness of the step which this House will take if it votes and carries the Amendment of the noble Marquess who leads this side of the House, but this I am certain that if this House were to take the advice given us by the noble Earl on the Cross Benches, we should then justly earn the opprobrium of being regarded as a party House. It may possibly be in the interests of the Conservative Party to allow this Budget to pass because it may be that within a short time, if the Budget were in operation, the Government responsible for it would be hurled from office as the noble Earl more than once suggested that they would. But, my Lords, this House will not consider whether it is to the advantage of Party, or to the possible advantage of a Party in determining what its proper course of action should be. If we were an annex of the Carlton Club, we might consider the advantages derived from the passing or non-passing of the 1051 Budget, but your Lordships' House considers no question of Party advantage, and I agree that your Lordships would be right in saying that you would give the authority which alone can decide this matter the opportunity of deciding for themselves in regard to it. Notwithstanding what noble Lords opposite have said and may say, this issue was not created by your Lordships' House. It was created by no section of the State, except by the Government in power, who only a year ago announced that at the next election the dominant issue was going to be the House of Lords, thus carrying out the various announcements made by the former Prime Minister, Sir Henry Campbell-Bannerman. When the noble Earl, Lord Rosebery, made his eloquent speech at Glasgow, it was known to him, as well as to everybody else, that the present Prime Minister had declared that the dominant issue at the next election was to be the House of Lords. If there be an issue, therefore, it is not the seeking of this House, but of the present Government who have taken this means of forcing it to a conclusion.
I am but a young member of your Lordships' House, and I have the greatest hesitation in saying one word upon the constitutional principle, or on the constitutional power of the House, but there is no Member who values his seat here more than I do, or who would more willingly retain his privileges in this House than I would. But I would not value this seat, I would not care for its privileges if I did not feel that the House was going to act up to its duty as a Second Chamber in this matter, because of the scarcely veiled threats of the other side, even if it were certain that it was going to lose its power for ever. I remember the late Lord Goschen saying in this House that to propose a change in the tariffs was to gamble with the food of the people. But my Lords, this Government is gambling with their very existence. Upon the financial naval and military stability absolutely depends the existence of this Island Power, and it is upon that that this Government is gambling. It is for us, therefore, by passing the Resolution which the noble Marquess has moved to say that we trust the people to vote for themselves and that they must trust us with the power which is ours as a Second Chamber, to see that it is used for the 1052 benefit of the nation, and that on a chance majority of four years ago we cannot surrender the people to the tyranny of modern Liberal bureaucracy.
THE UNDER-SECRETARY OF STATE FOR WAR (LORD LUCAS)
My Lords, we always listen with the greatest interest and attention to the noble Viscount who has just spoken. He stands at the head of a very powerful political body in this country in whose programme and movements we are, of course, very much interested, and we always listen to the noble Viscount in the hope that we may learn something of what the policy of the Tariff Reform League may be. I must say, however, that at the end of his speech we are not much wiser than we were before. The noble Viscount quoted a chance remark of a great Free Trader on the question of taxing the foreigner, but he carefully refrained from telling us how it was to be done. That is a question, my Lords, which has got to be discussed, and which has got to be discussed openly, and if the noble Viscount and those who think with him wish to obtain the following of the country, the sooner they tell us, in view of the election that is at hand, and the clearer they make it to us how this is to be done the better chances they will have of success.
Then the noble Viscount went on to discuss not the question of the Budget itself but the question that has arisen over the action which your Lordships are taking, and, as I think the noble Lord, Lord Balfour, said, that is for the moment the more important question of the two. My Lords, this Budget will now go to the arbitrament of the country, and the justice or the injustice of the taxes which it imposes will be discussed by the people who are going to pay them. But there is one question, and it is a very great and important one indeed, which has not yet been fully put in all its bearings before the country. I too, like Lord Ridley, am a very young Member, an even younger member of your Lordships' House than he, and I am grateful, as an evitable fate has made me a member of this House, that I should have been lucky enough to become a member of it at a period, what one may call a culminating period perhaps, but certainly a critical period, and one which can only be described as an era of great change in the position which 1053 this House occupies in the political machinery of the country.
The remark has often been passed by Liberals, and the question has come up from time to time during many years, that something must be done in order to deal with the House of Lords. Of recent years that cry has become more and more insistent. The reason of it is not very far to find. You have only to look at the list of the measures which have been sent up to this House by Conservative Governments and by Liberal Governments to see the reason why this cry is becoming more insistent. It is becoming more insistent, my Lords, and the reason is in the fact that every successive Liberal Administration find that a larger proportion of their Bills are rejected and killed by this House. I was going through the list to-day. During the three Liberal Parliaments which preceded the present one eleven Liberal Bills were killed by your Lordships' House. During the four years of this Parliament, seven Liberal Bills have been killed by your Lordships' House, or to be more accurate, will have been killed by next Tuesday night. Of those seven Bills, three of them—the Education Bill, the Licensing Bill of last year, and this present Finance Bill—represent the main work of three out of our four sessions of Parliament, and were the three biggest Bills which this Government has been responsible for. When you realise that in the period covered by the last four Liberal Parliaments not one single Conservative measure of any kind has been rejected by this House, you are brought face to face with the fact that there has been a frank abandonment by the House of Lords of its ancient position as a revising Chamber, and that it now stands in the political arena as a competing body with the House of Commons on Party lines.
My Lords, how does that work? The noble Marquess, rd Salisbury, said last night that when this House differs from the House of Commons on any measure that the House of Commons sends up to it, that measure should be submitted to the considered judgment of those who are our masters. That is a very sound maxim, my Lords, but if you are to follow that it would mean that the General Election before us now would have been the third General Election since this Parliament came into power four years ago, and that under a system of that kind you are going to have Septennial Parliaments for the Conservative 1054 Party and Annual Parliaments for the Liberal Party. Lord Onslow's statement last night that this country will not stand a Single Chamber Legislation was cheered by noble Lords opposite, but I do not know whether noble Lords opposite realise that at this moment we are governed by the most insidious form of Single Chamber Legislature. When the Conservative Party are in power there is very little of the House of Lords and when the Liberal Party are in power there is very little of the House of Commons. What is the result of this? The result seems to me to be as clear and as certain as that night follows day, that when any Liberal Prime Minister takes office he will have to ensure that he has not merely, as heretofore, a majority in the House of Commons, but that he must have a majority in both Houses of Parliament, or, at any rate, that the present power of the House of Lords, acting as it does on Party lines, must be so curtailed that the work of Parliament can go forward. My Lords, when you consider the methods by which this, the final act in a long stage of acts, has been reached, I think it shows that the position as it stands at the present moment is an impossible one.
Let us look at the history of finance as it has been carried on during this present year. Noble Lords opposite connected themselves with the demand for a very great increase of expenditure at the beginning of this year. When preparations were made for that expenditure, when the sums which Parliament would have to vote in due course were marshalled together, and when they were presented to Parliament ear-marked for separate purposes, as they are in the Appropriation Act—when that Bill came up to your Lordships' House your Lordships were perfectly aware of the methods which were proposed for raising the money which was required by the Appropriation Act—I think that under those circumstances, knowing the means by which that money was to be found, it would have been better, had your Lordships decided to stop the ordinary financial working of Parliament by dealing with the Appropriation Bill. But you allowed the Appropriation Bill to pass and thereby pledged the Government to the expenditure of money which you now refuse to allow them to find. What was done in the case of the Appropriation Act was done in an even more aggravated 1055 form in the case of the Development Bill, because the Development Bill, which is now an Act, depends for the money which is to be spent under it entirely upon the Finance Bill which is before your Lordships' House at the present time. Those two Bills have been passed and that money is therefore pledged, and now your Lordships step in and veto the finding of this money. Had this House wished to protest against and to stop the present financial methods which have been followed by this Government; had they wished to arrest them because they thought it a matter of some danger to the country, surely they could have taken earlier steps and left the issue a good deal simpler and clearer than it is at the present moment.
When one considers all the obvious and inevitable consequences of the attitude which the House of Lords has taken up on the most important political questions of the day, and when on the top of that one considers the way in which the House has conducted this last stage with regard to the finance of the country, it is not for me to ask your Lordships to pause and consider the seriousness of it. And for this reason: because I think I should be insulting your Lordships if I assumed that your Lordships must yourselves have realised clearly that this step which you are going to take at the end of this debate is just as much an incentive to revolution as was, for instance, the levying of ship money. I would like to put to you the financial position created by the killing of the Budget as it appears to one who represents in this House one of the great spending departments of the State. An absolutely impossible situation is created thereby from the point of view of conducting the Governmental administration in this country, and I must say that the position created by your Lordships' action seems to me to preclude, when we do come to a settlement, the setting of it again on existing lines. The Army Estimates were passed at the beginning of last April but they represented the work of the War Office and of the Treasury dating back very many months previous to that. It was about a year ago that those Estimates were settled and that the policy of the War Office for the coming year was thrashed out, item by item, and was finally decided upon. It was at that time that the actual sum which was to be spent was fixed. My Lords, at the beginning of the 1056 financial year, when the House of Commons passed its financial resolutions, the War Office began spending that money which was voted in the Estimates, and the Exchequer began to collect it by means of the Budget resolutions. It is only on the certainty that those resolutions have hitherto provided that the money you are spending on your great services, the money agreed to in the Estimates passed in the Autumn previous to the year in which the Budget is introduced, will be raised, that the policy of the great Government Departments can be settled. At the present day probably something like half, or possibly more than half, the money that was voted in the Army Estimates has been already spent, and if any uncertainty arises with regard to the finding of the money, as uncertainty is bound to rise in view of the attitude of your Lordships, not only will that uncertainty paralize the whole of the work of the great Departments, but will make it impossible for any man in charge of a Department to carry it on. Suppose the Government were to refuse to go to the country, what position will your Lordships find yourselves in then? This House has rendered the action of the House of Commons in financial affairs perfectly futile.
The House of Commons is now helpless. On the other hand what can the House of Lords do? It seems to me that you are forced into this position if you are going to allow this House to absolutely nullify the work of the House of Commons in matters of finance, that the obvious and the only corollary to that proposal is that you should allow this House to make use of some part at any rate of those powers of which it has deprived the House of Commons. By this breach of the custom of the Constitution you find yourselves face to face with what is frankly and openly an illegal and an unconstitutional position, and the logical conclusion is that it ought, if it is possible, to itself initiate a money Bill. That is the position your Lordships are in at the present time. I quite agree, as regards the War Office, that means will have to be found for legalising the collecting of the money that has already been spent but I repeat unless you have a certainty that the machinery which has always worked so well and which has now in these matters been brought down to a very fine point of organisation, is not to be interfered with, you will destroy all 1057 confidence in those Government offices where the money is spent and all possibility of their working out and practising anything like a continuous or an economical policy.
My Lords, in all this debate I have felt that the most impressive of many impressive speeches and which but for one or two omissions in it, has been the most powerful indictment against this Budget, was the brilliant speech of Lord Revelstoke on the first day of this debate. I know Lord Revelstoke said that he only appreached this question from the point of view of the City and the attitude that the City took towards it. I hope, my Lords, that if what from my point of view struck me as omissions were simply omissions because he did not want to cover the ground too widely, that the noble Lord will put me right. The City, my Lords, represents a part, and a most important part, of the great fabric which we call British commerce. It is, if one may so express it, one end of that great machine. It is the end at which all problems tend to become to a certain extent de-humanised. Those problems which at the other end of the machine are problems of flesh and blood, at his end of the machine are problems of gold and silver. A great many of the questions which effect what I call the other end of the machine, which are to a great extent social questions and which have a very important bearing on the working of the other end, are questions which cannot enter into a place like the City, and I think one is always inclined to ask oneself whether the City does or does not take an interest in what you may broadly call social problems, and how far they allow things of that kind to enter their calculations.
I do not think I misconstrue what the noble Lord stated when I say his opinion was that the feeling in the City was that they would like to go back to the days before the Government took office. That was the point of view from which he looked at it as being far preferable to the position in which it is at the present day. If that is so, if the City thinks that this country, as it was in the days immediately preceding the advent of this Government, was in a safe condition and one suitable for the development of industry and enterprise, then, my Lords, all one can say is that the City does not consider social problems. 1058 Because in so far as you were building up any great enterprise in those days in this country which involved the expenditure of large sums of money, you were raising an edifice on a base in which there were fissures, and those fissures were getting a little bit wider every day. The fissures I refer to, that we were faced with then, were a decreasing birth-rate, a deteriorating national physique, a growing state of discontent due to the fact that little or nothing was being done for unemployment in the way of organising the labour market, that great hardships were being borne in consequence, and that there was nothing in front of the workers of this country beyond a penniless and hopeless old age. Further than that, my Lords, no social reformer can get away from the fact that there was also growing and becoming more serious every day the effects of what we regard as the great vested monopolies, the Land and the Liquor trade. There is another thing that I thought the City would have taken great notice of because I think it is a thing which affects them most of all, and that is that in the ten years preceding the year 1905 there was probably the greatest growth of Socialism that this country has ever seen simply due to the fact, in my opinion, that there existed those great growing evils amongst us, and that nothing was being done to cope with them.
My Lords, that was the position at that time. What was it due to? I believe it was due to totally insufficient attempts having been made to try and combat, by every scientific means possible, the hopelessly unnatural conditions which have existed in this country for over 100 years, ever since the date of what is called the industrial revolution, and that those evils, the crowding into towns, and all the other evils that we know of, were allowed to grow unchecked and were coming so rapidly to a head and had reached so great a size that nothing would meet them. And nothing will meet them now, because after all they by no means are reformed yet, except the application of a surgeon's knife; and there is no question that a great deal of difficult work and a great deal of social upheaval and a certain amount of uneasiness and of unrest must be the result of the operation. My Lords, I think that is, putting it in as few sentences as one can, the position broadly with regard to what I may call social 1059 reform at the present day. One could not help feeling all through the speech of the noble Lord, Lord Revelstoke—I hope I am not misconstruing him in any way—that although these social conditions were plain for everybody to see, this great dehumanised money-making machine asking for its toll of money or mead of human labour, and all those things which go to make up trade, was regardless of and even prepared to thwart, because that is the position it occupies at the present day, social reform if social reform tends to decrease those supplies which it requires.
It seems to me if that is the true attitude of the City, that it is a thing which is capable of doing infinite harm; and above all it is a machine which will grind out a far larger number of Socialists than anything this Government can do. My Lords, I do not believe that is the position of the City at all in this matter. One knows it is not, and therefore one feels this, that when the City realises that this Government are not Socialists but are Social Reformers who are trying to wipe off some of the arrears of the last 100 years in the way of reform which previous Governments have left behind them—I hope that there will be, and I think one ought to feel a certain amount of confidence in feeling that there will be, a revival of confidence on the part of the City and that they will realise that after all what we are striving for is to make that base upon which all their interests, all the labours and the industry which they create depends, as sound as it possibly can be made. Surely my Lords, that is a thing, when it is realised, as I think it will be realised very shortly, towards which the City as well as every other part of the community will co-operate and help. The noble Lord said that a great deal of the money which is being invested by the City was being invested abroad. I do not know how far people who have money to invest take it to the City and insist on the City investing it for them in exactly what they themselves want, or how far they are prepared to take the advice of the City as to how it should be invested. It is pretty certain that both things happen and that the general attitude of the City is responsible to a great extent for a percentage—I cannot say more than that because I have not the remotest idea of what the percentage is, of how that money is invested. We all know that the knowledge, acumen, and foresight of the City in 1060 all matters connected with its work is very great; and when you say that, you give it credit for a knowledge which covers a very large field. But, I do not think it covers everything in a world where no one is infallible, and there undoubtedly are a number of things which do not come within the purview of the City. I do not think they are anymore infallible than the rest of mankind, and one of the things on which I would question their infallibility is in their inability to conjecture the outcome of what this extraordinarily complicated and difficult political situation is going to be, because when the noble Lord tells us the view of the City on the political situation, that political situation being the speeches of the members of His Majesty's Government they might be right or they may be wrong, but I do not suppose they are any more right or any more wrong than the rest of us.
My experience of these things is very limited but I know of one instance, which although quite outside the present case is perhaps on all fours with it, of how far the City was right or wrong in forming an opinion. It is with regard to the South African war. In those days I was a journalist and used to follow those things more closely than I do now, and I can only say that the information one got in the City was very much less trustworthy than that which came from any other source. So much so that it became a common saying if you wanted to know what was not going on in South Africa you must go and ask the City. Following up this, I was looking up old files of The Times the other day and I saw that on the eve of Colenso Consols were rushing up because the City thought that Ladysmith was relieved, and the same thing happened—Consols were going up—on the night when our troops were pouring down the sides of Spion Kop and the Boers on the summit of it. Again, when the day came that the Boers decided to accept peace at Vereeniging, Consols were two points lower than they were on the day before. To talk about the City packing up its stocks and shares and bonds and sending them abroad as ballast, because they have read into some sentence of a speech of the Chancellor of the Exchequer a kind of savage Socialism, which does not exist in the Chancellor of the Exchequer's breast, recalls, I must say, to a certain extent the not very pleasing spectacle of the City rejoicing on the eve of British defeats, and depressing Consols on the eve of a great British victory.
1061 Now my Lords, I return for one moment to the subject on which I began my speech, and particularly with regard to the question which is before your Lordships' House. The policy which has been followed by the Opposition in this House has been a perfectly plain one. I do not think its best friend could call it a democratic one; and therefore, my Lords, when we suddenly see that the opinion of the country is going to betaken on this question, it is at any rate a change from what the steady trend of policy, about which I spoke earlier in my speech, has been. My Lords, what is the question that is going to be pat before the country next January? The question is not going to be whether we do or whether we do not want to raise an extra seventeen millions in taxation. That is a point which has been settled. Whichever Party comes in, we are committed to the expenditure of money. The question which is going to be asked the country at the next election is, whether we wish to raise it by Free Trade methods, as exemplified in the present Budget, or by that alternative method which the noble Marquess mentioned in his speech, that is to say the method of Tariff Reform? My Lords, the importance of the step which is being taken in order to be in a position to place this matter before the country we are all agreed upon. Therefore, I should have thought that the obvious corollary of that is that the country should be put in a position in which they really can form a judgment on this question; and there is only one way in which a judgment on this question can be arrived at, that is by putting the two alternatives boldly before them.
The noble Marquess suggested the other night that my noble friend the Leader of the House might have in his box a complete scheme for dealing with this perfectly unprecedented position which has arisen. Is it too much to suggest that the noble Marquess might have in his box a document that he has had seven years to prepare, that is to say a Tariff Reform Budget? I do not wish to ask an impossibility, and I would not ask the opposite Party to produce the Budget which it proposes to bring in if it is returned to office; but I think the country has a right to demand to know something of the broad line of the alternative you are going to ask them to vote upon. Is food going to be taxed or not? We have been told that 1062 food is not going to be taxed and that the cost of living is not going to be increased, but that imported manufactures are going to be taxed for the purposes of revenue and for improving the conditions of employment in this country. My Lords, I do say this, when you have taken up the position you have taken up at the present time, when you say you are prepared to go the length that you are going, when you say you are prepared to overthrow the fabric of the Constitution in order that you may obtain the judgment of the people, it is cant if you do all that and say all that, and at the same time prevent the people from having that information without which it is impossible for them to form a judgment.
You cannot get away from the fact, my Lords, that you are at one and the same moment upsetting the existing order of things on the one hand and holding back the information from the country so as to prevent them from forming a fair and a just judgment of the position, on the other. I admit, my Lords, that the tactical advantages of the situation lie with you. Our position is exposed, and you do not have to expose a single gun on your position. But, my Lords, I do not think the country cares for that, and I believe that unless you are prepared to give the country the opportunity of forming a judgment in the only way in which it can be done, by laying your alternative proposals before them, the country will agree with us in thinking that the democratic, attitude you have taken up with regard to this matter of refusing to pass the Finance Bill until the country has had an opportunity of pronouncing judgment upon it first, is not a genuine one.
§ LORD FABER
My Lords, after a strenuous fight lasting for over six months a difficult and complicated Budget has been produced by the other House. That Budget, of course, has been radically altered since it was first introduced into the House of Commons, and to my mind the most important clause in the whole of the Budget, I mean the clause annexing the Sinking Fund and taking it for development purposes, has been entirely dropped. We have had also the Licensing Clauses and the Land Clauses tacked on to this Budget. The noble and learned Lord on the Woolsack, to whose speeches we always listen with so much respect and with so much interest 1063 said the other night that he thought the Licensing Clauses had not been tacked on to the Budget. With your Lordships' permission I should just like for one moment to argue that question from a commonsense point of view and not from a political point of view, because I feel that they are not always the same. What are the facts with regard to the Licensing Clauses?
It will be in your Lordships' memory that last year a Licensing Bill was brought in in the House of Commons; it was passed there by a large majority; it was sent up to your Lordships' House and it was rejected by your Lordships by an equally large majority. After it had been rejected we began to hear for the first time threats and mutterings uttered by people in high places in the Liberal Party that the last state of the Licensing Bill would be worse than the first; and then suddenly, for some reason or other, the Liberals seemed to have discovered that those great Licensing Clauses, which surely were important enough to be included in a Bill by themselves, were not important enough for a separate Bill, but should be added to the next Budget. What is the common-sense of the question? Is it not this, that the House of Commons thought with their big majority of 300 that they would be able after being defeated on the Licensing Bill in a straight fight, to tack these clauses on to the Finance Bill and to press them through your Lordship's House. That is why I think, looking at it from a common-sense point of view we are entitled to say that the Licensing Clauses at any rate were tacked on to the Budget.
Now, the Commons have thought it reasonable to say to your Lordships' House: "Here is this Budget Bill, pass it unaltered, or take the consequences." So far as human actions are concerned, no man can tell what the consequences may be. The consequences of any action men may take are in the lap of the gods. For my own part, having to choose, as I have to choose, between this Budget and the rejection of the Budget I unhesitatingly say that I am in favour of the rejection of the Budget, and I must take the consequences of that action. The country no doubt will be flooded with a considerable deal of violent eloquence. We cannot wonder at that because, after all, the leaders of the Liberal Party have indulged in violent invective, and in those circumstances Under- 1064 Secretaries of course follow Secretaries of State, and those who are anxious to get into Parliament and those who are in Parliament follow in the wake of the Under-Secretaries. I have two quotations here which I think will interest the House if the House is good enough to allow me to read them. One of them will certainly make the House laugh and give us an opportunity of congratulating the Liberal Party on what is evidently a very valuable recruit. It was William Pitt who said "Where men complain without cause, they complain without temper." The first quotation I want to read to your Lordships is one from an address issued by Mr. Masterman, an Under-Secretary of State, to his constituents. He says—The difficulty all through in carrying out the will of the people expressed at the last election has been the insolent opposition of the House of Lords to all reform.The next quotation is a very laughable one, and funnily enough was made in a speech addressed to a meeting of ladies in one of the Yorkshire constituencies. I will not mention the names, although I have them before me if necessary.They would fight and beat the House of Lords. They would go to the gilded Chamber and ram the Budget down the Lords' gilded throats even if it gave them pain and produced a cataclysm in their gilded shirt fronts.I congratulate the opposite party upon possessing a gentleman who is evidently a very valuable recruit, in Yorkshire at any rate. Let us look at the tendency of Radical finance in the past so that we may, if possible, arrive at what the minds of their leaders may be in the future with regard to finance. I noticed that in 1906 they took a shilling off coal, which realised two and a half millions sterling. In 1906 they took a penny off tea, which represented one million and a quarter sterling, and in 1908 they did what I think was a very extraordinary thing from a financial point of view—they took off half the sugar duty, which amounted to no less than three millions. This was extraordinary, because they were face to face with this position. The Chancellor of the Exchequer had to find eight millions for Old Age Pensions, three millions for Dreadnoughts, and four millions for what I call fancy legislation, such as the Development Fund, money for roads, and land valuation. So that they had to find altogether fifteen millions of money, and the Chancellor of the Exchequer began by taking three millions off the sugar tax. I 1065 think that was bad finance, and showed a desire to make it as difficult as possible in the future to find the money that was necessary to carry on the business of the nation. To my mind there would have been no difficulty, if only ordinary prudence had been exercised, but there seems to have been a desire to make vast changes all at once. I cannot help feeling that in the history of a nation, for after all the life of a nation is long, if you have to make large changes the proper policy is to spread them over a series of years. If you make them all at once, it will lead to inevitable unrest, especially in regard to finance. The next point I desire to refer to is with regard to land taxation. I allude to it because I think, judging by a quotation I am going to read to you from a speech made by the Chancellor of the Exchequer on August the 18th last, the right hon. gentleman has departed from the ways of previous great masters of finance, who, in the past, first sat down to calculate what the financial needs of the nation would be during the coming year, and then tried to find a way of meeting those needs, each separate year standing on its own basis.
What Mr. Lloyd George said on August 18 was as follows:—We have budgeted as regards the Land Tax for £675,000 this year. We are going to have the money. Next year I venture to say it will be double that amount, and it will grow from year to year until it will amount to millions a year.So you see he went altogether outside the boundary of one year, and seemed to have in his mind millions and millions of money which would come to him out of land in years to come. So far as I understand the position of land during late years it is very bad policy and very bad finance to say that you are going to get millions and millions of money out of land whether it is agricultural land or urban land, because I verily believe that if any man in either of these Houses of Parliament thirty years ago had invested his money in either agricultural or in urban land, and had left it until this day, he would have done quite as well by investing his money in Consols. Now we come to a very interesting tax indeed, and it is interesting because it can be applied in such novel ways—the increment duty on site values. It will be in your Lordships' minds that this is a very one-sided proposal, because the valuation of sites is to be made every five years, 1066 and if the value has gone up in the meantime the Government are going to get twenty per cent. of the increase, whereas if the value has fallen the individual owner has to find the money himself. That seems to be grossly unfair. As has been said, why should land alone be singled out for this increment tax? That is where the gravity of this policy comes in, and the policy of extending this increment duty to what I should call the general business affairs of life has already been mooted, because on the 24th of September last no less a person than the Home Secretary said this—it is very interesting and may be very far reaching—I do not see at all why at some future time when more money is wanted the principle of the unearned increment should not be applied to other forms of property as well as property in land.Now, does the country realise the gravity of a statement of that sort? Let us take one or two ordinary transactions in life. A stockbroker goes into the Stock Market, and buys £100 Consols at the price of eighty-five. He waits until Consols go up, and when the next valuation comes round they may be at ninety-five. He has to pay, under this new Budget, twenty per cent. of that increase to the Government. If on the other hand, however, they fall to seventy-five, the stockbroker has to bear the loss himself. Take another case. A man goes into the Wheat Market, and buys wheat at 40s. a quarter. Wheat goes up to, say, 45s., and the buyer would have to pay part of that increase to the Government, but if it falls to 35s., he has to bear the loss himself. It is obvious that no dealings of that sort would be undertaken if the increment duty is placed on anything but land. A trader is willing enough in the ordinary course of trade to say "I will take an even chance if it goes up or down," but he is not willing to play with loaded dice. If you apply the increment principle to the business affairs of everyday life, I say without hesitation that it will mean ruin to the business of this country.
Then, my Lords, we come to what I can only describe as these amazing increases in the liquor licences. No trade could bear such increases as we have in this Budget. Messrs. Buxton and Whitbread wrote to The Times to say that their increases in taxes under this Budget would mean that they would have to pay no less 1067 than £104,000. It has been already pointed out in this debate that their dividend amounted to £61,000 and therefore the whole of the ordinary dividend would be swept away, and they would be £50,000 short to pay the interest on their Preference Shares and Debentures. As I said before, when I spoke in this House on the Licensing question, this means the ruin of very many innocent shareholders. On-licences are worse treated than anything else under the Budget, because no less than half the yearly value of licensed premises is put on as a tax. For instance, a man who now owns a house worth £400 a year pays £40 in taxation. Under the new Budget he will pay £200 a year. I have some figures here that are rather interesting, and are quite new. They refer to a city which I know something about—the City of Leeds. I only had them sent to me the other day to show the enormous increase in licence fees in a city like Leeds. The first set of figures refers to on-licenced houses owned by brewers. The present duty is £9,172, and the proposed duty is £27,460. On-beer houses, that ought to be specially well treated by reason of their strong position under the 1869 Act, pay now £1,216, but they will pay under the new Budget £10,561. There are 105 ale-houses not owned by brewers, and they pay now £3,450, but they will pay £11,844. Ninety-one beer-houses now pay £336, but they will pay £3,333. I think, my Lords, I am justified in saying that these increases are really amazing. As regards hotels, that are so very necessary to our comfort, and to the comfort of our foreign friends, who come to us, the increase of taxation is large, but I allow at once that there are rebates made as regards that taxation if the amount of liquor sold in those hotels bears a small proportion to the food and bedrooms which are provided for their customers. But we must not forget that the site tax comes in with regard to the big hotels in London, and if the site value of a large hotel like, for instance, the Hotel Cecil goes up, the hotel has to face that. I call these clauses very revengeful clauses. They bring in no revenue, and we know quite well that education and temperance, if let alone, are doing all and more than is necessary to bring the liquor trade into a proper condition. It seems to me that the country or, at any rate, the House of Commons does not recognise the gravity of smashing a big trade like this all at once.
1068 I come now to a very interesting question indeed, I mean the question of Death Duties. Under this new Bill, the incidence of these duties is as certain as death, and is as capricious as death itself. The most interesting figures and the newest figures I have come across lately were the figures given us in the most interesting speech delivered by the noble Earl, Lord Beauchamp. He told us what I had not known before, how much it is necessary for a man who is fifty years old to pay in insurance if he wants to guard himself and his estate against (1) Income Tax, (2) Super Tax, and (3) Death Duties. Those figures were full of interest, and if I can put them before your Lordships in a clear way I think you will see that the new duties are very large indeed. I doubt if there is any country in the world at the present time that puts such a large taxation on estates as will be put on large estates in this country under this Bill. The noble Earl gave us instances of estates worth £50,000 and £100,000, and half a million and one million pounds. Let us take the case of a man who is aged fifty, and who is the owner of a million either in property or in money. He, we may suppose, is a family man, and he has a very earnest and proper desire to leave the property that he received from his father without any reduction. Now what has he got to do under the old Budget? It would cost him an insurance of £5,600 a year. Under the new Budget it would cost him £9,000 a year. He is going to get three per cent. for his money, which comes to £30,000 a year, and he has to pay one-third of that, or in round figures £10,000 a year to the Government, or rather to the Insurance Company to enable him to leave to his successor the money unimpaired. Take 30,000 sovereigns a year, and out of every sovereign, for all time, he will have to pay 6s. 8d. to the Government of this country, and not only will he have to pay it, but his son will have to follow it up, and his grandson and his great grandson. All of them will have to pay 6s. 8d. in the £ to the Government to enable them to maintain their estate intact. If the head of the family happens to have more than one son, God knows what he will do to keep his estate intact. He cannot do it, and I say advisedly that unless there are most prudent generations of men coming on one after the other, these tremendous Death Duties, because they are nothing else, will ruin every estate 1069 in this country. As I said, these figures are very interesting, and they brought home to my mind what I never thoroughly realised before, the enormous propositions made by the Government with regard to these new Death Duties.
Let us now consider for a moment the Super Tax. That is perhaps a reasonable tax from some points of view. I would not say it is not; I think it is, but it is inquisitorial, and it is a very difficult tax to understand. I notice with some degree of amusement, and perhaps a little alarm, that the penalty for a wilful mis-statement is six months imprisonment with hard labour. I think there can be no doubt that the Budget itself, the speeches made by those of high official position—the hen-roost men—and the threats made especially against one of the greatest trades in this country—I refer to the railway trade, in which there is no less than £1,200,000,000 of capital employed—have thoroughly unsettled the financial mind of the country. There is no doubt that all these things are frightening capital out of the country. I see that. I have means of judging that, and I have no doubt at all that it is so. It is not for me to say whether it is wise for people to be frightened, or to think that they can get in a foreign country five per cent. as safely as they can get four percent. in this country. Perhaps greediness has had some little to do with the flight of capital from this country, but I am convinced that the great and the dominant reason is due to a feeling of fear. It is not for me to give advice. It would not be right for me to give advice to the great British public, for whose opinion I have the greatest respect, and who are in the long run generally in the right. My first set of statistics has been used already. I think it was Lord St. David's who said these figures were not to be relied upon, but I think upon the whole they can be relied upon. Of course, they do not give the money raised in England privately for English things, but as some noble Lord said speaking earlier to-day, they give the general tendency of the investments now going on. In the last nine months £155,000,000 capital has been raised—£86,000,000 of it for foreign loans, £53,000 for Colonial loans, and £16,000,000 only have been raised for things in England. Then again, we see Consols and other gilt-edged stocks at the lowest price they have touched since 1880. Enormous 1070 losses have had to be paid owing to the continuous fall in the very best class of Stocks.
There is another fairly sure sign of the flight of capital from this country at the present time. It is a sign that has not been alluded to by any speaker in your House up to the present, but I think I am right in my conclusion that it is owing to capital leaving this country. I mean the gold famine that at this moment is reigning in the City. It is not a credit famine, for money there is in plenty, but it is what is called a gold famine. Have we been buying more cotton, or more wheat, or more wool? Certainly not, but we have to find a great deal of gold for foreign countries, and that is evidently because we have been buying largely of foreign loans, much more heavily than before, and that has given foreign countries, especially countries in South America, a power over our gold market they have never had before. We have been buying their loans, and they have decided that they would be paid in gold. The result has been that there has been a gold famine in this country during the last few weeks, and it is more difficult and more expensive than ever to get credit in our markets just now.
In the last nine months British and Indian stocks have fallen from £763,000,000 to £753,000,000, a fall of £10,000,000 in the last nine months. Now what of foreign stocks of the like class in the last nine months? They have gone up from £813,000,000 to £826,000,000, so that while our British and Indian stocks have gone down within the last nine months £10,000,000, foreign stocks have gone up no less than £13,000,000. The Prime Minister, in the argument that he used in the House of Commons, rather hailed the flight of capital to foreign countries because, he said, and said with a certain amount of truth, that we in this country would get the interest from these investments, and that those foreign countries who took our money would spend a good deal of it in buying articles from this country. There is a certain amount of truth in that, but it is not the whole truth, because evidently the most important thing of all is that sufficient capital should be left in this country to enable us to look after our own industries and our own businesses. That is a very vital thing, to keep sufficient 1071 capital in this country for all our needs; but that is not what we are doing at the present moment. There are two trades suffering very much just now, namely the building trade and the railway trade. The building trade, I apprehend, is not suffering from want of capital so much as from fear of the Land Clauses of the Budget. I allow that, and I cannot use it as an argument, but I can use this as an argument for all it is worth, and that is that at the present moment if any of the large and important railway companies of this country want to borrow money, not on their ordinary stocks—investors may reasonably be frightened of ordinary stocks—but on their preference and debenture stocks, they would have to pay more for their loans than they have had to pay since 1878. That shows very conclusively that capital is scarcer than it used to be in our own home markets.
What the nation wants at this moment more than anything else is employment for its men, not charitable employment, but regular employment, and a rest for some years, if I may say so without disrespect, from the meddling and muddling of Parliament. I say, my Lords, go to the people. Consult the people. Do not go to a four-year-old House of Commons that has ceased to represent the people, if any inference we can get from recent by-elections is to be drawn. I do not think, and I never have thought, there is any need for revolution, either financially or in any other way. Of course, the ways of Governments and of Government officials are very difficult to understand, but where a £50,000,000 deficit is going to arise I cannot understand, except in one particular. We know quite well that the great bulk of the Income Tax of the country falls to be collected between December 31st and March 31st. Now there is one grave danger, and only one, and that is, if we do not pass a Budget Bill before the 31st March, we should lose, perhaps, £30,000,000 or £35,000,000 of Income Tax. But if we do pass a Budget Bill before the 31st March, I do not see myself that there will be any great need for borrowing very much money. I am sure there will not be this need unless the great Liberal Party are, may I say with all respect, foolish enough to try and bring about financial chaos because, forsooth, after being in power for four years they find it necessary to consult the people of 1072 this country. Surely a big party like the Liberal Party will never think that that is good policy or good tactics. For all the reasons that I have been so kindly allowed to put before your Lordships, I feel sure the right course is being pursued when we say that we shall support the Amendment of the noble Marquess, the Leader of the Opposition.
§ LORD BURGHCLERE
My Lords, before I commence I should like to express in common with your Lordships my regret that we have been deprived to-night of a speech from one of the most distinguished members of this House, Lord Curzon. I have had the pleasure of knowing him more years than I like to remember, and I shall always remember with some pride that I had the privilege of following him in the House of Commons, and endeavouring to answer him in the very first speech he made there, and in the very first speech which I made. The noble Lord who has just sat down will, I am sure, not think I am guilty of any discourtesy if I do not follow him in his very interesting speech. He is a great authority on financial matters. I am not an authority on such matters, and I do not intend to-night to refer to matters of finance. I must confess, although I think I may say I have taken part in almost all the great debates in this House for the last fifteen years, and although I have had twenty-five years of political life in one House or the other, I never rose to speak in any debate with a deeper sense of responsibility than I do on this occasion, a responsibility which attaches itself to the voice and vote of even so humble a member of your House as I am. I have followed this debate with great attention. I have listened to and admired the very admirable and statesmanlike speeches that have been made, but—and I say it without, I am sure, at all wishing to give any offence—when I have listened to the witty and somewhat light-hearted remarks of this noble Lord or that noble Lord, I have rather wondered whether this House in its entirety thoroughly appreciates the enormous gravity of the question which is before us, and which has been raised by the Amendment of the noble Marquess opposite.
I have often in the past, as most of those I see around me have, been present when great Bills have been sent up from the other House, and I have often heard it remarked on those occasions by authorities on both sides, that in discussing these Bills which 1073 have received so much attention from the other House, and in the papers before they come to us, we seem to be speaking as it were in a sort of atmosphere of unreality. Everything that ought to be said had been said, and all that remained for us to do was to repeat the wise and party sayings and clothe them with the best eloquence which was at our disposal. My Lords, that is not the case here to-night. We are debating a subject which has not yet been debated in the other House. We are debating the proposition of the noble Marquess opposite. The fundamental question which we are debating to-night is that of the Leader of the Opposition. I am not going to discuss the Budget. After very nearly a whole year's discussion in another place, after the multitudinous speeches that have been made upon it and the myriad of leading articles that have appeared in the newspapers about it, I do not think any noble Lord is anxious that I should go over these arguments again. But if there is such a noble Lord, I would remind him that I see in the Press we are shortly to have the benefit of another book on the subject, the author of which is no less a person than the Chancellor of the Exchequer himself. I do not want to minimise for a moment the responsibility of any vote that I am going to give with regard to the Budget, but I say without hesitation that as far as we on this side of the House are concerned, the Budget was doomed and dead when the noble Marquess first tabled his Amendment and announced it to your Lordships' House.
What then, my Lords, is our position? We are called upon to endorse or not to endorse an accomplished fact, as far as we sitting here are concerned. And what is that fact? That fact is the refusal of all Supplies to the Services of the country—Supplies which have been voted by overwhelming majorities in the other House, and, of course, on the authority of the chosen Ministers of the Crown. That is surely a very serious position, the seriousness of which is, I am certain, acknowledged by noble Lords opposite as much as by myself. But perhaps noble Lords would add, and it is possible that I should agree, that in any certainly most exceptional case, a case which seemed to be not even dreamt of, almost a nightmare, circumstances might arise in which it would be the duty of a Second Chamber at all risks and under all conditions, to take the extreme course that I have spoken of; but surely my Lords, they 1074 would add at the same time, that this course could only be taken when the financial propositions of which I have dreamt constituted a vital and a permanent danger to the existence of the State. I will say at once, speaking honestly as an independent and a somewhat moderate member of the Liberal Party, that when the Budget was first brought in, there were provisions in it that have been in many eases most beneficially amended. There were provisions which if I had had a seat in the House which has the power of amendment, I should have done my best as a private member to alter or to delete.
But, my Lords, this House has no power of amendment. I was rather surprised when I heard the noble Lord who last spoke say that the Commons could not send up a Bill which we were not to amend in any way. The noble Lord perhaps does not know that this House has no power of amendment. It has been relinquished by this House. It has been admitted by all authorities, and if you want us to mention the reason for it you will know perfectly well that when we pass an Amendment touching financial matters, and the Speaker rules it out of order on his own authority, we accept his ruling and we withdraw our Amendment. The noble Lord says this House has the power of amendment.
§ LORD BURGHCLERE
Well, someone else will probably point out where I am wrong. I say that this House has no power of amendment. The astute Statesmen who in 1860 for the first time sent up to this House the money Bills en bloc instead of sending them up Bill by Bill as they had done in the past, knew very well what they were about. In my humble opinion that revolution—for in some ways it was a revolution in the relations of the two Houses—removed from this House for ever practically the financial control which they had assumed in the past, except in the violent and extreme cases to which I have referred. I say that without hesitation, and moreover, I say that the situation which was then created in 1860 has been assented to, and been acquiesced in by all parties in the State, because since 1860 there have been many Conservative Governments in power, and many distinguished Conservative Chancellors of the Exchequer, and yet with their 1075 majority in the other House they have never tried to reverse that practice which was instituted in 1860 of sending up these Financial Bills, and which in my opinion took away from this House its financial control.
If I might make a homely illustration as to this action of taking away our financial control, I would ask you to consider what a surgeon would think if he was called in to operate upon a patient and was told that the only operation he could perform was to cut off his head. I do not think that that surgeon would consider that he was put in thorough surgical control of the full body of the patient. Yet that is our position with regard to Money Bills. I have heard it said, and I think somewhat loosely said, that there was a close analogy between the veto of the Crown, and the power which your Lordships have of rejecting Money Bills. In my humble opinion there is no analogy at all. In a Constitutional Monarchy the Sovereign acts by the advice of his Ministers who command a majority in another place, and it is perfectly obvious that if they bring in their Bills and pass them with their own majority, they will not advise the Sovereign to use his power of veto upon them. If I may be allowed to indulge in imagination for a moment, it does bring in some analogy as regards the position in which we are placed. I ask you to imagine, if it were possible, that a Ministry having a majority in another place, introduces some rather disputed measure. It passes the Lower House and the Upper House, and then at that moment the Ministry falls, but having known by the usual means, by the Press and by meetings, that the opinion of the country was against this measure which had received the assent of Parliament but not the assent of the Sovereign, the Prime Minister would take upon himself to advise the Sovereign to use his veto. I ask to be allowed to put that forward as an illustration, because the noble Marquess stands somewhat in the position of that Minister. He is advising your Lordships to use the veto which you had in your hands, but on what sole condition alone would a responsible Minister advise the Sovereign to take such a step? On one condition alone—that he was quite certain that he had behind him the voice of the people, and that at the ensuing election the steps he had advocated would be endorsed by the electorate of this country.
In taking the action which you are 1076 going to take, are you quite sure that you have behind you the voice of the people? If you have not, have you considered in what position you are placing this House, and what dangers you are raising for the Constitution? I have heard it said that if you had taken another course you would not have shown courage. No one on this or the other side of the House would accuse either the noble Marquess or his friends opposite of want of courage, but if I am not presumptuous I would venture to say that courageous as their action may be, they would have shown a greater and a higher courage if they had resisted the impetuous enthusiasm of their followers, and the daily diatribes of their Press, and had reverted to the calm, patient, prudent course which has characterised this House in all its great quarrels with the House of Commons since the days of the Duke of Wellington and Catholic Emancipation down to the passing of the Disestablishment Bill for Ireland. I think if they had taken that course they would have taken the wiser course; for if their action is not now confirmed by the country I think they will do great harm to the authority of this House, and if they have rushed into it not knowing what is going to happen, they have gone perilously near, if they have not actually attained, to the position of gambling with the Constitution of the country. If I sat on the other side of the House, and if I thought all the bad things of the Budget that every speaker, responsible or irresponsible, has laid to its charge during the course of this debate, I could not follow the noble Marquess into the Lobby, for I feel that it may be the action he has taken will not only arouse great political difficulties in the Constitution, but it may, under very conceivable circumstances, be a very serious danger to the Empire itself.
§ [The sitting was suspended at eight o'clock and resumed at nine o'clock.]
My Lords, I am unwilling to give a silent vote on this occasion. Having had for many years the honour of a seat in this House, as well as having been for several years in the other House of Parliament, I feel that it is of serious importance the vote a member has to give, but he must have perfectly good reasons for the vote he is prepared to give. I do not propose at the present moment to embark on the whole question 1077 of the constitutional rules of this House for that has been freely discussed before. What I take exception to, however, is the remark made by Lord Burghclere just before the House adjourned that this House had no power whatever to amend any Money Bill. I believe when any tax is put on perfectly separate from any other, it is competent that this House should have the power of amending that tax as it pleases. But there are in this Budget several matters of contention and injustice, most of which have been alluded to.
There are two points to which I should like to direct your Lordships' special attention because in them is started the idea of tracing the source from which the income comes. I allude, in the first place, to the question of Royalties on Minerals. A royalty unfortunately is frequently called rent whereas really it is payment on capital. The owner sells absolutely the mineral, coal, iron, clay or whatever it may be, at so much a ton to the purchaser, and on that he has paid for many years, and now pays, his Income Tax. At the present moment that amounts to 1s. 2d. in the pound. Under this new Budget, if it became law, he would have to pay practically another shilling Income Tax on that same article, and if the amount it produced happened to bring him within the scope of the Super Tax he would practically have to pay 2s. 8d. in the pound Income Tax—really that is what it comes to—on one source of his income. I would ask your Lordships and the country is that a fair method of taxation?
But to my mind the most dangerous point in the Budget is the question how far the present Government has mixed up Imperial and Local Taxation? It is proposed that one-half the money collected from a certain number of taxes should go towards the relief of rates. Up to the present time the ratepayers have always known that the money they contributed to the rates was spent on their locality and was of use to that locality. They could see for themselves what was the benefit, and locally elected bodies have had the power of criticising and checking the expenditure and seeing that the rates to which they themselves contributed were properly expended. As I gather from the present Budget the money that is disposed to the rates will not go back to the locality, or at all events the amount it has subscribed 1078 will not. Take the case of ratepayers in the Midland counties. If the Chancellor of the Exchequer should so choose their money might be spent on afforestation in Scotland, or in Devonshire, or anywhere else. As a rule ratepayers all over the country feel that whatever they contribute to the rates should be locally applied and locally spent. I believe that clause was put in with the view of bribing municipalities to accept these terms, but I ask your Lordships does it not lend itself to still greater danger in the future? There may be these sums at the disposal of the Chancellor of the Exchequer and which he may give to any locality he likes to prefer. I have no wish to make any remarks about any future Chancellor of the Exchequer, but we all know there is such a thing as political pressure, and I have grave doubts myself—I don't know whether it is put in the Bill—whether that money so disposed is under the control of Parliament at all. I think that is a very important question, that there should be large sums of money which the Chancellor of the Exchequer may have at his disposal to suit different localities according to their different complexion, possibly without the control of Parliament.
I now come to the more serious question, that is with regard to the vote this House is going to give early next week. No member can approach it without feeling a sense of the gravity of the vote he has to give, but at the same time we must look at the various remarks that are made about your Lordships' House by speakers on the other side. We have had several violent communications and threats of extreme measures possibly through His Majesty's Government; but there is one statement which appeared in Tuesday's papers from a speech by the First Lord of the Admiralty in which he said—They were going to teach the House of Lords their last final lesson. It was their duty to bow to the will of the country.I take it by the vote we are going to give we wish to find out what is the will of the country, and I do not see on what ground, considering the terms of the Amendment of the noble Marquess, Mr. McKenna has any right to object to the course that is being taken. What your Lordships' House propose to do is to test whether the will of the country is in favour of this Budget or not. I think myself that is not an unreasonable line for your Lordships' 1079 House to take. We have had various stories told us with regard to the Budget—how far it would benefit different classes and different people; but nobody on the other side of the House has yet ventured to get up and say it would seriously diminish the great evil of unemployment. There is no doubt the additional taxes they are putting on agricultural land must naturally decrease employment in agricultural districts. I do not take the cheerful view which the Minister of Agriculture took last night, because after all is said and done he cannot prove to your Lordships' House that by putting additional taxes on the land, no matter in what form, it will conduce to agricultural employment in the country.
What is the advice which is given to your Lordships' House? I regret the speech of my noble friend below the Gangway, Lord Balfour of Burleigh, because he disapproved of the Budget but he did not drive it to its logical conclusion, that is that it must be submitted to the will of the country. I hope and trust your Lordships' House will not be induced to follow his advice, because it has not always proved successful in the past. I would say with regard to the noble Earl on the Cross Benches, Lord Rosebery, that it strikes me the advice he gave is hardly worthy of his great position and his great oratorical powers which we all acknowledge and admire. What does it come to? He disapproves of the Budget in every possible way. He said it would bring, practically, disaster and ruin on the country, yet he advised your Lordships' House to let it pass; so that the country may suffer for six months from it and possibly thereby eject from power the authors of the Budget. It does not seem to me a worthy position for your Lordships' House to occupy—that you should let the people of this country suffer injury and ruin when you believe and know in your own hearts it will bring upon them both these disasters.
We are the only Second Chamber at present, and I do not believe for a moment that the country wishes to have an uncontrolled House of Commons. The country looks to the Second Chamber to save it from having all these measures thrust upon it which in your Lordships' thoroughly determined opinion will bring disaster upon it. I hold, therefore, without any hesitation that we shall be false to our duty 1080 as the Second Chamber of the country if we do not give the people the chance of passing their opinion on what we honestly believe—and I feel sure many noble Lords on the other side who may vote the other way believe—is fraught with grave risk and danger to the country. We must do our duty as a Second Chamber. We are driven to it. It is not our seeking. We are driven to it by the action of His Majesty's Government, and I feel it is our bounden duty to give the country an opportunity of recording its opinion on a Budget which all of us who vote with the noble Marquess, believe to be fraught with such danger and ruin to the country.
THE LORD BISHOP OF HEREFORD
My Lords, after the speech of the most rev. Primate last night it may seem to your Lordships somewhat rash on the part of a rural Bishop like myself who can claim no special influence in the House to take part in this Debate. The most rev. Primate, as will be remembered, with his unfailing consideration for his brother Bishops, and his unfailing courtesy, allowed it to be assumed that we should all retain our individual liberty in the matter, yet he informed the House that he and his Grace the Archbishop of York and the majority of his brother Bishops had deliberately decided to take no part in this debate or in the division, presumably leaving to Caesar the things that are Cæsar's. I cannot but feel some reluctance in stepping aside from that decision, but my reluctance to do so was much lessened by the reason that was given. The main reason given by his Grace was that they understood the division on this great question on this critical occasion would be a division on strictly party lines. I hold it is a very great misfortune if, on a very critical constitutional occasion like this, it should even be understood that the division was going to be on party lines.
I desire, therefore, for myself and the two or three others who may act as I do, to say that on this and such like matters we owe no party allegiance. We give our vote on one side or the other and we speak according to our convictions as independent members of this House, and because of the function which we feel we are called to discharge as having the honour of membership in this great Assembly. If his Grace had been here 1081 I might have ventured on a suggestion, and that is that it would be perfectly easy for the two Archbishops and all my brother Bishops who agree with their view, to prove conclusively on this occasion that the division was not on party lines if they would simply join my brother of Birmingham and myself that we may all go into the same lobby in support of the Budget. I desire your indulgence for a few minutes because of what I conceive to be the function of a Bishop here on such an occasion. If we who are Bishops have any special function at all in this House I venture to think that it is that we may speak and vote here on behalf of the multitudinous poor whenever occasion arises—a part of the population which is very numerous and which is not largely represented in this place. I hold that one of the chief functions of a Bishop here is to be, according to his reasonable convictions, the advocate and the procurator of those poorer classes whom he represents more especially than any other member of the House.
It is for this reason that I desire to say a few words explaining why I give my support to this Budget, and more particularly why on this occasion of constitutional crisis—for I think I may venture so to call it—I deeply deplore the dangerous revolutionary course which your Lordships are invited to take. I support this Budget for a very simple reason; because as was very well stated a few days ago by one whom I consider our greatest living political economist in England, it is a Social Welfare Budget and based on sound finance. In spite of all I have heard from the other side during this long debate I am still convinced that this is the right view of the Budget, that it is a Social Welfare Budget and based on sound finance. At any rate as an old student of political economy I am well content to take my stand on the verdict of Professor Marshall in this matter.
But, on the other hand, what does it really mean to reject this Bill? Unless I am mistaken it will do a good deal towards letting loose and stirring up and stimulating the dangerous spirit of revolution in the masses of our people. And none can pay any attention to European history without seeing that there is a danger wherever you artificially stimulate, as you will be doing on this occasion, that spirit of revolution, of angry revolution, whether it be dormant or not already. As your Lordships know 1082 very well, with the spread of education everywhere our life inevitably becomes more democratic. You cannot expect an educated democracy and their leaders to remain content with the survivals which represent the present constitution of our society. You must recognize that in connection with this growing intelligence and knowledge there is a growing sense of impatience, and a democracy under those circumstances, if you rouse its spirit of revolt and stimulate it by such opposition as you are giving, may become very dangerous. That is what I dread as one of the results of this action. That is why I wish this Budget to be passed in the usual way, as a protection and safeguard against the spirit of revolution, and that is why I would make an appeal to your Lordships on the Opposition Benches, if the opinion of such a person as myself were likely to be of any avail.
Well then, I give a very hearty support to this Budget as a Budget of Social Welfare based on sound finance, but I have freely to confess while doing so that I cannot do it without a word of protest. I feel that the Chancellor of the Exchequer deserves the very highest credit for his Budget, given the necessity for it, but I am inclined to protest against the alleged necessity for all this immense expenditure year by year. Our bloated Estimates, and not ours only, but the bloated estimates for military armaments all over Europe—why, on any dispassionate consideration in the twentieth century of Christian history, such competitive instruments for destructive purposes area discredit to European civilization, and more than that, they are a continual menace to European peace; and, as we know very well, they are a constant hindrance to all social progress and reform. But your Lordships who oppose this Budget cannot join me in this protest because you and your friends are more responsible than the Government for these bloated Estimates.
And yet I do not entirely acquit His Majesty's Government from some blame in this matter. Four years ago many of our hopes were raised about peace, retrenchment, and reform, and we had some very noble utterances, one in particular by the late Sir Henry Campbell-Bannerman in which he asked what nobler rôle could our country have than to place herself at the head of a League of Peace so that arbitration might succeed the competitive armaments. He said he looked for this at the fitting 1083 time. We are waiting, a good many of us, hoping to see that fitting time; but in the meanwhile I personally should like to hear our leading Statesmen on both sides declaring their earnest desire for this happier time in more articulate terms than they are in the habit of using.
Turning for one moment to the Budget itself, as I have listened to this Debate it has been borne in upon my mind that your objections to it are mainly three. Your Lordships, not all I am happy to think, but many of your Lordships oppose it because you desire Tariff Reform. Many again oppose it because they object to the Land Taxes and Land Valuation; and Land Valuation necessarily follows the taxes. Your third objection is because you take the side of the Liquor Traffic in this matter. Well, I will not presume to enter into details on all these matters; I will only ask your indulgence while I say a word on each of them. As to Tariff Reform I am old enough to remember what men called "the hungry forties" in the North country where I was brought up. It is engraven in my memory what a dismal and wretched time it was for the poorer people in this country, and not only for the labouring classes but for the farmers and many others. I desire not to see again anything like that. If a majority of the electors of England were as old as I am and had the same memories of that dismal and wretched time, there would be no Tariff Reform. But I venture to say with regard to Tariff Reform, which is but a new name for the old Protection, that it is a gamble with the necessaries of life. I would challenge any noble Lords opposite to say that there are not two fundamental objections to it. One of these objections is that while no doubt it will make many of the rich richer—the gospel of the millionaire—yet it will sink the poor into deeper poverty. All experience shows that when you look into it. And the other objection is this, as experience again teaches us if we choose to read contemporary history, it will honeycomb our political life with intrigue and corruption from which it is now happily free.
I pass from Tariff Reform to the Land Taxes and Valuation. I cannot but feel that all through this discussion there has been an endeavour in many directions to confuse the issue. This Budget as I understand it—I say this with all deference—will be of benefit to agriculture in the long run. Purely agricultural land will gain by 1084 it. Our farmers should recognise that and so should landlords. And with regard to urban land, who is there who really dares to assert that the greater part of the increment on such land is not the real property of the community? In my own city only yesterday we had to buy an acre of land for a boys' school, and after much difficulty we obtained an acre of land for £1,200—a small city, remember. And on turning to the rate book what do we find? That acre of land has been hitherto valued, as I am informed, for rating purposes, at about £6. Is it not reasonable that the rate-paying community which has added to the increment of that land by industry, by enterprise, by sacrifice, should have a fair share of that increment? I venture to think it is hardly decent for owners of such land to stand up in either House of Parliament and oppose this tax.
I turn for one moment to the Liquor Taxes. Now the liquor trade is a dangerous trade and it is doing a good deal to debauch the population of England. It has far too long enjoyed a very cheap monopoly from the State, having an annual licence at almost a peppercorn rent in many cases. And now, forsooth, we are told by the friends of the Liquor Trade—and your Lordships by your action, I am afraid, are supporting it; I am surprised it should be so—that we ought not to raise the rent, that it ought not to be introduced into an annual Budget. Is there any one who will seriously say to us, as we have been told outside, that taxes which are accepted as just and reasonable in New York and Massachusetts, or one of our Colonies, are nothing short of spoliation and iniquity here at home? The noble Earl, the late Prime Minister, a few years ago uttered a prophecy which has become famous, that if we did not take care this trade—and many members of it are constantly reminding us that their trade is their politics—would throttle the community. I begin to fear that this prophecy is being fulfilled.
My Lords, I have done, and I will conclude with one word of respectful appeal. I believe, as I said before, that this much abused Budget is really a protection and safeguard against the upraising and the stimulating of an angry revolutionary spirit in the masses of the people, while on the other hand the noble Marquess's motion, what is it? It is revolutionary in its essence, and in its consequences it will be no less revolutionary. I can hardly believe that its origin is really 1085 to be traced to the mind of the noble Marquess himself. Admiring, as we have had so many occasions to do, his high political instinct, his dispassionate approach to all the great questions of State, I cannot believe that the origin of this movement was in that mind, nursed in such noble historical and constitutional traditions. I am inclined to believe that people outside are right who say we must look to another quarter for its origin, and that the remarkable man, the highly distinguished man, who is now your guide, philosopher and friend in this matter, but was not always so, had a good deal to do with the origin of this motion. [Cries of, "Name."] I think the record of the history of later years in England has proved to the hilt that that highly distinguished man has been revolutionary in spirit at every stage of his career, and that being so your Lordships in your constitutional position, as I venture to think, could hardly take a more unsafe guide. Several speakers have urged on the noble Marquess the desirability of pressing through this motion uncaring consequences, none more so than the noble Viscount, Lord Milner. But it is not the first time, I think you might do well to remember, that the noble Viscount has pressed for strong measures on the noble Marquess and his friends. Let us hope that this advice will prove less disastrous than the advice given on that other occasion. In this House we are too apt to forget the people of England outside, but can any of us really imagine that the people of England will forget, that they are so degenerate as to forget, the great historical struggles for their fundamental liberties, and above all for the liberty and the power of the purse which cost so much and which we have long held so dear? Can you imagine that these people at the present time are at all likely to forget, or are in any degree likely to surrender these fundamental liberties under the thin disguise, the very thin disguise, of such a phrase as this Amendment?
No, my Lords, you may send this Budget to the country; but, living among the people, having grown up among the people and come out from among them, I have some knowledge of their fundamental feelings and ideas; and my belief is that the answer will come back to your Lordships in very plain English, and I fear it may come in tome form which you may regret. The answer will come, I think, something like this— 1086Never again, never again, in this country shall the fundamental liberties of the people be endangered by any privileged class.It is not the answer I fear when I regard with something like dread your Lordships' action, or proposed action. It is not the answer that I fear so much as the storm and the tumult and the class antagonisms and the strife and the bitterness for which you are making yourselves responsible to-day.
§ LORD LAMINGTON
My Lords, the question of the right of your Lordships' House to reject this measure has been dealt with and I wish to allude to the remarks made by the Lord Chancellor in this connection. He said that constitutionally we were wrong to do so, and he referred to the constitutional aspect and the legal, saying the constitutional point of view was more elastic and less rigid than that of the law. Now, as far as I can gather he wishes to claim that the constitutional situation should be made rigid in respect of our action, while in regard to the Government there should be allowed full elasticity. Well, after that very telling quotation of Lord Salisbury last evening, I do not think it necessary to have any better authority for our rights in this matter than that of the Lord Chancellor himself, but I think the feature of the evening's debate has been the declaration of Lord Balfour of Burleigh for whose judgment and experience I, like every other Member of the House, have the most profound respect. He drew an alarming picture of what would happen if the Amendment now before your Lordships' House is acted upon. These views have been supported by the speech of the right rev. Prelate just delivered. I confess I do not share their alarms in the slightest. We were told the other evening, by Lord Russell, that time after time your Lordships' House had thwarted the will of the people of the country. I think that statement in itself goes to disprove the idea that when we had rejected measures from the other House we had done so against the will of the people, but that we had correctly interpreted what were the wishes of the people. It would be perfectly impossible for a House constituted as this House is time after time, year after year, to impose a barrier to the wishes of the people. In some indirect way we do really represent in some degree what are the wishes of the people.
I believe that during the last quarter of a century the feeling of the public towards 1087 your Lordships' House has grown favourably. Since the last great Franchise Act, whenever we have ventured to oppose any important measure coming from the other House, we have always been threatened, but I consider that if Mr. Gladstone with all his power, prestige and authority failed in his attack upon this House, I do not think it will be the present Government who will bring the walls of this House about our ears. I believe this, too, that the people of this country have been so long accustomed to engage themselves in politics that they have such an intuitive appreciation of constitutional government that year by year, as the House of Commons seems to be degenerating in its procedure and practice, so there is a growing respect for your Lordships' House. It may be an unconscious act, but I believe that your Lordships' House is responding to that feeling. Since I have been a Member of this House I have spent a considerable time abroad. When I came home two or three years ago I was enormously impressed by the change that had come over this House. Formerly the Debates were stereotyped and confined practically to the two Front Benches. I came back and found the attendance regular; I found Members, young and old, interested in and participating in the Debates; and I believe intuitively they are qualifying themselves to play a more important part in the government of the country than they had previously done.
I do not wish to go into many details of the measure before us, but the right rev. Prelate has just informed us that in his view the Budget is a "Social Welfare Budget," "a philanthropic Budget." I do not believe in any Government indulging in philanthropy. It is not their mission and they almost invariably fail. It is well enough that out of the ordinary reforms of the country a certain proportion of them may be devoted to what we term philanthropy. We have very recently had presented to Parliament a report of a most important Commission on the Poor Law. It is one of the primary and rudimentary duties of any Government to look after the very extreme poor of the country. What is the general result of that report? What may be gleaned from it? Why, even in this rudimentary duty the Government have hopelessly failed in the past. This is said to be a Social Welfare Budget. Well, if you had, say, a Military Budget would 1088 you not get an expression of opinion upon it from your most competent Generals or those versed in military subjects? Suppose you had some Budget connected with the Crown Colonies, would you not get their opinion? As to this Social Welfare Budget I ask whether there are not plenty of earnest devoted workers in this country who give up their lives to philanthropy? That being so you would only reasonably expect that these men and women who lead these laborious lives would have made their voice heard when this great measure came before them to help them in their toil, but have we heard a single word from the leading philanthropists in this country? I certainly have heard none. You have good Societies like the Charity Organisation Society. Have they given any support to this Budget? You have great Friendly Societies whose mission is to help the people in time of need. Have they made any representation in support of the Budget? You have your great Hospitals which directly administer to the suffering poor. Have their directors or managers said a single word in favour of this Social Welfare Budget? Not one of them. Why? Because they are not affected by a partisan spirit in the matter. Their concern is with the strict purpose of trying to relieve the necessitous poor. They have no political aims, and they know well enough too that were such the case, not to try to administer philanthropy by the State, because it would invariably fail. It must needs be so. A Government must work on strict lines. They cannot discriminate. If they do they are very apt to become lax, and perhaps lead to corruption.
Well, the Lord Chancellor drew a very dismal picture of the condition of the lower working classes at the present time. For myself, I believe that he overdrew that picture. I believe that year after year there is some improvement in the general welfare of the masses, but if that is not so, I only say his description is a most terrible indictment of that paternal legislation which has been a marked feature of the last half century. I consider the result of these attempts to cure all evils by legislation is very often that where you manage to heal one sore you open two sores elsewhere. But there is one particular aspect of this question to which the noble and learned Lord is never weary of drawing your Lordships' attention. It is what he terms the serious diminution of the agricultural 1089 population. I am not going into the question of the general revenue of the landowners connected with the Budget, but I wish to say a word upon this point because it has so often been put before your Lordships.
The noble and learned Lord seems to forget that this tendency of country people to move into the towns is not peculiar to this country. I believe in every country in the world, and every new country with countless acres of fertile land to be cultivated, you will see the people congregated in the towns. I need not now enter into the reasons for this, but if the noble Lord had been present he might have derived some solace from one consideration. I know it in the part of the country in which I live. Small villages have disappeared and the people have migrated to the towns and the mines. My view is that they go into the towns and engage in industrial occupations because there is suitable employment. There is also a movement of people from the crowded districts to take up life on the borders of even the smallest country town in which you see springing up small residences, villas and detached houses. These are the people who have made their money and become prosperous in the towns. In mining villages you will find that even miners possess their own houses. I contend that by a natural process far better than any you can devise by a legislative system there is a continual movement into the towns, and then when better off, people come out of the towns and enjoy better conditions of life and fresh air.
I shall be informed that this has nothing to do with the rural population. I do not know what the noble Lord would like to see. Would he like to see two men working a plot of land which could be cultivated by one man? This migration is due solely to natural causes, and if two men were to do the work of one man would he like to see the wage obtained by one man divided between the two? Or, if not, would he expect the State to step in and supplement the wages and provide the men with decent conditions of life? There is the noble Earl sitting opposite whose care is the Department of Agriculture. He has been in Australia. I wonder if he has ever visited any of those communities set up by Government, communal communities, so that one man should not have any advantage over another, but should be 1090 strictly settled on the land under conditions very favourable to everyone. What do you see there? You find, perhaps, one or two men remaining; otherwise derelicts, weeds everywhere, land lapsing again into the bush from which it was originally carved. Yet these were people who were settled on the land under every condition of prosperity, land provided free, houses provided, implements supplied, and so on, and yet they have failed. While touching on this question he referred to the unearned increment. In Australia he will find a community who are living strictly under Socialistic principles—that is they have no religion, they have no property; they are the aborigines of Australia. I see the right rev. Prelate smile. I am not taking an exaggerated view at all. These are not degraded people in the slightest, but men of intelligence and fine physique. But ask anybody who works among them to try to save them from the civilisation that is pressing on them. What would you be told is the essential difficulty in trying to preserve them? First, the absence of any strong religious belief, and secondly, the absence of any knowledge of the rights of property. These are the two principles which have to be inculcated in them. There you have an instance of what pure Socialism is. Communism is from Socialism. It is a parasite which drops off that which created it. It is not initiative; it is purely destructive.
We are told this is not Socialism, but that is ridiculous. The Socialists in this country and the Socialists on the Continent hail the Budget as a big instalment in the carrying out of their Socialistic principles. There is one reason which has been given very forcibly why it is sought to heap so many taxes upon the land, and that is because the land cannot escape them. It is quite true. Capital in other forms does escape, whether it be the Death Duties or the Super Tax in regard to the Income Tax. That telling speech of Lord Revelstoke showed very clearly how capital does manage to escape. In my own experience I know it. I have come across two foreigners, one a very distinguished British Indian subject, a man of considerable wealth, who told me he was taking care to withdraw his money from this country. So also I heard a Spanish gentleman, who has a large connection here, say. Moreover, some months ago I was told by a Banker abroad that he was simply being inundated by requests 1091 from this country as to how people could so place their accounts that they might escape the taxation of this country. I quite agree that luxury is a very bad thing, and there is a great deal of luxury in this country, but I do not think that those who are living in luxury are the landed classes of this country. I think the money will be found to be chiefly derived from foreign sources, from our kinsmen on the other side of the Atlantic. Certainly for the most part it does not come from incomes derived in this country. It may be you will find this luxurious system will disappear, but I do not think so. I think what is more likely to happen is that these taxes, the Super Tax and graduated taxation, which may be theoretically very fair but may be unwise, will cause capital to take flight out of this country. It is taking flight, but the luxury will remain here. Therefore you will be beset by both evils. Lord St. David's last evening seemed to be quite indifferent as to whether capital was driven abroad or took itself abroad. I don't quite know what he wants. I suppose he wishes to see the country reduced to having a prairie value. It may be a very sound state of affairs. Money and happiness are not necessarily co-existent; but I don't think anybody has yet put forward as a practical proposition that it is desirable to impoverish the sources of the wealth of the country. I believe there is a perfectly sound maxim that any system of taxation, if it is permanently or continuously applied, should fall fairly on all people in the country, but it must not be liable to violent fluctuations and changes.
And it is the worst feature of the Budget that it proposes to tax certain classes and sections for the benefit of others. This will involve changes year by year. You are simply trying to get as much money as you can out of small sections of the people. I quite agree with what the right rev. Prelate described as the evils; similar evils will result from the imposition of the Budget. You get change and uncertainty and you draw into politics a number of people who are ordinarily engaged in commerce or trade who find themselves liable to be injured and are desirous of obtaining some benefit under a system of high protection—trying to obtain either protection for themselves or benefit for themselves. Thereby you run the danger of introducing a system of corruption. I deplore the Budget because I regard it as a system, or an attempt to set up a system, 1092 of a kind of philanthropy based on the destruction of our present financial system. I think it is extremely unfortunate that it has been introduced at the present time. I am no believer in the hostile intention of any particular Power, but, as Lord Cromer pointed out the other evening, there are very disquieting features that demand that at home we should have strength and calmness. The present Government have done nothing in this direction. They have done everything to promote disquietude instead of trying to instil a sense of order and stability which are the factors absolutely essential for the proper conduct of affairs at the headquarters of the world-wide Empire.
§ THE MARQUESS OF NORTHAMPTON
My Lords, I have listened to the noble Lord with pleasure. We must feel he is looking at affairs in this country with a comparatively new eye, instead of the way in which we regard affairs in the country with a vision which is perhaps a little dulled by the constant habit of microscopic observations. We recognise that he has fulfilled high service abroad. He conies back to us and the first thing he tells us is that this House has improved. As he has returned during the time when a Liberal Government is in power I think that we on this side of the House may accept that as a compliment. He also said, at least so I understood, that the Government is guilty of philanthropy. I do not quite understand why anybody should defend himself against an accusation of philanthropy. So far as I am concerned, the only reason I ever took part in politics or entered into political life was from philanthropic motives. I do not use that term as if I were better than anybody else, but I do use the term as one who sees that the chief object of a Government should be to do what they can to better the condition of the men who live around us. After all, the noble Lord has given us an interesting speech of his experience in one direction, but has hardly dealt with the vital issue before the House at the present moment.
There has been raised a new issue with which the House has never had to deal before, with which the country has never had to deal before, and we have to deal with a new claim on the part of your Lordships' House. The new claim is the right of the Opposition in this House to cause by their action a General Election. We are perfectly well accustomed to the power which this House has claimed and exercised of dealing with 1093 Liberal legislation whenever Liberal legislation is brought forward, either by rejecting it or by altering it in such a way that it is impossible for any self-respecting Liberal Ministers to accept the alterations. But to-night and during this debate the Amendment which has been moved by the noble Marquess has raised an additional question and claimed a fresh power.
Now I should like to ask the noble Marquess a question, which I am perfectly certain he will not answer, and it is this. If this Liberal Government had introduced this Finance Bill in the first year of their existence as a Government, would the Opposition in this House have rejected that Bill by a large majority? If they had introduced it in the second year, would the Opposition have opposed and rejected it? Is it a question of the lapse of time or a question of the Finance Bill which we are deciding? I do not believe for one moment that the noble Marquess or any responsible noble Lord on the opposite side would have risen to reject the Finance Bill if it had been introduced in the year after the Liberal Party had come in with a very gigantic majority, when the whole flood of the tide had gone in their favour and swept them in and swept you out. If you say "Yes"; if it was so iniquitous, if, according to the language of the noble and learned Lord, Lord Ashbourne, it was so unclean, if it was so wicked that it would have been rejected the first year, in spite of the gigantic majority, then we can understand what the claim of the Opposition is. It is that, whenever the Liberal Party come into office, whatever may be the majority, whatever may be the feeling of the country, if a measure they bring in is distasteful to the Opposition, they will reject it. On the other hand, I do not believe for one moment that you would have rejected this Bill in the first or in the second year of the existence of the present Government. But you do move to reject it in the fourth year. A change has come about, the change being that, owing to certain circumstances, certain signs, you think that the present Government is no longer able to get a majority. I wish the cheer had been more universal on the other side. It was only one or two who were incautious enough to cheer that remark. If you still admit that you are rejecting this Finance Bill because you think you are going to get a majority in the country, then all the speeches that have been delivered by noble 1094 Lords on the Opposition side are unreal speeches, and the only reason why you are objecting to this Finance Bill is because you think you will be able to place yourselves in power and turn out those who are in power at present.
I am anxious, if I can, to place before noble Lords opposite the knowledge of what some of us see is going on in this House and what will probably be the result. A gradual change has come about. Your majority has grown larger and larger through no fault of your own. The Liberals have tried at times to feed the minority in this House by making Liberal Peers. I look round now and I wonder how many of the Liberal Peers who have been made Peers in the last twenty years are still sitting on this side of the House. You have gradually absorbed them for reasons which I cannot state, except that, I imagine, in some cases they have got what they want, and, having got what they want, they prefer to sit on the other side, and, perhaps, in other cases they have not got what they want, and therefore they have changed to the other side of the House. We have suffered from a gradual loss. Yes, and we admit it. We are in a small, weak minority in this House, and that time after time, owing to measures that we have brought forward, we have lost some of those who have hitherto supported us. We are quite alive to the fact but that does not change the situation that in this House, the Second Chamber, there has come about such a state of affairs that we have a gigantic political majority permanently here, representing whom? Whose policy or what? A gigantic majority that at the present moment are using their power solely with the idea of defeating Liberal legislation, defeating Liberal ideals, whose sole idea at the present moment is to get rid of a Liberal Government. Will any one deny that? And with the idea, the mistaken idea, that they themselves will soon enjoy office.
I have once before spoken in this House and made a gentle appeal, on behalf of a very small Bill, against party tactics. Nobody knows better than the noble Marquess who moved the Amendment what party tactics really mean. We know perfectly well the forces that are being brought into action in order to force the Opposition into taking the course they have taken. It is no secret that there has been every influence—political influence— 1095 brought to bear upon the noble Marquess and those around him to make them, perhaps against their will, reject the Finance Bill of the Government. The result is that, with a general election that returned the Liberal Government by a large majority we have had four short years during which Liberal legislation has been recklessly vetoed. We have now almost the new claim to reject the Finance Bill, and we have the further additional claim, according to the words of the Amendment, that any moment the Opposition in this House may cause a General Election. We are to have the rejection of legislation and the rejection of taxation. At this moment it seems to me that it would be better if wiser counsels had prevailed. There are one or two independent members of this House. I am not one of them, but I recognise to the full the value of the fact that we have some independent members. They are very few indeed. Every independent member of this House who has spoken has recommended that this Amendment should not be accepted.
I do not for one moment imagine that I shall influence a single vote, but I do think I might appeal to the House that the views that have been put forward by moderate men should be carefully considered before we come to an ultimate decision. We are asked at the present moment to take a step which is in antagonism to immemorial custom. We are asked, in the language of the Secretary of State for Foreign Affairs, who, after all, cannot be considered an extreme man, to enter upon a gambling transaction. Can any of us foretell what the result of the General Election will be? I daresay you have been advised that you have a chance at the General Election, but no noble Lord opposite will venture to say that it is a certainty. We are asked to throw into the melting-pot some of the best parts of our constitutional system, and to enter upon a great war which will last, perhaps, for many years, but can only have in the end one result.
I have hitherto only spoken on the constitutional aspect, but I feel that it would be almost cowardly, although that aspect is the most important in my mind, not to say something as regards the Budget itself and what the Budget proposes to do. In the first place we are asked to tax "the trade." It does seem to me a most unfortunate thing that, whenever there is a 1096 question in regard to the taxation of the licensed trade, the whole Conservative Party should unite in one solid body on its behalf. We who have been in the House of Commons and have fought many an election know quite well the power of the trade. Noble Lords who have not gone through contested political elections will hardly be aware of the power the public-house has. I am quite ready to admit that at General Election time, or during by-elections, it is a valuable asset to any political party to have the public-house on their side. But it is a very disreputable asset, and I am astonished sometimes that the Conservative Party should have such a very strong political alliance with the trade, whose houses, certainly during political elections, are allowed to be used in a manner of which none of us would approve. It is, however, the other taxation that I imagine forms the chief difficulty of this Budget. There is the question of the taxation of land. I happen to be one who has urban property as well as property in the country. I am not at all anxious to pay more than I need. I think all Budgets are detestable. I think the amount of money we spend is much too large. But we have to look facts in the face, and I see at the present moment that there is a serious demand in the country for a large sum of money which must be raised somehow. Personally I thoroughly approve of the principle that the largest share of the taxation should be placed on the shoulders of those who are best able to bear it. I do not say for one moment that it is a good thing for the country. I think this gigantic expenditure is a bad thing for the country. We are face to face with circumstances which none of us can overlook. In the first place both Parties pledged themselves to grant Old Age Pensions. Both Parties must carry out that pledge. It will not matter which Party is in power, that pledge will be carried out.
Then we heard the speech which was delivered by my noble friend, Earl Cromer. I do not take, perhaps, quite so gloomy a view as he does of our position in the world and the dangers which surround us, but I acknowledge, as a Liberal, that I think it is the duty of our country to place our two defensive forces, the Navy and the Army, in a perfectly safe condition, so that we may depend upon them in any circumstances, and certainly that, above all, our Navy should be supreme, in order 1097 that we may fulfil our duty to the Empire for which we are responsible. But that means spending money. Money must be provided, and when some noble Lords opposite, who are Imperialists just as I am an Imperialist, say that this revenue which we see foreshadowed in the Finance Bill is something very bad, I feel that that prospective revenue is the one thing that this country requires, for we owe a large debt as regards social reform and we must put our Navy and our Army into efficient order.
My Lords, I feel that it is almost a waste of time even to speak about this matter, because it is practically already decided, but I do think noble Lords opposite ought to consider what really takes place when Liberals are in power and when Conservatives are in power. When the Conservatives are in power and Bills are sent up from the House of Commons, they are received here by the majority—a gigantic majority—with content. They are passed almost without discussion. They are hardly ever amended. But when Liberal measures are sent up here we know the fate of them even before they arrive. When the Conservatives are in power your Lordships send, as it were, blank cheques to the House of Commons to be filled in as the House of Commons likes. When the Liberals are in power you refuse payment. Is it possible that a Second Chamber can go on under these conditions? Is it possible that the people of a free country will always submit to this fact, that if they return Liberals to power, the Liberals have no voice and no power? Do you think it is really the popular wish of the present moment that the House of Lords should be supreme and that the House of Commons should be powerless?—for, after all, we are gradually getting to that. We are to be supreme. We are to reject measures. We are to mutilate measures. If we pass measures we pass them, not because we approve of them, but because for some political reason we think it is better to pass them. We are going in the future always to say that if a Finance Bill does not suit us we will reject it and we will have a General Election. We are claiming to say that the Government, on any question that comes, most go to the people. We are laying claim to a power which no free people will stand for one moment. You are going to the country now and you are going to place yourselves in a position from 1098 which you will never be able to withdraw until the people have declared that you shall not have the power which you profess is your right at the present moment to exercise.
I feel the seriousness of the position; I feel the danger of the position. No one is more alive than I am to the social unrest existing in our country. I do not believe that any noble Lord in this House has ever done what I have done. I have gone among the Socialists and spoken to them against Socialism. I have gone amongst them where I was the only one who was anti-Socialist. I have gone amongst those who are the most extreme and the most determined. I have had no fear of them in the past, and I will not say I have any fear of them in the present. But if anything is to increase Socialism, if anything is to give Socialists power, it will be the action which this House is going to take on the Finance Bill. You are playing into the hands of the extreme party and against the moderate party; and I believe that your only reason for taking this step is that you think you will be able to get rid of the Government to which you are politically opposed.
§ LORD NEWTON
My Lords, nobody will question the sincerity of the noble Marquess in supporting the principles of this Budget, because, if I am not mistaken, he is one of the persons who is largely affected by it. But I regret that the motives which he has imputed to Peers upon this side of the House are of so uncomplimentary a nature that I do not think it worth while to comment upon them. As for the enquiries which he put to the Opposition Front Bench, they are of a purely hypothetical nature, and as to the question as to why so many Liberal Peers eventually change their politics on attaining a place in this Chamber, that is a question which has perplexed many persons besides himself and will probably continue to perplex other people to the end of time. Although I, personally, am unable to appreciate the moral beautie of this Budget, and although, unlike the right rev. Prelate, I am unable to see that it is likely ever to promote social welfare, or that it is based upon sound finance, for I should have thought that if it were based upon sounder finance, if it would have obtained the support of any of those members of what the noble Lord, Lord Lucas, somewhat impolitely described, as the "de 1099 humanised monetary machine" which is his euphemism for the City—I should feel there was some greater ground for the statement if this view were supported by any sound financial or commercial authority who is other than a political partizan. But although, as I have already said, I have been unable myself to detect the good qualities of this Budget, yet I confess that I hoped for a long time that a contest upon this question would be averted. For one thing I candidly confess that I always hoped, in common with other members of this House, that when it came to a struggle with another place that struggle would be fought upon what is called favourable ground. In this particular case I am afraid that we cannot flatter ourselves that we are going to embark upon the contest on favourable ground, and I find myself entirely in accord with a member of the present Administration who, when he was asked by an opponent with whom he was on friendly terms as to what he thought would be the best method of making the Budget unpopular, replied with, I think, profound political insight, "If you wish to make this Budget unpopular you ought to pass it."
It appears to me that the temptation to pass the Budget is exceedingly strong. It would not have taken long to have shown the futility of the proposals, and the result to the Government would have been to have forced the Government into a more desperate course. On that ground it certainly does not strike me as either a very straightforward or a very courageous course of action to adopt. For that reason I regret more than I can say the speech which was made yesterday from the Cross Benches by my noble friend, Earl Rosebery, whose absence I regret at the present moment. But the sentiments of the noble Earl appear to me to be so admirably expressed in a British classic, which I hold in my hand, that I am unable to resist the temptation of quoting it in full, because it appears to me so exactly to typify the position adopted by the noble Earl—Ruin stared me in the face. I took a desperate resolution. I left my home early one morning, with one suit of clothes on my back and another tied up in a bundle under my arm. I arrived on the cliffs, opened my bundle, deposited the suit of clothes on the very verge of the precipice, took one long look down into the yawning gulf beneath me and walked off in the opposite direction.That appears to me exactly to describe the conduct of the noble Earl upon the occasion 1100 in question. He did not lead; he invited the Opposition to advance towards the edge of the precipice and when the edge of the precipice was attained he himself executed a right-about-face.
There is another ground upon which I, at all events, should not have felt myself bound to oppose this Budget, and that is on the stereotyped ground that I, like, I presume, nearly everybody in this House, have long ago come to the conclusion that whatever Government is destined to rule us in the future rich people will, undoubtedly, have to pay more in the future than they have had to pay in the past. That is precisely, as everybody knows, what this Budget does not do, and as long as it specially and vindictively singles out two forms of wealth only for the purposes of taxation I, naturally, was disappointed in this expectation. There is a third reason why I desired, if possible, to see a compromise effected on the question of the Budget. That is, frankly, because it was perfectly apparent to me that the more aggressive and pugnacious members of the Government are only too anxious to have a fight upon this particular point.
No great intelligence is required in order to realise what has led to the present situation. This Government, like all other Governments, has been steadily losing ground. It has seen its measures rejected and so far from that indignation being manifested which the noble Marquess appears to think rankles in the breast of every voter in the country the country notes the rejection of those measures with absolute indifference. In the endeavour to regain popularity, the leadership of the Liberal Party has fallen into the hands of the extreme men and those extreme men see an opportunity, not only of regaining popularity, but of destroying—a thing which they value much more—for effective purposes this House. Now, to do the Government justice I honestly believe that if any member of the Government, whom I see opposite now had been in charge of this measure, it would have been perfectly possible to have arrived at a compromise and there would have been no crisis, such as there is at the present moment. But whatever the feelings may be which actuate peaceable people like myself, what vestige of evidence has there been all through that any compromise of principle would be entertained by the persons who 1101 are really, and not nominally, responsible for the policy of the Government? Owing to the attitude of those Ministers and owing it must be admitted, partly to the attitude adopted by some of ourselves at the earlier portion of the controversy we have, for some time since, arrived at the stage when, as the French say, "the guns go off of themselves."
It is perfectly true, as has been pointed out over and over again in this debate, that this Budget has been so altered as to be almost unrecognisable. It contained so many absurdities and so many crudities that even with the gigantic mechanical majority which the Government command in another place they were fairly and honestly argued out of those absurdities by the small Unionist minority which exists in the House of Commons. But, on the other hand, in spite of those concessions, every speech delivered by the Chancellor of the Exchequer has made it perfectly plain that he never meant to yield, that he saw there was a good chance of a fight and that he was determined to make us fight upon it. Well, it is only fair to say that this line was not adopted by all Liberals. As long as there appeared to be a reasonable chance of carrying the Budget, the time-honoured Parliamentary dodge was tried on of producing bonnets to assure the world and to assure old-fashioned Liberals that this Budget really meant nothing in particular, and that it was only a very moderate scheme of Liberal finance which Mr. Gladstone himself would have been glad to give his benediction to, and all the "heavy fathers," official and non-official, of the Party, who belong to the Parliamentary cast, were introduced so that they might be brought forward and give their benedictions to the Chancellor of the Exchequer, the classical macte novâ virtute, puer: sic itur ad astra being rendered somewhat in these words, "Go on, my boy, put the burden on the widest shoulders; I am with you heart and soul, so long as my shoulders are not affected by the burden." It is wonderful the enthusiasm which can be created in the hearts of these noble-hearted patriots when they see that the burdens have to be borne by other people. But now that the Budget—to put it mildly—is in extremis there is no further occasion for these histrionics and everybody in the Party has now got to join in the shouting—I might almost say the bellowing—against this 1102 House, or else it is clearly intimated to them there will be no longer room for them in the Party. The long and short of that is that there is no longer room for any moderate men in the Liberal Party. Noble Lords know that as well as I do, that the Chancellor of the Exchequer and the President of the Board of Trade have got their own way and a general election and a possible war of classes and the destruction of the old Liberal Party, and the elimination of the moderate men from that Party, is the price which you pay for being led by those adventurous spirits.
Speaking for myself, I do not hesitate to say that I would sooner be the most insignificant Under-Secretary that ever crouched upon a Front Bench, the humblest private Member that ever tramped through the division Lobby at the bidding of an imperious Whip, rather than be known as the man who has utilised high office, and such gifts as nature has given me for the purpose of setting class against class and of hounding on one set of men against another. And when I study, which I do occasionally, the utterances of those twin protagonists of the Liberal Party, who like… "two coursers of ethereal race With necks in thunder cloth'd and long resounding paceare whirling along the Liberal chariot at the present moment, completely free of any control from those who are supposed to guide the Party, I confess I do not know whether I am most repelled by the nauseous cant in which they occasionally indulge, or by their almost blatant appeals to the predatory instincts of their fellow creatures. Take the case of that austere moralist, the President of the Board of Trade, who has invented a new political theory with regard to the attitude of the State towards wealth. In future the new Liberal Government is going to the taxpayer, saying in a homely sort of way,It is not your money we want; we are not actuated by any sordid feelings of that kind; we want to know how you made it. If you made your money in land, or if you have anything to do with what is called 'the Trade,' your wealth is obtained in an unsatisfactory manner, and you will be heavily fined; but if, on the contrary, your money has been made by manufacturing, shall I say, cocoa, chemicals, or aëraled waters, or soap, there is nothing criminal in that, and we think it only fair to spare you as much taxation as we consistently can.What a vista this opens up for the really imaginative Liberal Chancellor of the 1103 Exchequer of the future! Why, in pursuance of this doctrine, he may say to himself—There can be no more pernicious occupation in the world than to purvey Conservative political opinions. You are the owner of one of those pernicious newspapers, let us say The Times, or the Winning Post, or the Spectator. It is you who provide this unclean, deleterious stuff. You shall pay through the nose. Whereas as there can be clearly nothing more meritorious than to advocate Liberal opinions, it can only be fair that the Daily News and the New Age should escape from taxation altogether.I pass from one moralist to another: to the Chancellor of the Exchequer, who is not likely to be left behind in the race. If there is one thing which nobody claims for this Budget at all, it is that it is going to do anything for unemployment. But the Chancellor of the Exchequer has the audacity to announce that he is about to wage what he calls "an implacable war against poverty;" that "no cupboard is to be left bare," and that he is "going to bring rare and refreshing fruit to the parched lips of the multitude." Yes, rare and refreshing fruit were brought to the parched lips of our old acquaintance Tantalus, but they never attained as far as his lips. He was never allowed to taste them or, so to speak, "get his teeth into them." And on the top of this we have the amazing statement. "To deceive the poor is the meanest of all crimes." These Pecksniffian sentiments may excite derision, but the shameless appeals to what I can only term the predatory instincts of the people are naturally of a more serious character. Nothing annoys the Government more—and it is not difficult to annoy the Government—than to be accused of Socialism.
For my part I willingly acquit all noble Lords upon the Front Bench of any sympathy with Socialism, just as I acquit them of being responsible in any way for the provisions in this Budget. But if they decline the imputation; if, like my noble friend, Lord Ribblesdale, they are unable to detect any Socialism in the Budget, how do they account for the fact that Socialists, not only in this country but all over Europe, have risen as one man, or as one woman, and called this Budget blessed—not the Government but the Budget; in fact it would be hardly correct to say the Budget, but a portion of the Budget! If the Government cannot quote one single, solitary, impartial financier or commercial 1104 authority in favour of their Budget, can they quote one single Socialist who is not in favour of it? I am afraid they cannot quote a banker or an agent, or a manager, or a builder, or even an auctioneer in favour of the Budget; but I repeat, that it would be impossible for them to name one single Socialist in this or any other country, who is not in favour of, at all events, some portions of it. As a matter of fact it has been received by Socialists all over the world as "glad tidings of great joy," and the new principles which have been introduced are considered, and probably rightly considered, to be the greatest advance which Socialism has made since it originally started. And the only real difference between the bonâ fide Socialist and the present Government is this—and I am afraid it is not a very complimentary difference—the difference is that the pure Socialist is logical, and, according to his lights, a perfectly honest person, who proposes to appropriate the whole of private property for public benefit. The Government, on the other hand, only propose to appropriate a certain portion of a particular form of property, which, unhappily, happens to be identified with their political opponents.
Nobody is really in the least taken in by the elaborate and ingenious arguments which are being constantly used in order to differentiate the case of land from anything else. The explanation is perfectly simple, the Lord Advocate, lapsing for a moment into accuracy, said, with extreme felicity, "Land cannot run away." Of course that is so. It stares you in the face, and nothing is easier than to create prejudice against people because they are the owners of land and their wealth is evident and it is stationary. They cannot get rid of it, whereas other people may be infinitely richer in every sense and yet, because their wealth is not apparent and is not fixed and stationary, they escape altogether.
This very simple plan of helping out the Socialist case was pointed out by Karl Marx many years ago when he said that really England was the most favourable soil upon which to plant the Socialistic seed. It is almost pathetic, considering the efforts which have been made by the Government to placate the Socialists, to see the extreme ingratitude which they receive in return. The Socialists and the Labour people—and personally I never can see any more difference 1105 between the Socialist and a Labour leader than I can between, say, a coloured gentleman and a full-blooded negro—the Socialists and the Labour people won't even give the Government credit for originality. They won't even give the Chancellor of the Exchequer credit for originality. They say that the Limehouse speech was only famous because all its economic and social items were copied substantially from the speeches of obscure street-corner talkers who had been spreading the views of the Labour party for years. That seems to me a perfectly true assertion, more especially that part which refers to street corners. It is in vain that the Chancellor of the Exchequer humbly follows in the train of Labour-cum-Socialist processions. The only return that he gets for the subservience is that whenever the Socialists or the Labour Party can manage to do so they run a candidate against a Government candidate. The attitude of the Labour-cum-Socialist coalition towards the Liberal Government suggests to me the attitude of the boa-constrictor towards its attendant. That somewhat unsympathetic animal receives all that is given it without evidencing any gratitude or any emotion. It takes all that it can get, and it will be quite ready to take the attendant himself and appropriate him should an opportunity arise.
If the Socialists and Labour Party show less gratitude than might be expected for this heaven-sent gift in the shape of the Budget, it actually seems doubtful whether the ordinary voter appreciates it at its true value. This Budget is loudly described as the "People's Budget," the "Poor Man's Budget," and, above all, the "Popular Budget." Yet it is a most remarkable thing to me that the most enormous pains are taken to emphasise the fact that the Budget really is popular—efforts before which even the exertions of Mr. Haldane and Lord Esher on behalf of the Territorial Army, pale. In order to emphasise the fact that the Budget is really popular a gigantic League has been started to proclaim the fact. A distinguished law officer of the Crown has been liberated from his duties in older to perambulate the country and to present the Budget in its most attractive, or perhaps it would be more correct to say, its most alluring, lights. Even such things as gramophones and other mechanical appliances have been introduced; and finally even the spirits of the illustrious have been invoked to bestow blessings, couched 1106 in such vile grammar, that the language certainly would have been disowned during life.
Then, too, I do not infer for myself that the by-elections which have taken place since the Budget was introduced, convey any idea of excessive popularity. There have, I think, been four. One of those elections was lost. In the other seats—they were all carefully selected—the Government candidate was returned in each case with a largely reduced majority. Upon the whole it is not so very surprising that the Budget may turn out to be less popular than was abundantly supposed, because although it sounds very well at first if you tell A that B is going to be heavily taxed, yet if A finds he does not benefit by it, and that C, for instance, is gravely inconvenienced by it his enthusiasm for the proposal is likely to evaporate to a very considerable extent. Upon the whole I am personally inclined to hope that the reputed popularity of the Budget must rest largely upon the speeches which have been made against it in the country by members of this House; speeches which, unfortunately have been interpreted in a somewhat different sense from that in which they were delivered. Then it is assumed that even supposing the proposals are less popular than is commonly supposed, nevertheless thousands, and, indeed, possibly millions, of voters, will be so goaded to frenzy at the idea of any infraction of the privileges of the Commons that there can be no possible doubt as to the result. Now I desire to speak with all respect of the House of Commons, for one reason because I was for some years a member of that Assembly myself; but I cannot resist the feeling that at the present time a great many people have what I venture to call privilege on the brain. There are many estimable persons who enter Parliament firmly convinced that they are the only people in the country in whom any real interest is taken, and that what seems to them matters of supreme importance, such as the forms of the House, the procedure, resolutions, and privileges are matters of equally absorbing interest to the outside world. Not even a perusal of the halfpenny papers, which never report anything at all of what happens in the other place unless it be in the nature of an incident, seems to convince them to the contrary. I myself believe this view to be an absolute delusion.
My firm belief is that the ordinary voter in this country does not concern himself in the very least with questions of this 1107 kind. He sends people to represent his opinion and to get certain work done. And if that work is not done, or if it is done in a way he disapppoves, he replaces them with somebody else. But to suggest that the ordinary voter is violently agitated over, for instance, the exact meaning of a resolution passed more than two hundred years ago is too heavy a draft upon my credulity at all events. This is the kind of question which enormously excites professors and dons and people who write long letters to the Spectator and to papers of that kind. But does anybody seriously suppose that the voters are going to work themselves into an uncontrolled fury because we say that they ought to be consulted upon what is admitted by the Government itself to be nothing but a revolution. Does any voter draw elaborate distinctions between Bill or Budget? Does he care whether a Bill, if it is a good one, is introduced in this House or the other House, and does anybody believe, for one single moment, that because an abnormal step is to be taken by this House that this House is going continually to interfere in such matters to the end of time? I do not believe there is any person possessed of the smallest amount of common sense who entertains those views for an instant; and my firm belief is that when the contest takes place the purely constitutional question will play a very little part. With regard to this contest I myself embark upon it, I freely admit, like everybody else, with the greatest reluctance. I said at the beginning of my remarks that I had hoped for a long time that there would be no contest at all. I cannot help realising the extreme disadvantages under which we fight. As a matter of fact we have been driven, or jockeyed into a fight. It is not one of our seeking. My hope is that the commonsense of this country will once again come to our assistance and that people will realise that the mere collection of money is not the end in view; that they will realise at the same time that the Licensing Clauses embody a principle already rejected and that the Land Clauses are not remunerative but vindictive, and that if these proposals are allowed to take effect they will injure, and probably finally destroy, that credit and confidence upon which the prosperity of the country depends.
§ LORD EVERSLEY
My Lords, I think there should be some division of labour 1108 in a debate of this kind, and that each member of the House should endeavour to deal with two or three points. For this reason I shall not attempt to deal at length with the constitutional question. I am quite satisfied with the manner in which that has been treated by the Lord Chancellor in his most able speech, and also by the noble Lord, Lord Balfour of Burleigh, in a speech extremely able, lucid, and courageous. We all feel, on this side, that in abstract law there is a right on the part of this House to reject the Finance Bill, but what we say is that, by the usages of Parliament for many centuries that right has practically been abrogated, and that the House of Commons has acquired supremacy in the finance of this country. For my part I cannot believe that that supremacy can be set aside without considerable danger to the State. If this Amendment is carried it will form a precedent for the future of a most dangerous character, and I do not believe for a moment that any Liberal Government can take office after the General Election, if the election should prove favourable to them, or could resume office at any future time if this election should be unfavourable to them, without obtaining powers for the purpose of upsetting the decision at which your Lordships will probably arrive on this Amendment, and for resuming, on the part of the House of Commons, full control over the finance of the country. Whenever that comes about other questions undoubtedly will have to be dealt with affecting the relations of the two Houses.
I think no one can have sat through the debates on the many measures which have come up from the House of Commons during the last four years and seen the manner in which those measures have been treated by your Lordships without having felt that the position of the Government in this House is a somewhat humiliating and impotent one. They are completely at the mercy every night of the Opposition. They cannot practically carry any measures without the consent of the Opposition. Perhaps the most conspicuous instance of this position is the case of Bills affecting Ireland. Bills affecting Ireland come up from the other House, where they have been supported by enormous majorities of the representatives of the Irish people; they come here and are dealt with by a House in which there is 1109 not a single representative of the Irish Nationalist Party and where the overwhelming number of Peers representing Ireland represent one interest only. They are dealt with by this House in a fashion which was exhibited in the Land Bill only a few days ago, and they are sent back to the other House and eventually some kind of compromise is arrived at. Legislation dealt with in this way cannot possibly, I think, give satisfaction to Ireland. It appears to me, therefore, that some change is absolutely necessary in the relations of the two Houses. What that change will be I cannot at the present moment enter upon; but my own impression is that it is more likely to take the line of the recommendations of the late Prime Minister, Sir Henry Campbell-Bannerman, than any great change in the construction and constitution of the House.
Turning to the Budget before the House, I should like to say one or two words upon the land clauses, and especially upon the clause dealing with increment value. It has been said by many speakers in the course of the debate that this clause amounts to confiscation, and is Socialistic. I cannot myself take that view of the case. The first, I believe, who advised the principle of the taxation of unearned increment was the late Mr. Mill, and he was very far removed indeed from Socialism. I think I was present at the birth of the idea, because something like forty-five years ago I was a member of the Political Economy Club, of which Mr. Mill was a leading member, and it was there that he first broached his idea of unearned increment. That club consisted of members of the most orthodox economic type, but it was never suggested by any one of them that the proposal of Mr. Mill was Socialistic. The only difficulty that was ever raised by the club was that it would be extremely difficult to work out in practice, and that was my view of the case until quite lately. But it seems to me that the Government have very cleverly devised a scheme under which it can be practically worked.
I should like to give the House an illustration of the possible working of the increment clause of this Bill. A good many years ago I was concerned with a number of others in the purchase of a very large property adjoining Hampstead Heath with a view of adding it to that open space. We arranged for the purchase 1110 of 240 acres there, from two large owners, and with the assistance of the London County Council and other local authorities we were able to raise the money for the purpose. The price was something over £1,000 an acre. It transpired from the title deeds which were examined on the purchase of this property that a considerable part of it had been bought some thirty or forty years earlier for £50 an acre. Therefore this land bad increased in value during thirty or forty years from £50 an acre to £1,000 an acre, and during the whole of that time it had paid nothing in the shape of rates to the local authority except as agricultural land. Now it does seem to me that land under that condition may fairly be called upon to contribute something to the State and equally to the local authority. I am told that quite recently some more land adjoining that of which I speak, some four or five acres, has been sold to one of the local authorities at the price of £5,000 an acre. Therefore there has been yet a further increase from £1,000 to £5,000 an acre. It seems to me that that, again, is an illustration of a case where it is not unreasonable that a considerable contribution should be made to the State.
Turning to another point, I observed that the noble Marquess who opened this debate said in the course of his able speech that in his view the Budget exhausted all the possibilities of raising revenue on Free Trade principles, and apparently it was on that ground, to some extent, that he gave his adherence to the scheme of the Tariff Reformers. For my part I cannot think that the revenue to be derived on Free Trade principles is exhausted by the Budget. It would be easy enough for Parliament to revert to the taxes which were put on in 1900–1901 by the late Government under the auspices of their then Free Trade Chancellor of the Exchequer, Lord St. Aldwyn. We might put on another penny to the Income Tax. We might raise again the Sugar Duties and the Tea Duties to the level at which he put them, and we might also again reimpose the import duty on coal, which, although in my opinion a bad tax, is not half so bad as a duty upon the import of foods. If we imposed those duties we should raise a revenue of £11,000,000—a very considerable amount—all within the purview of Free Trade doctrines. Although I consider that there is this 1111 alternative to the Budget I do not propose it as an alternative. On the contrary, I think that the Government have done exceedingly well in not imposing extra duties on tea and sugar. At the present moment, when the prices have been rising of almost every kind of food, it would be a very great burden to the labouring people if the prices of tea and sugar were increased. Although I hold that there is another alternative to the present Budget compatible with Free Trade doctrines, and which is an important reserve in the event of war, yet I also think that such an alternative is not likely to come from the Opposition in the event of their succeeding at the General Election. From all appearances, if a Unionist Government should be returned after the General Election it is more likely to adopt the scheme of the Tariff Reformers.
I should like the House to consider what would be the incidence of the two schemes—the Budget scheme and the Tariff Reform scheme—upon the two classes of the community, namely, the agricultural labourers and the agricultural landowners. These classes occupy two extremes of our social system. The effect of the Budget upon the labourers will be an extremely small one. Lord Pentland, with great justice, said the burden of the Budget on the working classes would be equivalent to two pence in the pound on their wages. He referred, I think, to an artisan earning 30s. a week, and if we take the case of the agricultural labourer, who does not earn more than half of this. I do not think the burden would be more than 1½d. in the pound at the outside. What will be the burden under a Tariff Reform scheme? I must make this assumption, which I am told the Tariff Reformers will not admit, that an import duty will raise the price of the article upon which the duty is imposed by at least the same amount as the duty and probably by something more. I believe that the assumption that the foreign importer will pay any part of the duty is a wrong one, and that there is no warrant for it in political economy. In fact, it is a fable worthy only to be told to the marines. All economists of any repute have always recognised that an import duty raises the price of the imported article. This is the experience of all protected countries. There is a warrant for that in the case of drawbacks allowed on exports of articles which have paid duty and in various other ways. I must assume that an import duty 1112 will raise the prices of imported articles. Upon that assumption it is not difficult to work out the effect of the Tariff Reform scheme. It would be to raise the prices of the articles consumed by the labourer by at least the average amount of duties which it is proposed to raise—namely, seven and a half per cent., if you take into account not merely food, but other necessaries of life. The burden on the agricultural labourer would be something like 16d. in the £1, compared with 1½d. in the £1 under the Budget. The difference is enormous.
Then how do the two schemes bear upon the landowner? I do not mean the fortunate man who owns land in a suburban district, but the owner of agricultural land. I will take the case of an agricultural landowner, and I think the Budget, when carefully examined, will be shown to bear very lightly upon him. Take the case of a landowner with gross income of £10,000 a year, and a net income of £5,000, the difference being accounted for in part by the burden of repairs and maintenance of the property, and in part by family charges and interest on mortgages. Under the Budget the landowner with a net income of £5,000 a year will not have to pay the Super Tax; he will only have to pay the extra twopence on the Income Tax, and he will have the great boon under the Budget of the relief of further abatements as regards the Income Tax in respect of one-eighth of the gross rental expended upon repairs and maintenance. Under the present law he is only allowed one-eighth, but under the Budget he will be allowed another one-eighth abatement, and he will save the Income Tax of 1s. in respect of that additional abatement. That will amount to a considerable sum of money in excess of that payable under the twopence extra Income Tax. The abatement in such a case would be £62 per year, whereas the twopenny Income Tax would be only £40. On the other hand it may be reasonable to take into account that the landowner may be a provident man and may desire to insure himself against the increased Settlement Duty. Under the Budget the increased Settlement Duty is one per cent., and to insure that for an average age of fifty years he would require an outlay of £50. Taking all these into account, the landowner with a net income of £5,000 would only have to pay under the Budget £28 in the shape of increased burdens, and that seems to me a very small amount—it is not so much as the wages of a single gardener.
1113 Under a Tariff Reform scheme the landowner with a net income of £5,000 would have to meet some increased cost on food and other necessaries of life for himself and his family. That would not be a very considerable sum, and, on the other side, he would very greatly benefit; he would gain an increase of rent in consequence of the increased prices of agricultural produce. If I am right in my statement that the price of agricultural produce would be increased exactly in the proportion of the import duty, so the rent will increase in the same proportion. We have statutory authority for this. In the case of a Tithe Act it is provided that the tithe, which is in fact a part of the rent of land, rises and falls exactly in proportion to the rise or fall in the price of corn from year to year. This is a statutory recognition of the fact that rent will rise in proportion to the prices of food. If the average import duty under the scheme is to be seven and a-half per cent. upon imported food of all kinds, we may be perfectly certain that, sooner or later, rent will increase in the same proportion; moreover, a landowner with a net income of £5,000 a year will get an increase of this rent, not upon the net, but upon the gross income of £10,000 a year. Calculating that at seven and a-half per cent. there will be an increase of £750 a year to his income. Therefore the landowner in this case would gain £750 and would lose only the increase in the price of food for himself and his family. I think I have shown, therefore, that under the two schemes the agricultural labourer would, in the case of the Budget, have a very small burden put upon him, and a very heavy one by the Tariff Reform scheme, where as in the case of a landowner the present Budget would impose only a very small burden and the alternative scheme would also impose only a very small burden, whilst on the other hand it would increase his rents very largely.
The noble Earl, Lord Rosebery, in alluding to the landowners, referred to the fact that no less than one-fifth of the land in this country is owned by members of your Lordships' House. That was the calculation, I believe, arrived at by the "Domesday Book" of twenty-five or thirty years ago, and I do not think there has been much change since that time, except that a certain number of Irish landlords have sold their property to their tenants and some territorial magnates have been added to the members of the House. On the other hand, 1114 there has been a considerable reduction of rent, to the extent of at least thirty per cent. But taking this into account, it would appear that the average rental of members of this House is at the present time—and there are over 600 members in the House—£16,000 a year. Lord Rosebery seemed to think that the House of Lords, which is so deeply interested in land, ought to have some voice in the finances of the country. If by voice he merely meant the opportunity of discussing the Budget in this House, they have that already. But if it is intended that they shall have some share in the responsibility of passing a Finance Bill and some power of controlling the finances of the country, I venture to differ from him in toto. I think it would be dangerous for the House of Lords, being so deeply interested in the land of the country, to have a voice in the finances of the country. Looking at the Budget as a whole, I believe it to be a just and fair one. It imposes charges on all classes of the community—very light charges upon the labouring people and those of small means, rising by gradations to a higher charge in proportion to their superfluities, but not in a manner to cause them any embarrassment. It seeks out new sources of revenue in the increment of land and the monopoly of the license holders. I think, therefore, it is a fair and reasonable Budget. On the other hand, the alternative proposal which has been suggested tends in the opposite direction. It relieves property of all kinds from any charge, and throws immense burdens on the labouring classes. In short, it can only be described as a scheme for robbing the poor for the benefit of the rich.
My Lords, I do not propose to touch upon the grave constitutional issues which have been raised, further than to say that I fully concur in the view expressed by the noble. Marquess in his Amendment. I cannot think that the course which has been recommended, that this House should pass this Bill for the present and trust to a rebound taking place in the opinion of the public when the nature of its provisions come to be known by experience, would be either right or straightforward, But apart from that higher view on which I confess that I feel most deeply, and taking the much lower view of policy and expediency, I do not think it is a course that it would be judicious to adopt. Should that rebound take place, the odium attaching to the 1115 framers of the Bill would be shared in by this House, and would fall even more severely upon it, because it would be said the promoters of the Bill believed, however erroneously, in the excellence of its provisions, while the House of Lords adopted it knowing it to be bad, and the public would say that the House of Lords was far the worse of the two. Among the large section of our countrymen opposed to the Bill there would be those who would say "the House of Lords shared our convictions that the Bill was a bad one, and still they passed it and deserted us in our hour of need." Therefore, from both quarters we should lose what respect attaches to the decision of this House.
I should like to say a word upon the effect this Bill will have on Ireland and the impression it has created. Lord Mayo has said that it has been received in Ireland with marked hostility and even with a feeling approaching to dismay. He told the House that a great many local bodies had protested against it, and that some had even taken the extreme and unusual course of appealing to the members of this House to vote against it. Ireland has been favoured in the case of the licence duties, but, on the other hand, all the objections raised to the Bill in this country apply with more force to Ireland, because increased taxation presses harder upon a poor country than the rich one. Talking about rich men in Ireland reminds one of the old story of the man who began a scientific dissertation on snakes in Iceland by saying "There are no snakes in Iceland." In Ireland there are no rich men, or so few that they don't count. People there lead somewhat hard and struggling lives, and find it extremely difficult to make both ends meet. The acceptance of this Budget means retrenchment in consequence of the increased taxation, and retrenchment 1116 means reduction of the labour bill. In this way labourers will suffer acutely when the enhanced taxation comes into force on the more well-to-do people. Another class that would suffer severely is the new race of peasant proprietors—those who have purchased their farms under the recent Land Purchase Acts. These men, the great majority of whom are small farmers, will suffer both by the Death Duties and by the increased duties on transfers or dealings in land. It may appear to be a small matter, but it would be a big thing to them. Some may say that no facilities ought to be given to such transfers. A certain class of politicians hold that the panacea for the woes of Ireland is the subdivision of the land into small farms, the boundaries of which are to be stereotyped for all time, tilled by the present occupants and their descendants, without change, for ever. This is manifestly impossible, and it is not at all desirable that if a man has good reason to part with his farm he should be precluded from doing so. In my opinion it is better that he should do so, and that another man better qualified should succeed him. Transfers of land will take place, and that there should be any impediment to legitimate transfers is, in my opinion, extremely undesirable. In conclusion, I do urge that the new duties on excisable commodities press very hardly upon the poorer sections of the community. It is their position that I submit to the House, and I appeal to your Lordships to take that into consideration and to express your objection to this Bill by supporting the Amendment of the noble Marquess the Leader of the Opposition.
Debate again adjourned to Monday next.
§ House adjourned at twenty minutes before Twelve o'clock, till To-morrow, half-past Ten o'clock.