HL Deb 07 April 1910 vol 5 cc607-23
LORD AVEBURY

My Lords, I rise to ask His Majesty's Government why they do not pass the usual Resolution authorising the collection of the Income Tax in anticipation of the Budget Bill, as has been the invariable practice for many years past. Almost the last day before the holidays the subject of the Question which I desire to put to the noble Earl the Leader of the House gave rise to an interesting discussion in the House of Commons, and I shall very likely be told that it is unnecessary therefore to revive the question. The answers given were, however, so extraordinary that the fact seems an additional reason for doing so.

As the House is aware, for many years and under Chancellors of the Exchequer representing both Parties in the State, immediately after the Budget statement Resolutions have been passed authorising the collection of the Income Tax and certain duties, such as those on tea, tobacco, and alcohol, which would otherwise lapse. Why has not this been done now? As regards Income Tax on coupons and dividend warrants, banks, companies, and financial houses have been, and are, collecting the Income Tax at the rate of 1s. 2d. The usual course is that at the end of the quarter the banks and other companies notify the amount to the Inland Revenue, and then receive instructions to pay the same to the Accountant-General. At the end of last year they intimated the amount they had received for the preceding quarter, and which they were prepared to pay over. Another quarter has now expired. They have, however, received no instructions to pay over the amount they hold. Government, we know, are borrowing largely; here is a very large sum which must amount to some millions, and yet the Government do not claim it, but prefer to borrow at the expense of the taxpayer.

The Prime Minister told us in December that immediately on the re-assembling of Parliament— If we are fortunate enough to enjoy its confidence, then our first act will be to re-impose from this week all the taxes and duties which were embodied in the Finance Bill and to validate all past collections and deductions. In the meantime all persons desiring to do so may deposit with the proper officers the appropriate duty at the rate so sanctioned, and full instructions and information will be forthwith issued by the Departments concerned. He added— It is our duty to do what we can without any infringement of the law or of constitutional principles to mitigate hardships and inconveniences. Again, in his speech at Oxford the Prime Minister said— There are reasons which seem to my colleagues to be unanswerable for pushing the Budget forward with all possible promptitude. Then why do they not do so? Parliament met on the 15th of February. It is now April, and yet they have not done so. The Budget has crumbled away under criticism. In reality the country has decided against it. Liberal and Labour Members—and I am not sure that they are all in favour of the Budget—number 315. The Irish are against it, and with the Unionists the number is 355. This, I may say in passing, fully justifies the action of your Lordships last session, and is no doubt the reason why the Government have not yet brought the Budget on. It is the Veto, not of your Lordships, but of Mr. Redmond. They know that in the present House of Commons there is, or was, a majority against it. No doubt the Prime Minister may induce the Nationalists to pass the Budget by the promise of Home Rule. They may consider that the advantages of Home Rule outweigh the disadvantages of the Budget. But the fact remains that the majority of the present House of Commons did agree with your Lordships that the Budget was unwise and unjust.

I am not, however, dealing with the Budget Bill, but with the Resolution. According to the report of his Oxford speech, the Prime Minister professes to give an answer. I have doubted whether the report could be correct, for it is obvious that the reason given cannot be the real one. He is reported to have said— Ever since 1861 the Budget has been treated, not as a series of Bills dealing with separate taxes, but as one integral and interdependent scheme, and we are certainly not going to be the first …. to depart from the great financial precedent set us by the greatest of financiers. But who has asked them for a series of Bills? We submit, no doubt, that as they themselves tell us a Budget Bill—I say a Budget Bill, not the Budget. Bill of last year—ought to be, and has not been, pressed forward with "all possible promptitude." But that is not the question I am now asking the noble Earl the Leader of the House. The Government are departing from "the great financial precedent set us by the greatest of financiers"; they are departing from the course which has been followed ever since 1861; and we wish to know the reason why.

It is reported in the City—I do not vouch for it myself, but the noble Earl will no doubt tell us if it is a mistake—that some of the great railway companies were prepared to pay over the amounts due from them, and the Inland Revenue were prepared to undertake to repay the money should the matter not be regularised, but at the last moment, as is understood owing to the intervention of the Chancellor, the arrangement was cancelled and the payment stopped. I hope the noble Earl will tell us what has really happened. At present the position is most anomalous. While in the main the Income Tax is not being collected it is being collected in some places and from some classes. The Government, for instance, we are told are collecting it from their own employés and from officers in the Army. It is said that they are returning in some cases Income Tax which they have not received! Now we desire to know why the Chancellor of the Exchequer is departing from the invariable practice of his predecessors, inflicting these heavy losses on the taxpayer and throwing the finances of the country into such confusion. All other Chancellors have desired to secure a surplus. Mr. Lloyd-George seems to wish to create the greatest possible deficit. The House of Commons has been adjourning night after night very early, often even before dinner; yet the Government have not passed the ordinary Income Tax Resolution, and it really seems as if they deliberately wished to throw the finances of the country into confusion.

The Government are, moreover, imposing considerable and unnecessary losses on the country, for there are immense sums lying at the disposal of Government, and yet the Chancellor does not collect them, but prefers to borrow and pay interest, the burden of which will fall on the taxpayer. The fall in the Income Tax is, in round numbers, £20,000,000, the interest on which, at three per cent., is. £600,000. The financial policy of the Government is involving the country in this heavy loss. Nor is this all; it is shaking confidence, as we see in the continuous and alarming fall in our national securities. Since the present Government came into power the securities of the other great Powers have risen; ours, and ours alone, have fallen heavily, and are continuing to fall. No wonder that the attacks on your Lordships' House and what seems to many the reckless mismanagement of our national finances create uneasiness and anxiety among English investors. Consols fall lower and lower. The present opinion in the City is no doubt that expressed last week by Mr. Gibbs and Sir Marcus Samuel. Mr. Gibbs spoke of "organised confusion which was being brought into the finances of the country"; and Sir Marcus Samuel characterised the present position as a device—he used, indeed, a stronger term—of the Government in which the interests of the taxpayers were sacrificed in order, if possible, to secure a Party advantage. That is certainly a very general impression amongst business men, and the impression of many who are not Unionists. Mr. Sydney Brooks, for instance, himself a strong Radical, in an article in last month's Fortnightly, condemns the Government "for prolonging the chaos at the Exchequer in some pitiful and fantastic hope of Party gain." I am not, however, now expressing any opinion myself, but am asking for an explanation. There can be no doubt that the non-collection of the revenue is involving the country in heavy loss, that it is introducing great confusion into our national finances, and shaking public confidence. As far as we can see there is no reason why the necessary Resolution should not have been passed, and the collection of revenue resumed. I beg to ask the Question standing in my name.

LORD FABER

My Lords, before the noble Earl answers the Question I should like to put before him the latest phase of this Income Tax question, and with the permission of the House I will give the example of a company in which I am slightly interested, merely saying that it is the largest and the most important company in this country. This company is in the habit of paying its Income Tax at the end of December and at the end of March, and each of those two payments comes to nearly £150,000. My noble friend Lord Avebury alluded in his speech to a promise that was undoubtedly given on several occasions by the Prime Minister that the first act of the Government if they came back to power would be to regularise the finances of this country'. Further, the noble Marquess who leads the Opposition in your Lordships' House said distinctly that, so far as the Opposition were concerned, they would gladly acquiesce in any Resolution that was brought in to regularise the finances, more especially the Income Tax at the rate of 1s. 2d. in the £.

This company received a letter on December 6, written from the Office of the Special Commissioners of Income Tax, 49, Wellington-street, Strand, informing them that the moiety of the Income Tax assessable in respect of the profits of the company was £148,811, and that if this sum was tendered as usual on or about December 21 it would be accepted by the Accountant-General. The company, in view of the fact that they had the speeches of the Prime Minister before them and also the promise of the noble Marquess who leads this side of the House that he would acquiesce in any Resolution with regard to the Income Tax, paid that £148,811. On March 10 last a similar letter was received from the Special Commissioners of Income Tax. Then, of course, a grave question arose for this company to consider what they ought to do in the circumstances. They came to the conclusion that their business was to look after the interests of their shareholders—in point of fact, that the company must not pay this second great whack, if I may use the expression, of Income Tax unless they were quite certain they would not have to pay it over again if no Budget was passed and if the shareholders demanded their Income Tax. The company desired to pay this money, and I have reason to believe that the Government were anxious to get it.

What could the company do? They were willing to pay if the Government would guarantee the repayment of the money should the Budget not be passed. Whether the Government could give such a guarantee I do not know, though there was a question on the subject in the House of Commons. We took the highest legal opinion we could get, and came to the conclusion that no agent, not even the First Lord of the Treasury, could bind the Government unless the agent was hedged round by certain safeguards which were hardly possible in the case of the Prime Minister. Therefore the company were in this position, that they could not get a guarantee that the money would be repaid to them; and this pitiful result remains, that the company, who are anxious to pay, cannot pay this money because it is not safe to pay it. That is the position we have got into owing to the promises of the First Lord of the Treasury not having been carried out. The Government seem to forget that their position is not quite the same as it was before the last General Election. Then they were at the head of a very large majority, and now, apart from the Irish, they are hardly in a majority at all. If they would think rather more of the interests of the country and not quite so much about their own dignity, we should get on rather better than we have done in the past.

There is another question to which my noble friend Lord Avebury alluded. Consols are on the down grade. On the average the interest paid by Consols during the last few months has been the highest interest that has been paid for the last thirty years, which means that Consols are at the lowest price reached since 1880. It is the sort of price that Consols fall to when we are threatened with a serious war. I suppose, to quote the words of the Chancellor of the Exchequer, we are face to face with some sort of war, for this is what he said on a public platform— We have got to secure the economic independence of tho workmen of this country. You will never do that as long as you have feudalism. You have in this country 2,500 landlords who own two-thirds of the soil. They, by virtue of their ownership, exercise complete sway, control, and power over the livelihood of millions of men, women and children. Here a voice cried "Tax them out of existence," to which the Chancellor of the Exchequer replied— Well, I have made a start. That sort of language, my Lords, coming from the Chancellor of the Exchequer, does more harm than anyone can conceive, and I do hope that the noble Earl who leads the House will be able to give us an assurance that the bigger interests of this country will have the attention of the Government, and chat they will regularise the finances of the country.

THE EARL OF DENBIGH

My Lords, there is another matter to which I think we might call attention apart from the question of the inconvenience of the present situation to the mercantile community, and that is that the policy which His Majesty's Government have pursued with regard to this question is directly contrary to what they said was the object of the taxation in the Budget. The desire of the Government was said to be to place taxation on the broad shoulders of those best able to bear it. That was obviously a desire to place taxation on the shoulders of the wealthy classes, and the wealthy classes were hardest hit through the Income Tax. Well, the result of this refusal to collect Income Tax is that the working classes, who pay the greater part of their taxation through the tobacco and liquor duties, have been paying their share of the Budget taxation, whilst the wealthy classes have been practically going exempt through the non-payment of Income Tax. This, I think, is a point the country ought to know.

THE EARL OF CREWE

My Lords, the noble Lord who asked this Question alluded to a debate which took place on the subject in the other House, but he did not refer to the fact that the whole subject was debated here at considerable length, I think, in his absence, on March 7, on the Treasury (Temporary Borrowing) Bill. I cannot help thinking that that debate has entirely escaped his notice. At any rate I am sure the noble Lord will acquit me of any discourtesy towards him if I do not this afternoon go over all the ground which I then attempted to cover.

It will be remembered, to put it briefly, that at that time we explained, not, no doubt, to the satisfaction of noble Lords opposite, but still we explained the reasons why we had not introduced the Budget before the Easter recess. The reasons to the contrary—and here, again, I am sure the noble Lord will acquit me of any slighting intention—were put with a force which even he with his great experience cannot exceed, by the noble Lord opposite, Lord Revel-stoke, and also by Lord St. Aldwyn, who is not in his place to-day. The arguments for the immediate introduction of the Budget, for the possible course, which we declined to take, of passing a separate Income Tax Bill before the Dissolution of Parliament, and for introducing an Income Tax Resolution the moment Parliament met—all these were stated with the fullest force by noble Lords opposite, and we endeavoured to the best of our ability to explain why we were not in a position and why we did not think it right to take any of those courses. It would serve, I think, no useful purpose if I repeated the arguments I used on that occasion.

The noble Lord, however, is entitled to ask why, on the reassembling of Parliament on March 29, the Budget was not immediately proceeded with in another place. The explanations which we gave of the reason for dealing at once with Supply when Parliament met and not then taking the Budget, obviously do not apply to the course which we have taken of proceeding with what are familiarly but inaccurately known as the Veto Resolutions in another place. Before I say a word upon that I should like to refer to a point which was raised in the remarks of Lord Faber. The noble Lord stated the case of a company which had tendered Income Tax, I think, at the end of December, when it was accepted, and which had received in March an intimation that if it liked it might pay Income Tax again, and he pointed out, as an illustration of the confusion caused by the present state of things, that His Majesty's Government could not give a guarantee—I am only quoting the noble Lord, because I have no personal knowledge of what occurred—that the Income Tax, if paid, would be returned in the event of the Budget not becoming law. I suppose it is open to anybody, if a particular tax is paid and not confirmed by Parliament, to sue for the recovery of that amount; and in previous cases, in the case of 1885, when the Budget did not pass the House of Commons and another Budget had to be brought in—in that case my impression is that actual refunds were made. At any rate it was understood that they would be made. What the technical point about an absolute guarantee may be I confess I do not know. I do not understand what material fear such a company could have that if the tax were paid it would not be returned in the event of the Budget not becoming law.

I should have thought that the action of this company was from one point of view something of a defence of our action, because the charge which is brought against us is not so much, I think, that we did not immediately proceed with the Budget, but that we did not pass a separate Income Tax Resolution. I do not know whether, if such a Resolution were passed, the noble Lord's company would feel more disposed to pay the Income Tax than they are at present. They would not, so far as I can see, be in any better position than now as regards the repayment of the tax, should the Budget not become law. Not only that, but I have heard it stated that there are a considerable number of persons, representing large sums of money, who would not pay Income Tax now on the strength of a Resolution passed in another place, and for this reason, to be perfectly candid in the matter, that nobody can say at this moment whether the Budget will pass either the House of Commons or the House of Lords. And supposing it should not pass, it is impossible to say what financial arrangements a Government in power at the time might choose to make. Those financial arrangements might conceivably involve a second payment of Income Tax, and I can quite imagine that matters having reached the situation which they have, owing, as we say, to the rejection of the Finance Bill by your Lordships, a mere Resolution of the House of Commons would not be regarded as sufficient for the payment of Income Tax; and, as I have said, I am told that there are a number of persons who will not pay if such a Resolution is passed.

The reasons which I gave on the last occasion, and which I do not wish to repeat, for taking Supply instead of the Budget no longer hold good; but what I said on that occasion as regards the political situation still holds good. After all, His Majesty's Ministers may be looked at in two capacities. They are no doubt clerks, if you like so to put it, responsible for the management of the taxpayer's money; but they are also for the time being, as long as they are honoured with the confidence of the Crown and the country, the guardians of the Constitution, and it is conceivable that those two functions may, on a given occasion conflict. We have never concealed from the House—in fact, I definitely stated—that it is the political situation founded on the action of your Lordships' House which has caused the House of Commons now to insist upon proceeding with this question of the relations between the two Houses before the financial situation is attempted to be regularised. Your Lordships opposite, of course, think that wrong and foolish. But it is the fact. They are determined to deal with the constitutional question, to express their opinion upon your Lordships' rights in dealing with finance, to express their opinion on the general situation as it exists between the two Houses, before they proceed to the consideration of the financial business of the year 1909–10.

That involves a loss of something over a fortnight of time. I am assuming that we have dealt with the case up to March 29, when the House met. What will happen will be that the Budget will be started in the House of Commons on April 18. I fully admit that the loss of interest on borrowed money accruing to that time is lost for constitutional reasons, and because of the refusal of the House of Commons to deal with finance until it has dealt with the constitutional question. As I pointed out before—and I may remind the noble Lord of it as he was not here—even if we had taken the advice of noble Lords opposite and resigned office, the case would not have been different, because whoever was in office the House of Commons, constituted as it is, would have refused to take any course but that which it has taken. Therefore, so far as the actual facts of the case are concerned, nothing that we could do, even if we desired to do it, would have altered the situation. In the meantime I understand the general situation to be—and we all regret the situation, of course, although we ascribe different causes to its origin—that the Treasury will take money which is offered to it, but it does not feel able to ask for money until it knows for certain that it will be authorised by Parliament to keep that money.

Then the noble Earl below the Gangway, Lord Denbigh, pointed out that while the poorer classes had been paying indirect taxes, yet the broad shoulders on which it was intended to place the burden had so far gone free. I do not think the noble Earl need be seriously alarmed. It is not anticipated that the loss on arrears will be a heavy one, although, of course, there is bound to be some loss, and I think that the burden will be placed on the broad shoulders quite as soon as the noble Earl himself could desire. As a matter of fact, a considerable part of the burden, as Lord Faber pointed out, has been paid, because the wealthy individual has paid it and it is now in the hands of the banker, who, I suppose, from one point of view, cannot greatly regret the continuance of the existing state of things, for he has a great deal of money which he is able to advance, I hope on satisfactory terms, to those who require it for short periods of time. I confess I do not think the argument of Lord Denbigh is one which of itself need carry very great weight with your Lordships.

There was one more observation made by the noble Lord, Lord Avebury, to which I wish to allude. He said it is not the case that anybody asked us to split up the Budget and bring in a series of Bills. Is that quite accurate? I thought that one of the main charges brought against the Budget and one of the principal reasons adduced for its rejection was that it ought to have appeared in a series of Bills. That is an argument which was freely pressed by many noble Lords on that side of the House, and it certainly offered to us an additional reason, if additional reason were needed, for declining to treat the Income Tax as a thing by itself, because such a course would undoubtedly have seemed to offer some adhesion to the view so freely expressed by noble Lords opposite that the Budget was not a Bill by itself. The noble Lord, I have no doubt, takes the sound view, which was also taken by Lord St. Aldwyn, that in these times there could be no question of bringing in the financial proposals of the year in more than one Bill; but I am not at all sure that noble Lords opposite, taking them altogether, would subscribe to that doctrine. I am strongly of opinion that they would very much like to see the financial proposals of the year split up into several Bills in order that they might deal with each on its merits. However, I do not wish to dwell upon that any further, but merely to say that if I have not argued at length all the reasons which have induced us not to take the course of bringing in the Income Tax Resolution in another place, which the noble Lord seems to consider so easy and reasonable, it is because in the former debate, on March 7, I and noble Lords on this side dealt with them at great length.

THE DUKE OF DEVONSHIRE

My Lords, I am afraid my noble friends who raised this question cannot feel at all satisfied with the reply which they have received from the noble Earl the Leader of the House. Nothing new has been added in the way of information in reply to the very plain and direct question addressed to the noble Earl. His defence is that he is unwilling to repeat statements which he has already made on a previous occasion. I had not the privilege of hearing that debate, but I understand that the reason why the Government refused to take any special steps for the purpose of collecting the Income Tax was that they could not divide their financial proposals.

I presume that the theory of a single indivisible Finance Bill dates back to 1861, but I do not know how far that is supposed to be a precedent for all time. I do not wish to labour too closely questions of precedent, but certainly it has not been invariably adhered to. In consequence of a debate which took place, I think, in the year 1888 a subsequent Bill, originating in Committee of Ways and Means in the House of Commons, was passed; and in 1900, in order to raise money needed for the war, a similar proceeding took place. I admit that there were excellent reasons for the introduction of those separate Bills and that in ordinary circumstances it is convenient that the financial proposals of the Government should be contained in a single Bill each year. It is a matter of convenience and enables them to state their proposals as a whole and to lay them before the country. But at the same time there have been ample precedents for departing from precedent, as when questions of great emergency arose and when it was necessary that definite steps should be taken to raise money.

I presume that when the Government state that they will use only one measure in which to lay their financial proposals before the country they mean that they will make only one proposal for bringing money into the Exchequer. But what about the present session? Already there have been two Bills originating in Committee of Ways and Means; there is every prospect of another, which will contain the Budget of 1909–10; and of yet another originating in Committee of Ways and Means and constituting the Budget of 1910–11. Therefore, in the one year there is a possibility of four different sets of financial proposals for collecting money being placed before Parliament. Certainly if ever there was a departure from the precedent established in 1861 of introducing your financial proposals in one Bill I think we find it in the present year.

Large sums of money are lying in the banks to-day for the payment of which into the Exchequer only the authority of Parliament is needed. As far as the transaction to which Lord Faber referred is concerned, I can state one which is identical. There had been some previous correspondence between the Inland Revenue authorities and a certain company. The point in question was whether it would be safe for the company to hand the money over to the Inland Revenue. I believe the reply was couched in such a form that it was felt that there would be the necessary security, and it was only upon subsequent development that the Inland Revenue had to write a letter informing the company in question that that guarantee could not be given. Where that subsequent information was received from, of course we do not know, but the inference we are justified in drawing is that it came from the Chancellor of the Exchequer acting through the Treasury. It would have been perfectly easy, we maintain, to have passed the Income Tax Resolution. There has been ample time, and an undertaking was given by the Leaders of the Opposition in both Houses that every facility would be given for its passage.

It was no doubt the intention of the Government before the election, probably during the election, and possibly for a few days after they met Parliament, to take steps at once to redeem the very clear and distinct pledge given by the Prime Minister that it would be the first duty of the Government to regularise the collection of taxes. It was only after the somewhat mysterious proceedings which have taken place since the new House of Commons met that the prospects of that pledge being redeemed have been disappearing into the future. As it is understood that we are to continue for some time in this condition, I think, as was suggested by Sir Robert Finlay in the House of Commons, a notice might be put up on the door of the Treasury to the effect that it is a most praiseworthy institution and supported by charitable contributions. By the course which the Government have adopted they have managed to cause the maximum of inconvenience to individuals with the least benefit to the Treasury. And you are now in this peculiar position, that you are having to borrow money in order to refund those abatements which come under the Income Tax laws, and in respect of which you have received no tax at all. If a parish council conducted their affairs in a manner in any degree comparable to that in which the Government are conducting the affairs of the nation, it would have been the duty of the Local Government Board auditor to declare, in the most clear and distinct manner, that they ought to be surcharged and that they were unworthy to carry on the duties entrusted to them.

The noble Earl the Leader of the House has informed us that the Budget is to be introduced on April 18. Can he go a step further and tell us whether it is to be the same Budget? He has informed us that nothing can be done to require the collection of these taxes until April 18, when the Budget is to be again introduced into the House of Commons. Is he able to give us any information beyond that and to tell us whether it will come up to this House without the alteration of a comma? If he cannot give any immediate satisfaction as to the collection of the Income Tax, can he say whether the negotiations now going on have reached a point which give a reasonable prospect that the Budget will be passed by the House of Commons? Perhaps he may be in a position to take us a little more into his confidence and tell us whether there is any reasonable prospect that these very heavy arrears of taxes will be collected. I am afraid it is not likely that we shall get much further information, and I say, with all deliberation, that you have produced no arguments, no reasons, for this wilful and wanton abandonment of the collection of money which is properly due to the Treasury. You cannot possibly have done it in the interests of the country. You may think there is some petty advantage to be gained in this great constitutional question in which we are now engaged by the course you have adopted, but I believe you are doomed to disappointment. The real reason for this course is that the Government are making a deliberate attempt to "queer the pitch" for their successors, and to make it as difficult as possible for them to carry on the government of the country.

LORD RITCHIE OF DUNDEE

My Lords, I do not think the noble Duke and the noble Lord who initiated this discussion were quite fair to the Prime Minister. They found fault with him for not having kept the undertaking which he gave that the first act of the new Parliament would be, to regularise the financial position of the country. But I think they have both overlooked the qualifying words in the Prime Minister's statement, "if we are fortunate enough to enjoy the confidence of the House of Commons." It is notorious that the Government do not enjoy the confidence of the House of Commons, at any rate as far as their financial policy is concerned. If they did enjoy that confidence, then their first act would have been to regularise the financial situation. They do not enjoy the confidence of the House of Commons, so nothing is done, and the country is plunged into financial chaos. The Government try to smother up the unpleasant fact that they do not enjoy the confidence of the other House by blaming this House for the chaos. No doubt it is rather galling for His Majesty's Ministers to find that owing to the action of this House last session they no longer enjoy the confidence of the House, of Commons, but it appears to me rather unfair to blame this House for giving the people an opportunity of expressing their disapproval of the Budget.

I am quite aware that it is said the Irish Party are not really opposed to the Budget; that they only dislike parts of it. I am like the Irish Party. I am not really opposed to the Budget. I only dislike parts of it. Your Lordships are not opposed to the Budget; you only dislike parts of it. One would have thought that the Government would proceed with the parts that everybody likes. But that would not be dignified, and it would amount, so we are told, to a surrender of one of the most cherished privileges of the House of Commons. So the dignity of the Government and the privileges of the House of Commons are costing the country about £20,000 a week, and have led to a deficit of some £26,000,000. Nero fiddled while Rome was burning, and it appears to me there is about as much dignity in the attitude of the Government at the present moment as there was in Nero's fiddling.

But what a time for the Government and the House of Commons to stand on their dignity! At this very moment they are engaged in pursuing their unalterable determination to deprive this House of all voice in the financial legislation of the country. Surely on the eve of our doom it would not be a great thing for the House of Commons, of its own free will, to waive one of its privileges in order to save the country from financial chaos. Were it not for the fact that one is more anxious for the good of the State than for Party advantage, the financial antics of the Government would be excessively funny. Only last session a distinguished member of the Government told the capitalist that the time was coming when he would be asked the tremendous question, Where did you get your money? The same Government goes to the capitalists this session, cap in hand, and says to them, "You owe the State a certain sum of money for Income Tax. We won't trouble you to pay it; we merely ask you to lend it to us, and you can settle between yourselves what rate of interest you will charge us. Then we shall both owe one another money, and in the fulness of time we hope we may persuade the people's representatives to swallow the People's Budget and then we will settle it all up." That is better business for the capitalists even than floating rubber companies. There is a certain amount of risk, though not very much, in connection with rubber, but there is no risk in lending the Government money that belongs to the Government; and one of these days, when Mr. Winston Churchill goes to the capitalist and asks him the tremendous question, "Where did you get your money?" he will be told by the capitalist that some of it at any rate he has got through lending money to the Government that was due to the Government and receiving interest on the loan.

During the General Election campaign the Chancellor of the Exchequer or the Home Secretary—I forget which—told the country that the Budget was in a state of suspended animation, but that it was destined to a great and glorious resurrection. I suppose the Budget is still languishing in purgatory, and I think it is extremely doubtful whether it will ever emerge; but, if the Government do succeed in galvanising it into life again, I am certain that when it reappears it will not be surrounded by a halo of glory. I am certain, too, that the people will know how to deal with, and what to think of, a Government which have only succeeded in galvanising their Budget into life again by buying the support of those who were returned to Parliament to oppose it.

LORD AVEBURY

My Lords, perhaps with your indulgence I may be allowed to say one word. My noble friend the Leader of the House mentioned that I was not present when the debate took place in March. I was prevented, much to my regret, from being in my place on that occasion, but I read very carefully all that was then said. We did not understand the reason then given on behalf of His Majesty's Government. We now learn that the present condition is not due to any financial cause, but is really owing to the wish of the Government to get up a case against the House of Lords.