HL Deb 28 April 1910 vol 5 cc775-815


Order of the day for the Second Reading read.


My Lords, I think that the debate on this Bill, the Second Reading of which I now rise to move, may be regarded as a continuation of that which was closed on November 30 last year. It is true that not unimportant circumstances have intervened since in the General Election and in the paralysis of ordinary business which have taken place; but it is the same Bill and the same debate, though destined, as I hope, to have a very different ending from that with which they met on the last day of November last year. I do not propose in thus continuing the debate to do so at any length. I said my say on the former occasion on the general aspects of the Finance Bill, and I do not desire to repeat anything of what I said then. Nor is it necessary, I think, on the present occasion to resume the discussion of the story of financial confusion and loss due, as we say, to the action of your Lordships' House at that time.

All that I really have to do to-day is to inform the House how far in a technical sense my statement that it is the same Budget has to be qualified. There are no changes in the provisions of the Bill, but there are certain alterations which have been rendered necessary by the lapse of time that has passed since the Bill was last before Parliament, and upon those I should desire to say a word. In the first place, the Finance Bill has been affected in some degree by legislation which has since been passed. The old Clause 92, which provided that the amount of the permanent annual charge for the National Debt under Section 1 of the Sinking Fund Act, 1875, should during the current and every subsequent financial year be the sum of £24,500,000 instead of £28,000,000, has become unnecessary from the passing of the Borrowing Powers Bill, by which the whole amount ordinarily available for the Sinking Fund was taken over for the current year; and the effect of the omission, of course, is that while the Sinking Fund for the present year is taken over, for future years it will stand at £28,000,000 unless in a future Finance Bill provision is made to alter that amount.

The only other alteration due to legislation that has taken place since the rejection of the Finance Bill is little more than a verbal one in Clause 90, due to the passing of the Development Act. Then there are changes, numerous changes, in date, which have become necessary owing to the lapse of time. They are mainly automatic and are to be found all through the Bill. I need only speak of two. In the first place, as regards the licences for motor-cars those will become payable in the month of June, and from the amount then payable will be deducted, of course, the old rate where it has been paid for the current year. So far as regards the liquor licences, those become due also in June as from the last payment, either September 30 or December 31 of last year; but I understand that my right hon. friend the Chancellor of the Exchequer, in view of the hardship which may be considered to fall on the licence-holder of having to make two payments within so short a space of time, has promised, as far as possible, that the payment due next year shall be spread over the whole period instead of being called for, as it naturally would be, at the end of next September. The third class of amendments is in Clause 95, which provides for an indemnity in the case of all payments made on account of duty during the interval which has elapsed before the Bill becomes Law.

Then I come to the final class of changes in the Bill, which are less strictly automatic but at the same time do not involve any real alterations of its provisions. These are amendments of a declaratory character, intended to clear up doubts which have existed in some minds as to the possible construction of three or four of the clauses; but they do not in any case change the intention of the framers of the Bill. I am quite willing to admit that so far as these declaratory amendments have any effect—I think it is very doubtful whether any of them have any real effect—those who will profit by them may take off their hats to your Lordships' House for your action in rejecting the Bill in November last year. The first of these amendments is in Clause 7, and it involves a slight alteration in the terms under which agricultural land is to be exempt from the Increment Value Duty. It has, all through, been our intention that agricultural land should be exempt from that duty. This particular doubt arose from a question well known to noble Lords connected with Ireland, as to whether the economic value and the market value in that country could be taken to mean the same thing. Here we should be disposed to say that it invariably did, but it was argued—I confess I do not know with what legal force—that there might be cases in which a construction might be put upon "value" which would lead to an increase in agricultural value becoming subject to the Increment Duty, and if these words make it clear that that is not the case they simply carry out our intention throughout.

Then in Clause 41, the definition clause, another case arises which applies solely to Ireland. It has reference to the conditions of judicial tenancy. There it was contended—again I do not know with what legal force—that in certain conditions it might be thought that a judicial tenancy would become subject to the increment charge in relation to an increase in its value, even though it remained a judicial tenancy, because a judicial tenancy, as your Lordships know, although in one sense an annual tenancy, is not a terminable tenancy, and I understand it was upon that point the doubt arose. A very rare combination of circumstances would have been necessary for such a case to arise, even if it could have arisen at all, but as the doubt was supported by some weight of opinion we decided to make our meaning clear. In Clause 61 there is a small alteration with regard to the exemption of statutory tenancies under the Irish Land Act from Death Duty, which carries out the existing practice in every way. In Clause 74 there is a small addition, the design of which is to make it clear that in every case an implied trust, no less than a trust which is a trust on the face of it, escapes duty, which again has always been our intention.

These, my Lords, are the only alterations that have been made in the Bill as it came up to your Lordships' House last year. They are none of them material, and but for them the Bill is in all respects identical. The Bill comes up once more with the sanction of the representative House. It has been freely stated that the fact that it has so come up is the result of some kind of bargain.


Hear, hear.


If it were I do not know that there would be anything to be ashamed of in that fact. Certainly five-sixths of the legislation which appears on the Statute Book is the result of a bargain, and it is, indeed, because your Lordships have in so many cases given up the practice, when a Liberal Government is in power, of bargaining with the other House and have preferred to over-ride it, that so much of our present trouble has arisen. It is quite true that no Finance Bill which has ever become law has been equally welcomed in all its clauses by a great number of those who have supported it. We have known cases in which Finance Bills in their progress have been altered in deference to public opinion. Mr. Lowe's Match Tax was one well-known instance and Mr. Goschen's Van and Wheel Tax was another. But as to corrupt or improper bargains, such bargains, unknown as I hope they always have been, and, I trust, always will be, to every Party in this country, would meet with a swift and sure punishment. I say categorically that as far as this Budget is concerned, or any future Budget, there is no bargain of any kind. There is no bargain of any kind on any action that has been taken or might conceivably be taken with reference to the controversy between the two Houses. There is no bargain of any kind with reference to any future legislation on any subject. I say this categorically, and, having said it, I venture to hope we shall hear no more of the accusation. The noble Lord who laughs is good enough not to believe what I say.


I beg the noble Earl's pardon; I did not laugh.


I was not speaking of the noble Marquess. It is usual when not merely any noble Lord, but even a Minister in this House, makes a statement of that kind for it to be accepted as a matter of fact. If the, as I think, rather untimely merriment exhibited by one or two noble Lords opposite indicates that they do not believe what I say, it is clear that no repetition of my statement would have any effect upon them.

My Lords, there is only one more point with which I wish to deal. This Finance Bill was accused during its progress through this House before of being a tacked Bill. I do not know whether that charge was ever seriously meant or whether it is seriously pressed now. At any rate we have the satisfaction of knowing that in the opinion of the principal economical and financial authority on the other side of the House, Lord St. Aldwyn, this Bill does not involve tacking. I repeat what I said on a former occasion, that I think that if your Lordships seriously believed this was a tacked Bill you would not pass it on the present occasion, because, so far as tacking is concerned, the mere fact that the Bill was approved by the country at a General Election would be in itself not relevant. As I understand, the main objection taken in this House to tacking is that it interferes with the power of amendment, and the existence of that power could not be affected by anything that took place at a General Election. Therefore I venture to assume that that charge will now be dropped. I ask you, then, to pass this Finance Bill through all its stages to-night. I am aware that there are many of its provisions to which you profoundly object, but we have been told on the authority of the noble Marquess who is able to speak for the majority of this House that on this occasion you will pass it. Before I sit down I desire to say a word of personal apology. I have to-night a long-standing engagement to attend an important public dinner, which I am afraid may take me away from part of the debate. I hope, therefore, that if I am absent when any noble Lord opposite is speaking he will acquit me of any discourtesy towards him.

Moved, That the Bill be now read 2a.—(The Earl of Crewe.)


My Lords, the noble Earl who leads the House has given your Lordships a clear account of the changes which this Bill has undergone since it last came before us. I think he was justified when he told your Lordships that those changes were, in his opinion, not material. Nor is it necessary for me to refer to them, unless, perhaps, it be for the purpose of saying that in one case—I mean the amendment which has been introduced with the object of making it clear that agricultural land is to be exempt from Increment Duty—we are by no means persuaded that the new wording proposed by His Majesty's Government really carries out their intention. That is a matter which can only be decided afterwards when these questions come within the purview of the Courts of Law. The noble Earl at the very outset of his observations expressed a confident hope that the Bill would become law this evening. I certainly am not prepared to suggest that his confidence is misplaced. Last year we withheld our concurrence from this Bill solely with the object of obtaining a reference of it to the constituencies, and now that the constituencies, through the mouths of their representatives in the House of Commons, have expressed themselves favourably to the Bill, we are, I conceive, as honourable men bound by the pledges we have given in and out of this House to acquiesce in the passage of the Bill through all its stages to-night.

But I think, nevertheless, that it would be scarcely right that we should part with the Bill without some words of comment from this side. I think we have a right to take note, in the first place, of the extraordinary hesitation shown by His Majesty's Government in bringing this Bill before Parliament. Then we may well note the proceedings of His Majesty's Government during the period of suspense, when apparently they did not know themselves whether they would be able to proceed with the Bill or not. In the next place, I think there is something to be said as to the composition of the majority by which this Bill has been carried through the House of Commons; and lastly as to the methods by which the support of that majority has been procured. These are things which are of importance, not only in themselves, but they are of vital importance to this House because it is only by considering these things as they deserve to be considered that it is possible to form an opinion as to the course taken by your Lordships in the month of December last, and unless these matters are taken into consideration it would be difficult for us to vindicate our conduct as we believe it can and ought to be vindicated.

May I for a moment recall to your memory the attitude of this House last winter? This Bill came before us announced by His Majesty's Government as being a Budget Bill unlike any other Budget Bill which had ever been produced in the history of Parliament. No language could have been stronger than that which they employed both in and out of Parliament in dwelling upon the wholly unprecedented and novel character of the proposals which they were going to make. It was not merely that those proposals involved the imposition of heavy burdens upon the taxpayers of this country, but that the incidence of those burdens was distributed in a manner which seemed to most of us wholly indefensible. And pray let it be understood that I am not speaking now of the incidence of these new taxes as between one class of the community and another class, but of their incidence upon individuals within the same class of the community, whether belonging to the more opulent or the less opulent classes. Under this Bill you will find two persons not differing from one another in their ability to pay taxation treated in a wholly different manner. One man, a working man, perhaps, is called upon to pay double, the contribution towards these new liabilities which his neighbour belonging to the same class is called upon to pay; and in exactly the same manner you will find among the wealthier classes one individual taxed far more severely than his neighbour simply because he has chosen to invest his fortune in land instead of in some other form of property. That is indeed what this Finance Bill is to my mind most remarkable for—namely, that it introduces us, for the first time, I believe, to the principle of taxation not according to the ability of the individual to pay, but according to the origin of his possessions.

There was another point that impressed us greatly. It was impossible to regard this Bill merely as a Finance Bill. It was impossible to talk of it merely as a financial instrument. The Prime Minister himself spoke of its far-reaching political and social results. I take as an illustration of my meaning the taxes falling upon what is commonly spoken of as "the trade," and the taxation of land values. Both of those subjects had come before this House in separate Bills promoted by His Majesty's Govern- ment. Those proposals were now included in this great composite measure which we were asked to pass into law last year. When I am told that this is a purely financial measure, I ask whether, for example, the new Whisky Duty is to be defended merely as a financial measure. I am informed that the new duty has actually produced less than would have been produced had the old duty remained in force. There are no financial results. The tax is a political and not a financial tax. With reference to the remarks made by the noble Earl a moment ago as to "tacking," pray let it be understood that I make these criticisms quite without regard to whether this Bill really comes within the definition of "tacking" given in the well-known Resolution of, I think, 1702. The noble Earl relied on my noble friend Lord St. Aldwyn's view that this was not a case of "tacking." Well, I am quite ready to assume that it is not. But that does not in the least prevent me from believing that this Bill cannot be regarded as a purely financial Bill, that it does contain provisions which are not financial but political and social in their objects; and, that, whether there is technically tacking or not, we had a right to pass those proposals in review and to take what action seemed proper to us in regard to them.

Another matter which weighed very much with us was this. We believed that it was impossible that these proposals, breathing as they do at every turn hostility to capital, could pass into law—could indeed be introduced to the attention of Parliament—without creating a dangerous sense of insecurity, in the public mind and seriously affecting the credit of this country. With regard to that my opinion remains unchanged; and when I see that Consols are at this moment quoted below eighty-one, and that they have been falling steadily since the advent to power of His Majesty's Government, at a time when the securities of foreign countries have on the contrary been creeping upwards, I ask myself whether it is not likely that one at any rate of the causes contributing to that result has been the effect upon the public mind of the Budget Bill of 1909. Another ominous symptom bearing upon this part of the case is to be found, I think, in the fact that when a short time ago His Majesty's Government desired to make an issue of Exchequer bonds, they had to close their list, not because they had received all the applica- tions that they desired, but because persons who had applied would have withdrawn their applications if they had had an opportunity of doing so.

In these circumstances many of your Lordships were deeply convinced that the great majorities by which this Bill was supported in the other House of Parliament did not truly represent the views of the people of this country in regard to the matter, and we withheld our concurrence. I remain of opinion that this House would have been profoundly unworthy of its position as a Second Chamber had it taken any other course. The right of dealing with measures of this kind is a right indispensable to any Second Chamber in any civilised community, and as a matter of fact it is a right enjoyed, to the best of my belief, by all Second Chambers in all civilised communities, and particularly by our great self-governing Commonwealths under Constitutions which you yourselves have conferred upon them.

So much for what I would describe as our moral right to deal with the Finance Bill of last year. But there is the other question—that of our constitutional right. I am not going this evening to revive the long controversy which has raged over this part of the case. There have been confident assertions on both sides and apparently irreconcilable differences, but I sometimes wonder whether, after all, the difference of opinion between moderate men on both sides of Parliament is quite so great as people would have us believe. I noticed the other day that the Secretary of State for War said this— I quite agree that if you take the constitutional literature of the period— He was talking then of the older Resolutions which are so often quoted— you find it obscure not only on this but on many other points. But I will not this evening again pass in review the authorities which have been cited, and I will mention one and only one of them. I cannot but think that if there is any one document to which both sides may not unreasonably appeal, that document is the Resolution of the House of Commons—Mr. Gladstone's Resolution—passed in 1860 at the time of the controversy in regard to the Paper Duties. That Resolution affirmed three propositions—in the first place, that Money Bills had in fact from time to time been rejected by the House of Lords; in the second place, that the right of rejecting such Bills was one which the House of Commons regarded with peculiar jealousy, and that, I must say, seems to be an entirely natural and reasonable feeling; and, thirdly, that the undue exercise of that right was to be deprecated—in other words, should be used with very great caution and circumspection. Those are propositions to which I believe many noble Lords on both sides of the House would be ready to subscribe.

And let me here remind the House that the noble Viscount the Secretary of State for India, in the debate on the Second Reading of the Finance Bill of last year, said— The bare legal right to reject the Budget has not been denied. Some, no doubt, and I do not know that I would quarrel with them, would argue that the bare legal right may on certain occasions be appropriately transformed into a moral duty. We naturally cheered that sentiment. The noble Viscount went on to say— Yes; I can imagine a state of things—I can imagine it with difficulty—which would justify the transformation of a legal right into aspects of moral duty by reason of the wild-cat proposals of a demented House of Commons. That passage, which I think is a locus classicus in this controversy, seems to me to bear upon the interpretation which Parliament should place upon Mr. Gladstone's Resolution, and is wholly inconsistent with the theory that the right of this House has lapsed; the only question to be decided on this or any other occasion is a question of degree—whether this House was or was not justified in putting that right into operation. I dwell upon this because it seems to me to be one thing to charge us with the injudicious use of a right which we possess, and quite another thing to charge us with the usurpation of a right which does not belong to us.

Well, the appeal was made to the country, and we know the result. Speaking frankly, I do not suppose that either side was very well satisfied with that result. It fell short of our expectations. I do not think it can have been entirely agreeable to noble Lords opposite. A distinguished member of His Majesty's Government, Sir E. Grey, soon after the election, announced that, in his view, it was not very conclusive as regards future issues. Another Minister, the Home Secretary, informed the public that Ministers had hesitated to take office, and that they had finally undertaken great responsibilities with only moderate powers to give effect to them. Surely, if that was so, that in itself is sufficient to justify our hesitation to allow the measure to be passed into law. In the new House of Commons a confident majority of 230 was replaced by a majority of less than 100, which included a body of Irish Members, most of whom voted, if I remember right, against the Second Reading of the Bill and abstained from voting on the occasion of the Third Reading, and who now proclaim that upon the merits they are no great friends of the Budget. What I may term the Nationalist asset was so doubtful that for two long months you did not dare to bring your Budget forward, you, who had pledged yourselves emphatically that your first act would be, if you came into power, the re-introduction of the old Budget.

During that period of hesitation you proceeded to deal with the finances of the country in what I can only call a most eccentric manner. You had threatened us with chaos, and without being too uncharitable I suggest that you set yourselves to work to produce chaos. You began by refusing all offers of assistance from your opponents. You did so on grounds which I think were partly frivolous—I mean the ground that to accept such co-operation was incompatible with your dignity—and partly upon the rather unworthy plea that, if you were to proceed by Resolution to regularise the collection of these taxes, you could not tell, after what had happened with regard to the Budget Bill, that any Bill which you might thereafter found upon the Resolution would not be thrown out by the House of Lords. The noble Earl just now made an appeal, and I listened to his appeal with some sympathy. He hoped that his veracity, at any rate, would not be challenged, and, of course, nobody would dream of challenging it. But might not our good faith, when we made these offers of co-operation, have in the same way been accepted as current coin?

It is satisfactory to know that, in spite of all this attempt to engineer chaos, nothing very dreadful has happened to the country. I was reading lately the speech made by the Chancellor of the Exchequer, in which he congratulated himself and everybody else upon the triumphant manner in which the country had passed through this period of suspense and emergency. If I recollect right the total amount which has been lost, or may be lost, is something like £300,000 of Income Tax, and £350,000 of interest—interest which need never have been incurred at all if His Majesty's Government had set to work in a business-like manner to deal with a business transaction. The chaos has at any rate been proved not to be irremediable, and it has not cost those untold millions which we were informed it was going to cost. We have escaped from it by the good sense of the trading community, and, I think, to some extent, owing to the reasonable attitude taken by His Majesty's Opposition.

I said a moment ago that, in my belief, the result of the General Election justified the action of your Lordships in suspending the Budget. Why, until a very few days ago, not one of you could have told us whether you had a majority or not. Occasionally the truth about these things is blurted out in a rather inconvenient manner by some of your supporters. Let me read part of a speech delivered a few days ago by a gentleman of the name of Clancy, who, as I understand, is a conspicuous member of the Nationalist Party. Mr. Clancy said— I rise on behalf of the Party with which I act to say that we intend to vote for the Second Reading of the Bill, and I may say at once that the reason why I do so, and why we do so, is entirely unconnected with the merits or demerits of the Bill. Mr. Clancy goes on— I frankly confess that up to a very recent date I felt convinced that we should be obliged to take the opposite course … Happily we find ourselves in a position to take the course which I have announced. The unmistakable declaration of the Prime Minister on Thursday night has, in my opinion, completely altered the situation. I congratulate His Majesty's Government upon the success, of their diplomacy. It seems to me to have been achieved by the kind of tactics which we might look for, let us say, in Morocco or Somaliland, where allies of doubtful allegiance have to be brought into line by the offer of certain inducements.

The noble Earl told us emphatically that there had been no bargain. The word bargain is a little ambiguous. I must say that I have been interested in observing the different lines upon which this question of the existence of a bargain has been dealt with by various apologists of His Majesty's Government. It has been said—the noble Earl said so to-night— that bargains of this kind are quite proper and natural. Then I have seen it said by very much the same people that there was no bargain. And, thirdly, it has been said that the bargain might very well have been made rather earlier than it was. After the noble Earl's emphatic disclaimer I shall not for a moment suggest that there was any transaction, signed, sealed, and delivered, between him and his colleagues on the one hand and the Nationalist Members on the other. But I shall await with very great interest the production of the Budget of 1910–11. I observe that Mr. Redmond said the other day significantly— The Budget of 1910–11 has yet to be produced. But about that part of the story, I mean the financial inducements said to have been offered to the Nationalist Party, I will say no more.

There is, however, another part of the case about which I am obliged to say a word. It seems to me absolutely clear and established beyond possibility of doubt that what carried the day and enabled you to take your Irish allies with you into the Lobby was the statement made by the Prime Minister a very few days ago, "the unmistakable declaration"—as it has been called—of the Prime Minister. Now I do not believe there is any reason for supposing that the Irish are in favour of a Single Chamber, or that they owe any particular grudge to the House of Lords. But, in their view, these Resolutions for the abolition of the Veto of the House of Lords spell Home Rule for Ireland. Hear what Mr. Redmond said on the 3rd of this month at Tipperary— The question at issue is the speedy abolition of the House of Lords, and this means nothing less than Home Rule for Ireland. There is a directness of statement about Mr. Redmond which is rather refreshing. He speaks frankly, he sees the thing in its true proportion—"The abolition of the House of Lords." Mr. Redmond does not affect to believe, as some of the noble Earl's colleagues do, that the House of. Lords is going to be left under this new dispensation in a position almost equal to that which it now occupies. The House of Lords, then, the only obstacle to Home Rule, was to go. But these gentlemen were not going to be content with a mere announcement of I policy. They required something a great deal more definite than that, and they have got it. They have forced you to disclose not only the end which you have in view, but the means by which you are going to accomplish that end, means which you are going to use in defiance of your own better judgment. Unless we misunderstand the position wholly you have contracted to advise the Crown to coerce one House of Parliament by steps never resorted to since the reign of Queen Anne, and you contemplate these measures, you who have been in the habit of charging us with revolutionary practices and who draw fine-drawn distinctions between legal and constitutional rights.

I do not make these allegations without the possibility of proving them. The process of education which His Majesty's Government have gone through can be followed stage by stage with absolute distinctness. Let me remind the House what those stages have been. The first stage was the stage anterior to the General Election. The House will remember the noble Earl's announcement during the debate on the Second Reading of the Finance Bill. He told us then that what would happen was that His Majesty's Government would set themselves to obtain guarantees, not the old guarantees, but guarantees of a different kind. The noble Earl's language was vague and, on the whole, I think, was characterised by a reasonable amount of caution.


The words I used were "statutory guarantees."


I would not misquote my noble friend. I will read his words— We must set ourselves to obtain guarantees—not the old guarantees sanctioned by the course of time and enforced by accommodation between the two Houses, but if necessary, if there be no other way, guarantees fenced about and guarded by the force of Statute. These words, if I may borrow the simile of the noble Viscount the Secretary of State for India, were the premonitory rumblings of the earthquake. The Prime Minister ten days later was, not more precise, but more emphatic. He announced to the country that His Majesty's Government would not assume office and would not hold office unless they could secure— the safeguards which experience shows to be necessary for the legislative utility and honour of the party of progress. That intimation attracted very great attention, and it is no exaggeration to say that the General Election was in a great measure fought upon that declaration of the Prime Minister's.

Then came the election, with its dubious results—the results which made both Sir Edward Grey and the Home Secretary perceive that matters were not going quite so well for them as they had hoped, and there was a period when apparently a chastened spirit prevailed amongst Ministers and their supporters. Let me quote to the House what was said by the Prime Minister on the first day of the present session. Mr. Asquith said— To ask in advance for a blank authority for an indefinite exercise of the Royal Prerogative in regard to a measure which has never been submitted to, or approved by, the House of Commons is a request which, in my judgment, no constitutional statesman can properly make, and it is a concession which the Sovereign cannot be expected to grant. That was a very remarkable abandonment of what I might call the Albert Hall position, which was wholly different. But a few days later the noble Earl himself contributed a statement, to my mind more remarkable than any of the Ministerial utterances upon this subject. Let me read it to the House. It was made at Winchester on April 5. The noble Earl was referring to the exercise of the Royal Prerogative for creating Peers in order to overcome the resistance of this House, and he said that this was— a power which has only once been used, and used to a small extent…obviously a power which only ought to be used in the last resort and under circumstances of the most special character. Now listen to this— It is to my mind altogether improper even to consider such a contingency until the occasion has actually arisen, if it ever does arise, because its exercise must depend upon a great number of issues. Then follows a very remarkable passage— It is not a question of the Minister's going to the Sovereign and asking the Sovereign to create a certain number of Poers as a favour, but it is the constitutional exercise of the power of advice by the Minister to the Sovereign. My Lords, those are obscure but somewhat ominous words. I do not like to comment upon them, but I have yet to learn what is this distinction between that which a Minister may ask of the Crown as a favour, and that which he may ask as the constitutional adviser of the Sovereign. At any rate at that time I shall not be wrong in saying that the noble Earl opposite was penetrated by a sense of the gravity of the step which was under discussion, that he was extremely reluctant to see it adopted, that he did not desire to have it even con- sidered, and that he for one was determined that it should not be adopted save at the last moment, and as a last resort. With that remarkable statement ended the period of moderation. Mine days passed—less than nine days—and a complete change came over the scene. Something happened; we can easily divine what that something was—the something which induced Mr. Clancy to change his mind at the last moment; and we have the full-blown pledge given by the Prime Minister on April 14, a pledge that— If the Lords fail to accept our policy, or decline to consider it when it is formally presented to the House, we shall feel it our duty immediately to tender advice to the Crown as to the steps which will have to be taken if that policy is to receive statutory effect in this Parliament.


I do not think the noble Marquess is quoting quite accurately.


This is an extract from Hansard. I believe it is accurate. I will undertake to compare the text this evening before the discussion closes, and if I find I am inaccurate I will certainly make a correction. The Prime Minister proceeded— If we do not find ourselves in a position to ensure that statutory effect will be given to this policy in this Parliament, we shall either resign our offices or recommend a dissolution of Parliament. … In no case would we recommend Dissolution except under such conditions as will secure that in the new Parliament the judgment of the people as expressed in the election will be carried into law. I have quoted those words—I believe I have quoted them accurately—because I want to know what has become of the Prime Minister's objection to asking in advance for a blank authority for an indefinite exercise of the Royal Prerogative. What has become of the noble Earl's objection, even to consider such a contingency until the occasion has actually arisen? If these things were improper when the noble Earl made his speech at Winchester on April 5, why is it that they have become proper on April 14? You now have His Majesty's Government not only considering what the noble Earl said they had no business to consider, but announcing to Parliament exactly what they are going to say to the Crown, exactly what they are going to do in all the different eventualities which can be supposed. I must say that a more extraordinary change of front could not have been perpetrated by the responsible advisers to the Crown.

Only one word more. I ask your Lordships to note that these guarantees—that is the usual word for them—these guarantees, these undertakings to put pressure upon the Crown (because that is the only interpretation that I can put upon the noble Earl's language), are suggested not in order to secure the passage into law of a complete and well-considered measure of constitutional reform, but to obtain a mere fragment of that reform—a partial fragment of it dealing only with the powers of this House, neglecting such questions as the constitution of your Lordships' House, neglecting such questions as the possibility of devising better machinery for settling differences when they arise from time to time between one House and the other. All that is left blank, and all that is to be done is to put this House in a position in which it will be absolutely precluded from taking part or lot in the decision of these immense constitutional problems which, by the admission of His Majesty's Government themselves, will have to be solved at some future time. It was the pledge to do these things that saved the Budget. I am quite willing to assume that there was no bargain. If it was not a bargain it was a capitulation—a capitulation at the bidding of a faction to whom you have promised, or to whom it has been intimated, that you are ready to overturn the Constitution by unconstitutional means, without having in your minds the smallest idea of that which you intend to put in its place.

As to this Bill, we remain convinced that we were acting within our right and acting in accordance with our duty when we asked that it should be referred back to the constituencies, and, if proof is wanted that we were acting within our right and according to our duty, I think it is to be found in the remarkable transactions which I have endeavoured to describe to the House. We, at any rate, have passed through the interesting events of the last few weeks with clear consciences and clean hands.


My Lords, I had intended to commence my observations by saying that we stood in a very different position from that in which we stood when we were last discussing this measure, that we were face to face with a different situation, and that the same considerations were hardly before us. As I listened to the speech of the noble Marquess opposite, particularly to the concluding portion of it, I began to wonder whether the situation really had changed. It was not merely that the noble Marquess was still from our point of view impenitent on the question of the right of this House to reject the Finance Bill, but that he appeared to be arguing in favour of a course, which should, I think, correctly be followed by a vote to reject the Bill again to-night. If the arguments of the noble Marquess have validity, why does he not propose to give expression to them, why are they not carried into effect, and why is the Finance Bill not again to be thrown out?

The noble Marquess knows very well, as all your Lordships know, that there is, in fact, a very considerable change in the situation. The Finance Bill has reached this House, after a General Election, backed by a very considerable majority, and an examination such as the noble Marquess has made of the composition of the majority does not alter that basic fact. We are in the normal position of this House when discussing a Finance Bill sent up by a Liberal Government; that is to say, this House is about to-night to pass, so far as the assent of the House is concerned, a Finance Bill of which it entirely disapproves. That, I venture to think, is the normal position of this House in connection with Finance Bills of Liberal Governments. Why the noble Marquess, in the face of that, should continue to say that the power of rejection is not to be exercised I do not know.

Your Lordships will remember that a great many speakers in the last debate said that they would not care to be members of a House which was compelled to pass into law measures of which they entirely disapproved, that they would not care to belong to an Assembly of that sort which had no powers, and which had, therefore, lost all dignity. It should be remembered that that is exactly the position before this House to-night. The speech which we have just listened to makes it obvious that the Bill is disapproved of as much as ever. None the less, noble Lords themselves are able to-night, fortunately for the country and fortunately for themselves, to find it consistent with their dignity to pass this measure. The noble Marquess said a great deal about the change of front on the part of Mr. Asquith and the Government in connection with the question of guarantees. It is perfectly obvious that a subject of that character is one of a delicate nature, and one which could only be discussed with considerable reserve; but I should have thought that the speech of the Lord Chancellor in this House at the commencement of the debate last year made the attitude of His Majesty's Government sufficiently plain, and although there may be slight differences of words here and there I do not see that there has ever been any change from that attitude.

The noble and learned Lord on the Woolsack announced, in the plainest terms, that no Liberal Government would again take office unless they were to be given power to put an end to the opposition of this House. Everything that has happened since has been in pursuance, of that policy, and I think when we come to a later discussion we shall welcome the rather incautious admission of the noble Marquess that the General Election turned very largely on the question of the Veto of this House, because we can hardly be told that that question was not before the electors and decided by them. I desire to-night to discuss not so much the general constitutional question, with which, I think, we have finished, and which I hope will never have occasion to rise again. We are now, as I venture; to think, in the normal position. Members of your Lordships' House stand in a rather peculiar position with regard to taxation. You are taxed without representation, and you stand in exactly the same position in the community as women who own property. You have no powers, except indirectly, to return Members to the other House, and there is no power to deal with questions of taxation when they come up to your Lordships' House. But I do not know that on that account it is necessary for us to be entirely silent on the Bills that come before us. It is possible at any rate to discuss the provisions of such Bills.

Last year I felt was an unsuitable time for dealing with any of the details of the Bill, but on this occasion I shall ask the indulgence of the House while I call attention to a portion of the measure which has not been dealt with in this House at all, and which has received very scant attention in the other House—I mean the portion which refers to the new taxes on motor-cars. Your Lordships laugh. I think that goes to support my argument. My argument is that classes of the community who are in a minority are apt to have taxation of this sort imposed upon them without adequate discussion or examination, and if ever that could be the case it has been the case in regard to this Bill. The clauses which impose taxation, on motorists received very small consideration in another place, and the Chancellor of the Exchequer did not give adequate consideration to those who were entitled to speak. In this House those proposals have received no consideration at all, nor, of course, can they receive any effective consideration here. But I want to submit to your Lordships one or two propositions. First of all, I wish to inquire what reason, what logical, defensible reason, there is for the imposition of the taxes at all; secondly, I desire to call attention to the mode in which they have been imposed; and, thirdly, to make one or two observations on the attitude of the Chancellor of the Exchequer.

Mr. Asquith about three years ago, in his Budget Speech, said the question of the taxation of motor-cars would have to be considered, as they constituted a luxury which was fast degenerating into a nuisance. I do not know whether Mr. Asquith would be prepared to repeat those words to-day. I read the speech of the Chancellor of the Exchequer to find out on what ground he founded his claim to tax motor-cars. It consisted partly of the suggestion that they were a luxury and that they wore out the roads. As to their being a luxury, that is hardly true at the present day; and if it were true, there would hardly seem any reason why other luxuries should not be taxed. The expensive landaus that we see in the park drawn by expensive horses are luxuries, racehorses are luxuries, many other things are luxuries. But it is not proposed to put a tax on racehorses. As a motorist I see no reason why they should not be taxed at least as much as motor-cars.

I now come to the question of wearing out the roads. We have definitely abandoned in our system of the maintenance of roads what I would call the turnpike idea, the idea that the vehicles using the roads are to be taxed per vehicle. When we abolished that system we came, I take it, to the conclusion that the roads should be national and should be supported, as they are, by local areas. I have always urged that the area should be a larger one, and that there should be certain national roads; but, at any rate, we came to the conclusion that at roads as a whole were for the benefit of the whole community. I regard the proposed tax on motor-cars which is brought into force by this Bill as a retrograde step; it is a sort of octroi tax on the individual. If vehicles using the roads are to pay a tax as vehicles, it is logical to argue that that should apply to all vehicles. In this matter the Chancellor of the Exchequer has adopted a line of argument which I can only describe as adroit. He began by assuring motorists that not a penny of this money would go to local authorities. Motorists were to consent to the taxation because it was going to be spent for their own purposes and for the improvement of the roads. Later in the history of his Budget the Chancellor of the Exchequer had to meet a deputation of local authorities, and he assured them that this taxation would make them £200,000 or £300,000 a year better off, and later he said it would do so by relieving them of improvements which they would otherwise have to make. I venture to think that the two arguments are not consistent.

There is a great deal less to be said than otherwise because of the attitude of motorists themselves. Motorists have been given away by their organisations, and have not taken the steps they might have taken to obtain justice. The description which the Chancellor of the Exchequer gave on introducing these proposals, that they had the assent—he was careful not to say the enthusiastic assent—of motorists themselves is hardly correct. At that time the negotiations which had been proceeding were not known, but since then it has come out that what in effect happened was that the Chancellor of the Exchequer sent for certain distinguished persons, who assumed to speak on behalf of the whole class of motorists, and said to them, "I am going to tax you so much. How will you have it found?" One of the representatives said it was not a question of whether they would be birched, but on what part of the body they should be birched. That is what the Chancellor of the Exchequer may call assent, but it is assent in precisely the same sense as your Lordships will assent to this Bill to-night. There are certain persons who should have been consulted by the Chancellor of the Exchequer. This trade was begun in this country under difficulties. Your Lordships all know that in the beginning it was retarded by legislation which made it difficult to introduce locomotion of this kind into this country. Those difficulties were to some extent removed, but they never have been removed to the extent to which they are removed in France. But in spite of the difficulties put in the way, a very large and important trade has grown up in this country giving employment to an enormous number of persons, and a trade of that sort ought to have been consulted.

There exists an organisation called the Society of Motor Manufacturers and Traders. It is the official trade society of the whole country, and it embraces practically every trader of any consequence in motor vehicles in this country. One would have thought that a Chancellor of the Exchequer like Mr. Lloyd-George, who professes himself so solicitous for the trade of the country, would at least have taken some opportunity of learning the views of this trade before inflicting upon it the severe injury which Ms taxes entail. I have in my hand the annual report of the society to which I refer, and I find therein this statement— Although every step was taken to bring to the notice of the Chancellor of the Exchequer and the Financial Secretary to the Treasury the position of the society as the recognised representative body of the industry, the society's proposed deputation was never received, nor was any reason vouchsafed for the refusal to receive it. That is all the more extraordinary when it is remembered that deputations were received in the same connection. The society went to great trouble to compile facts showing in what directions the taxation in the Budget affected the industry, and offered to submit to the Chancellor of the Exchequer the original proofs. I think the trade have a right to complain that it has received no hearing. It is true that the Chancellor of the Exchequer was then occupied with other proposals, but there has been a very considerable interval since, during which he might have ascertained the views of this industry.

Coming to the Bill itself, I find in it the most extraordinary provisions, to which the attention of the Chancellor of the Exchequer has been called by deputation and otherwise, and which no attempt has been made to remedy. First, as to the definition of "motor spirit" on which a tax is to be paid. The expression "motor spirit" is defined in the Bill as meaning— Any inflammable hydrocarbon (including any mixture of hydrocarbons and any liquid containing hydrocarbon) which is capable of being used for providing reasonably efficient motive power for a motor car. It has been pointed out to the Chancellor of the Exchequer that that includes ordi- nary lamp oil and paraffin; it includes coal burnt in a steam-car; it includes also wood and coke. The Chancellor of the Exchequer was urged to give some reasonable interpretation of motor spirit and a definition was suggested to him, but nothing has been done to make that clear. I also find that the Bill imposes upon dealers in motor spirit a licence duty of 5s. Those dealers are, in fact, licensed already. Everyone of them has to be licensed now by the local authority, and I do not know whether the Excise have any real excuse for making them pay an additional duty and enter upon an additional register. Nor do I discover that any discussion on that point took place in the other House.

When you come to the tax on motor-cars themselves—on the carriages—you find there a tax on the scale of horse-power. The eminent persons whom the Chancellor of the Exchequer consulted had some little fad of their own, and they submitted scales to the Chancellor which apparently he swallowed. To tax on a scale of horse-power is bad. The Royal Commission which sat upon the subject of motor-cars recommended against it, and suggested that taxation by weight should be adopted. It has been pointed out that if horsepower is to be the scale, then the taxes should rise by an increase of one horse-power at a time instead of having artificial jumps at particular places, which would have the effect of leading to undesirable sizes being standardised and inflict injury upon the trade. Although an interval has elapsed which has given time for that to be considered, nothing has been done in that respect, nor has any intimation been given that anything will be done. In that connection I should like to say that I think probably no motorists, or at any rate very few motorists, in this country would object to the tax on high-power cars. There is a general feeling that persons who choose to use cars of a racing horse-power are persons who can afford to pay this tax. I do not think any objection has been offered to the tax on racing cars, but the tax on ears of small horse-power will be most oppressive. In the case of the doctor the Chancellor of the Exchequer has recognised that, by allowing him a rebate of one-half. There is no reason why the doctor should have this rebate any more than anyone else. It is purely a sentimental reason. No rebate, however, is given to the surveyor or estate agent, or even to the commercial traveller. The class of person who uses a motor-car over the country roads for pleasure has almost ceased to exist. Cars are now used for a definite purpose, and in the case of persons who use motor-cars in a business way the tax is most excessive.

To my mind one of the worst features in the whole of this Bill in that connection is the way in which this horse-power is to be calculated. The Bill provides that the unit of horse-power shall be calculated in accordance with the regulations made by the Treasury for the purpose. That is imposing by Statute taxation of an absolutely unknown amount. It is not said that the horse-power is to be a real horse-power, but a horse-power calculated in connection with some formula to be put forward by the Treasury. I submit that it is not right that an Act of Parliament should impose taxation and leave the amount of the tax to be fixed entirely at the discretion of a Department. The House of Commons in the days when it was less under the control of the Cabinet than it is now would not have agreed to these taxes without indicating what would be regarded as motor spirit and what scale would be adopted in calculating horse-power. During the months that have elapsed there has been ample time for these points to be settled. There has been ample time for an announcement to be made by the Treasury as to what they will actually regard as motor spirit; and also as to what formula they are going to use in calculating horse-power; but nothing whatever has been done. Then there is a clause which has been put in at the instance, I believe, of the Army Motor Reserve, with the concurrence of the War Office, under which they are to have a reduction, if they use their car six days in the year for military purposes, of 6–365ths of their tax. Is it worth while offering 5s. or 6s. reduction on their cars to people who lend them for the purposes of national defence?

I know your Lordships feel that this matter is not exactly relevant to the debate before us and that we cannot discuss it effectively, but the matter has not been properly ventilated, and I felt bound to say what I know to be the feeling of the great bulk of motorists in the country on this question. They are oppressed because they are in a minority. The Chancellor of the Exchequer said this was a most popular tax. I daresay that if it was proposed that every member of your Lordships' House should pay a tax of £10,000 it would be very popular with those who do not sit here. That does not seem to be a very statesmanlike reason for imposing such a tax. The fault of the whole of this taxation is the want of logic in the imposition of it. The Development Act is the bribe which was dangled before motorists, but that Act, apparently, is going to be used now for doing things that the local authorities ought to do, and there are, apparently, to be no great improvements and no national roads. For these reasons I venture to think that this tax is unfortunate and constitutes a blemish upon a Bill which otherwise I welcome very heartily—a Bill the passage of which is going to be one of the greatest assets in the history of the Liberal Party.

The, noble Marquess opposite asked what we were going to do, and when we were going to do this and that. The Government have been engaged in the task of what is technically known as making the will of the people prevail. I am not over-fond of the expression "will of the people" in view of the fact that one-third only of the adult population of the country have the suffrage. When you say the "will of the people" you mean the will of those who have votes, and those who have votes in this country wish to make their will prevail. That is the object undoubtedly of all the discussion that has taken place, and your Lordships, by your action last year, raised that question in an acute form, and everything that has been said since has had relation to this question. On those matters we shall doubtless have another discussion soon on another issue, when we shall consider how that is to be done. But while in any event, even with the theoretical power of rejecting Finance Bills, we have no power to amend them but have to submit to any taxation the Commons impose, I think we ought not to be deprived of the right of criticism, and that is why I have ventured to make these few remarks this evening.


My Lords, the debate so far has been of a varied character. It was rather a far cry from a constitutional revolution to the grinding oppression under which motorists are suffering. One thing comes quite clearly out from the speech to which we have just listened, and that is that in the noble Earl's opinion the will of the people has not prevailed as regards the motor taxes. My own view is that it is useless to fight the battle of the Budget over again. Moreover, after the eloquent and convincing speech of the noble Marquess the Leader of the Opposition there is not much to be said on the general aspect of the question. I wish, therefore, to confine my remarks to one special point. I refer to the recent operations in connection with the Sinking Fund. I allude to this question not so much with a view to criticising the actions of the past, but rather with a view to sound a note of warning in respect of the future.

So far as I understand the facts, they are somewhat as follow. When the late Unionist Government went out of office there was a fixed charge on account of the Debt of £28,000,000, which left a very handsome provision—I cannot say at this moment how much—to be used for the reduction of debt. In the early part of their career the present Government followed with commendable assiduity the policy of reducing debt which had been initiated by their predecessors. In three years something like £40,000,000 was paid off, with the result that in the £28,000,000 fixed charge at the beginning of the last financial year no less a sum than £10,000,000 was provided for the Sinking Fund. That was before the period when the full tide of reckless and extravagant expenditure had set in. Subsequently the Sinking Fund was reduced, first by £3,000,000, and then by £500,000. Many high financial authorities were of opinion that the Sinking Fund should have been maintained at the high level at which it had previously existed until the National Debt had been reduced to the amount at which it stood previous to the South African War. I am quite free to admit that from a purely financial view there was a great deal to be said in favour of that, but it was really a counsel of perfection. It was really almost impossible, considering the high demands made for naval expenditure and for social reform, that this very high standard of financial virtue should have been preserved. Therefore the Chancellor of the Exchequer reduced the Sinking Fund by £3,500,000. I confess I was rather sorry to see that last half million go. At the same time I do not think in all the circumstances of the case that the reduction can be said to be excessive.

My principal reason for addressing the House this evening is that I wish to express the very earnest hope that, whatever may be the future course of financial legislation, there will be no further tampering with the Sinking Fund, and that the fixed charge will be not less than £24,500,000, thus leaving about £6,500,000 for the reduction of debt. The mater is one of very great importance. We are too apt to forget that financial preparation is quite as important as either naval or military preparation to meet any great national emergency which may occur. Moreover, it is of especial importance at this moment, for, without going into any details, it cannot be doubted that the measures recently adopted by His Majesty's Government have weakened financially our capacity for meeting a national emergency. I say that because as regards the Death Duties we are notoriously, to a certain extent, living on our capital; and as regards the Income Tax, it is now at so high a figure that it cannot be looked upon to the same extent as hitherto as a safe fiscal reserve. It has also to be remembered that we cannot safely rely to any great extent on what is known as the old Sinking Fund. The Chancellor of the Exchequer in another place a short time ago made a statement, which I willingly admit was of a generally satisfactory nature, as regards the finances of the last year; but I may, in passing, remark that when the right hon. gentleman spoke of a surplus of from £2,500,000 to £3,000,000 he was drawing on his imagination. No such surplus exists unless the Sinking Fund is drawn upon to the extent of another £2,700,000, and that would be a very objectionable course. As far as I can make out, if the Chancellor of the Exchequer collects all the sums he expects to collect his surplus will be about £250,000; in other words, it may be said, roughly, that the revenue and expenditure of last year balance. Then we all know that we are threatened with a further great increase in expenditure both on account of naval charges and social reforms. This being the case, it certainly does appear to me that it would not be safe to rely to any large extent on the old Sinking Fund, and our main reliance must be placed on the new Sinking Fund.

There is another point to be borne in mind. Whatever may be the causes, it cannot be doubted that our borrowing power has been impaired. Of that I think there can be no manner of doubt. One has only to look at the price of Consols to be satisfied of that. That is a very important point, for when we consider the high rate of taxation which now exists it cannot be doubted that in a case of great national emergency occurring we shall have to rely in future on borrowing to a greater extent than formerly. Hence the urgent necessity of reducing the Debt in time of peace. The causes which have weakened our borrowing power are very diverse, and I admit it is difficult to differentiate between them and to put one's finger on one special cause for the depreciation in Consols. At the same time I wish to say that some of the pleas put forward in palliation of the depreciation of our credit have been inadequate, and are, to say the least, not satisfactory.

The Chancellor of the Exchequer said, when it was pointed out that Consols had gone down more than six points, that it was entirely due to two special and temporary causes, for both of which your Lordships were responsible. In the first place, the right hon. gentleman said that owing to the rejection of the Budget the money which should have been available for the Sinking Fund was not there, and therefore purchases could not be undertaken in the open market to sustain the price of Consols. I must say that that argument came to me rather as a shock, and I asked myself whether we had got to the stage when the National Debt of England, which should be the highest and finest security in the world, should be treated like the shares of an oil or rubber company, whose price has to be sustained by what is vulgarly called "rigging the market." Surely that would be a very humiliating confession to make. The Chancellor of the Exchequer alleged another cause. He said that owing to the rejection of the Budget by your Lordships' House there had been large temporary borrowings, which had depreciated the price of Consols. I do not doubt that this is the case, but there would have been no cause for temporary borrowings if His Majesty's Government had collected the Income Tax in due time and season, as they were frequently pressed to do both in and out of your Lordships' House.

Independently of these two causes, and accepting the pleas of the Chancellor of the Exchequer for what they are worth, I maintain that it can be shown that there has been a very heavy fall in the price of Consols. In order to ascertain what has happened I will take two periods—August 31, 1908, three or four months after the present Chancellor of the Exchequer took office, and August 31, 1909. At this last-mentioned date the Budget had not come to your Lordships' House, and therefore any action we might take could not have influenced the price of Consols at that time; the Sinking Fund purchases were going on, and there had been no large temporary borrowings. At that time the floating debt amounted to £22,000,000 against £41,000,000 on April 26 of this year. I should like to draw attention to that figure of £41,000,000. It is an enormous sum. There is no part of our financial system which requires more careful watching than the growth of the floating debt, and I think I must be very near the mark when I say that there has been no record in recent times of the floating debt accumulating to such an extent.

To revert to my argument. In comparing these two dates—August 31, 1908, and August 31, 1909—I find that Consols fell in that year from eighty-six and three-eighths to eighty-three and five-eighths, while during the same period the Stocks of other great nations rose. The French Rentes rose one and a-half per cent.; the German Threes two per cent.; the Russian Fours three per cent. The Prime Minister declared, in a debate in the other House last evening, that these comparisons are quite fallacious, and that other special causes have contributed to depreciate Consols which have not applied in France, Germany, and Russia. The Prime Minister specially indicated the large scope which had recently been given to trust securities and the large demands which had been necessary on the market for South African and Irish purposes. I quite admit that many of those pleas are valid. They may have contributed to the fall in the price of Consols. It is impossible to differentiate and to say to what extent; but for all that I cannot help thinking that there is one cause to which the Prime Minister very naturally did not allude, and that is that the financial policy of His Majesty's Government has shaken the confidence of the Money Market.

As your Lordships know, confidence is a plant not only of very slow growth, but it is a plant that needs to be carefully nurtured; and I think he would be indeed a bold man who would assert positively that the action of His Majesty's Government has not tended to wither that plant and to stunt its growth. The Chancellor of the Exchequer remarked that the idea that our credit had been shaken was a pure delusion of Tariff Reformers. I wish to remark that I am not a Tariff Reformer. I am a Free Trader; and I wish to say, as a Free Trader, that on this particular point I am very much inclined to share the apprehensions of the Tariff Reformers. This is all I have to say on this subject. I repeat that my principal object in rising has been not to criticise but to warn, and I do wish to express the most earnest hope that the importance of the matter will not be lost sight of, that a strenuous endeavour will be made to reduce the Debt, and that there will be no further tampering with the Sinking Fund.


My Lords, I shall not detain the House for more than a moment, but I rise to make an observation with reference to the remarks of the noble Earl, Lord Russell. Personally I disagree with the noble Earl in thinking that motorists in general resent this taxation. As a body we are prepared to accept the taxation proposed, but we do ask His Majesty's Government to carry out their arrangements with regard to the Road Board and I hope that the noble Earl the Leader of the House will be able to tell us this evening the names of the members of the Road Board, or at any rate some of them. No less than £750,000 is going to be raised from a very small number of motorists, and I think His Majesty's Government will admit that we have assisted them in every reasonable way we could in ascertaining how these taxes can be best raised in order that they shall not injure the industry or be hard upon any individual. The Road Board was promised as the first step towards the I nationalisation of the roads and the improvement of highways; but His Majesty's Government have not seen fit to give us the names of the members of the Road Board or any idea of its composition. What Lord Russell stated with regard to the system of levying the tax by horse-power was quite correct. No regular system has yet been instituted. The words in the Bill as they stand are exceedingly vague, and I agree with the noble Earl entirely when he said that the classification as arranged will not be of advantage to the industry, but will entail hardship on certain classes of people. I will not detain your Lordships longer, but I would ask the noble Earl who leads the House whether he can give us any idea of what is being done about the Road Board, and particularly whether he can give us the name of the chairman and the names of any of the members.


I may say at once that I cannot give the information for which the noble Lord opposite asks. I did not know that he was going to put this question or I would have asked my right hon. friend the Chancellor of the Exchequer if it was possible for him to give the information. I understand that the formation of the Road Board is in progress, but I cannot say when my right hon. friend will be able to make any announcement on the subject.


My Lords, I am well aware that it is the usual custom in your Lordships' House not to have a prolonged debate on the Budget Bill when it is sent up from another place; but the career of the Bill which your Lordships are going to pass to-night has been of so remarkable a character that it is but right and due, in justice to the dignity of your Lordships' House after the course you took last November, that we should be empowered at any rate to criticise its details. My noble friend the Leader of the Opposition dealt so fully with the action of your Lordships' House in November last that it would be superfluous for me to add anything to what he said, but I do endorse fully what fell from him; and I would point out that if ever your Lordships in the annals of your history were justified in taking a strong course, you were justified in the course you then took, for your action in November last has been to my mind endorsed in the House of Commons.

The noble Earl opposite, in the course of a speech which concluded by an eloquent peroration on behalf of motorists, asked why, if we hold the views we do hold regarding this Budget, we are going to pass it to-night. My answer to that is the answer made by the noble Marquess. He stated clearly that if the Budget Bill, having been referred to the country—it was never rejected in your Lordships' House but only referred to the country—did pass the new House of Commons, he would then advise those whom he led to pass the Bill when it came up again to your Lordships' House. During the few moments that I propose to trespass on your Lordships' time I want to deal with the manner in which this Budget Bill has passed through the House of Commons. The Prime Minister said that the first act of the new House of Commons would be to reimpose all the taxes and duties embodied in the Finance Bill, and the present Home Secretary declared that the Budget would be run through the House of Commons. So far from this being the case, a good deal of time has been occupied in passing the measure through the House of Commons, and, as we have gathered from the speech of the noble Earl the Leader of the House, it has undergone a certain amount of alteration.

What was the reason for the delay in passing the Budget Bill through the House of Commons if it was not that given by my noble friend behind me—that there had to be a certain amount of bargaining? The excuse may be that the procedure and forms of the House of Commons delayed the passing of the Budget Bill, but if that were the case ought not those objections to have been foreseen before the Prime Minister and his colleagues made the statements which I have just quoted? I cannot but think that the real reason for the delay in carrying out the pledges of the Prime Minister and forcing the Budget Bill through the House of Commons was that after the General Election the Government were very doubtful indeed whether they had a majority in favour of the Budget, and if they had introduced it in the early part of the session it would not have passed through the House of Commons. Having regard to that fact, I hold that your Lordships were amply justified in your action last November in referring the matter to the country. Of course, we on this side of the House do not know how the majority which helped to carry this Bill through the House of Commons was secured. May I ask what the object of the Chancellor of the Exchequer was in negotiating with the respective sections of the Irish Nationalist Party? I do not think any one who heard the discussion in the House of Commons and the differences of opinion that existed between Mr. O'Brien and the Chancellor of the Exchequer can have considered that those negotiations were of a very edifying character. Surely if the Chancellor of the Exchequer had been sure of his majority after the General Election he need not have carried on those negotiations, because he would have been certain of being able to carry through his Budget.

It has been denied that there was any bargain—in fact, the noble Earl opposite rather took umbrage with some of us on this side of the House for thinking that there was. Of course, as my noble friend the Leader of the Opposition wisely said in the course of his speech, there was no question of a treaty signed, sealed and delivered; but is it not possible to come to an understanding without all that? I have read with great admiration the literary work of the noble Viscount the Secretary of State for India, and I would like to quote from his able and brilliant Life of Mr. Gladstone. The passage I suppose, refers to the Kilmainham Treaty. The noble Viscount wrote— Mr. Gladstone was always impatient of any reference to reciprocal assurances or outside understandings in connection with the prisoner at Kilmainham. Still, the nature of the proceedings was plain enough.


I have seen that passage quoted in the newspapers. If those who quote it would be kind enough to read the whole page, or even half the page, they would see that it refers to the negotiations or arrangements entered into with an emissary of Mr. Parnell, and has no bearing here. Whatever construction you like to put on these events, there is no kind of analogy or force in that illustration.


I took the quotation from The Times, and I apologise for not knowing the passage better. I pass on to what the Government had to give to obtain a majority of votes in the House of Commons. The Government had to obtain the support of Mr. Redmond and his followers if they were to carry through their Budget. They knew quite well that the people of Ireland and Mr. Redmond and his supporters were mot only indifferent, but to a great extent hostile, to the Budget. Therefore there had to be some negotiations between the Chancellor of the Exchequer and the followers of Mr. Redmond. What had the Government to offer to them? They had to offer Mr. Redmond in return for his support of the Budget that they would take steps to abolish the legislative power of the House of Lords, which would give Mr. Redmond all he wanted—namely, Home Rule for Ireland. There was no secret about it. The Nationalists did not hesitate to say, in speeches in Ireland, that the Prime Minister, when once he had abolished the legislative power of this House, was going to give Ireland Home Rule. Mr. Redmond never hesitated to say what was the price he set upon his support. His speech was quoted by my noble friend behind me. Mr. Redmond clearly laid down at Tipperary the terms on which his support and that of his followers could be obtained, and it is a curious thing that a short time afterwards the Prime Minister delivered a speech which it would not be unfair to describe as a plagiarism of Mr. Redmond so similar were the two statements. And yet we are told there was no agreement whatever between Mr. Redmond and the Government! Surely to any thinking man it must be rather extraordinary to see the way in which the two opinions, at one time so different, of the Prime Minister and Mr. Redmond came to converge.

At the beginning of the session the Prime Minister declared that to ask in advance for a blank authority for an indefinite exercise of the Royal Prerogative in regard to a measure never submitted to or approved by the House of Commons was a request which no statesman could properly make and which the Sovereign could not grant. Yet what do we find at the present moment? What is it that Mr. Asquith is going to ask for? What is he going to ask the exercise of the Royal Prerogative for unless it is for what he calls "this measure which has never been submitted to the House of Commons?" We know full well that Resolutions have been submitted to and carried through the House of Commons by means of the gag used in a very free manner, but I do not think any one will for a moment contend that Resolutions are synonymous with a Bill. There is another change in the attitude of the Prime Minister. At the beginning of the session he declared that he would not take the Resolutions respecting the Veto of the House of Lords first; but a short time after that, Mr Redmond having announced that he would not be a party to that, the Prime Minister said that the Resolutions and not the Budget would be submitted first to the House of Commons. There must have been some negotiations and some reason for such a remarkable change.

What was the quid pro quo given to Mr. Redmond for his supporting the Budget? The attitude of Mr. Redmond on the Budget has been indefinable, certainly very changeable, and, if I may use the word, squeezable. I read Mr. Redmond's remarks in Dublin on February 10. He then said— If Home Rule is put on one side, then I will fight the Budget, and if it is a question of the Budget and Home Rule I will accept the Budget. Therefore the Budget is quite a secondary object with Mr. Redmond. He has admitted that he abstained from voting against the Budget when it was before the House of Commons last year, not because he did not oppose it but because he knew that it was going to be defeated by the House of Lords, and to have voted against the Budget would, he said, have been giving them a show of additional justification for their action. That Mr. Redmond did not want to do, since he desired the House of Lords out of the way in order to clear the way for Home Rule. You now know exactly what has been the price paid to Mr. Redmond for the support of himself and his followers. The price paid for that support is the destruction of the Constitution of this country, under which for so many years we have lived happily, prosperously, and freely. In any other country but this, if there was any proposal of making an inroad into the Constitution, no such alteration would be made without the most careful thought, the most elaborate preparations, and without the country being appealed to on that question. All this is done here in the course of a few weeks to secure the support of Mr. Redmond and his followers in order to carry the Budget through the House of Commons and maintain His Majesty's Government in power for a few months longer.

The men for whose sake the dismemberment of the Empire and the destruction of the Constitution are promised are not men who have any care for England. Mr. Redmond and his friends make no secret of their dislike of England and of their desire to be out of the country. Yet it is with these men that the Government have negotiated and for whom the Constitution of this country is to be sacrificed. The bargain—I cannot help calling it so—has been made nominally with Mr. Redmond. The Constitution is to be sacrificed nominally to Mr. Redmond. But Mr. Redmond is merely an intermediary. He is subservient to his paymaster, Mr. Patrick Ford, a man who was found by the Parnell Commission to be guilty of advocating crime and even the use of dynamite. Therefore when we see these negotiations completed, I think we on this side, particularly those who belong to Ireland and know what the Union means to Ireland, are justified in saying that the country has been sold to no less a person than Mr. Patrick Ford. When the Act of Union was passed the Government of the day were accused of carrying it by means of corruption. I entirely deny that. But I venture to say that bribery and corruption—moral, of course, and I might almost say immoral—have been the only means by which this Budget has been carried through the House of Commons. A writer of past history has told us of a famous Government-known as the "Who Who" Government. The historian of the future will describe this as the "Wait and See" Government. And what are we waiting to sec? We are waiting to see this Government dragged down to a depth of degradation darker and deeper than has ever before been recorded in the annals of history.


My Lords, the whole of this debate has been tame, notwithstanding the efforts made at the conclusion of the speech of the noble Marquess to infuse a little more fire into it. The tempest of last November has indeed dwindled to a calm, yet I think a few words ought to be said on an occasion of this kind, because within twenty-four hours from now there will be concluded the first stage of the dangerous controversy into which this House was ill-advised and unwise enough to plunge the country last November. The Bill will pass into law, and in the course of a very short time it will be regarded as an unmixed benefit to the people of this country by all parties in the State.

That being the occasion of this debate, I was a little surprised that the noble Marquess the Leader of the Opposition made a curious and I think rather untimely excursion into the constitutional question which was debated last November—whether or not this House had the constitutional right to throw out the Budget. Upon that territory I shall not trespass for one moment That matter has been fully discussed and debated, and has become one of those practical things now to be settled definitely by law one way or another. It can no longer be left in a nebulous and uncertain state. I will say, not of that subject, but of the way it was treated by the noble Marquess one word. I think that he, with his high authority, has been giving sanction, and not for the first time, to a very hazardous doctrine. He spoke of the fine distinction drawn between what is legal and what is constitutional in this country. He has happily not been obliged to study the works of constitutional writers; he has not remembered, I think, the speeches of many statesmen on both sides of the House for a period of 150 years—Lord Lyndhurst, Burke, Chatham, Pitt, Walpole, and Peel. I do not care what statesman you search the speeches of. I defy you to search the speeches of any of the great statesmen without finding his recognition of the fact that the difference between what is legal and what is constitutional lies at the very root of the government of this country. Think of what are the relations between the Crown and the Ministers of the Crown: the whole thing rests on what is constitutional as distinguished from what is legal. If the legal powers of the Crown were exercised in this country without the responsibility of Ministers, what becomes of your boasted Constitution?

Why did the noble Marquess enter upon this excursion at all? I am afraid I must say it was really rather for purposes of diversion. It is unintelligible upon any other ground, because the question that really arises now on his part is how he can defend the advice he, as Leader of the majority of this House, gave the House last November. He has said to-night very little about the merits of the Budget, and there is very little to be said—or rather there is very little to be said on an occasion like the present one, unless you dwell on its demerits, and those are few. The noble Marquess has surely forgotten what he himself stated as a reason for advising the throwing out of the Budget. I have not had time to refer to the text of his speech, because I was not aware that I was going to take part in the debate, but am I not right in saying that he stated somewhere in the West of England that his reason for advising it was that he thought the Budget would be destructive of Tariff Reform?


One amongst many reasons given.


I think that was the main reason. It was not a bit on account of the different classes which are thought to be discriminated between un fairly by this Budget. It was not because the burden would fall upon one class or the other; it was not sympathy or pity for individuals of different classes upon whom differential taxation would fall, some of them, perhaps, working men, that was the predominant motive.


If the noble and learned Lord challenges me, I say that in the speeches to which he referred I used both arguments. I used the argument that the new policy of His Majesty's Government was destructive of Tariff Reform, but I also dwelt fully on the other argument founded on the inequitable incidence of the new taxation.


I fully accept that statement. But I do not think that the predominant motive was the fear of this or that tax being proposed, not any anxiety for constitutional doctrine, but the belief that this policy would be destructive of what I cannot help regarding as the pernicious doctrine of Tariff Reform, to which the noble Marquess has given his assent. But now look for one moment at the effect of that statement. We were a Government of whose time only eighteen months or two years had to lapse. We had an enormous majority in the House of Commons. If we had been a Conservative Government we should have been perfectly safe, because there is no chance of anything being done in this House to interfere with the life of a Conservative Government. But we were a Liberal Government.

Let me state frankly, without intending any offence, the charge we make against this House. It is that your Lordships have watched our footsteps, the footsteps of all Liberal Governments of recent years, and have endeavoured to trip us up by the heels when a convenient opportunity arose. That is the distinction between the treatment of a Liberal Government and the treatment of a Conservative Government by this House. If the power were impartially used, if there were fair play, if a sporting chance were given to a Liberal Government by this House as at present constituted, there would not be the bitter feeling that there is in many parts of the country owing to this want of impartiality. I hope the result of the Budget if it becomes law will be the defeat and ruin of Tariff Reform. Whether that will be so or not I do not know, that may depend on other and future elections, but so long as this millstone is hanging round the neck of the Conservative Party, they will never be able to obtain a majority in the constituencies of the country.

I will now turn for a few moments to another matter. The noble Marquess suggested that His Majesty's Government had capitulated to the Irish Nationalists and had bought at a corrupt price—it was so suggested by Lord Londonderry—the passage of this Bill. Will your Lordships kindly face the facts? We live in this country under a Party system; that means that the Government are bound to rely upon the support of the House of Commons, and if the House of Commons will not support it, the Government, to whichever side it belongs, must cease to exist. Are we not to ascertain what are the opinions on the great public Bills and questions that come before Parliament of all sections in the House of Commons? Is there any Minister who has sat in the House of Commons either on the Conservative or the Liberal side who will deny that this is necessarily and inevitably done by both Governments? Mr. Balfour, on that memorable occasion when there was a dispute between Mr. O'Brien on the one side and Mr. Lloyd-George on the other, said in the House of Commons, like a man of honour that he is, that it is impossible to carry on a Government unless you ascertain the opinions of the members of the House of Commons on the other side—opponents as well as friends. On that occasion Mr. Lloyd-George did endeavour to obtain not only the opinions of Nationalists but the opinions of supporters of His Majesty's Government, and I believe, though I cannot pledge myself to this, the opinions of any members of the Opposition who were willing to see him and wished to discuss this or any other question with him. He did so, but he had no authority, as he told the House of Commons, to make any arrangement. If any agreement had been arrived at it would have had to be confirmed by the Cabinet. All I can state is that he could not make any agreement, because we were not able to assent to any of the views that were propounded to us beyond any of the alterations in the Bill which have been stated to the House to-night and are of no importance.

I say that we made no terms. But it is suggested that we came to an understanding. My Lords, there is no understanding. It was suggested by the noble Marquess that he will be curious to see the next Budget. So will I. But he suggested or seemed to apprehend that there is an understanding about the next Budget. Is there a word in the English language fainter than "understanding" which will give some conception of even less tenuity that will enable me to contradict the suggestion more emphatically? If so I will use it. There is no person in the United Kingdom of whom I know who is tied by any understanding as to the next Budget. If he is I do not know of it, and I am sure that my colleagues will say the same. There is nothing of the kind. Is it not conceivable that this Budget, which is after all a Budget greatly favourable in parts to Ireland, and in my belief also to Great Britain, may possibly have succeeded on its own merits? Such a feat of imagination is scarcely to be attempted by noble Lords; but it is a fact, as far as I know, that no agreement or understanding has been arrived at. No agreement or understanding was needed.

There was a public declaration made by the Prime Minister which promised certain action in regard to the Veto. I wish to say this about it. What the Prime Minister said, as he stated, was deliberated upon and agreed to in the Cabinet. I would not have said that if the Prime Minister himself had not stated it in the House of Commons. He was expressing the deliberate policy and opinion of the Government. The statement was not extorted by the pressure of any one or by pressure of any kind. It is the complement and fulfilment of statements which have been made repeatedly by myself, by my noble friend the Leader of this House, by the Prime Minister, and by others, that we will not live as a Government in chains and under the bondage of the Conservative majority in this House. We will not continue as a Government in chains. Either we will be free in the sense that we are out of office, or as a Government we will be free in the sense that we will have power if we have responsibility.

Our purpose at present is to procure as well as we can, but as resolutely as men ever set their hands to anything, to procure a state of freedom in one condition or the other; and if any noble Lord thinks that we are anxious to protract a few lingering months of Government, I can assure him that if he knew the mental condition of at least some members of the Government he would not make such an accusation. The truth is that after four or five years in office—and here I think we may agree—there are very few Ministers who would not be very well pleased to have a holiday as far as their personal feelings are concerned. This policy, as I have stated, was announced by the Prime Minister in the House of Commons at the commencement of the session; but he could not say anything further until he had the policy framed and accepted by the House of Commons. It was, and then he made the declaration on behalf of the Government.

Now this Bill is at last through its long journey, and although little has been said on this occasion, I think it is a great occasion because this Bill is twice memorable and will be so in history—memorable because it was the spark from which was kindled and leapt into flame the fiercest controversy known in the annals of this country between the two Houses of Parliament, a controversy which is now steadily marching towards its inevitable settlement. I hope that it will be memorable for another reason than as being the occasion of a quarrel. I believe that it is the first effort on a large scale to provide means by which we may remedy the social evils which prevail amongst the most miserable of our population. I hope your Lordships will believe—at all events hope you will try to believe—that the men who have framed this Budget will endeavour to administer it in a spirit of honesty and justice.

On Question, Bill read 2a.

Committee negatived: Then (Standing Order No. XXXIX having been suspended) Bill read 3a, and passed.