FINANCE BILL. (Hansard, 27 November 1914)

THE LORD PRIVY SEAL AND SECRETARY OF STATE FOR INDIA (THE MARQUESS OF CREWE)

My Lords, in moving that the Finance Bill be read a second time I may remind the House that it has never been the custom for the Leader of the House in making this Motion to make anything in the nature of a Budget speech, and on this occasion I have no intention of departing from that practice. The House is I think familiar, from the ordinary sources of information, with the methods which are proposed by the Treasury for meeting, for the present, the financial situation created by the war. The object of the Exchequer has been that all persons in this country according to their means should contribute something towards the weight of taxation imposed in respect of the war, and, as the Bill will make clear to the House, so far as the wealthier classes of the community are concerned that object is achieved, generally speaking, by doubling the rate of Income Tax and of Super-Tax—making, however, such provision, by charging the extra payment only on the last three months of the financial year, as to prevent its laying an unfair burden upon individuals who, for one cause or another, may have suffered a diminution of income during the current year, and, in a great number of cases, by reason of the war itself.

As regards those classes of the nation who are not payers of either Super-Tax or Income Tax, their case is met in a great many instances by placing a tax upon beer. There, as the Chancellor of the Exchequer has 202 clearly explained, his object has been not to place any new burden upon the trade. He has not desired to tax either the brewer or the licensed victualler. The circumstances, of course, of different breweries and also of different public-houses vary so greatly that it is hardly possible to say that in imposing any legislation of this kind you place a precisely equal burden upon all the members of either of those trades; but a tax of so much a barrel on beer which can be calculated at so much a half pint can be worked out so as not to place a burden upon the producer. The difficult factor in all these cases is, of course, to know precisely what diminution in consumption is likely to follow the extra taxation, and, as your Lordships may have observed from reading the debates elsewhere, it has been a matter of some controversy as to what margin ought to be allowed to the producer in order to compensate him if he is not to be placed in a worse position through a diminution in consumption. We have endeavoured to arrive at a reasonable and fair solution of that problem by placing a smaller initial tax per barrel upon beer, and that, it must be remembered, in spite of the fact that the considerable stocks which both brewers and licensed victuallers have in hand will have escaped the extra impost altogether. We have endeavoured to solve the problem by placing a smaller tax on for one year (indeed, for the remainder of the financial year and the coming financial year—that of 1915–16), by increasing it after the end of that period, and then increasing it once more at the end of that financial year. In that way we hope the trade will be able to accommodate itself to the new conditions without undergoing as a whole any serious loss.

Then there are a certain number of other people in the three kingdoms who neither pay Income Tax nor drink beer. An attempt has been made to bring them into the circle of taxpayers affected by placing an additional change of threepence upon tea. Those really are all the imposts involved in this Finance Bill. A number of details, as will be seen by anybody who looks at the Bill, are involved for the purpose of relieving particular classes of persons, but into those I need not enter on this occasion. With this brief preface, therefore, I will ask your Lordships to be so good as to give the Bill a Second Reading.

§ EARL CURZON OF KEDLESTON

My Lords, the exceptional character of the circumstances in which we meet to-day is, I think, sufficiently indicated by the brevity, though I am far from saying the undue brevity, of the exposition which the noble Marquess the Leader of the House has just given us of the leading provisions of this Finance Bill; and even if his exposition had not been short, I certainly should not have been tempted to intrude at any length upon your Lordships' attention for this reason. Our powers of dealing with the Finance Bill of the year under the existing law are so small, being confined, as your Lordships know, to criticism and not extending to the power of amendment, that it is really almost useless for us in this House to discuss at length the provisions of what is commonly called the Budget. On the present occasion we should be even less anxious to do so than usual, because both Houses of Parliament desire to render conjoint assistance to the Government in providing the resources to enable them to carry on this war in which we are engaged. I am not therefore concerned to dispute—in fact, I am willing to accept—the general soundness of the financial principles which the noble Marquess laid down as being the basis of this Bill. I suppose that noble Lords on this side of the House, might, if they chose, have something to say about the Beer Tax. We recognise, however, that in another place efforts were made to lessen somewhat the pressure that is being placed upon that trade, and therefore I will say nothing more about the matter. As regards the remaining taxes that are being imposed by this measure, we fully recognise that it is the duty and ought to be the pleasure of all classes of the community to contribute according to their means to the burden that is now laid upon the country. And regarding the Bill as an attempt to carry out that principle, I for my part, unless any of my noble friends on this side of the House desire to say anything upon it, shall do nothing whatever except to assist its passage into law.