Lords Sitting of 8 May 1929

Preamble
The House met at a quarter before four of the clock, The LORD CHANCELLOR on the Woolsack.
VISCOUNT SCARSDALE.
Richard Nathaniel Curzon, Viscount Scarsdale, grandson and heir of Alfred Nathaniel Holden, Baron Scarsdale, having succeeded to the dignity of Viscount Scarsdale on the death of George Nathaniel Marquess Curzon of Kedleston, by virtue of a special remainder contained in a Patent dated the 2nd November, 1911—Was (in the usual manner) introduced.
LORD FAIRHAVEN.
Urban Huttleston Rogers Broughton, Esquire, having been created Baron Fairhaven of Lode, in the County of Cambridge—Was (in the usual manner) introduced.

LORD CRAIGMYLE.
The Right Hon. Thomas, Lord Shaw, formerly Lord of Appeal in Ordinary, having been created Baron Craigmyle of Craigmyle, in the County of Aberdeen—Was (in the usual manner) introduced.
The Viscount Finlay sat first in Parliament after the death of his father.

CLYDE NAVIGATION BILL.
Read 2a.
CHESTER CORPORATION BILL.
Read 3a, with the Amendments: Further Amendments made: Bill passed, and returned to the Commons.
METROPOLITAN RAILWAY BILL.
Read 3a, with the Amendments: Further Amendments made: Bill passed, and returned to the Commons.

SMETHWICK CORPORATION BILL.
THE CHAIRMAN OF COMMITTEES (THE EARL OF DONOUGHMORE): My Lords,

449
with reference to this Bill I beg to move that Standing Order 143 be dispensed with.
Moved, That Standing Order No. 143 be considered in order to its being dispensed with in respect of the said Bill, and that the Bill be now read 3a.—(The Earl of Donoughmore.)
On Question, Motion agreed to: Bill read 3a, with the Amendment, accordingly, and passed, and returned to the Commons.

BLACKROD, CROSTON, WITHNELL AND DISTRICT ELECTRICITY ORDER, 1929.
ST. HELEN'S ELECTRICITY EXTENSION ORDER, 1929.
STOKESLEY DISTRICTS ELECTRICITY ORDER, 1929.
WARMLEY ELECTRICITY ORDER, 1929.
CULM VALLEY ELECTRICITY ORDER, 1929.
MANCHESTER ELECTRICITY (EXTENSION) ORDER, 1929.
DULVERTON RURAL DISTRICT ELECTRICITY ORDER, 1929.
EXE VALLEY ELECTRICITY ORDER, 1929.
LISKEARD ELECTRICITY ORDER, 1929.
MACCLESFIELD ELECTRICITY (EXTENSION) ORDER, 1929.
STEPNEY ELECTRICITY (LIME-HOUSE GENERATING STATION EXTENSION) ORDER, 1929).
WITHERNSEA AND PATRINGTON DISTRICT ELECTRICITY ORDER, 1929.
WIVELISCOMBE AND WELLINGTON RURAL ELECTRICITY ORDER, 1929.
THE FIRST COMMISSIONER OF WORKS (THE MARQUESS OF LONDONDERRY): My Lords, thirteen Electricity Orders stand on the Paper in my name and, with your Lordships' permission, I will move them together. I therefore beg to move that the Special Orders as reported from the Special Orders Committee yesterday be approved.
Moved, That the Special Orders as reported from the Special Orders Com-
450
mitee yesterday be approved.—(The Marquess of Londonderry.)
On Question, Motion agreed to.

TUNBRIDGE WELLS GAS ORDER, 1929.
ULVERSTON GAS ORDER, 1929.
CHESHAM AND DISTRICT GAS ORDER, 1929.
CIRENCESTER GAS ORDER, 1929.
THE EARL OF LUCAN: My Lords, there are four Gas Orders standing in my name on the Paper which, with your Lordships' permission, I also propose to take en bloc. I move, therefore, that the Special Orders as reported from the Special Orders Committee yesterday be approved.
Moved, That the Special Orders as reported from the Special Orders Committee yesterday be approved.—(The Earl of Lucan.)
On Question, Motion agreed to.

MINISTRY OF HEALTH PROVISIONAL ORDERS (No. 3) BILL.
Order of the Day for the Second Reading read.
THE EARL OF LUCAN: My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2a.—(The Earl of Lucan.)
LORD JESSEL: My Lords, I desire to call the attention of your Lordships to certain facts connected with this Bill. Your Lordships may have remarked that in the case of all the Bills and Orders on the Paper the names of the places affected are mentioned. Here is a whole series of Provisional Orders Bills, No. 3, No. 4, No. 5 and No. 6, and it is very difficult to find out to what particular towns they relate. Some correspondence has been sent to me relating to the Leeds Corporation, who are included in No. 3 Bill. I took the trouble to try to find out, and I went to the very able clerk of the Chairman of Committees to ascertain in which particular Bill the Leeds Corporation is included, and unfortunately we could not find out. I had to go away rather upset at having wasted his time and my own. I do therefore

451
venture to suggest that in future on the Order Paper there might be printed the names of the particular districts affected by these Provisional Orders. The purpose of this Ministry of Health Provisional Orders (No. 3) Bill is to confirm certain Provisional Orders of the Ministry of Health relating to Cardiff, Gateshead, Leeds, Newcastle-upon-Tyne and Uxbridge. I dare say there are a similar number of towns in the other Provisional Orders Bills, and if one is approached upon certain matters it is very difficult to know in which particular Bill they are dealt with. I therefore make the suggestion for the consideration of your Lordships' House whether it would not facilitate business if the names of the towns could be added.
Another point I should like to make is that there is a tendency now for very contentious matters to be brought in under these Provisional Orders. I have looked through these Bills and I cannot say that there is very much except in the Cardiff and Leeds portions. The others are rather small matters, about ovens in one case and power to alter the rate of interest in another. But in the Leeds, part there does seem to me to be rather a peculiar case of municipal trading. The Corporation there is going to take and use land which is required for other purposes and to divert that land to use for letting out shops and various businesses. As your Lordships are well aware, by the machinery of the Provisional Order the Borough Funds Act is not required to be brought into operation and therefore the inhabitants have no knowledge of what is going on. The Minister of Health gives sanction for these matters and they go before the Parliamentary Committees.
I might remind your Lordships that the Minister of Health's sanction is sometimes upset and has been upset in some recent cases in the Law Courts. However, in this case the fiat of the Attorney-General could not be obtained and the only course is to oppose this Bill here. It is, I might say, going to be opposed in Committee and therefore naturally I will not ask your Lordships to oppose it upon Second Reading. It can be well thrashed out before a Committee of your Lordships' House. I wish to protest, however, against this growing practice of proceeding by Provisional
452
Orders instead of by the ordinary course of Private Bills, and to ask whether anything can be done to make it more clear as to which towns the Provisional Orders refer when they are put upon the Order Paper.
VISCOUNT BERTIE OF THAME: My Lords, I understand that the position-taken up by the Ministry of Health is that, under a section of the Public Health Act of 1875, if there is one clause in a Bill referring to health the Minister of Health can alter any other clause in any way he likes. In this particular case the National Federation of Property Owners and Ratepayers, of which I have the honour to be President, applied to the Attorney-General, as my noble friend has just told your Lordships, for a fiat to apply to the High Court on the ground that the Minister was exceeding his powers. That fiat was refused. It comes to this, that a very technical legal point has now to be argued before Committees of the House of Commons and the House of Lords, on which no lawyers may be sitting, and it makes it very difficult for the points to be brought out and properly considered.
THE EARL OF LUCAN: My Lords, with regard to what my noble friend Lord Jessel has said, I note that he objects to the names of towns not being included on the Order Paper which merely gives the title of the Bill. He will understand that I could not give him any assurance this afternoon on that point, but I can assure my noble friend I will represent the matter to the Minister of Health and to the Department concerned, and ask whether it is possible to do anything to meet his wishes and make the titles of Bills clear on the Order Paper. As regards the merits of the Bill I am afraid I cannot argue that point now. As the noble Lord told your Lordships the Bill is opposed; there is a Petition lodged against it by the Leeds and District Property Owners and Ratepayers Association, and, therefore, if your Lordships are good enough to give it a Second Reading this afternoon, it will go before the proper Committee and the matter will be thoroughly discussed.
THE EARL OF DONOUGHMORE: My Lords, perhaps as being closely in touch with officials of your Lordships' House I might say in one sentence I am glad my

453
noble friend Lord Lucan has said that he will consult, the Minister as to whether anything can be done in this matter. There is nothing the officials of your Lordships' House can do. The short title of a Bill, whatever that Bill is, appears on the Order Paper. Of course, if the short title was made more explanatory that would automatically assist in the direction my noble friend desires.
EARL RUSSELL: I suppose there is no question that there would be a locus standi to the opposition on this Bill?
VISCOUNT BERTIE OF THAME: I understand not as counsel was heard before the Commons Committee.
On Question, Bill read 2a.

MINISTRY OF HEALTH PROVISIONAL ORDERS (NO. 4) BILL.
Read 2a (according to Order).
MINISTRY OF HEALTH PROVISIONAL ORDER (NO. 5) BILL.
Read 2a (according to Order).
MINISTRY OF HEALTH PROVISIONAL ORDERS (NO. 6) BILL.
Read 2a (according to Order).
DONCASTER CORPORATION (TROLLEY VEHICLES) PROVISIONAL ORDER BILL.
Read 2a (according to Order).
SOUTHEND-ON-SEA CORPORATION (TROLLEY VEHICLES) PROVISIONAL ORDER BILL.
Read 2a (according to Order).
MINISTRY OF HEALTH PROVISIONAL ORDER (MERTHYR TYDFIL WATER CHARGES) BILL.
Read 3a (according to Order), and passed.
DUMFRIES AND MAXWELLTOWN BURGHS AMALGAMATION ORDER CONFIRMATION BILL.
Read 3a (according to Order), and passed.
KIRKCALDY CORPORATION ORDER CONFIRMATION BILL.
Read 3a (according to Order), and passed.
ST. JOHN'S HOSPITAL (WINCHESTER) AND OTHER CHARITIES SCHEME CONFIRMATION BILL.
House in Committee (according to Order): Bill reported without Amendment: Then, Standing Order No. XXXIX having been suspended, Bill read 3a, and passed.

DONCASTER AREA DRAINAGE BILL.
Order of the Day for the Second Reading read.
THE PARLIAMENTARY SECRETARY OF THE MINISTRY OF AGRICULTURE AND FISHERIES (THE EARL OF STRADBROKE): My Lords, I beg to move that this Bill be now read a second time. The object of the Bill is to sot up a central drainage authority for the low-lying area around the town of Doncaser, and also to provide means for dealing with any loss of efficiency that may occur in the drainage system of that area by subsidence caused by the working of minerals. The Hatfield Chase, well known to many of your Lordships, is in this area. That Chase used to be all swamp and mere, but as long ago as the early part of the seventeenth century it was drained by the famous Dutch engineer, Sir Cornelius Vermuyden. The system he adopted was to lead away the waters coming from the higher ground, which at that time were finding their way by various channels into the Rivers Don and Idle, from the Chase and having done that he was able to concentrate on the draining of the lower areas. The difficulty there was that these areas were below the high water level of the rivers into which all the waters both from the higher ground and the lower areas finally found their way. This led to a very complicated

455
system of pumps and sluices being adopted.
This Chase and the adjoining area covers a very important coalfield in which seven collieries are now in existence, and it will be readily realised that the effect of these collieries being further developed will lead almost certainly to a considerable subsidence of land. The problem presented in this way was mentioned before the Royal Commission which dealt with mining subsidence, and it was dealt with by a special Commission in the year 1926–27. The Bill is based on the findings of that body. The Commissioners included representatives of all the interests concerned and their Report was unanimous. As a further safeguard it was arranged that this Bill should be referred to a Select Committee of both Houses of Parliament after it had received a Second Reading in another place. That Committee reported in favour of the Bill.
At the beginning of my speech I mentioned that there were two objects of this Bill. The first is to appoint a comprehensive drainage authority to deal with the whole area concerned, and with all the area that is likely to be affected by subsidence. That authority will have direct control of the main rivers and main drains to conduct the water away and it will also have power of general supervision over existing internal drainage districts. It is hoped that it will be able to co-ordinate their activities. The second object is to impose a definite liability on the mine owners, who will be called upon to pay for the damage that is caused to the drainage system owing to any subsidence. In some cases the mine owners will restore the damage that is done at their own expense straight away. In other cases, the matter will be dealt with by the central authority, who will have under this Bill power to recover the expenses so incurred from the mine owners. Authority is also given to recover a proper proportion of the expense from the surface owners and the owners of royalties.
Perhaps I might mention before I sit down that this Bill will not conflict in any way with the general Drainage Bill which we hope will be introduced on the lines proposed by the Royal Commission on Land Drainage. There is nothing in this Bill to affect that and this drainage
456
scheme can easily be attached to a larger scheme—for example, to a catchment area or anything of that sort. The only reason for introducing this Bill now is that it is a matter of urgency because the collieries are in existence and subsidence may take place, and it is only right and proper that there should be means of dealing with any difficulties that may arise. Delay would be unfortunate. I hope, therefore, that your Lordships will give a Second Reading to this Bill, especially as those on whom it is proposed to lay obligations have agreed in principle to those obligations. I beg to move.
Moved, That the Bill be now read 2a.—(The Earl of Stradbrole.)
On Question, Bill read 2a, and committed to a Committee of the Whole House.

PRESERVATION OF INFANT LIFE BILL. [H.L.]
Order of the Day read for the consideration of Commons Amendments.
THE LORD CHANCELLOR (LORD HAILSHAM): My Lords, I beg to move that the House do now take the Commons Amendments on this Bill into consideration. There are only two formal drafting Amendments and in the absence of my noble and learned friend Lord Darling, it seemed to me that it would be a pity if the Bill were to be lost merely on account of drafting Amendments and there being no one to save the infant life of the Bill. Accordingly, I took it upon myself to take charge of the Bill at this stage.
Moved, That the Commons Amendments be now considered.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT.
Clause 1, page 1, line 14, after ("be") insert ("found").
THE LORD CHANCELLOR: My Lords, the first Amendment is to insert the word "found" in line 14 on page 1 so that the words in the proviso in Clause 1 will read "Provided that no person shall be found guilty," instead of "Provided that no person shall be guilty," and so on. I beg to move that this Amendment be agreed to.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT.
Clause 3, page 2, line 39, leave out ("Preservation of Infant Life") and insert ("Infant Life Preservation").
THE LORD CHANCELLOR: The next Amendment is in the title and will change the title from "Preservation of Infant Life "to" Infant Life Preservation." I beg to move that this Amendment be agreed to.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
On Question, Motion agreed to.

FINANCE BILL.
Order of the Day for the Second Reading read.
THE SECRETARY OF STATE FOR INDIA (VISCOUNT PEEL): My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Viscount Peel.)
LORD ARNOLD: My Lords, the Second Reading of this Bill gives an opportunity for reviewing the financial record of the Government in all its aspects and an opportunity for a general review of the financial position of the country. I confess that I am surprised, having regard to the fact that this is the last Budget that the present Government will bring in and the last Finance Bill that they will present to your Lordships, that The noble Viscount, Lord Peel, has not seen fit to make any observations at all in introducing it to your Lordships' House.
VISCOUNT PEEL: I will make some observations later.
LORD ARNOLD: Yes, but this is very often the occasion for a speech on behalf of the Government in the opening of the debate as well as at the close. Last year the noble Lord, Lord Cushendun, gave us quite a long speech outlining the Bill and its proposals, and when we were in office we did the same.
VISCOUNT PEEL: I am quite ready to do so.
LORD ARNOLD: You have lost your opportunity now. I am only pointing out that it is a somewhat unusual thing, and I attribute it to the fact that the Government find it extremely difficult to make any defence of their financial record. I am confirmed in that view by the fact that List week, when the Chancellor of the Exchequer had half an hour for broadcasting to the whole country, he never said a single syllable about his own Department, or his Budgets, which he knows perfectly well are incapable of being defended, and the Government are reduced to silence. It scarcely seems worth while to treat in full detail the Government's various financial sins of omission and commission. This Parliament is nearly dead at last. The Government are about to go to the country for a verdict and, I trust, sentence, and therefore there is perhaps not very much point in pursuing these matters. At the same time I feel that, as an Opposition, we should be tailing in our duty if we did not call attention to certain aspects of the Government's failure—for their record is one of failure, of unredeemed failure from start to finish.
First of all, I will say a word or two about expenditure and about the Government's failure to economise. A few days ago Lord Hugh Cecil said on this point that, of all the failures of this Government, the one which was most disastrously and lamentably disappointing was its failure in the matter of economy. That is not a surprising view. Look at the figures. In his first Budget the Chancellor of the Exchequer gave—I do not say a definite promise, but he held out a very great expectation which virtually amounted to an undertaking and has indeed been taken as a promise by some—
VISCOUNT PEEL VISCOUNT PEEL indicated dissent.
LORD ARNOLD: He went a very long way in that direction, if the noble Viscount will allow me. He certainly held out the prospect of reducing the Expenditure on Supply Services by £10,000,000 a year. Let us look at that. In 1924–5 the total Expenditure was £795,000,000. Accordingly it should now be £755,000,000. As a matter of fact, it is £818,000,000, despite the fact that the Chancellor of the Exchequer has changed

459
the character of the accounts, no doubt partly with a view to eluding criticism and concealing from the country the true state of affairs. On this account alone the Government is £63,000,000 to the bad. In addition to this, the Chancellor of the Exchequer distinctly held forth an expectation—indeed he made a statement—that there ought to be a reduction and saving on Debt charges of £5,000,000 a year. That would be another £20,000,000, from the reduction of Debt charges. As a matter of fact there is practically no reduction whatever, and the Debt charge this year, after four years of Conservative Government, was almost precisely the same as it was four years earlier. Unite the £20,000,000 to the £63,000,000 and you get £83,000,000. We are this amount to the bad as compared with the expectations which the Chancellor of the Exchequer held forth. Well indeed might Lord Hugh Cecil say what he did say!
We have had debates in this matter in your Lordships House. Language has been used about the Government for which, if it were used from this Bench, we should be scolded. Language has been used from those Benches behind the Government Front Bench accusing the Government of breaking its promises in regard to economy, and I am bound to say that I think that there is a good deal of justification for that language The Chancellor of the Exchequer, in opening his Budget in another place, with a view-to criticising the Labour Party brought in a phrase about "disillusionment in our time."
A NOBLE LORD: Hear, hear.
LORD ARNOLD: The noble Lord says "Hear, hear," but I say that, in the matter of Expenditure, it has not been a mere disillusionment in our time, it has been disillusionment all the time and every year. That is the history of the Government as regards expenditure. Now let me turn to the Budget of this year. I say that there was no real surplus in last year's Budget. As a matter of fact, the Chancellor of the Exchequer has really had four deficits running. That, I believe, is a record. I do not think that it has ever happened before in the history of the country. There were three undisputed deficits, and last year's finance really resulted in a deficit too. It is very easy to prove this.
460
The Chancellor of the Exchequer purported to have a surplus of some £18,000,000 or £19,000,000. There was no surplus as a matter of genuine finance. What is the position? The Chancellor of the Exchequer purported to have placed £57,500,000 to Sinking Fund last year. But that was not out of Kevenue, for £13,000,000 of that came from the Currency Reserve. That was another raid. It is not necessary for me to use very strong language about these aspects of the Government's finance, because, happily, I am spared doing so. I can quote from The Times, which uses language quite strong enough for my purpose. In inveighing against the methods of the Chancellor of the Exchequer, The Times has referred to them as "concealed burglary and open robbery." If we said that from this Bench we should be scolded, but that is what The Times said.
Then there was the £6,000,000 that came from the Dominions for Debt repayment. That is not Revenue at all. That is an invisible Sinking Fund. Then there is the sum of £2,000,000, which I will not go into unless the noble Viscount wishes me to do so, in the matter of provision for Savings Certificates. Add together the £13,000,000, the £6,000,000 and the £2,000,000 and you arrive at £21,000,000. That really has to be deducted from the £57,500,000 and therefore the amount placed to Sinking Fund out of genuine Revenue was £36,500,000, and there was really a deficit of £2,000,000 or £3,000,000, and not a surplus of £18,000,000 or £19,000,000. If you take the items that I have mentioned off the surplus, you arrive at a deficit.
I think it is worth while looking a little further at the record of the Government in the matter of the Sinking Fund and Debt redemption. In the four years ending March, 1929, the Chancellor of the Exchequer purports to have issued to the Sinking Fund for Debt redemption £232,500,000, but as a matter of fact the true position is very different from that. First of all, you have to deduct two big deficits, which amounted to £50,000,000, and then there are various raids which, I suppose, are what The Times had in mind when it spoke about "concealed burglary and open robbery." There were raids of various kinds amounting to £63,000,000. Add these sums and you get £113,000,000. Deduct

461
that amount from the £232,500,000, and you arrive at £119,000,000. That is really the amount that has come out of genuine Revenue for Debt redemption, and that is all. That is less than £30,000,000 a year, instead of £50,000,000 a year. That is to say that very little more than half has been accomplished. Even when I speak of £119,000,000, it is really too favourable a figure, because no sufficient provision has been made for the accruing interest of Savings Certificates. These various raids have been made, and I think it is true to say now that the only assets left to the country—and these, no doubt, will go very soon if the present Chancellor of the Exchequer remains in office much longer—are the Suez Canal and the Anglo-Persian shares: those are the only two assets that he has not raided. Everything else, so far as I can see, he has already laid his hands upon.
There has, not unnaturally, been a depreciation of the national credit during the Government's term of office. I remember that I made the statement a year or two ago, and the noble Viscount smiled incredulously. He did not believe that the national credit could be depreciated under a Conservative Government, but it is so. That is what has happened. Various Government securities are lower than when the Labour Government went out of office. I do not say, and I never have said, that the question of national credit is one which is solely determined by the action of the Government. Inter national questions are, also at work; but certainly the action of the Government is one considerable factor in the matter, and I call attention to the fact that there has been depreciation of national credit during the term of office of the present Government. If the Labour Government had been in office, if it had done anything even approximating to what the present Chancellor of the Exchequer has done, with regard to Debt reductions, these raids and various concealed burglaries, what furious indignation there would have been! Your Lordships know that what I am saying is perfectly true. Because it happens to be a Conservative Government nothing' is said, and the noble Viscount opposite seems to think it cannot have happened, but it has happened and these are facts that I am stating.
Before I leave the question of the Sinking Fund, let me call attention to
462
this, that the Sinking Fund this year is extremely unlikely to amount to the £50,000,000 which it ought to amount to. It is in the highest degree improbable that it will amount to more than about £45,000,000, and if I am right in that it will mean that the statutory obligations in regard to the various loans—contractual obligations—are not really being met out of Revenue. That means that with certain classes of War Stock holders faith is not being kept. I will take one item in the Expenditure for the present year. It is the item of Debt interest, which is put down by the Chancellor of the Exchequer at £304,000,000. In the last year, the twelve months ending in March, the figure amounted to £311,000,000—£7,000,000 more than the estimate which the Chancellor of the Exchequer has put down this year. What is the basis for this low figure of £304,000,000? There is not a single financial expert, as far as I know, who does not take the view that it is wrong, and I think we are fully entitled to criticise the matter, because for four or five years in succession the Treasury have been, not only wrong, but badly wrong over this one item.
Year after year the Chancellor of the Exchequer has come forward with an estimate of the total amount of Debt interest, and in the end that estimate has proved to be insufficient. As a matter of fact it really comes to this: much the major portion of the Debt charge is fixed, and about the remainder there can be no dispute. The only matter about which there can be any dispute is the amount for Unfunded Debt and for the redemption of Savings Certificates. So wrong have the Treasury been in their estimate that they have been wrong on the amount stated in the valuation to the extent of about 20 per cent. That is a serious matter. I think it is a bad example for the Treasury to set. It is supposed to be the model, and to look after the other Departments, but the worst offender of all in the matter of estimates is the Treasury itself. For four and five years in succession the estimate has been wrong. What is the explanation of it? I am driven to the conclusion that the real explanation is that if the Chancellor of the Exchequer made the figure £311,000,000, the same as last year, then he could not have balanced his Budget. I think the figure

463
is deliberately put low with a view of presenting, or trying to present, a better state of affairs to the country.
What is the justification for thinking that the Debt charge this year will be lower than last year? The Bank Rate is now 5½ per cent. During most of last year it was 4½ per cent. There seems to be no immediate prospect of it coming down, but even if it came down to 4½ per cent. this figure of £304,000,000 would be too low. I would like to ask the noble Viscount if, when he replies, he will tell your Lordships how the figure has been arrived at—what is the basis of it? The Secretary of State for War in another place explained how the figure was made up for last year, and we saw how the Government went wrong, and I think we ought to know what is the basis of the present estimate—how they arrived at the conclusion that, with the Bank Bate higher than it was during the whole of last year, the total Debt charge is going to be £7,000,000 lower than last year. What has been allowed for Savings Certificates and what is the average rate allowed on the Unfunded Debt? Then your Lordships will see that this figure of £304,000,000 cannot be justified.
There are two or three other figures to which I would like to call your Lord ships' attention. Last year the Death Duties exceeded the estimate by a very large amount. The estimate was £72,000,000. The amount of Death Duties paid was £80,570,000, or 10 per cent. more than the estimate. There again the Inland Revenue have put forward, as I think, very unfortunate estimates in the last two or three years. I spoke of this at the time. That estimate of £72,000,000 was clearly too low, and it has proved to be too low to the extent of £8,570,000. The fact is that we are now reaching the time when certain of the War profiteers are beginning to die out, and there is a very much bigger amount coming in for Death Duties than used to be the case. That is a fact which has been well known to students of finance for a long time, but the Inland Revenue seemed to have been oblivious of the fact. It is true that this year they have increased their estimate; but why did they not do that before?
I wish to say a word or two about another estimate which the Chancellor
464
of the Exchequer gave in another place in his opening speech on the Budget. He spoke about the proposal of the Labour Party for a surtax, and he said that on a certain formula it would bring in £65,000,000. The formula which he put forward was not the Labour Party formula, but if I take his own formula the £65,000,000 revenue which he estimated is demonstrably wrong, and so careless are the Inland Revenue about this matter that they did not even take the elementary precaution of putting in the word "about"—about £65,000,000. I will not go into this, though I shall be very pleased to do so if I am challenged. The Inland Revenue officials are apparently ignorant of some of the basic statistics of their own Department which have been published in official reports from time to time. Those statistics are available to all students of national finance, and from them it can clearly be shown that the £65,000,000 estimate is wrong.
Now I come to the changes which the Chancellor of the Exchequer outlined in his Budget speech—disappointing changes as they were to his supporters. This wonderful Budget that was going to restore the falling fortunes of the Government has proved a profound disappointment.
VISCOUNT PEEL: To you.
LORD ARNOLD: Not at all; to the Conservative Party. They have taken off the remaining part of the Tea Duty. They feel that at last it is necessary to endeavour to create the impression, that something is being done for the mass of the people. We support that. We took off many, many millions more from the Food Taxes than this remaining balance of the Tea Duty. We took off about £25,000,000, speaking from memory, from the Food Taxes when we were in office. This Government takes off £6,000,000 from tea in its last few weeks of office. We support it; it has been our policy. But what does it amount to? As a matter of fact, it will work out at about 3½d. per family per week. If that is the raft on which Conservative candidates are going to try to float back to Westminister, I think they will find it a very insecure one.
And whereas they have taken off that balance of the Tea Duty they have im-

465
posed heavy burdens upon the workers. They have imposed indirect taxation to the amount of £38,000,000 a year in all since they came into office. That, it is true, includes the Petrol Duty for financing the derating scheme, but, none the less, the Petrol Duty is a burden. It has to come from somewhere. It is not all paid by pleasure motorists. Nothing of the sort; it is a burden partly on industry and it is a harden on the transport of the poorer classes, their chars-a-bancs and so forth. £38,000,000 is the amount which this Government has imposed in indirect taxation since it came into office. And yet in its first year of office it gave away to the Super-Tax payers and the Income Tax payers £42,000,000 a year; and from that fact date many of the financial troubles of the Chancellor of the Exchequer. At last he seems to realise it, because in his Budget speech he said that if he could have foreseen certain things he would not have done it, or words to that effect.
VISCOUNT PEEL: That was purely in reference to the 6d. off the ordinary Income Tax.
LORD ARNOLD: And the Super-Tax.
VISCOUNT PEEL: No, he did not refer to that.
LORD ARNOLD: That is what he says, but we do not agree to that.
VISCOUNT PEEL: I am only quoting what he said.
LORD ARNOLD: If the noble Viscount thinks he is making it clearer, well and good, but I think the Chancellor of the Exchequer used the figure £42,000,000, which includes both Super-Tax and Income Tax. We do not agree, either, that the point is a good one about Estate Duties, because an increase of them was overdue—and more will be done before long in that direction, no doubt.
I now come to the Betting Tax. I think we are entitled on this Bench to speak about the Betting Tax, because it happens that this tax was first proposed in your Lordships' House when we were in office. It was brought forward by the noble Lord, Lord Newton, and it fell to my lot, speaking on behalf of the Labour Government, to say that we would have nothing to do with such a tax, and in
466
particular I was very definite about the yield of the tax. As I frequently tell your Lordships, it is no great satisfaction to us to turn round afterwards and say how right we were, because we have been right so often. But in this particular case we have been vindicated in a way which is almost incredible. I said, standing at that box, that this tax would not bring in more than £3,000,000 a year. Of course, we were derided and abused; we are used to that in this House. Next year, after we were thrown out of office, the same proposal was made, and expectations were held out, by Lord Newton I think, of getting £20,000,000 a year from it. I said that you would not get more than £3,000,000 a year. In order to get more the Chancellor of the Exchequer, throwing over the Select Committee which had gone into the matter, doubled the rate of the. Tax—an extremely foolish thing to do, as events proved. And now, what do we find? The Chancellor of the Exchequer himself has to get up in another place and say that the Tax is not merely a failure, it is a fiasco. As a matter of fact, it is more than that, it is the greatest fiasco of modern times.
That is the history of the Betting Tax. I do not think it has ever happened before in the history of Parliament that a Chancellor of the Exchequer within three years of bringing in a tax has himself to say that the tax is not merely a failure but a fiasco. We had the instance of the Match Tax, which some of your Lordships will remember, and even last year the Chancellor of the Exchequer had to withdraw, within three days of bringing it in, part of his new revenue for financing his derating scheme—that was the Kerosine Tax. Still, there was in a sense a precedent for that because the Match Tax was on record. But I do not think it has ever been known before in the history of British finance that a Chancellor of the Exchequer has had to get up within three years of bringing in a tax and tell the House of Commons that his handiwork is not merely a failure but a fiasco.
If I were to pursue these matters further I could prove that, strictly speaking, even as regards the Tea Duty, though we support that, the Chancellor of the Exchequer has not really got the money to give away at all. I have already pointed out that the Debt charge

467
is put at a figure which seems quite unwarrantable, and I will also call your Lordships' attention to this fact, that the Chancellor of the Exchequer has mortgaged for two or three years the normal growth of Revenue in order to finance his derating scheme. That, again, I believe is without precedent. This derating scheme in all, I suppose, will require about £35,000,000 a year. At the present moment, the Chancellor of the Exchequer out of current revenue has about £15,000,000 or £20,000,000, towards that. By certain raids and other devices he has built up a suspensory fund which will help a little bit for the time being; but as regards current Revenue, this large amount will have to be made up sooner or later, and it certainly mortgages, as far as I can see, the future growth of Revenue for two or three years. The Chancellor of the Exchequer, I think, must know very well the small prospect of his coming back to the Exchequer, or he would never have done these things. He is leaving this burden of trouble, this embarrassment, for his successor. He will be well out of it; he will be able to get up and criticise. I said before, and I say again, that there is no real money to give away, no genuine balance, and that the Government have imposed far more taxation on the workers than they have taken off the workers. That statement is, I believe, absolutely impregnable.
And this is true not merely of some of the taxes of which I have so far spoken; it is also true of the Safeguarding Duties, which were discussed during the Budget debate in another place. A claim was made that about £11,000,000 a year, including the yield of the Duties on motor cars and silk—which are not Safeguarding Duties at all—is being got by these import duties. These Duties are a burden upon the consumer. The Lord Chancellor has made the statement that Safeguarding has been carried out without increasing prices to the consumer. I have challenged him to prove that statement. I have on two occasions given him instances of articles—several of them—which have been raised in price owing to Safeguarding. Since then a Board of Trade reply has come out which admits, certainly in one instance, that there has been an increase of price, and virtually admits it in another; and it is very well known that the Safeguarding
468
Duties have increased the prices of a great many articles, and that they have increased them in a way which is injurious to the poorer classes. The Lord Chancellor is not able to substantiate his statements; nor, on the other hand, will he withdraw them.
VISCOUNT PEEL: Hear, hear!
LORD ARNOLD: It is all very well for the noble Viscount to say "Hear, hear." I say that it would be more in accordance with the ordinary proceedings of Parliament when a statement made in the country is exposed in either House of Parliament for it to be substantiated or withdrawn. That is the proper way of doing things. The Lord Chancellor will do neither. He cannot substantiate his statement, nor will he withdraw it. The same statement has been made by the Minister of Health, and I see that the same statement was made only a few-days ago by the Secretary of State for the Dominions. I say that this Safeguarding compaign has been carried on with a degree of misrepresentation and misstatement which has rarely been known in British politics. Happily people seem to be able to understand the effect of these Duties, and I think there is no doubt that at the coming General Election Protection will once again be condemned by the great masses of the people.
I will not pursue these matters further. A great deal more, of course, might be said about the Budget and the Government's financial record and the financial position of the country. When the noble Viscount gets up to reply I expect he will say that we have covered a lot of ground. Why not? This is the occasion for doing it.
VISCOUNT PEEL: Hear, hear!
LORD ARNOLD: I am glad to get approval for something. I have covered no more ground that is covered in financial statements in another place. I have not made a speech of more than three or four minutes in length on the Finance Bills of the last two or three years. But, as I say, on this closing occasion I think that we on this Bench would be failing in our duty if we did not put on record our view of some of the things which have occurred. When I stood at the box opposite, moving the Second Reading of the Finance Bill for the Labour Govern-

469
ment, I laid down the principles of finance, or some of them, which we regarded as cardinal, and I said in the words of a well-known maxim, that taxes ought to be equitable, economically sound, and productive. If I were to consider the financial record of the Government in relation to each one of those points I think it would be clearly seen that their taxation policy has not been equitable, that, it certainly has not been economically sound, and that in proportion to the burden that has been laid upon the masses of the people, it has not been productive. I hope there will be some discussion of these matters, and I shall be greatly obliged if the noble Viscount in his reply will in particular answer the specific questions which I have asked.
LORD GAINFORD: My Lords, I shall not detain your Lordships for more than a few moments, but I think it necessary at the end of the life of the Government, at any rate so far as we can forsee it, to say a few words from these Benches regarding the Expenditure of our country. The charge that might be brought against the Government is not one which necessarily calls for such strong words as "gross extravagance," but it would certainly be one of lack of economy in their administration during the period that they have been in office. To the results of that lack of economy I attribute our social difficulties, especially the unemployment which exists in this country and which all Parties deplore. I will not deal with two of the subjects referred to by the noble Lord who has just addressed you. One was the estimate made by the Departments of the Treasury. So far as my observation has gone over a series of years, the Civil Service and the Treasury are the best experts in connection with our Revenue and Expenditure that we can find. They have made mistakes, of course, by underestimating some items and overestimating others; but as a matter of fact their estimates have proved as a rule to be extraordinarily accurate, and I think they are to be complimented rather than blamed for the advice they have given to various Chancellors of the Exchequer. I hold the Chancellor of the Exchequer himself as the individual responsible for any errors which have occurred, and he alone is responsible to Parliament, with his Government.
470
The noble Lord referred also to the details of the several Taxes which are necessary to meet our Revenue. I shall not deal with that subject. What I want to say is that the heavy expenditure incurred by the Government has had a very depressing influence upon the country. It has withdrawn from profitable and productive investments enormous sums which I do not think have been fully stated even by the noble Lord who has just sat down. That depressing influence has been reflected in our industries and has very much aggravated the unemployment trouble which has been such a weight upon us and has caused us to spend £60,000,000 or £70,000,000 a year in connection with contributions for which we have received very little value in return. The Sinking Fund undoubtedly has been raided. The Chancellor of the Exchequer has made his explanation that it was very largely due to the General Strike and to the protracted cessation of operations at the collieries in 1926. I have been through those difficulties in connection with the colliery enterprise, and if I went back into history I think I could find very good reason for censuring the Government with reference to certain things which were done and which contributed to the terrible disaster in 1926. Therefore I for one do not hold the Government entirely irresponsible for the deficit which occurred in that year.
But it is necessary to emphasise the very small reduction in the total liabilities in this country now as compared with 1924–5 when the present Government came into office. The total liabilities of the country at that time were £7,707,000,000. To-day they are £7,616,000,000. In other words, they have gone down by only £90,000,000. What really concerns the British public is the interest which they pay upon those liabilities. When I tell your Lordships that in the first year that Mr. Churchill came to the Exchequer the interest was £308,000,000, that it is now £311,000,000, and that during the last three years the interest has been greater on the Debt of the country than it was in the year when he took office, you will see what a burden the country still has to meet owing to the lack of reduction in our national liabilities. The Sinking Fund has been raided in various directions. I believe that the Sinking Fund ought to be met out of Revenue and not

471
by raiding the Road Fund, and Schedule A of the Income Tax, and in other directions. The Debt remains at much too high a figure to-day.
The main charge, however, that I make against, the Government is this. When they came into office they incurred this obligation to find Revenue to meet £795,000,000, and their estimate, taking like with like, is for the current year £833,000,000. If any one takes the trouble to see what the intention of the Government was when they came into power, and takes the £10,000,000 of reductions which was indicated by Mr. Churchill as being possible for him to make every year, and then deducts those sums year by year from the actual Expenditure which was incurred by the Government, he will find that it gives the figure of £332,000,000, which is the expenditure over and above that which the Government expected they would be called upon to incur when they came into office. It is the withdrawal of a sum of that kind from the enterprise and industry of this country which has produced the appalling depression and the great trouble with unemployment which we have to face to-day.
VISCOUNT PEEL: My Lords, I think I can ask for some sympathy from your Lordships' House, because the subjects which have been dealt with, quite rightly, as was said by Lord Arnold, have been very wide, and I have not, unfortunately, been in charge of the finances of the country for the last four years; in fact, at the present time I could give a much more detailed account of the state of the Indian finances than I could of the finances of this country. Under that handicap I will do my best to answer some of the questions that have been put to me. Lord Arnold, I think, complained at first because, he said, I did not give an exposition of the Budget. Well, to tell the truth, I thought that had been so amply and fully and clearly and humorously set forth by the Chancellor of the Exchequer that I should only be producing rather a pale imitation if I were to repeat all that was said on the introduction of the Budget. The noble Lord seemed to think, and seemed to attach this criticism to the Chancellor of the Exchequer, that he was so ashamed of his Budget that he had taken refuge in silence. I have heard a great many
472
charges brought against my right hon. friend the Chancellor of the Exchequer, whom I have known for very many years, but I have never, I confess, heard that silence was one of his vices. I have in fact been a great admirer of his prolonged capacity for eloquence. I think the charge of the noble Lord was founded on a very slight basis. It was because, in giving some address on the wireless, the Chancellor of the Exchequer did not recite the whole of his Budget.
LORD ARNOLD: He did not refer to it at all.
VISCOUNT PEEL: He did not even refer to it! That shows enormous self-reserve on his part. He is very proud of his Budget, and I give him a laurel of commendation for it. I will only say one or two words in criticism of what the noble Lord, Lord Arnold, has said. He said the record of the Government in finance is one of unredeemed failure. May I give him this suggestion when he makes such attacks? It is sometimes better for artistic purposes to indicate one or two things that have been done badly rather than to deal with the alleged mass of failure into which the Government have plunged. You are not attracted by a speaker if he at once announces to you that for four and a half years the Government have done nothing but make mistakes. I am sure if the noble Lord had consulted his colleague, Lord Russell, who is skilful in these Parliamentary matters, he would have given him similar advice to that which I give him.
What I did regret to hear him say was that it was not only the Chancellor of the Exchequer who had made all these errors but that there was not a single person of any average intelligence either at the Treasury or the Inland Revenue. They were all just as bad, apparently, as the Chancellor of the Exchequer. They sinned against the most obvious considerations which are as clear as daylight to the noble Lord, Lord Arnold, who would have put them right in a moment if he had only been there. That is what filled me with melancholy, because Chancellors of the Exchequer may change, and even Governments may change, but even if the noble Lord and his friends came into power they would still find these same people at the Treasury and the Inland Revenue, and I

473
suppose they would remain there, for I presume it is not his Party's policy to go in for the "spoils" system if they come in. They are going to be advised by the very people who are condemned by the noble Lord, Lord Arnold, who, of course, Is always right. They are, according to him, the most hopeless people to make assessments; in fact they do not know their business. I was plunged into rather deeper gloom when I heard those observations than I was when I was told the Government had done so very badly during its four or five years. One further observation I will make, if I may, before I pass to what Lord Gainford said, and deal with the specific matters which he brought forward. Lord Gainford, I am glad to say, suggested that the responsibility lay with the Chancellor of the Exchequer and the Government. I do not like attacks made upon the Civil Service.
LORD ARNOLD: If the noble Viscount will allow me, the point is this. It is not a proper thing to mention any civil servant by name, and I have never done so, but it frequently happens in Parliamentary debates that there is either praise or blame given to the Civil Service. I am, of course, blaming the Chancellor of the Exchequer, and I said so. It is his Budget and his is the responsibility.
VISCOUNT PEEL: The noble Lord appeared to be attacking the Inland Revenue, and really it seems he was blaming the Chancellor of the Exchequer. The noble Lord, Lord Gainford, attacked us on the subject of economy. I am really glad to hear the word "economy" still coming from Liberal lips. I have not heard it for a very long time, but I do know this, that whenever, either in this House or in the other House, any suggestion for economy has been brought forward by the Government it has been invariably attacked, criticised and voted against. Really this cry of "economy" on the lips of the Liberal Party, I must respectfully say so, is absolute humbug. I remember a Bill on the question of reducing the Territorial Force. I made, as did my noble friends, what we thought were touching and eloquent appeals for that measure and other measures of economy, and they all met with the most unrelenting opposition
474
from the Liberal Party with an inconsistency which I can admire but cannot imitate. There was sandwiched between the debates on the matters which I have in mind another debate about economy in which most wonderful sentiments were given utterance to by the late Lord Oxford and Asquith and Lord Beanchamp on the question of economy. They were all for it when trying to beat the Government, but it was only when they were trying to beat the Government. When what they professed was put to the test in a specific way the Liberal Party voted against the Government.
I do not know to which section of the Liberal Party Lord Gainford belongs. I understand the Liberal Party is now a united Party, that Lord Grey and Sir John Simon have both changed their views and have joined with Mr. Lloyd George, and that they are all working together, although I think they said very different things of each other two or three years ago. We were actually told by Lord Gainford that the Government had withdrawn millions of money which might have been used in industry and had wasted it on other purposes. Is he really a supporter of the wonderful scheme by which £200,000,000 is to be withdrawn from permanent industry and invested in roads? If he is then on the one hand he is complaining of taking something from permanent industry and on the other hand is supporting a plan and a policy—in fact the only thing the Liberal Party has to say: he will agree to that—for taking £200,000,000 from the industry of this country and spending it in one-year and doing away with all unemployment in the course of one year.
I do not think I need say much more in reply to the speech of the noble Lord, Lord Gainford, but I will mention one thing. I noticed that Lord Arnold did not say much about economy and he was right because, curiously enough, I have in my pocket a document which was the programme of the Labour Party and I think he will agree with me that that did not lay very great stress upon economy. The only point is how many hundreds of millions they are going to add to the taxation of the country in order to carry out the reckless promises they have made and are making to their supporters throughout the country. He

475
was wise, I think, in not saying much about it, but I should like to say one word about it because of those great efforts which have been made, and have been made successfully in many ways, by the Government to economise. I must just refer to that sentence which both the noble Lords quoted from the Chancellor of the Exchequer, and to the statement about a pledge having been given to reduce expenditure, I think, by £10,000,000 a year. No such pledge was ever given.
LORD ARNOLD: Would the noble Viscount—
VISCOUNT PEEL: I must be allowed to finish what I am saying. The Chancellor of the Exchequer talked about an aim or object, but he never said more than that.
LORD ARNOLD: He said it more than once.
LORD GAINFORD: I used the word "intention."
VISCOUNT PEEL: Whose intention?
LORD GAINFORD: It was his intention.
VISCOUNT PEEL: It is certainly our intention to aim at that, but look at what has happened in the last four years. I do not want to rub in old sores, but I do want to ask the noble Lord, Lord Gainford, who is a fair-minded man, how if you aim at such a thing can you really carry it out when you have these gentlemen's General Strike and the coal strike and so on, and not only the whole finance of the country but the life of the country very nearly stopped through the machinations of men whom the Leaders of that Party were unable to control? I appeal to the noble Lord. If he had been in our position, what would he have said? I think this is an unfair charge to make. But if you look at the reductions which have been made you will see they are very considerable. They amount in the Fighting Services to more than £7,500,000, although during that time we have had, as everybody knows, to build up a number of squadrons in the Air Force. That has been done. I have looked into the figures and I say they show most remarkable economy. If the noble Lord, Lord Arnold, who is so distressed at finding nothing satisfactory in the conduct of the Government, would only look into
476
that, he would find that the management of the Air Force is a model for him to imitate and admire. The same thing has gone on in the Army Services and I should like to give some figures which I think are worth quoting.
If the Middle East—the noble Lord knows where that is—is included and pensions are excluded, because they are not expenditure on the Fighting Services, but are only the remains of past years, the total cost of defence was in 1924 £104,395,000. The Middle East expenditure is included in that 1924 figure because it was included in the subsequent expenditure. In 1929–30 the expenditure is estimated at £96,749,000, a reduction of £7,646,000. For the years 1925 to 1929 the average expenditure, including China—and that cost nearly £5,000,000—is £102,150,000 or £2,000,000 less than in 1924. I should like to give the figures, because they show, not a spasmodic reduction, but a regular, permanent, steady reduction, showing the determination with which the Conservative Party and the Government have pursued that reduction. May I say that this reduction is in face of other countries having very largely increased expenditure on their fighting forces. In 1925 it was £108,000,000—I am leaving out the odd figures—in 1926 it was £103,000,000, in 1927 it was £103,000,000, in 1928 it was £99,000,000, and in 1929 it is £96,000,000. I think that is a very satisfactory and steady rate of reduction. I do not want praise from the noble Lord opposite or even from my noble friend Lord Gainford, but I do think that if in addressing their countrymen they would only state fairly, without exaggeration and without excess, what has been done by the Conservative Government, and if their supporters believe them, we shall have an even larger majority than we are expecting to get.
Let me go a little further with this question of economy. By some process of calculation that I do not quite follow Lord Gainford made out that Debt had not been reduced. I think the noble Lord, Lord Arnold, also dealt with the same subject although I do not think that it distresses him so much as it does Lord Gainford. Of course, if your finance is smashed up, as it was in 1926, you cannot make the full amount of reduction of Debt, but despite the absence of assistance

477
from other Parties during those four and a-half years a careful actuarial calculation made for the Treasury—and I hope Lord Arnold will accept the Treasury figures—shows the reduction in Debt to amount to £175,000,000. That figure would have been £200,000,000 but for the fact that previous Chancellors of the Exchequer—I will not name them—did not make sufficient allowance for the accruing interest on War Savings Certificates. Now take the reduction in interest on the Debt—because, as Lord Arnold very truly says, that is another of the tests by which you can see what has been done. That reduction amounts to £11,000,000 a year. Of that amount £9,500,000 comes from reduction of the interest on the Debt through the Sinking Fund and £1,500,000 comes from reduction on conversion. The reduction on conversion, I may say, was £2,250,000, but, as I think some of your Lordships behind me may remember, there was an increase of something like £700,000 in interest when the 3½ per cent. War Loan was converted. That was a natural result, of course, of the terms of renewing a loan issued at pre-War rates.
Then, as regards the Sinking Fund it-self. I apologise for restating these figures, because they were stated very carefully by the Chancellor of the Exchequer; but no less than £57,000,000 was applied to the Sinking Fund last year. Lord Arnold asked me a question and I sent for the figures, but I am sorry I have not got the details of the £304,000,000. What the noble Lord must remember is that the dead weight of the Debt is constantly decreasing by the application of the Sinking Fund. Though he may have some evidence that, owing to American speculation or something else, the rate of money is going to be temporarily higher than it would be otherwise, that view is not taken necessarily by the Treasury, and the figures they have given are, I am informed based on a fair average figure for the interest of the short-term Debt, coupled, of course, with the interest on the permanent Debt. Therefore they seem to be confident that this £50,000,000 of the statutory Sinking Fund, to which Lord Arnold has alluded, will probably be securely met.
I think the next point with which I must deal is this charge brought against the Government of having increased the burdens of the poorer classes by the addi-
478
tion of £38,000,000 to indirect taxation. I want to say a word about that. It is not only Lord Arnold who says it. Perhaps he drew it from a passage in "Labour's Appeal to the Nation," which says:—
"The Tory Government has added £38,000,000 to indirect taxation, which is an increased burden on the wage-earners, shopkeepers and lower middle classes…. Now that the Election is in sight the Tory Chancellor has repealed what was left of the Tea Duty but has retained the Duties on sugar "—
Note that!
"coffee, and cocoa and other goods. This remission only amounts to one-sixth of the additional indirect taxation he has added in the last four years."
That statement is unfortunately full of mis-statements, and I am glad to say that one of them was corrected by Lord Arnold in his speech.
Let us examine exactly how that £38,000,000 of extra taxation is made up, and to what extent, if at all, it places an additional burden on the people of this country, and especially upon the poorer classes. First of all, out of this £38,000,000, there is, of course, £16,000,000 which is transferred to the relief of rates. You may say that it is not exactly in the same pockets, but it is transferred for the relief of rates and has the effect of improving the position of industry and employing far more of our people. It is rather difficult to know how that is a heavy burden on the resources of the poorer classes of the country. Lord Arnold admitted that £16,000,000 came from the Petrol Duty, but there is a curious omission on that point in the Labour "Appeal to the Nation." Possibly in the next version it will be inserted in a supplementary note by Lord Arnold. Next I come to the £2,000,000, in 1926, under the head of heavy motor vehicles. This goes to the Road Fund and is expended on new roads.
EARL RUSSELL: That does not follow.
VISCOUNT PEEL: The noble Lord, Lord Gainford, cannot call that a burden on the poorer classes of the population, because he wants to spend, not £2,000,000, but £200,000,000 on roads. Then we come to the Retting Tax. I hope that the noble Lord, Lord Arnold, enjoyed himself when he was talking about the Betting Tax being a failure. The Betting Tax was an experiment. Personally I was an un-

479
repentant supporter of it. I thought that there were difficulties in the way, but that it ought to be tried, and I am bound to say that when the Chancellor of the Exchequer admitted in the handsomest manner that the thing was a failure, it would have been a little more delicate if Lord Arnold had not trampled on him in this way. After all, when a man admits that in a great experiment there has been some error, I think that even his critics sometimes pass regretfully by and do not rub the thing in too cruelly, as Lord Arnold has done.
That leaves £17,500,000 to be accounted for. Of this £6,000,000 comes under the head of wines, tobacco and matches. Those people who drink wine and who smoke may possibly have a little more to pay, but I do not know that the people who drink wines are necessarily the poorest classes of the population. I did not know that this was so, unless in the case of British manufactured wine, and I do not know what that is like. When you talk about burdens, here is an element which has been entirely forgotten by the noble Lord, and which I regret to say that I do not see in the Labour "Appeal to the Nation." Against that £6,000,000 I first set off some ten and a third millions under the head—I know that the noble Lord will not like my mentioning it—of the Tea and Sugar Duties. Perhaps I ought not to boast about it, but still it was done, even though it was, done in the last Budget. That accounts for over £10,000,000, and when you are talking of £38,000,000 being laid upon the poorer classes, why do not the Labour Party mention this £10,000,000 and take it off?
LORD ARNOLD: I did so.
VISCOUNT PEEL: You can attack your opponents, but do not try to falsify the figures and fail to give us credit for this offset of over £10,000,000. I do not want to be too long, but let me say a word about silk. I do not know whether the noble Lord considers—he did not mention it—that the Duties on silk and artificial silk, amounting to £6,000,000, were a severe burden upon the poorer classes.
LORD ARNOLD: The Artificial Silk Duty, certainly.
VISCOUNT PEEL: He does think so. Then it is a very curious thing that, if
480
that is so, taking silk first, the import prices for piece goods have fallen from 4s. 1d. per sq. yard in 1924, in the heyday of the Labour Government, to 2s. 10 d. in 1928.
LORD ARNOLD: They would have fallen more.
VISCOUNT PEEL: They would have fallen more, says the noble Lord, if the Labour Government had still been in. We are not quite certain about that. I cannot speculate as to what might have happened if the Labour Party had been in, but surely this is a considerable fall, from 4s. 1d. to 2s. 10 d., and it cannot exactly be construed into a heavy burden on the pockets of poor women—for I suppose we are now alluding to the other sex. I will allow the noble Lord that, if the Labour Party had been in—I dare say he will tell his supporters this—there would have been a heavier fall than from 4s. 1d. to 2s. 10 d. As regards silk, exports have been steady, imports have declined from £22,000,000 to £14,000,000 and one of the big Continental manufacturers has set up a factory in Scotland and is already employing 300 people. When you are considering all this, do for a moment give your mind to what has been done in increasing employment in this country by these Duties. I think that this is worth considering.
LORD ARNOLD: How many people have been thrown out of employment?
VISCOUNT PEEL: How many? None! Thrown out of employment? Why 300 more persons have been employed by one firm alone. I will give the figures for artificial silk, which are even more interesting. There is still time to embody them in the Labour "Appeal to the Nation." The price of artificial silk yarn has fallen by 25 per cent. Is that a fresh burden? How is it going to burden people? Imports of foreign artificial yam have fallen to 25 per cent., whereas British exports have increased by 50 per cent., and twenty British companies have been formed since July, 1925, to produce artificial silk. I do not think that this is a very bad record of the terrible burdens that are being placed upon our people. Seven Continental firms have subsidiary companies here and, adding the figures together, where there were 46,000 persons employed in the artificial silk industry, these have now increased

481
to 70,000. That is the sort of burdens that the Government have been placing upon the working classes of the country!
As regards motor cars and the McKenna Duties, the noble Lord is quite right in saying that the Duty on motor cars is not a Safeguarding Duly. Bear that distinction in mind. Nevertheless it is a Duty, and it seems to have very much the same effect as the Safeguarding Duties, because there has been a decline in prices, imports have fallen and exports have, by values, increased. Two factories have been established here since 1925, and two are to be established, I am omitting the great Ford company, employing seven million pounds of capital, which has been established at Dagenham. I do not want to go through the whole list. Take tyres. Six factories have been established since 1927 by foreign manufacturers, and four of them are producing. I have searched very carefully through the £38,000,000, and I have looked at the reductions in the Duties on tea and sugar, and I fail to see where the burden has fallen, if there has been any burden at all, upon the working classes. I challenge noble Lords when they go to the country, and look into these figures, to modify some of those vigorous diatribes which they have brought in this House against the Government. Then take the reduction in the cost of living. It is well known to us all that according to the calculations of the Treasury there has been a reduction of £160,000,000 a year in the cost of living amongst wage and salary earners.
LORD ARNOLD: And how much have wages been reduced?
VISCOUNT PEEL: They have been increased; and if you add to that the allowances for people not in the insured class, you get a very large addition to that reduction of £160,000,000. I have dealt with that question, with the question of the reduction of the Debt, and with expenditure on armaments, and therefore I think I need only say two or three words more, because I had hoped that we should get credit in this debate from the noble Lords who have spoken for the great derating scheme, which I think they might have admitted to be a considerable achievement on the part of the Government. There are already signs
482
of increased prosperity as the result of that measure. I know that the Labour Party are very weak in the counties. They probably realise that they have no chance in the agricultural constituencies, and are therefore concentrating upon the towns; but if they should happen to speak in the agricultural districts I think they might remind their audiences that we have accelerated the derating of agricultural land by six months, and that therefore agriculturists will enjoy the benefit at once instead of having to look forward to it after a successful Election.
Then, of course, there is the benefit which is going to be conferred by the abolition of the Passenger Duty. There is also the reduction of the Duty on tea, and I rather condole with noble Lords opposite because they have always complained of the assistance given by the derating proposals to tobacco manufacturers and brewers. That, of course, has been put right by this Budget, and I am afraid that the only point of attack which they could find against us on the Derating Bill has therefore been taken out of their hands. I think I have shown that as regards taxation, repayment of Debt, conversions, economy and so forth, the Conservative Party has a very fine record, which has not been touched by the criticisms of noble Lords opposite, and although I am sorry indeed to attribute bad motives to anybody, I can only regard much of the criticism which we have heard to-day as being the best efforts that can be made in detraction of a successful Government by baffled and embittered partisans.
EARL RUSSELL: My Lords, I do not generally take part in the discussion of these matters, because I do not feel fully qualified to do so, but as the noble Viscount has referred to me I should like to say one word. I do not know whether his compliment was not a two-edged one. I thought it rather looked as if he thought I was likely to be less truthful than my noble friend. May I suggest to him that perhaps it is a difference of temperament. Rightly or wrongly, I have a feeling that nobody is entirely bad, even the present Chancellor of the Exchequer. I am inclined, perhaps, to act upon that. The noble Viscount spoke about the art with which a speech like my noble friend might be made. May I

483
in turn congratulate him, not upon the histrionic art with which he has delivered his speech, but upon the full conviction of the justice of the cause which he was defending, which must be not only gratifying to your Lordships but extremely creditable to the loyalty of the noble Viscount, if not to his full apprehension of the matters which he was discussing?
He gave us some advice about the counties. I shall be speaking in an agricultural county in the course of the next few weeks, and I can promise him that I shall read his observations to-day with great care. If I find that they survive examination and study, and that they are entitled to the credit he has claimed for them, I can assure him that I shall do my best to be truthful when I address those audiences. We have heard again to-day, as we have heard over and over again, the defence that the General Strike is responsible for all the misfortunes of the Government and of the Chancellor of the Exchequer. What a blessing that General Strike has been to the noble Viscount opposite. He is going to say that hub for the General Strike this or that could have been done, and it is going to account for every misfortune—for the deficit and for the smaller reduction in Expenditure. That will not do in the country. The General Strike was provoked by the conduct of the Party opposite as much as by anything, and they cannot take refuge in that happy explanation.
Towards the end of his speech the noble Viscount said something about the Derating Bill, and said that much of our criticism and grievance had been removed, because of the fresh taxation upon brewers and tobacco manufacturers. Let me assure him that in any speeches which I am going to make my criticisms upon the Derating Bill will not be foundered by lack of material owing to the fact that one injustice has been removed by another tax. I have still in my ears the words of the noble and learned Lord on the Woolsack, when he said, with reference to the Derating Bill, that what the Government were aiming at was simply justice between the various classes of ratepayers, If that were indeed so, how is it that the Chancellor of the Exchequer has thought it necessary to impose these fresh burdens upon the brewers and the tobacco manufacturers Is it not because he had a feeling that
484
there was some injustice such as that of which we complained? As I have said, I do not profess to be an expert on these matters, and I do not profess to have anything like the knowledge of my noble friend behind me, but I can assure the noble Viscount that I shall do my best to understand everything that he has said, and if I can find good things to be said of the Government I shall say them—I shall not disguise them—but I think I can promise that I shall find many more bad things.
On Question, Bill read 2a: Committee negatived.
Then, Standing Order No. XXXIX having been suspended, Bill read 3a, and passed.

POLICE MAGISTRATES SUPERANNUATION (AMENDMENT) BILL.
Order of the Day for the Second Reading read.
LORD DESBOROUGH: My Lords, I hope that your Lordships will give a Second Reading to this Bill, more especially as it is a certified Bill, and I hope I shall be allowed to proceed with all its stages to-day. The object is to give an appropriate pension to a very deserving class of public servants—namely, the Metropolitan Police Magistrates. They are 27 in number. These Police Magistrates are appointed after something like twenty years' service at the Bar, and the average age is 52. They are entitled to the full pension after thirty years' service. If you add that on to the 52, that would make them 82, but under the Pensions Acts they have to retire from the public service at the age of 70, so in present circumstances they are extremely unlikely to earn their pension. All that they can look forward to on the average is eighteen years service, and then they would only be entitled to retire on half pay. This has been causing a great many of these public servants the greatest anxiety, and indeed illness and mortality has been very high.
It is, I suppose, not a very pleasant duty and very often it is a painful one, but I think it is always acknowledged that the Metropolitan Police Magistrates have earned, and justly earned, the title of being friends of the poor. I find that ten of them have died in harness between

485
the years 1922 and 1927, and the average period of office has been only seven or eight years. Two others, unfortunately, have committed suicide. Of five appointed in 1917, four have died. To sum up the object of the Bill in a word, it is proposed to make the annual increase of the Magistrates' pensions scale from the eleventh year of their service onwards two-sixtieths instead of one-sixtieth, so that the maximum pension will be obtainable after twenty years, instead of after thirty years service. I beg to move.
Moved, That the Bill be now read 2a.—(Lord Desborough.)
On Question, Bill read 2a: Committee negatived.
Then, Standing Order No. XXXIX having been suspended, Bill read 3a, and passed.

SALMON AND FRESHWATER FISHERIES (AMENDMENT) BILL.
Order of the Day for the Second Reading read.
THE EARL OF STRADBROKE: My Lords, I beg to move that this Bill be now read a second time. Its object is to correct a drafting omission in the Salmon and Freshwater Fisheries Act, 1923. Prior to that Act migratory trout were regarded as a species of salmon, but the Act provided that in future sea trout should be treated under their proper scientific designation of trout, and consequently more nearly related to brown trout than to salmon. The Act of 1923 contains a section which provides that where, by by-law, it is legal to catch salmon during the close season, the salmon so caught may be sold. As sea trout were then treated as salmon there was no need for any alteration in that provision. But now, under the existing: circumstances, an anomalous position has arisen, as, although it may be legal to catch sea trout under the by-laws on certain rivers, those who do so are not
486
allowed to sell them. There are by-laws in force on several rivers where fish are allowed to be taken during the close time, that is, between September 1 and March 31, and now, if your Lordships pass this Bill, trout so taken can be legally sold. The Bill also deals with another small point. The law, as it now stands, prohibits the sale of frozen trout imported from Newfoundland and Canada during the close season in this country. At this time it would provide an inexpensive and valuable addition to the national food supplies, and the Bill proposes to remove this prohibition. The Bill is entirely uncontroversial, and I hope your Lordships will give it a Second Reading.
Moved, That the Bill be now read 2a.—(The Earl of Stradbroke.)
On Question, Bill read 2a, and committed to a Committee of the Whole House.

BASTARDY (WITNESS PROCESS) BILL.
House in Committee (according to Order): Bill reported without amendment.
EARL RUSSELL: My Lords, if there is no objection I shall, in the case of this and the next Bill, propose to take the remaining stages now.
Then, Standing Order No. XXXIX having been suspended, Bill read 3a, and passed.

FIRE BRIGADE PENSIONS BILL.
House in Committee (according to Order): Bill reported without amendment.
Then, Standing Order No. XXXIX having been suspended, Bill read 3a, and passed.
House adjourned at ten minutes past six o'clock.