Sitting of 29 April 1909

Preamble
Mr. SPEAKER took the chair at a Quarter before Three of the clock.
ORAL ANSWERS TO QUESTIONS.

  German "Dreadnought" Docks.
  Mr. LONSDALEasked the First Lord of the Admiralty whether he can state how many dry docks capable of taking a battleship of the "Dreadnought" type are under construction in Germany, in addition to the five already in existence?
  The FIRST LORD of the ADMIRALTY (Mr. R. McKenna): One dock capable of taking a "Dreadnought" is at present under construction.

  Rosyth.
  Mr. LONSDALEasked the First Lord of the Admiralty whether he will state when the new dry dock at Rosyth will be completed; and whether its capacity will be such that a damaged "Dreadnought" may enter if drawing more water than ordinarily through having some of her water-tight compartments flooded?
  Mr. McKENNA: The contract date for the completion of the Rosyth Dock is February, 1916. The answer to the second part of the question is in the affirmative.
  Mr. LONSDALE: Are we to understand that from now until February, 1916, there will be no dry dock available for the purpose of receiving "Dreadnoughts" in the condition suggested in the question?
  Mr. McKENNA: No, Sir.
  Mr. ASHLEY: Would it not be possible by giving a premium to the contractor to accelerate the completion?
  Mr. McKENNA: Yes, Sir; a premium has been offered to the contractor for the acceleration of the dock.

  East Coast Docks for "Dreadnoughts."
  Mr. LONSDALEasked the First Lord of the Admiralty whether he will state what provision was being made by the Government for dry docks and floating docks capable of accommodating damaged "Dreadnoughts" on the East Coast of Great Britain, in addition to the dry dock at Rosyth?
  Mr. McKENNA: The question is under consideration.
  Earl WINTERTONasked the First Lord of the Admiralty if he will state on what date the Admiralty first decided that a dry dock for ships of the "Dreadnought" class was required on the East Coast; and on what date that decision was made public?
  Mr. McKENNA: The decision to construct a dock at Rosyth capable of taking ships of the largest size was arrived at in 1902; and the decision was made public on the 5th March, 1903.
  Earl WINTERTON: Can the right hon. Gentleman state the actual date at which the work was begun?
  Mr. McKENNA: My impression is that it was February of this year.
  Earl WINTERTONasked the First Lord of the Admiralty what is the earliest possible date on which a dry dock, capable of holding ships of the "Dreadnought" class when undergoing repairs for damage to water-tight compartments or for other defects, could be ready for use on the East Coast of England and Scotland?
  Mr. McKENNA: I must refer the Noble Lord to the answer just given, Question No. 15 from the hon. Member for Mid-Armagh. As I stated the other day it is estimated that a floating dock of the necessary dimensions can be constructed within two years.

  Naval Gunnery Fittings.
  Mr. WEDGWOODasked the First Lord of the Admiralty whether a satisfactory system of automatically setting the elevation and deflection sights for the 12-inch guns of the battleships by electric manipulation from the ranging station has yet been evolved; how many ships are at present fitted with this system; and are steps being taken to protect the ranging stations, range-finders, and connecting tubes by armour?
  Mr. McKENNA: It is against the interests of the public service to give details of our gunnery fittings.

  Egyptian Ministry of Agriculture.
  Mr. JOHN ROBERTSONasked the Secretary of State for Foreign Affairs whether the Egyptian Government has in contemplation the creation of a Ministry of Agriculture; whether it has been in negotiation with the Khedivial Society of Agriculture with this object; and, if so, when the appointment of a Ministry of Agriculture can be expected?
  The SECRETARY of STATE for FOREIGN AFFAIRS (Sir Edward Grey): I have received no information to the effect that the Egyptian Government contemplate the creation of a Ministry of Agriculture, but will inquire.

  Egyptian Afforestation.
  Mr. JOHN ROBERTSONasked the Secretary of State for Foreign Affairs whether, in view of the admitted importance of tree culture in Egypt, he will recommend to the Egyptian Government the expediency of establishing a thoroughgoing system of afforestation.
  Sir E. GREY: The question whether the establishment of a system of afforestation is advisable is clearly one for the decision of the Egyptian Government, who alone are in a position to judge whether such a step would at present be justified from a financial point of view, and, if so, whether financial resources permit of it.
  Mr. J. D. REES: May I inquire whether a thorough-going system of afforestation has yet been attempted in England, and whether it is reasonable to ask the Egyptian Government to make the desert blossom like the rose?
  Sir E. GREY: That is hardly a Foreign Office question.

  Waterguard Officers (Disciplinary Visits).
  Mr. WILLIAM THORNEasked the Secretary to the Treasury why, as it is considered necessary that waterguard officers of His Majesty's Customs in London on night duty should be subjected to two disciplinary visits nightly, one before and one after midnight, an equal amount of supervision is not exercised over these officers at the outports?
  Mr. HOBHOUSE: The disciplinary visits of supervising officers to the water-guard staff on duty at night are arranged according to the conditions existing at the various ports. At ports other than London occasional surprise visits are paid by supervising officers direct from their own homes. In London, where a large staff is scattered over an extensive area, and where the difficulties of communication at night are considerable, it is necessary to keep a supervising officer continuously on duty to make around of the various stations at night, but it does not necessarily follow that every station is visited twice nightly.

  American Duty on Lithographic Transfers (Proposed Increase).
  Mr. WEDGWOODasked the President of the Board of Trade whether he has been
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  able to verify the proposed increase in the American duty on lithographic transfers from 10d. to 10s. 5d. a pound; and, if so, will he join the German Government in a protest against this interference with trade?
  The PRESIDENT of the BOARD of TRADE (Mr. Churchill): The provisions of the United States Tariff Bill in respect to these lithographic transfers were explained in the reply given to my hon. Friend on April 7th. I understand, however, that the duty originally proposed in the Bill has been amended both by the House of Representatives and by the Senate Committee of Finance, and that the proposed rate on "decalcomanias in ceramic colours" now stands at one dollar per pound. As regards the second part of the question, I understand that no official representations have been made by the German Government to the United States Government on this subject, but the question of the proposed duties on these and other articles under the Tariff Bill now before Congress continues to receive the earnest consideration of His Majesty's Government.

  United Kingdom Wheat Acreage.
  Mr. FELLinquired what is the official estimate of the acreage which would be required to be grown in wheat to supply the amount of wheat necessary for the annual consumption of the country; and whether such an acreage of land suitable for the growth of wheat exists in the United Kingdom?
  The TREASURER of the HOUSEHOLD (Sir Edward Strachey): The acreage required to supply the total annual consumption of wheat in the United Kingdom, assuming the present average yield per acre to be maintained, would be 8,287,000 acres. We are not in a position to make an estimate of the total area of land suitable for the growth of wheat in this country, but I may say that the largest acreage officially returned as under wheat was nearly 4,000,000 acres, in the year 1869.

  Farmers and Wheat Values.
  Mr. FELLasked what is the official estimate of the price at which it would be necessary to maintain the value of wheat to offer sufficient inducement to the farmers in the United Kingdom to plant with wheat all the land suitable for its cultivation?
  Sir E. STRACHEY: It is not possible for the Board to make any estimate of the nature suggested.

  Cramond Island, Dalmeny.
  Mr. WEDGWOODasked whether Cramond Island, lying off the mouth of the River Almond, which divides Dalmeny from Midlothian, has been purchased by the Government, or is under negotiations for purchase; what purchase price has been fixed, if any; what is the area of Cramond Island; and at what annual value has it been hitherto assessed for purposes of taxation under Schedule A of the Income Tax or for rates?
  Mr. HOBHOUSE: I beg to refer the ton, Member to the answer which I gave to a question by the hon. and learned Member for South Donegal on Monday, the 26th instant.
  Mr. WEDGWOOD: With regard to the last part of the answer, can the right hon. Gentleman say what is the annual value of the assessment for the purposes of taxation under Schedule A, or for the rates?
  Mr. HOBHOUSE: That I cannot say. The question does not arise.

  Edinburgh School Board and Catholic Children.
  Mr. BOLANDasked the Lord Advocate whether he had taken any, and, if so, what steps to inquire into the action of the Edinburgh School Board in refusing to give free books to any children in Catholic schools within their district; and could he state the result of his inquiry?
  The LORD ADVOCATE (Mr. Ure): I have made inquiry as suggested, and find the facts to be as follows: Reports in the sense indicated in the question were addressed to the Edinburgh School Board on behalf of certain voluntary schools on 21st January and 1st February. The Board, by eight votes to seven, resolved that no expenditure upon these items be made during the current financial year (ending May 15th next), but expressed an opinion that this provision should be made thereafter. Meanwhile, a School Board election has taken place, and the matter has not, as yet, been before the new Board for consideration.
  Mr. BOLAND: Can the right hon. Gentleman say when this matter will come before the School Board again?
  Mr. URE: No, sir; it depends upon the arrangements made by the School Board themselves.
  Mr. WATT: Has this been a vital question in the recent elections?
  Mr. URE: That I cannot say.

  National Debt.
  Mr. CHIOZZA MONEYasked Mr. Chancellor of the Exchequer if he will state, for each of the financial years 1905–6, 1906–7, and 1907–8, by how much the National Debt was reduced through the operation of the new Sinking Fund, the under-estimation of revenue, and the over-estimation of expenditure, respectively?
  Mr. HOBHOUSE: To the questions put down by the hon. Member I have not been able to prepare an answer. The House will understand that the Department has been very much overworked in connection with the financial statement.
  Mr. CHIOZZA MONEY: Arising out of the interesting answer that might have been given—[cries of "Order"]—may I direct the attention of the hon. Gentleman to the fact that what I ask for is not down in the Memorandum which is placed in our hands?
  Mr. HOBHOUSE: I never said it was.

  The Church in Wales (Royal Commission).
  Mr. TALBOTasked the Solicitor-General, when the evidence taken by the Royal Commission on the Church in Wales, which is ready for presentation, will be in the hands of Members?
  The SOLICITOR-GENERAL (Sir Samuel Evans): This question ought to be addressed to the Home Office. I suggest the right hon. Gentleman should repeat the question to the Home Office.

  Army Horses.
  Earl WINTERTONasked the Secretary of State for War, whether any decision has been arrived at by the Army Council as to the steps to be taken to provide an adequate supply of horses for the Territorial forces on mobilisation?
  The FINANCIAL SECRETARY to the WAR OFFICE (Mr. F. D. Acland): On the introduction of Army Estimates the Secretary of State explained fully to the House what steps were being taken in regard to the supply of horses for Army purposes. I have at present no further information to add.

  Two-Power Standard.
  Mr. ASHLEYasked the Prime Minister whether, in calculating the two-Power standard, he included Germany in his estimate of naval strength?
  The PRIME MINISTER (Mr. Asquith): It has not been customary of recent years to specify the Powers which for the time being enter into comparison.
  Mr. ASHLEY: If it has not been customary to specify the particular Powers, why was the United States specifically left out the last time?

ORDER OF BUSINESS.
Sir ALEXANDER ACLAND-HOOD: I desire to ask the Prime Minister what business he intends to take next week; secondly, with regard to his Motion for the Suspension of the Eleven o'clock Rule, and presume he does not intend to keep the House to a later hour than is necessary for getting the Resolutions; and, thirdly, I wish to ask whether we shall have a full opportunity of discussing the Budget proposals on some subsequent Resolution?
The PRIME MINISTER (Mr. Asquith): With regard to next week we propose on Monday, Tuesday and Wednesday to take the Budget Resolutions, with the suspension of the 11 o'clock Rule on these nights. On Thursday we shall take Supply. With regard to the last question put by the right hon. Gentleman it will be necessary before the House adjourns to-night to get three Resolutions. On Monday, with the assent of the Chair, in accordance with the usual practice, we suggest that the general Debate should be continued on the next Resolution.

PRESENTATION OF BILLS.
The following Bills were presented and read the first time:—
Earl of RONALDSHAY—Easter Offerings.—Bill to exempt voluntary Offerings to clergymen and ministers from taxation. (To be read a second time to-morrow.)
Viscount MORPETH—Clerks of the Peace and County Councils (No. 2).—Bill to amend the Law with regard to the appointment of Clerks of the Peace and County Councils (To be read a second time to-morrow.)

BUSINESS OF THE HOUSE (WAYS AND MEANS).
Ordered, "That the Committee of Ways and Means have precedence this day of the business of Supply."—[The Prime Minister.]
Ordered, "That the proceedings of the Committee of Ways and Means, if under consideration at Eleven o'clock this night, be not interrupted under the Standing Order (Sittings of the House)."—[The Prime Minister.]

WAYS AND MEANS.

  CONSIDERED IN COMMITTEE.
  [Mr. EMMOTT in the chair.]
  (IN THE COMMITTEE.)

  BUDGET STATEMENT.
  The CHANCELLOR of the EXCHEQUER (Mr. Lloyd-George)rose, at six minutes after Three of the clock, to submit the Annual Financial Statement.
  At the close of my right hon. Friend's last Budget speech the right hon. Gentleman, the Member for East Worcestershire, condoled with me upon having to follow such a master of lucid exposition. I confess that even if my task had been a comparatively easy one, I should have felt sorry for myself to have to follow such a predecessor as my right hon. Friend. But seeing that my difficulties are abnormally great and the burden which I have to carry is a very heavy one, I can only throw myself upon the kind sympathy and indulgence of the House. I have departed from precedent in one respect, which I hope will command the general assent of the House. I caused to be circulated with the Votes this morning a full statement showing the position last year, and showing what the position would be this year, assuming that taxation remained in its present form. I circulated that statement not merely because it lightened my task in delivering my speech, and lightened the task of the House in having to listen to it, but because I think it is fairer to Members.
  It is exceeding difficult to follow these figures, even if you have time to go through them. They are very complicated, they are very perplexing, and they are apt to be very elusive, and therefore I thought the better plan would be to give hon. members full time to go through these figures in order thoroughly to appreciate what the position is. I have no doubt that hon. Members perhaps were slightly disappointed with the figure of the anticipated deficit, but on the whole I am sure there was a great sense of relief at the figure of the realised deficit. There is a realised deficit, as will be seen from the statement, amounting to £714,000, and the Exchequer balance, which stood on 31st March, 1908, at £8,919,000—an exceptionally large amount arising by reason of the

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  very considerable old Sinking Fund of 1907–8—is accordingly depleted by the amount of this deficit. That is how I propose to deal with that. I do not propose to add it to the taxation of the year, but I propose to deal with it by taking it out of the Exchequer balance. I will give a full explanation later on of these arrangements. They are rather complicated, and I do not want to take up too much time. Now I come to the consideration of the anticipated deficit for the coming year.

  REVENUE AND EXPENDITURE FOR 1909–10.
  I now turn to a brief consideration of the Revenue and Expenditure of 1909–10, the main details of which are already in the hands of hon. Members. It will be seen that on the basis of existing taxation and of the estimates of expenditure already presented to Parliament, there is an anticipated deficit of £15,762,000. This amount is perhaps even larger than some Members may have anticipated, but this is attributable in part, at any rate, to the fact that the true revenue of this year from Customs and Excise has been largely anticipated. Towards the end of last year there were unusually heavy withdrawals of all dutiable commodities, particularly of spirits, owing to a not unnatural apprehension of increased taxes. The sum that was thus added to the revenue of last year must be taken away from the revenue for the present year and therefore has to be counted twice in the comparison. This to a great extent accounts for the very large and otherwise inexplicable drop in our estimate of the Excise of the year.
  When we come to Customs, the apparent decline of one million pounds is due entirely to the same cause—the transference of £550,000 which properly belongs to the present year to the receipts of 1908–9, since the normal increase in the consumption of sugar, of tea and of tobacco will, in the opinion of my advisers, more than make up for a probable decline in the consumption of foreign liquor. I ought to observe that apart altogether from forestalments there was, I will not say an alarming, but an encouraging, diminution in the consumption of alcoholic liquors observable during last year. This was partly due to the very bad trade from which we suffered. But the figures of the last few years justify me in assuming that it was also attributable to the steady growth in the habits of sobriety amongst the masses of the people.
  Although there is every prospect that before the end of this financial year there will be considerable improvement in the trade of the country—the symptoms are all distinctly favourable—still I shall have to reckon upon a continuation of that steady growth in the habits of self-restraint amongst the people in the matter of indulgence in alcoholic liquors which has been such a very marked feature of the national liquor bill during the past few years, which is so gratifying to the reformer and so discouraging to the revenue. The Committee will bear in mind that a. comparatively small decrease in the consumption of a certain class of highly alcoholised liquor would account for a considerable drop in the revenue. These elements taken altogether, forestalments and increased temperance—account for the considerable diminution which I anticipate in this branch of the revenue for the coming year, and which adds greatly to my difficulties.
  Before I leave this brief and cursory examination of the revenue side of my balance sheet I should like specially to call the attention of the Committee to the wonderful steadiness in the yield of the income tax. In spite of one of the worst years of bad trade which this country has experienced for many a year, the income tax has surpassed every prediction and realised nearly a million pounds in excess of the Budget Estimate. No tax could possibly be put to a more severe test, no tax could possibly rise from it more triumphantly than the income tax has during, the past year. Whatever else may be said about our fiscal system, there is this to be said for it, that it stands the strain much better than any other system in time of trade depression as far as producing revenue is concerned. So much for the revenue side.

  REVENUE AND EXPENDITURE FOR 1909–10.

    EXPENDITURE.
    Now I come to the expenditure side of my balance sheet, and it is to this, after all, that must mainly be ascribed the exceptionally heavy deficit. Were I dealing with a shortage due only to a temporary cause like forestalments I might have resorted to some temporary shift which, would have carried me over until next year, when the revenue would resume its normal course. But, unfortunately, I have to reckon not merely with an enormous increase in expenditure this year, but an inevitable expansion of some of the heaviest items in the course of the coming years. To what is the increase of

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    expenditure due? It is very well known that it must be placed to the credit of two items and practically two items alone. One is the Navy and the other is Old Age Pensions. Now, I have one observation which I think I am entitled to make about both, and I think that now I am about to propose heavy increased taxation it is an observation that I am entitled to make on behalf of the Government. The increased expenditure under both these heads was substantially incurred with the unanimous assent of all political parties in this House. There was, it is true, a protest entered on behalf of hon. Members below the Gangway against increased expenditure in the Navy, but as far as the overwhelming majority of Members in this House are concerned the increase has received their sanction and approval. I am entitled to say more. The attitude of the Government towards these two branches of increased expenditure has not been one of rushing a reluctant House of Commons into expense which it disliked, but rather of resisting persistent appeals coming from all quarters of the House for still further increases under both heads.
    As to the Navy, we are now in the throes of a great agitation to double and even treble the cost of our Construction Vote this year; and as to old age pensions, the responsibility was cast upon me of piloting that Bill through the Committee, and the one difficulty I experienced was to persuade the House of Commons not to press Amendments which would enormously augment the very heavy bill we were incurring under the original proposals. I had constantly to appeal to the party loyalty of the supporters of the Government to resist Amendments which commended themselves to hon. Members, and which we ourselves should like to have seen carried, in order to confine within something like reasonable limits the Bill which we were encouraged to pass. And these were not Amendments moved by small sections of the House; on the contrary; they were moved from all quarters and almost invariably received the official sanction and support of the Opposition. I say that in order to show that, in the main, the two great items of expenditure which are responsible for this deficit are items which a vast majority of the Members of the House of Commons have not merely sanctioned, but in regard to which they brought a con-
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    siderable amount of pressure to bear upon the Government to increase.
    I made a calculation the other day as to what these Amendments would have cost us in the aggregate if we had assented to them, and I am sure the Committee will be surprised to find that Amendments which received the support of the official Leaders of the Opposition, if they had been carried, would have left me to-day to find not £9,000,000, but £14,000,000. The Amendments received the official sanction of the Leaders of the Opposition. I am not complaining of that. On the contrary, I think that many were Amendments which represented the extensions of the principle which I think are inevitable, but for the time being our attitude was to restrict expenditure rather than extend it. There were a few hon. Members who opposed the Bill altogether. There was my hon. Friend the Member for Preston and the hon. Baronet for the City. They represented a very small party, although no doubt a very intelligent party. I am not mentioning these matters by way of reproach to any section, nor with any desire to divest the Government of any share of its responsibility, but merely in order to show that the deficit in respect of which I have to suggest such heavy imposts to-day is not, as has been hinted in many quarters, one which the Government has landed the country in by wild and extravagant socialistic proposals, but rather an expenditure in which the Government represented the minimum demands and in which its proposals were more moderate from the point of view of expenditure than those which emanated from any other section of the House.
    Before I dismiss this question of the expenditure for this year, I think I am entitled to answer a criticism from another quarter. We are told that we ought not to have touched old age pensions—at least, not at the present moment, when heavy liabilities were in sight in connection with the defence of the country. I may point out that when we introduced our Old Age Pensions Bill the emergency had not arisen. But, apart altogether from that, we had no honourable alternative left. We simply honoured a cheque drawn years ago in favour of the aged poor, which bore at its foot the signature of all the leaders of political parties in this country. They had all promised pensions at election after election, and great political parties have no right to make promises to poor people in return for political support, which is all these people

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    had to give, and then—time after time—return the bill with "No assets" written across it. It was time this measure should be carried for the fair fame of British politicians as a whole. I am glad we have done it. I am not here on behalf of the Government to apologise for having done it. On the contrary, I think all political parties ought to be pleased that this thrice defaulted obligation has at last been discharged.

    FINANCIAL OUTLOOK.
    Before I come to explain the proposals which I shall submit to the Committee for the liquidation of this deficit I must invite hon. Members to join me in taking a wider survey of our financial responsibilities at this moment. It must be patent to everyone cognisant of the facts that fresh liabilities must be incurred next year in connection with the Navy and with social reform. These are commitments to which we are pledged, and from which no Government can honourably escape, and if I were to ignore these liabilities altogether in arranging my finance for this year I might, it is true, lighten my burden Very considerably, but I should be guilty of an unbusinesslike short-sightedness which would be highly culpable.
    I cannot conceive anything which would be more disturbing to trade than the uncertainty which must ensue if it were thought that in addition to the taxes for the year new and unknown taxes were looming in the near future. It is far better, as well as bolder, therefore, that we should frankly examine the financial outlook and make provision not merely for the ascertained needs of the year, but for the further and increased liabilities which are not merely in sight, but to which the Government and Parliament are definitely and irrevocably committed. Prudence seems to me to dictate such a policy, and although it may seem as if we were needlessly anticipating troubles of the morrow, still those troubles are inevitable, and it is therefore better to provide against them without delay. This is the course which would be adopted in any commercial undertaking conducted on ordinary business lines. Whenever an exceptional effort has to be made to raise money for the discharge of liabilities already incurred stock is generally taken of all further liabilities which must necessarily be incurred in the immediate future, and the financial provision made generally covers both present and future indebtedness. That is the course I propose to
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    follow in the financial operations which I shall submit to the judgment of the Committee.

    NAVAL PROBLEM.
    Let us, therefore, examine our commitments. First of all comes the Navy. Up to the present we have been considering the Naval problem from the point of view of merely spending money.
    An HON. MEMBERon the Opposition side: Speak up.
    Mr. LLOYD-GEORGE: I hope hon. Gentlemen will extend to me their indulgence. I am afraid that I shall have to try their patience by speaking at considerable length, and I do not want to strain my voice. I will do my very best. I shall now have to invite hon. Members and the country to consider the Naval problem from the equally essential but less agreeable standpoint of paying. Spending is pleasant, paying is irksome; spending is noble, paying is sordid. And it is on me falls the labour of making the arrangements for the less attractive part of the Naval programme. Let us see what it means. The building of two "Dreadnoughts" represents nearly a penny a year on the income tax during the two years of construction. The construction of four "Dreadnoughts" therefore, represents nearly 2d., and of eight "Dreadnoghts" nearly 4d., added on to the income tax. It is my business as Finance Minister to consider all these programmes which add to the expenditure of the country in the terms of new taxes. In estimating what the Naval programme is likely to cost the Chancellor of the Exchequer next year I must, of course, premise that it is quite impossible with even approximate accuracy to forecast twelve months' ahead what the expenditure in any Department of the Government is likely to be, at least so I am assured.
    But there are one or two facts which lead to the inevitable conclusion that we must look forward to a considerable increase in our Naval expenditure next year. Let us, first of all, examine the prospect, if the programme this year is confined to four "Dreadnoughts." Then I will examine what it will mean if we have eight "Dreadnoughts." The Vote taken this year in respect of building these four "Dreadnoughts" will cover building operations in the case of two "Dreadnoughts" for nine months, in the case of the second instalment for only six months, and the first few months' ex-

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    pense upon these huge machines is, I am told, the least burdensome. But next year the Treasury will have to find money for paying the whole cost of construction of four "Dreadnoughts" during an unbroken period of 12 months. This, in addition to an eleven months' building on the two "Dreadnoughts" which were laid down some time ago, will bring up the Estimates of the year for Naval construction to a figure which is considerably above even the increased estimate of this year. But if, in addition to these four "Dreadnoughts," we are to have a 12 months' expenditure upon still four more, the Naval bill for the year will attain very serious and grave dimensions indeed, at which the taxpayer may well shudder. It is quite impossible to say in advance what the Naval Estimates will be next year, because there are other items in those estimates, but on construction alone the increase will be something gigantic. I am not putting these considerations forward in any sense as reasons why we should not incur this expenditure. Whatever be the cost, no great country can afford to shirk its responsibilities for the defence of its coasts against every possible invader, and I am not dwelling on the magnitude of the burden which is cast upon us in order to suggest that we should in the slightest degree lighten the load by evading any part of our obligations. I have simply invited the Committee to consider the prospect in front of them, not with a view to urging them to run away from the imperative duty which is thrust upon them of providing for the defence of the country, but rather in order that they might follow me in facing that prospect, and make beforehand all the provision which wise and resolute forethought shall deem adequate for the occasion. We all value too highly the immunity which this country has so long enjoyed from the horrors of an invaded land to endanger it for lack of timely prevision. That immunity at its very lowest has been for generations, and still is, a great national asset. It has undoubtedly given us the tranquillity and the security which has enabled us to build up our great national wealth. It is an essential part of that wealth. At the highest it means an inviolable guarantee for our national freedom and independence. Nay, more. Many a time in comparatively recent history it has been the citadel and the sole guarantee which has saved the menaced liberties of Europe from an impending doom. I can
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    assure hon. Members if they still have any suspicion lurking in their minds that any Member of this Government or of this, party proposes in any ill-judged fit of parsimony to risk even for an hour so precious a national treasure they can dismiss those unworthy suspicions entirely from their minds. Such a stupendous act of folly would, in the present temper of nations, not be Liberalism, but lunacy. We do not intend to put in jeopardy the naval supremacy which is so essential not only to our national existence, but, in our judgment, to the vital interests of Western civilisation.

    "DREADNOUGHT "BUILDING.
    But, in my judgment, it would also be an act of criminal insanity to throw away £8,000,000 of money which is so much needed for other purposes on building gigantic flotillas to encounter mythical Armadas. That is why we propose only to incur this enormous expenditure when the need for it arises. We must ensure the complete security of our shores against all real dangers, but, rich nation as we are, we cannot afford to build navies against nightmares. It is much too expensive an operation. To throw away millions of money when there is no real need for it purely to appease an unreasoning panic would be to squander resources essential to our safety in time of real danger, and it is the business of a Government to follow with calmness, as well as with courage, the medium path between panic and parsimony, which is the only safe road to national security. However, as it may be necessary to make arrangements for laying down all the eight "Dreadnoughts" on 1st April, 1910, so as to complete them by April, 1912, the financial proposals which I shall submit to the Committee will be of such a character that we can pay for them without resorting either to additional taxation or to the vicious expedient of a loan. Should it on the other hand be discovered that our fears are groundless, and this precipitate "Dreadnought" building is unnecessary, then the money will find its uses either in further endowment of our social programme for the benefit of the masses of the people or in giving the much-promised relief to the local ratepayer. He is entitled to consideration in respect of the increased expenditure imposed upon him both by the late Government and by the present Government, more especially in educational matters. He has also been very hard pressed owing to the increased cost-

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    liness of maintaining the roads, attributable to the development in mechanical traction. I am not sure that it is altogether a fiscal question. It has almost become a great social question, for the municipalities are at the end of their resources, and their work is almost at a standstill in many of these areas because they cannot afford to spend what is absolutely necessary on their development. The local ratepayer has been promised consideration by successive Governments, and he is surely entitled to get it. I think I can safely say more; the financial proposals which I shall lay before the House will enable me to make good that promise.

    URGENT SOCIAL PROBLEMS.
    Now I come to the consideration of the social problems which are urgently pressing for solution—problems affecting the lives of the people. The solution of all these questions involves finance. What the Government have to ask themselves is this: Can the whole subject of further social reform be postponed until the increasing demands made upon the National Exchequer by the growth of armaments has ceased? Not merely can it be postponed, but ought it to be postponed? Is there the slightest hope that if we deferred consideration of the matter, we are likely within a generation to find any more favourable moment for attending to it? And we have to ask ourselves this further question: If we put off dealing with these social sores, are the evils which arise from them not likely to grow and to fester, until finally the loss which the country sustains will not be infinitely greater than anything it would have to bear in paying the cost of an immediate remedy? There are hundreds of thousands of men, women, and children in this country now enduring hardships for which the sternest judge would not hold them responsible; hardships entirely due to circumstances over which they have not the slightest command; the fluctuations and changes of trade—even of fashions; ill-health and the premature breakdown or death of the breadwinner. Owing to events of this kind, all of them beyond human control—at least beyond the control of the victims—thousands, and I am not sure I should be wrong if I said millions, are precipitated into a condition of acute distress and poverty. How many people there are of this kind in this wealthy land the figures of old age pensions have thrown a very unpleasant light upon. Is it fair, is it just, is it humane, is it
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    honourable, is it safe to subject such a multitude of our poor fellow-countrymen and countrywomen to continued endurance of these miseries until nations have learnt enough wisdom not to squander their resources on these huge machines for the destruction of human life? I have no doubt as to the answer which will be given to that question by a nation as rich in humanity as it is in store. Last year, whilst we were discussing the Old Age Pensions Bill, all parties in this House recognised fully and freely that once we had started on these lines the case for extension was irresistible. The Leader of the Opposition, in what I venture to regard as the most notable speeches he has probably delivered in this Parliament—I refer to his speech on the third reading of the Old Age Pensions Bill and the speech he delivered the other day on the question of unemployment—recognised quite boldly that whichever party was in power provision would have to be made in some shape or other for those who are out of work through no fault of their own and those who are incapacitated for work owing to physical causes for which they are not responsible. And there was at least one extension of the Old Age Pensions Act which received the unanimous assent of the House and which the Government were pressed to give, not merely a Parliamentary but a Statutory pledge to execute. I refer to the proposal to extend the pension to the meritorious pauper.

    REMOVAL OF PAUPER DISQUALIFICATION FROM OLD AGE PENSIONS.
    During the discussion on the Old Age Pensions Bill in the House of Commons, several Amendments were moved with a view to extending the benefits of the Act to the septuagenarian pauper, and I think it was generally felt in all quarters of the House that it was rather hard upon those who had managed up to a ripe old age by a life of hard work to keep off the poor law, and who only finally resorted to parochial relief when their physical powers utterly failed them, it was rather hard they should be still kept to their miserable and pauper-tainted allowance of 2s. 6d. a week, while their more fortunate, but not more deserving, neighbours were in receipt of an honourable State pension of 5s. a week, and often of 10s. a week. That cannot possibly stand. It was condemned by all, and could only be defended by the Government on the ground of stern financial necessity. With

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    the unanimous assent of the House of Commons a purely provisional character was given to the pauper disqualification, and unless something is done, it automatically comes to an end on the 1st January, 1911, and all these poor old people, numbering between 200,000 and 300,000, will become chargeable to the Pension Fund. I cannot recommend Parliament to undertake the whole financial burden of putting such a transaction through. It would put too heavy a charge upon the Exchequer, and there is no reason why it should fall entirely upon Imperial funds. At the present moment these paupers cost something like £2,000,000 to the local rates of the country. If we received a contribution from local funds which would be substantially equivalent to the relief which would be afforded by withdrawing such a large number of paupers from the rates, then something can be done to remove this crying hardship. My right hon. Friend the President of the Local Government Board and I have entered into negotiations with some representatives of local authorities with a view to effecting an arrangement on this basis, and although we have not yet arrived at any decision as to the amount of the national contribution, we are very hopeful of being able to enter into a bargain which will be satisfactory to all parties concerned. I do not think it would be desirable for me at this stage to give any figures—otherwise it might embarrass us in the negotiations—but it is my intention in the financial proposals which I shall submit to the House, I am afraid not this year, but probably next year, to make provision which will enable us with the assistance of the local authorities to raise over 200,000 old people from the slough of pauperism to the dignity and the comparative comfort of State pensioners. That is a contingent liability which I am bound to take full note of in arranging for my finance, because it is perfectly clear we cannot impose taxation this year and next year impose new taxation for proposals of which at the present moment we have full cognisance.
    But still, all those who have given any thought and study to this question must realise that the inclusion of the septuagenarian pauper is but a very small part of the problem which awaits solution—a problem of human suffering which does not become any easier of solution by postponement. On the contrary, the longer
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    we defer the task of grappling with it the more tangled and the more desperate it becomes. We are pledged, definitely pledged, by speeches from the Prime Minister given both in the House and outside, to supplementing our old age pensions proposals. How is that to be done? It has been suggested that we should reduce the age limit. I am emphatically of opinion that that is the most improvident and ineffective method of approaching the question, and that it would be the line upon which advance would be slowest and most difficult, and which would achieve the least hopeful results. For the moment it is financially impracticable.

    REDUCTION OF AGE LIMIT IMPOSSIBLE.
    A reduction of the age limit to 65 would cost an additional 15 or 20 millions a year to the Exchequer. I will not say that is beyond the resources of a rich country like this, but it is much the most wasteful way of dealing with the question, for whilst it would afford relief to many thousands and hundreds of thousands probably who neither need nor desire it, and whose strength is probably more happily and profitably employed in labour, it would leave out of account altogether far and away the most distressing and the most deserving cases of poverty. What are the dominating causes of poverty amongst the industrial classes? For the moment I do not refer to the poverty which is brought about by a man's own fault. I am only alluding to causes over which he has no control. Old age, premature breakdown in health and strength, the death of the bread winner, and unemployment due either to the decay of industries and seasonable demands, or the fluctuations or depressions in trade. The distress caused by any or either of these causes is much more deserving of immediate attention than the case of a healthy and vigorous man of 65 years of age, who is able to pursue his daily avocation, and to earn without undue strain an income which is quite considerable enough to provide him and his wife with a comfortable subsistence. When Bismarck was strengthening the foundations of the new German Empire one of the very first tasks he undertook was the organisation of a scheme which insured the German workmen and their families against the worst evils which ensue from these common accidents of life. And a superb scheme it is.

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    It has saved an incalculable amount of human misery to hundreds of thousands and possibly millions of people who never deserved it.

    INSURANCE AGAINST INVALIDITY, ETC., IN GERMANY.
    Wherever I went in Germany, north or south, and whomever I met, whether it was an employer or a workman, a Conservative or a Liberal, a Socialist or a Trade Union Leader—men of all ranks, sections and creeds of one accord joined in lauding the benefits which have been conferred upon Germany by this beneficent policy. Several wanted extensions, but there was not one who wanted to go back. The employers admitted that at first they did not quite like the new burdens it cast upon them, but they now fully realised the advantages which even they derived from the expenditure, for it had raised the standard of the workman throughout Germany. By removing that element of anxiety and worry from their lives it had improved their efficiency. Benefits which in the aggregate amounted to 40 millions a year were being distributed under this plan. When I was there the Government were contemplating an enlargement of its operation which would extend its benefits to clerks and to the widows and orphans of the industrial population. They anticipated that when complete the total cost of the scheme would e 53 millions a year. Out of the 40 millions the Government contributes something under three millions a year. Out of the 53 millions they were looking forward to having to find five millions. I know it is always suggested that any approval of the German scheme necessarily involves a condemnation of the Act of last year. That is not so. The Act of last year constitutes the necessary basis upon which to found any scheme based on German lines. It would be quite impossible to work any measure which would involve a contribution from men who are either already 70 years of age or approaching the confines of that age as a condition precedent to their receiving any benefits. It was therefore essential that people who had attained this great age should be placed in a totally different category. But that is not a reason why the young and vigorous who are in full employment should not be called upon to contribute towards some proposals for making provision for those accidents to which we are all liable, and always liable.
    At the present moment there is a network of powerful organisations in this
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    country, most of them managed with infinite skill and capacity, which have succeeded in inducing millions of workmen in this country to make something like systematic provision for the troubles of life. But in spite of all the ability which has been expended upon them, in spite of the confidence they generally and deservedly inspire, unfortunately there is a margin of people in this country amounting in the aggregate to several millions who either cannot be persuaded or perhaps cannot afford to bear the expense of the systematic contributions which alone make membership effective in these great institutions. And the experience of this and of every other country is that no plan or variety of plans short of an universal compulsory system can ever hope to succeed in adequately coping with the problem. In this country we have trusted until recently to voluntary effort, but we found that for old age and accidents it was insufficient. In Belgium they have resorted to the plan of granting heavy subsidies to voluntary organisations, and they have met with a certain amount of success. But whether here or in Belgium, or in any other land, success must be partial where reliance is absolutely placed upon the readiness of men and women to look ahead in the days of abounding health and strength and buoyancy of spirit to misfortunes which are, not even in sight, and which may be ever averted.
    The Government are now giving careful consideration to the best methods for making such a provision. We are investigating closely the plans adopted by foreign countries, and I hope to circulate Papers on the point very soon. We have put ourselves into communication with the leaders of some of the principal friendly societies in the country with a view to seeking their invaluable counsel and direction. We could not possibly get safer or more experienced advisers. We are giving special attention to the important reports of the Poor Law Commission, both Majority and Minority, which advise that the leading principle of poor law legislation in future should be the drawing of a clear and definite line between those whose poverty is the result of their own misdeeds and those who have been brought to want through misfortune. All I am in a position now to say is that, at any rate, in any scheme which we may finally adopt we shall be guided by these leading principles or considerations. The first is that no plan can hope to be really comprehensive or conclusive which does

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    not include an element of compulsion. The second is that for financial as well as for other reasons, which I do not wish to enter into now, success is unattainable in the near future, except on the basis of a direct contribution from the classes more immediately concerned. The third is that there must be a State contribution substantial enough to enable those whose means are too limited and precarious to sustain adequate premiums to overcome that difficulty without throwing undue risks on other contributors. The fourth, and by no means the least important, is that in this country, where benefit and provident societies represent such a triumph of organisation of patience and self-government, as probably no other country has ever witnessed, no scheme would be profitable, no scheme would be tolerable, which would do the least damage to those highly beneficent organisations. On the contrary, it must be the aim of every well-considered plan to encourage, and, if practicable, as I believe it is, to work through them. That is all I propose to say on that particular subject at this juncture. I have gone into it at this length merely to indicate that here also is a source of contingent liability which I am bound to take into account in my financial scheme. In this country we have already provided for the aged over 70. We have made pretty complete provision for accidents. All we have now left to do in order to put ourselves on a level with Germany—I hope our competition with Germany will not be in armaments alone—is to make some further provision for the sick, for the invalided, for widows and orphans. In a well-thought out scheme, involving contributions from the classes directly concerned, the proportion borne by the State need not, in my judgment, be a very heavy one, and is well within the compass of our financial capacity without undue strain upon the resources of the country.

    PROBLEM OF UNEMPLOYMENT.
    The Government are also pledged to deal on a comprehensive scale with the problem of unemployment. The pledges given by the Prime Minister on behalf of the Government are specific and repeated. I do not wish to encourage any false hopes. Nothing that a Government can do, at any rate with the present organisation of society, can prevent the fluctuations and the changes in trade and industry which produce unemployment. A trade decays, and the men who are engaged in it are thrown
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    out of work. We have had an illustration within the last few days, to which Lord Rosebery has so opportunely called our attention, in the privation suffered by the horse cabdriver owing to the substitution of mechanical for horse traction. That is only one case out of many constantly happening in every country. Then there are the fluctuations of business which at one moment fill a workshop with orders which even overtime cannot cope with, and at another moment leave the same workshops with rusting machinery for lack of something to do. Trade has its currents, and its tides, and its storms and its calms like the sea, which seem to be almost just as little under human control, or, at any rate, just as little under the control of the victims of these changes, and to say that you can establish by any system an absolute equilibrium in the trade and concerns of the country is to make a promise which no man of intelligence would ever undertake to honour. You might as well promise to flatten out the Atlantic Ocean. But still, it is poor seamanship that puts out to sea without recognising its restlessness, and the changefulness of the weather, and the perils and suffering thus produced. These perils of trade depression come at regular intervals, and every time they arrive they bring with them an enormous amount of distress. It is the business of statesmanship to recognise that fact, and to address itself with courage and resolution to provide against it.

    INSURANCE AGAINST UNEMPLOYMENT.
    Now, I have a word to say about the proposals of the Government to meet this state of things. The Poor Law Commission has recently called attention to the; importance of endeavouring to devise some effective scheme of insurance against unemployment. The question is one which bristles with difficulties, and the Commission put forward no definite scheme of their own, but they expressly approved the principle, and recommended that immediate steps should be taken to devise a workable scheme. My right hon. Friend the President of the Board of Trade has anticipated this recommendation, and the Board of Trade have been closely engaged for the last six months in endeavouring to frame and develop a scheme which, while encouraging the voluntary efforts now being made by trade unions to provide unemployment benefit for their members, will extend the advantage of insurance to a very much larger circle of workmen, including unskilled

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    labourers. I do not now speak of the unemployment due to infirmity or personal failings or of unemployment due to labour disputes, but to that unemployment, by far the larger part of the evil, which occurs as a regular feature, varying with seasons and cycles, in important groups of trades; which renders the position of the worker in such trades unusually precarious; and which can only be dealt with, and ought clearly to be dealt with, by a process of spreading wages and of averaging risks and fluctuations. I do not propose to enter into the details of the Board of Trade scheme, which is, however, far advanced, and for which the national system of labour exchanges promised in the King's Speech will afford the necessary machinery. We recognise in this matter that we must walk with caution, and that it will be best to begin with certain groups of trades peculiarly liable to the fluctuations I have referred to, and in other respects suitable for insurance rather than to attempt to cover the entire area of industry. The Royal Commission were emphatic in recommending that any scheme of unemployment insurance should have a trade basis, and we propose to adopt this principle. Within the selected trades, however, the scheme will apply universally to all adult workers. Any insurance scheme of this kind must necessarily require contributions from those engaged in the insured trades, both as employers and employed; but we recognise the necessity of meeting these contributions by a State grant and guarantee. We cannot, of course, attempt to pass the necessary Bill to establish unemployment insurance during the present Session. But the postponement will not involve any real delay, for the establishment of labour exchanges is a necessary preliminary to the work of insurance, and this will occupy time which may also be advantageously employed in consulting the various interests upon the details of the scheme and in co-ordinating its financial provisions with the machinery of invalidity and other forms of insurance.

    DEVELOPMENT SCHEME.
    So much for the provision which we hope to be able to make for those who, under the changing conditions which are inevitable in trade and commerce, are temporarily thrown out of employment. We do not put this forward as a complete or an adequate remedy for all the evils of unemployment, and we do not contend that when this insurance scheme has been set
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    up and financed that the State has thereby done all in its power to help towards solving the problem. After all, it is infinitely better, in the interests both of the community and of the unemployed themselves, that the latter should be engaged on remunerative work, than that they should be drawing an allowance from the most skilfully-contrived system of insurance. This country is small—I suppose it is the smallest great country in the world—but we have by no means exhausted its possibilities for healthy and productive employment. It is no part of the function of a Government to create work; but it is an essential part of its business to see that the people are equipped to make the best of their own country, are permitted to make the best of their own country, and, if necessary, are helped to make the best of their own country. [Cheers.] I am glad that that statement has been received with such general assent. A State can and ought to take a longer view and a wider view of its investments than individuals. The resettlement of deserted and impoverished parts of its own territories may not bring to its coffers a direct return which would reimburse it fully for its expenditure; but the indirect enrichment of its resources more than compensates it for any apparent and immediate loss. The individual can rarely afford to wait, a State can; the individual must judge of the success of his enterprise by the testimony given for it by his bank book; a State keeps many ledgers, not all in ink, and when we wish to judge of the advantage derived by a country from a costly experiment we must examine all those books before we venture to pronounce judgment.
    Any man who has crossed and recrossed this country from north to south and east to west must have been perplexed at finding that there was so much waste and wilderness possible in such a crowded little island. There are millions of acres in this country which are more stripped and sterile than they were, and providing a living for fewer people than they did even a thousand years ago—acres which abroad would either be clad in profitable trees or be brought even to a higher state of cultivation. We want to do more in the way of developing the resources of our own country. [Cheers.] Hon. Members opposite cheer, and I am sure they will help me to find the money. There is much to be done for the re-settlement of neglected and forgotten areas in Britain. We have been spending for the last two or

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    three years £200,000 to £300,000 a year upon work which I would not like to discourage. I have no doubt that it has relieved a great deal of distress, and that it is the best thing that could be done as a temporary shift and expedient, and all thanks and gratitude are due to the people who have devoted their time, leisure, and labour in expending the money in the most profitable way possible, but still it is a wasteful expenditure. Sometimes I have no doubt some good is done, but it is wasteful whenever you create work for the sake of creating it. We think that the money could be spent much more usefully and profitably, and with better direction, so long as we take a wider view of our responsibility in this matter.

    AFFORESTATION.
    This brings me straight to the question of afforestation. There is a very general agreement that some steps should be taken in the direction, I will not say of afforesting, but of reafforesting the waste lands of this country. Here, again, we are far behind every other civilised country in the world. I have figures here on this point which are very interesting. In Germany, for instance, out of a total area of 133,000,000 acres, 34,000,000, or nearly 26 per cent., are wooded; in France, out of 130,000,000 acres, 17 per cent.; even in a small and densely populated country such as Belgium 1,260,000 acres are wooded, or 17 per cent., out of a total area of 7,280,000 acres. Again, in the Netherlands and Denmark, out of total areas of 8 and 9½ million acres respectively, over 600,000 acres, or between 7 and 8 per cent., are wooded. In the United Kingdom, on the other hand, out of 77,000,000 acres, only 3,000,000, or 4 per cent., are under wood.
    Sir Herbert Maxwell, who has made a study of this question for a good many years, and whose moderation of statement is beyond challenge, estimates that, in 1906, "eight millions were paid annually in salaries for the administration, formation and preservation of German Forests, representing the maintenance of about 200,000 families, or about one million souls," and that, "in working up the raw material yielded by the forests, wages were earned annually to the amount of 30 millions sterling, maintaining about 600,000 families, or three million souls."
    Anyone who will take the trouble to search out the Census Returns will find out that the number of people directly
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    employed in forest work in this country is only 16,000. And yet the soil and the climate of this country are just as well adapted for the growth of marketable trees as that of the States of Germany. I am disposed to agree with those who contend that afforestation is not particularly well adapted to the provision of employment on any large scale for the kind of labourer who is thrown out of work by the fluctuations of trade in the towns, and that its real utility will be rather found (to use the phrase of the hon. Member for Merthyr) "in the extension of the area of employment." It will be serviceable in providing employment in the rural districts during that inclement season of the year when work is least abundant. It would also afford an excellent adjunct to a system of small holdings and allotments.
    Recently we have been favoured with a striking Report of a Royal Commission very ably presided over by my hon. Friend the Member for Cardiff. A perusal of the names attached to that Report will secure for it respectful and favourable consideration. It outlines a very comprehensive and far-reaching scheme for planting the wastes of this country. The systematic operation which the Commission recommend is a gigantic one, and, before the Government can commit themselves to it in all its details, it will require very careful consideration by a body of experts skilled in forestry. I am informed by men whom I have consulted, and whose opinion on this subject I highly value, that there is a good deal of preliminary work which ought to be undertaken in this country before the Government could safely begin planting on the large scale indicated in that Report I am told that experiments ought to be made, so as to test thoroughly the varying conditions of climate and soil and the best kind of trees and methods of planting to meet those variations. I am also told that we cannot command the services in this country of a sufficient number of skilled foresters to direct planting. I am advised, and, personally, I am disposed to accept that counsel as the advice of prudence, that the greater haste in this matter will mean the less speed, and that to rush into planting on a huge scale, without first of all making the necessary experiments, organising a trained body of foresters, and taking all other essential steps to secure success when you advance, would be to court disaster, which might discourage all future attempts.

    ENCOURAGEMENT OF AGRICULTURE.
    I will tell the Committee how I propose that this subject should be dealt with; but, before I do so, I have something more to say about proposals for aiding in the development of the resources of our own country. The State can help by instruction, by experiment, by organisation, by direction, and even, in certain cases which are outside the legitimate sphere of individual enterprise, by incurring direct responsibility. I doubt whether there is a great industrial country in the world which spends less money on work directly connected with the development of its resources than we do. Take, if you like, and purely as an illustration, one industry alone—agriculture—of all industries the most important for the permanent well-being of any land. Examine the Budgets of foreign countries—we have the advantage in other directions—but examine and compare them with our own, and hon. Members will be rather ashamed at the contrast between the wise and lavish generosity of countries much poorer than ours and the short-sighted and niggardly parsimony with which we dole out small sums of money for the encouragement of agriculture in our country.
    We are not getting out of the land anything like what it is capable of endowing us with. Of the enormous quantity of agricultural and dairy produce and fruit, and of the timber which is imported into this country, a considerable portion could be raised on our own lands. There, hon. Members opposite and ourselves will agree. The only difference is as to the remedy. In our opinion, the remedy which they suggest would make food costlier and more inaccessible for the people; the remedies which we propose, on the other hand, would make food more abundant, better, and cheaper. What is it we propose?—and, let the Committee observe, I am only dealing with that part of the problem which affects finance.

    NATIONAL DEVELOPMENT GRANT.
    I will tell the House therefore, briefly, what I propose doing in regard to this and all kindred matters I have dwelt upon. There is a certain amount of money—not very much—spent in this country in a spasmodic kind of way on what I call the work of national development—in light railways, in harbours, in indirect but very meagre assistance to agriculture. I propose to gather all these grants together into one Development Grant, and to put in this year an additional sum of £200,000.
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    Legislation will have to be introduced, and I will then explain the methods of administration and the objects in greater detail, but the grant will be utilised in the promoting of schemes which have for their purpose the development of the resources of the country. It will include such objects as the institution of schools of forestry, the purchase and preparation of land for afforestation, the setting up of a number of experimental forests on a large scale, expenditure upon scientific research in the interests of agriculture, experimental farms, the improvement of stock—as to which there have been a great many demands from people engaged in agriculture, the equipment of agencies for disseminating agricultural instruction, the encouragement and promotion of co-operation, the improvement of rural transport so as to make markets more accessible, the facilitation of all well-considered schemes and measures for attracting labour back to the land by small holdings or reclamation of wastes. Every acre of land brought into cultivation, every acre of cultivated land brought into a higher state of cultivation, means more labour of a healthy and productive character. It means more abundant food—cheaper and better food for the people.
    The sum which I propose to set aside for these large and diverse purposes may seem disproportionate, especially as a good deal of capital expenditure will necessarily be invested in the carrying out more especially of the experiments. For the purpose of afforestation schemes, at any rate at the earlier stages, when the expenditure will be particularly heavy, I propose that borrowing powers should be conferred upon the Commission directing the distribution of the grant, though I intend to avoid the necessity of resort to loans in connection with the capital expenditure required for other parts of the scheme.
    Mr. JOHN REDMOND: Does this include Ireland?
    Mr. LLOYD-GEORGE: Oh, yes. I should hope to retain a great deal of money spent in Ireland for the purposes of which I have spoken. I should hope to attain this end by what may at first sight appear a proposal of a more drastic character. Hitherto all surpluses due either to unexpected accessions to the revenue or savings upon the Estimates have passed automatically into the old Sinking Fund for the liquidation of debt. I propose that all these unanticipated accretions and economies shall in future pass into the De-

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    velopment Fund, so as to constitute a reserve for the purpose of money spent on the recommendations of the Commissioners, but under the direction of Parliament, on such objects as I have too compendiously sketched. The days of surpluses are not quite gone, and I sincerely hope, although the omens are for the moment bad, that the days of economising in public Departments are not over. Last year the various Departments saved over two millions, and I feel confident that we shall not look in vain for a similar spirit of cautious and conscientious dealing with public money in the course of the coming years.
    We have more especially during the last 60 years in this country accumulated wealth to an extent which is almost unparalleled in the history of the world, but we have done it at an appalling waste of human material. We have drawn upon the robust vitality of the rural areas of Great Britain, and especially of Ireland, and spent its energies recklessly in the devitalising atmosphere of urban factories and workshops as if the supply were inexhaustible. We are now beginning to realise that we have been spending our capital, and at a disastrous rate, and it is time we should make a real concerted, national effort to replenish it. I put forward this proposal, not a very extravagant one, as a beginning.

    MOTOR TRAFFIC AND ROAD MAINTENANCE.
    It would be better that I should in this connection inform the House of another project which I shall have to submit in detail to its judgment later on in the course of the Session, but as it involves a substantial addition to the financial burdens of the year, I have to outline its general character in my Budget statement. It also has an indirect, but important, bearing on the question of providing useful and not purposeless employment in times of depression. I propose that a beginning should be made this year with a scheme for dealing with the new, but increasingly troublesome, problem of motor traffic in this country. We are far ahead of all other European countries in the number of motor vehicles upon our roads. We have at least three times as many as France and more than four times as many as Germany. And I am informed by those best able to judge, that to-day among, the products of our factories are some of the best cars procurable in the world, both as regards the compara-
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    tive perfection of the more costly vehicles and the value given for the prices asked for those designed for popular use.
    I therefore look forward to a great future for this industry, and I am the last to wish to hinder its development or be responsible for proposals which would be in any way hostile to its interests. Quite the reverse. I am anxious to be helpful to its growth and prosperity. But I cannot help feeling that this problem is urgent, and calls for immediate attention. Any man who takes the trouble to consider the damage which is done to the roads of this country, often by men who do not contribute—or perhaps I ought to put it in another way, who have not been given the opportunity of contributing to the upkeep of the roads they help so effectively to tear up—the consequent rapid increase in the expense of road maintenance, the damage done, if not to agriculture, at least to the amenities of rural life by the dust clouds which follow in the wake of these vehicles, above all, the appalling list of casualties to innocent pedestrians, especially, to children, must come to the conclusion that this is a question which demands immediate notice at the hands of the Central Government. The question of road construction, which was at one time deemed to be part of the essential development of the country, seemed to have been almost finally disposed of by the railways, but the advent of the motor has once more brought it to the front. It is quite clear that our present system of roads and of road-making is inadequate for the demands which are increasingly made upon it by the new form of traction. Roads are too narrow, corners are too frequent and too sharp, high hedges have their dangers, and the old metalling, admirably suited as it was to the vehicles we were accustomed to, is utterly unfitted for the motor-car.
    If there be any truth at all in Ruskin's sweeping assertion that "all social progress resolves itself into the making of new roads," it must be admitted that we have been lamentably deficient. The State has for a very long period done nothing at all for our roads. I believe that no main road has been made out of London for 80 years. We have no central road authority. The roads of England and Wales are administered by 30 metropolitan borough councils (including the London County Council and City of London), 61 county councils, 326 county and non-county borough councils, and 1,479 urban and rural district councils. The great North Road, our greatest his-

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    toric and national highway from London to Carlisle, is under no fewer than 72 authorities, of whom 46 are actually engaged in maintaining it. Among those are such authorities as the Kirklington Urban District Council, which controls one mile, and the Thirsk Rural District Council, which is responsible for 1 mile 1,120 yards in one place and 2 miles 200 yards in another! Both the general public and motorists are crying out for something to be done, and we propose to make a real start. How the funds will be raised for the purpose it will be my duty later on to explain; the only indication I shall give now is that the brunt of the expense at the beginning must be borne by motorists, and to do them justice they are willing, and even anxious, to subscribe handsomely towards such a purpose, so long as a guarantee is given in the method and control of the expenditure that the funds so raised will not merely be devoted exclusively to the improvement of the roads, but that they will be well and wisely spent for that end. For that reason we propose that the money shall be placed at the disposal of a central authority, who will make grants to local authorities for the purpose of carrying out well-planned schemes which they have approved for widening roads, for straightening them, for making deviations round villages, for allaying the dust nuisance, and I should also propose that power should be given to this central authority to set aside a portion of the money so raised for constructing where they think it necessary and desirable, absolutely new roads. Power will be given them not merely to acquire land for that purpose, but also for the acquisition of rights over adjoining lands, which will enable them eventually to bring into being new sources of revenue by taking full advantage of the increment and other benefits derived from the new easements they will be creating for the public. That is all I have to say with regard to expenditure, and I now come to the question of how I have got to meet it.
    Once more I want to make it clear before I dismiss this part of the subject that the expenditure undertaken out of the fund must be directly referable to work done in connection with the exigencies of the motor traffic of the country. Although this is expenditure which will be incurred in the course of the present year, and is, therefore, not in the same category as the prospective liabilities which I have hitherto sketched, I do not think it incumbent on me to add this
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    new liability to the ordinary deficit for the year, and I think the House will see that I have a sufficient reason for not doing so. I propose to deal with this expenditure by raising a special fund for the purpose, and it is therefore not quite in the position of being part of the current expenditure of the year. The expenditure will be strictly limited by the revenue we succed in raising.

    SUMMARY OF LIABILITIES.
    I have outlined what I deem to be some of our more pressing requirements in the near future. I have now to consider in what way my proposals will affect the balance sheet of the current year. For this purpose I shall leave out of account for the moment the expenditure upon motor roads since it will, as I have indicated, be covered by and limited to the produce of certain special sources of revenue. Liabilities in respect of schemes of insurance against unemployment and other contingencies affecting the working classes will not mature within the current year, but for labour exchanges £100,000 will be required mainly for the provision of buildings. Under the head of development £200,000 will, as I have explained, be set aside for the first year's grant to the proposed fund. These two items together give a total of £300,000, to which must be added a sum of £50,000 for a purpose which will shortly become apparent, making a total addition of £350,000 to the estimated expenditure. If this is added to the estimated deficit of £15,762,000 on the basis of present taxation, and of the Estimates already presented to Parliament, the amount which must be found, either by further taxation or other means, is increased to £16,112,000, or (allowing a margin for contingencies) to, say, 16½ millions.

    NATIONAL DEBT AND SINKING FUND.
    It is important that the Committee should recollect that during the first three years of the present administration taxes amounting in the aggregate to something over 7½ millions a year were taken off. In addition to that, provision has been made for a net reduction of deadweight debt to the extent of no less than 47¼ millions, and of our aggregate capital liabilities to the extent of 42¼ millions. This means a saving to the country in respect of interest of over a million pounds a year, which, if it had been directed to relieving the taxpayers' burthens instead of to increasing the Sinking Fund, would

    499
    have enabled the total remission of taxation to have been raised to 8½ millions—a sum practically equivalent to the annual cost of the Old Age Pensions measure of the Government.
    Another satisfactory element in our Capital Account is to be found in the fact that under the head of "Other Capital Liabilities" the repayments will, in the present financial year, for the first time since the introduction of the system of naval and military works loans, exceed the new borrowings. The estimated borrowings on capital account for 1908–9 were £2,785,000. The actual borrowings were £2,636,000, of which £1,300,000 was for telephone purposes, £859,000 for naval works, and £270,000 for military works, while the amount applicable in the year to repayment of principal was £2,279,000. The estimated borrowings for the current year are only £1,795,000, of which £1,300,000 will be required for telephone works, while the amount applicable to repayment of principal is estimated at £2,497,000. The borrowings under the Naval and Military Works Acts are now limited to works actually in progress, and have practically come to an end. The proposal which I now have to make was foreshadowed and justified by the Prime Minister when he opened the Budget last year, and I need now scarcely say more than that the amount by which I propose that the fixed debt charge should be reduced is three millions pounds.
    The dead-weight debt on the 1st of April last was £702,688,000, a decrease of £8,788,000 as compared with the amount on the 1st of April, 1908. The reduction would have been considerably larger but for the fact that I did not deem it advisable, having regard to the state of the market towards the close of the year, to lay out the whole of the moneys available for debt reduction. The unexpended balance of Sinking Fund moneys in the bands of the National Debt Commissioners at the end of 1908–9 was no less than £7,667,000, as compared with £1,132,000 a year ago. This additional £6,500,000, or £5,750,000, if we assume that the realised deficit is met out of these moneys, represents a debt-redeeming capacity in terms of Consols at current prices amounting to £6,750,000. If we add this amount to the previous figure of £8,788,000 we arrive at the real reduction of dead-weight debt which is properly attributable to the finance of last year—£15,538,000. When this is brought to
    500
    account the dead-weight debt will stand at approximately £696,000,000, or somewhat less than its amount twenty years ago (£697,043,000), when the late Lord Goschen reduced the debt charge to 25 millions a year. There is, however, an important difference between a fixed debt charge of 25 millions in 1899–90 and a fixed debt charge of the same amount now. The rate of interest on Consols 20 years ago was in process of reduction from 3 to 2¾ per cent., now it is 2½ per cent. While, therefore, in 1889–90 20 millions in round figures of the total provision was applied to the payment of interest and management expenses, leaving little more than 5 millions, or about three-fourths of 1 per cent. of the amount of the debt available for repayment of principal, interest and management will in the current year absorb only about 18 millions, leaving nearly 7 millions (or more than 1 per cent.) for Sinking Fund purposes. This figure is £300,000 more than the average annual provision made for the repayment of principal in the ten years immediately preceding the South African War, and only three quarters of a million less than the amount estimated to be available in 1899–1900, before the adoption of Lord St. Aldwyn's proposal to reduce the fixed debt charge from 25 millions to 23 millions, and whereas in 1899–1900, and the years immediately preceding and following it, we incurred a net increase of our other liabilities in respect of naval, military, and other works by an average of more than £3,500,000, there will this year be a net surplus of moneys applicable to repayment of principal over new borrowings of about £700,000. In view of these facts, and more particularly as we are spending so much out of current revenues upon Naval construction which less provident finance might have found an excuse for charging upon a future generation, I think the time has come when, without any failure in our duty to posterity, we can reduce the fixed debt charge from 28 to 25 million pounds. The adoption of this proposal will mean a reduction of the amount to be found by new taxation from 16½ to 13½ millions.

    DIFFICULTIES OF THE ECONOMIST.
    How am I to obtain the necessary money for the settlement of this very heavy account? I dismiss borrowings. One way, of course, to balance the account would be to effect a saving of expenditure, and the other is by raising taxes. I should like to say one word on the first before I come

    501
    to the second question. The path of the economist is hard. His is not a very attractive or popular role in any Government. One might infer that the first object of a finance minister who has to face a heavy deficit would be to inquire as to possible economies, with a view, if not of obviating new imposts altogether, at all events lightening them as far as possible. Last summer, when there was a suspicion that I might possibly do my level best to seek out economies and make a beginning in that respect, what was the result? I saw paragraphs in responsible Opposition journals accusing me of impertinence in instituting a search into possible economies in some of our most expensive services. What happened? Merely because I proposed to inquire, merely because I sought investigation, myself and my colleagues were subjected to such persistent abuse, insults, and scurrility as few Ministers have ever been subjected to, merely for desiring inquiry. I am still of opinion that it is worth this country's while to inquire thoroughly into its affairs, but I am equally clear that until public opinion is educated up to the point of assenting to the institution of that inquiry, and therefore giving the necessary support, no substantial results will be achieved in that way. Therefore I fall back upon the other resource of raising taxes and of so meeting and liquidating the demand.

    PRINCIPLES OF TAXATION.
    Now what are the principles upon which I intend to proceed in getting those taxes? The first principle on which I base my financial proposals is this—that the taxation which I suggest should be imposed, while yielding in the present year not more than sufficient to meet this year's requirements, should be of such a character that it will produce enough revenue in the second year to cover the whole of our estimated liabilities for that year. And, moreover, that it will be of such an expansive character as to grow with the growing demand of the social programme which I have sketched without involving the necessity for imposing fresh taxation in addition to what I am asking Parliament to sanction at the present time. The second principle on which I base my proposals is that the taxes should be of such a character as not to inflict any injury on that trade or commerce which constitutes the sources of our wealth.
    My third principle is this, that all classes of the community in this financial emer-
    502
    gency ought to be called upon to contribute. I have never been able to accept the theory which I have seen advanced that you ought to draw a hard-and-fast line at definite incomes and say that no person under a certain figure should be expected to contribute a penny towards the burden of the good government of the country. In my judgment all should be called upon to bear their share. No voluntary association, religious or philanthropic or provident, has ever been run on the principle of exempting any section of its membership from subscription. They all contribute, even to the widow's mite. It is considered not merely the duty, but the privilege and pride of all to share in the common burden, and the sacrifice is as widely distributed as is the responsibility and the profit. At the same time, when you come to consider whether the bulk of the taxation is to be raised by direct or indirect means, I must point out at this stage—I shall have a little more to say on this subject later on—that the industrial classes, in my judgment, upon a close examination of their contributions to local and Imperial finance, are paying more in proportion to their incomes than those who are better off. Their proportion to local finances especially is heavier, because, although nominally the rates are not paid by them, as everyone knows, they are really. For that reason the burden at the present moment of new taxation bears much more heavily in proportion to their income on that class than it does, upon the wealthier and better-to-do classes.

    NEW TAXATION—MOTOR CARS.
    I now come—and I trust that the Committee will not think that I have delayed too long—to the most interesting and the most difficult part of my task, the explanation of the various proposals for fresh taxation which I have to lay before them. I think it will be to the convenience of the Committee if I deal first with motor cars, and so dispose at once of a source of revenue from which, as I have explained, I, as Chancellor of the Exchequer, shall derive no advantage. In Great Britain, private cars, as distinct from hackney carriages (i.e., taxicabs and motor omnibuses) at present pay £2 2s. carriage tax if under one ton in weight, with an additional £2 2s. if between one and two tons in weight, and an additional £3 3s. if between two and three tons, while motor-cycles pay 15s. In Ireland there is at present no tax on motor-

    503
    cars. I propose to remove that Irish grievance. These duties brought in for the year 1908–9 the sum of £150,569.
    I propose to substitute for this a new and increased scale, with graduations, which will come into force next January, for the whole of the United Kingdom, and I have decided to base the scale on the power of the cars and not on the weight. The horse-power will be determined in accordance with regulations made by the Treasury, and in the case of petrol cars with reference to the bore of the cylinders. It will no doubt be somewhat more difficult to ascertain the power than it is to ascertain the weight, but I believe that the plan I am adopting will be on the whole the fairest method of distributing the tax.
    The scale I propose will be as follows:—

    Under 6½

    horse-power, tax

    £2

    2s.

    Under 12

    horse-power, tax

    £3

    3s.

    Under 16

    horse-power, tax

    £4

    4s.

    Under 26

    horse-power, tax

    £6

    £6

    Under 33

    horse-power, tax

    £8

    8s.

    Under 40

    horse-power, tax

    £10

    10s.

    Under 60

    horse-power, tax

    £21

    0s.

    Above 60

    horse-power, tax

    £42

    0s.

    It will be seen that the tax rises rapidly when we get to cars over 40 horse-power—a provision with which I think the Committee will not quarrel.
    Doctors' cars I propose to charge at one-half these rates.
    Motor cycles I would charge at the uniform rate of £1.
    No additional duties will be placed on hackney carriages, and the existing exemptions to trade vehicles will be continued. The new duties on private cars and motor cycles I estimate to yield, in the aggregate, this year £410,000, or an increase of £260,000 over last year's figures; but such an estimate must be to a large extent guess-work, for, though I am able to say with fair certainty that the number of private cars is about 55,000 and of motor cycles 40,000, the number of the former in each category of power is of course entirely a matter of conjecture. I need hardly say that, in accordance with the Prime Minister's undertaking in ids Budget Speech in 1907, arrangements will be made so that the local authorities will continue to obtain a sum equivalent to the old duties.

    DUTY ON PETROL.
    I now come to a second proposal that I have to make in this connection. I have already explained to the Committee that one of the chief reasons for imposing additional taxation on motor cars is the fact that the increase in their numbers necessitates a reorganisation of our main-road system, and it will be obvious that, were I to confine taxation to a mere re-adjustment of the scale of licence duties, the burden would be imposed with absolutely no relation to the extent that the car might use the roads. Some cars are out four or five hours a day all the year round, others are used but rarely, and I believe that, were I to obtain anything like adequate contribution from motor cars entirely by direct taxation, I might hinder to some extent the development of the motor industry by discouraging persons from keeping a motor, or an additional motor, should they only want it for occasional use.
    I, therefore, propose to put a tax of 3d. per gallon on all petrol used for motor vehicles. This small tax, very small compared with what hon. Gentlemen would have to pay if they were motoring in France, where they would be compelled to pay 1s. 8d.—[HON. MEMBERS: "They have got protection," and "No, no."] I worked it out, and the hon. Member is absolutely wrong. It varies very much, but in the principal towns you also pay an octroi duty. This small tax will fall on motorists in proportion both to the distance travelled and also to the power of the car, for the Committee knows that a high-powered car will consume considerably more petrol per mile run. In order to meet the case of commercial vehicles and vehicles such as motor cabs and omnibuses which will not perhaps profit to so great an extent by the improvement in our roads, I propose to give a rebate of half the duty on the quantity consumed in their propulsion. There will, of course, be a rebate of the whole duty on petrol used for all purposes other than propelling motor cars—though the amount used for such other purposes is comparatively small.
    I estimate the yield of this tax to be about £340,000 for the 11 months of the current financial year, and to be about £375,000 for a full year. The total sum, therefore, available for that part of my development scheme which bears on road improvement from these two sources (after allowing for the payment to the local authorities of a sum equivalent

    505
    to the old licence duties) will be some £600,000—a figure which should rapidly increase in succeeding years. I propose that the proceeds of these duties should be issued from the Exchequer to a separate account under statutory arrangements similar to those applicable to the estate duties grant, and the local taxation grant. Now that disposes of motors, and gets them out of the road.

    DIRECT TAXATION.
    Now I come to my direct taxation. It must be obvious that in meeting a large deficit of this kind I should be exceedingly unwise if I were to trust to speculative or fancy taxes. I therefore propose, first of all, to raise more money out of the income tax and estate duties. Income tax in this country only begins when the margin of necessity has been crossed and the domain of comfort and even of gentility has been reached. A man who enjoys an income of over £3 a week need not stint himself or his family of reasonable food or of clothes and shelter. There may be an exception in the case of a man with a family, whose gentility is part of his stock in trade or the uniform of his craft. Then, I agree, often things go hard.
    Then when you come to estate duties what a man bequeaths, after all, represents what is left after he has provided for all his own wants in life. Beyond a certain figure it also represents all that is essential to keep his family in the necessaries of life. The figure which the experience of 70 years has sanctified as being that which divides sufficiency from gentility is £150 to £160 a year. A capital sum that would, if invested in safe securities, provide anything over that sum ought to be placed in a different category from any sum which is below that figure.
    There is one observation which is common to income tax and the death duties, more especially with the higher scales. What is it that has enabled the fortunate possessors of these incomes and these fortunes to amass the wealth they enjoy or bequeath? The security ensured for property by the agency of the State, the guaranteed immunity from the risks and destruction of war, ensured by our natural advantages and our defensive forces. This is an essential element even now in the credit of the country; and, in the past, it means that we were accumulating great wealth in this land, when the industrial enterprises of less fortunately situated countries were not merely at a standstill,
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    but their resources were being ravaged and destroyed by the havoc of war. What, more, is accountable for this growth of wealth? The spread of intelligence amongst the masses of the people, the improvements in sanitation and in the general condition of the people. These have all contributed towards the efficiency of the people, even as wealth-producing machines. Take, for instance, such legislation as the Education Acts and the Public Health Acts: they have cost much money, but they have made infinitely more. That is true of all legislation which improves the conditions of life of the people. An educated, well-fed, well-clothed, well-housed people invariably leads to the growth of a numerous well-to-do class. If property were to grudge a substantial contribution towards proposals which ensure the security which is one of the essential conditions of its existence, or towards keeping from poverty and privation the old people whose lives of industry and toil have either created that wealth or made it productive, then property would be not only shabby, but short-sighted.

    INCOME TAX.
    Now what do I propose? When it is remembered that the total yield of income tax on its present basis amounts to little more than five years' normal growth of the aggregate income upon which income tax is payable (which increased from £607,500,000 in 1901–2 to £640,000,000 in 1906–7), it will be seen that our present reserve of taxable capacity is as great at the present moment with the existing rate of the tax as it would have been five years ago if there had been no tax at all. If the tax were doubled in the present year income tax payers would, in the aggregate, after payment of the double rate, be in the enjoyment of almost exactly the same net income as five years ago. A careful consideration of these figures ought to convince the most sceptical that the maximum rate of the tax may be retained at 1s., or even increased, without seriously encroaching upon our available reserves for national emergencies. The time, however, has gone by when a simple addition of pence to the poundage of the tax, attractive as the simplicity of that expedient is, can be regarded as a satisfactory solution of a financial difficulty.
    As the Prime Minister so well pointed out two years ago, inequalities which might be tolerated in a tax designed for the purpose of meeting a temporary emergency are intolerable in a permanent part

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    of our fiscal machinery. The income tax, imposed originally as a temporary expedient, is now in reality the centre and sheet anchor of our financial system. The principles of graduation and differentiation, the apportionment of the burden as between different classes of taxpayers, according, on the one hand, to the extent, and, on the other hand, to the nature of their resources, are in the lower stages of the income tax scale already recognised by abatements and allowances. It remains to complete the system by extending the application of these principles, and in regard to differentiation by taking account to some extent, at any rate, not only of the source from which income is derived, but also of the liabilities which the taxpayer has contracted in the discharge of his duties as a citizen, and of the other burdens of taxation borne by him by virtue of those responsibilities.
    Notwithstanding the relief given by the Finance Act of 1907, the burden of the income tax upon earnings is still disproportionately heavy. While, therefore, I propose to raise the general rate at which the tax is calculated, I propose that the rates upon earned income in the case of persons whose total income does not exceed £3,000 should remain as at present, namely, 9d. in the pound up to £2,000, and 1s. in the pound between £2,000 and £3,000. In respect of all other incomes now liable to the 1s. rate I propose to raise the rate from 1s. to 1s. 2d.

    ABATEMENT ON CHILDREN.
    In the case of incomes not exceeding £500, the pressure of the tax, notwithstanding the abatements at present allowed, is sorely felt by taxpayers who have growing families to support, and although a comparatively trifling additional burthen will be imposed upon them by the increased rate, since the aggregate income of this class is to the extent of at least four-fifths exclusively earned income, I think that even upon the present basis they have a strong claim to further relief. Even from the purely fiscal point of view there is this essential difference between the position of a man with a family and that of the taxpayer who has no such responsibilities. The family man is, generally speaking, a much heavier contributor to that portion of the revenue which is derived from indirect taxation and inhabited house duty, so that in comparison with the bachelor he is taxed not so much in proportion to his income as in proportion to his outgoings.
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    There is no class of the community which has a much harder struggle or a more anxious time than that composed of the men whose earnings just bring them within the clutches of the income tax collector. On a small income they have not merely to maintain themselves, but to exhaust a large proportion of their limited resources in that most worrying and wasteful of all endeavours known as "keeping up appearances." They are often much worse off and much more to be pitied than the artisan who earns half their wages. If they have only themselves to think about they do well, but when they have a family dependent upon them the obligation to keep up the appearance of respectability of all their dependants is very trying. I am strongly of opinion that they deserve special consideration in the rearrangement of our finances. Continental countries recognise their claim, and I propose that for all incomes under £500, in addition to the existing abatements, there shall be allowed from the income in respect of which the tax is paid a special abatement of £10 for every child under the age of 16 years. Take the case of the widow with a family, which is always cited in reference to proposals to tax income or property: she will in most cases be better off with this abatement, should her family be of average numbers, even though she is rated at 1s. 2d., than she was before. The new abatement will, like the existing abatements, be allowed irrespective of the source from which the income is derived, and earned incomes, upon which no new burthen is to be imposed, as well as unearned incomes, will enjoy the advantage of the concession. The addition of 2d. to the rate upon all incomes in excess of £2,000, and upon unearned income enjoyed by persons whose total income does not exceed that amount, would yield in a full year £4,700,000, and in the year of imposition £3,760,000. But from this source I must deduct £160,000 in respect of the retention of the 1s. rate upon earned income enjoyed by persons whose total income is between £2,000 and £3,000, and £600,000 for the costs of the new abatements. This reduces the estimated net receipts from the additional 2d. in 1909–10 to £3,000,000.
    The rate of income tax under the present law is absolutely uniform upon all incomes in excess of £2,000 a year; between that rate and £700 the allowance in respect of earned income operates to relieve the less wealthy taxpayer, and thus

    509
    to introduce the principle of graduation. Below £700 the system of abatements produces a regular graduation by descending stages. The introduction of a complete scheme of graduation, applicable to all incomes, besides raising questions of general principle, which it is not necessary now to discuss, would require an entire reconstruction of the administrative machinery of the tax, including in all probability the abandonment to a very large extent of the principle of collection at the source upon which the productivity of the tax so largely depends. It would create for the administrative Department a series of problems which, if not insoluble, could at any rate scarcely hope to obtain a satisfactory solution in a year where other taxation of a novel character must necessarily claim a large part of its attentions.

    INCOME (SUPER) TAX.
    The imposition of a super-tax, however, upon large incomes on the lines suggested by the Select Committee of 1906 is a more practicable proposition, and it is upon this basis that I intend to proceed. Such a super-tax might take the form of an additional poundage charged at a uniform rate upon the whole income of persons whose total income exceeds the maximum above which the tax is to be applied, or the poundage might be varied according to the amount of the income to be taxed. A third, and I think preferable, alternative is to adopt a uniform poundage, but to charge the tax not upon the total income, but upon the amount only by which the income exceeded a certain fixed amount which would naturally, but need not necessarily, be the amount of the minimum income which attracts the tax. We might begin, say, at £3,000, and levy the new tax upon all income in excess of £3,000, or at £5,000, and levy the tax upon income in excess of £5,000. In the former case some 25,000 assessments would be required, in the latter only 10,000—from the point of view of administration a very strong argument in favour of the adoption of the higher figure at any rate in the first instance. On the other hand, a general abatement of £5,000 per taxpayer would be extremely costly, and though it would have the effect of largely reducing the actual as compared with the nominal rate of the tax except in the case of very large incomes indeed, the nominal rate necessary to produce an adequate revenue—though in reality no measure of the general burthen—would
    510
    tend to appear somewhat alarming. While therefore I propose to limit the tax to incomes exceeding £5,000, I propose to levy it upon the amount by which such incomes exceed £3,000, and at the rate of 6d. in the £ upon the amount of such excess. An income of £5,001 will thus pay in super-tax 6d. in the £ on £2,001, the equivalent of an addition to the existing income tax of rather less than 2½d. in the £, and an income of £6,000 the equivalent of an additional 3d. The equivalent of an extra 4d. (or a total income tax of 1s. 6d. in the £) will only be reached when the total income amounts to £9,000 and 5d. not until £18,000. Assessments to the new tax will be based upon the Returns of total income from all sources, which will be required from persons assessable. The machinery will be, in the main, independent of the machinery of the existing income tax, but the assessments will be made by the special Commissioners appointed under the Income Tax Acts, and assessable income will be determined according to the rules laid down in the income tax schedules. Total income for the purposes of the tax will be ascertained in the manner prescribed by Statute for determining total income for the purposes of the present income tax exemptions and abatements, that is to say, deductions will be allowed for interest upon loans and mortgages and any other payments made under legal obligation, while in the case of real property assessed to property tax under schedule A, a special 5 per cent. allowance will be made for cost of management, as well as the allowances of one-sixth and one-eighth for repairs at present made in collection of the property tax under that schedule. Sir Henry Primrose, in his evidence before the Select Committee in 1906 estimated the number of persons in receipt of incomes over £5,000 a year to be 10,000, and their aggregate income to be £121,000,000. From this it will be seen that the amount of income liable to a super tax would be £90,000,000. The yield of the super-tax in a full year is estimated at £2,300,000, but as new machinery has to be set up and as returns have to be obtained from taxpayers, examined, and assessments made upon them, I should be sanguine if I anticipated that more than a small proportion of the first year's income will reach the Exchequer before 31st March next. In these circumstances I have not felt justified in including more than £500,000 in my Estimate for the current year.

    RESTRICTION OF ABATEMENTS.
    My last proposal relating to the income tax is the restriction of the exemptions and abatements to persons resident in the United Kingdom. The income of a person resident abroad only comes within the scope of the income tax in so far as it is derived from sources within the United Kingdom. Whatever may be his total actual income, his total income from all sources within the meaning of the Income Tax Acts comprises only such receipts as accrue to him from sources in this country. A foreign millionaire, who draws anything between £160 and £400 from English investments, can obtain £8 from the Commissioners of Inland Revenue. If his dividends exceed £400 but do not exceed £700 he can recover a sum which varies from £7 10s. to £3 10s. in accordance with the abatement scale. If they are £701 or upwards he can recover nothing. There is reason to suppose that by far the greater part of the money paid to persons outside the United Kingdom in respect of these abatements goes to people who, if they were resident here, would not be entitled to it. The claims are, besides, from an administrative point of view, very difficult to deal with, and the difficulty will be greatly increased if my proposal to grant special abatements to the fathers and mothers of families are adopted. The claims themselves are received in the main through income tax repayment agencies, which absorb in commission a large percentage—often, I believe, as much as 50 per cent.—of the amount recovered. In these circumstances I am satisfied that the abolition of this concession, which was recommended by Lord Ritchie's Committee of 1904, will give rise to no appreciable hardship. The consequent saving to the revenue will be something like £250,000, to which must be added a considerable saving in respect of the salaries of the staff at present employed in the troublesome business of dealing with the claims. As, however, the repayments take place in a year subsequent to that in which the tax is collected, and I do not propose to make the alteration retrospective, no part of the saving will accrue to the revenue of the present year.

    DEATH DUTIES.
    The proposals I have to make with regard to the death duties are of a very simple character. The great reconstruc-
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    tion of these duties in 1894, which will always be associated with the name of Sir William Harcourt, has given us a scheme of taxation which is at once logical and self-consistent as a system, and a revenue-producing machine of very high efficiency. Apart, therefore, from one or two minor changes in the law, which experience has shown to be desirable, I intend to confine my attention to adjusting the rates with a view to increasing the yield without altering the basis on which the duties are levied.
    The estate duties upon small estates of which the net principal value does not exceed £5,000 will remain at one, two or three per cent., according to value, as at present; but between £5,000 and £1,000,000 I propose to shorten the steps and steepen the graduation. I do not propose to increase the maximum of 15 per cent., but I propose it should be reached at £1,000,000 instead of £3,000,000. An estate of £10,000 belongs to a different category, and represents a greater taxable capacity, than an estate of £1,001, yet both alike pay three per cent.; and the same is true of an estate of £25,000 as compared with one of £10,001, both of which now pay four per cent. Under the new scale, estates from £5,000 to £10,000 will pay four per cent., and those from £10,000 to £20,000 five per cent. The next step will be £20,000 to £40,000, and the rate six per cent.; the next £40,000 to £70,000, with seven per cent., while estates of £70,000 to £100,000 will pay 8 per cent.; from £100,000 to £150,000, the rate will be 9 per cent.; from £150,000 to £200,000 it will become 10; the rate from £200,000 to £400,000 will be 11 per cent.; from £400,000 to £600,000, 12; from £600,000 to £800,000, 13; from £800,000 to £1,000,000, 14; and above £1,000,000, 15 per cent. upon the whole of the estate. The new rates, if chargeable, as I propose they should be, in respect of all estates passing upon deaths occurring on or after to-morrew, are estimated to yield an additional revenue of £2,550,000 in 1909–10, increasing to £4,200,000 in the following year, and ultimately to £4,400,000.

    SETTLEMENT ESTATE DUTY.
    As a consequence of these increases, added to the increases made in the higher steps of the estate duty scale two years ago, it becomes necessary to deal with the settlement estate duty, which has remained unaltered since its original imposition in 1894. Non-settled property is chargeable with estate duty according to scale every time the interest in the property passes on death upon the full corpus

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    of the property. Settled property, on the other hand, if settled by will, is so chargeable only upon the death of the testator, or, if settled otherwise than by will, only upon the death of the first tenant for life, and, unless a subsequent life tenant is competent to dispose, escapes any further payment of estate duty until the expiry of the settlement, however many life tenants may intervene. For example, a non-settled estate left to a son, by him to a brother, and by the brother to his son would pay estate duty three times, whereas, if it took the same course under a settlement made by the will of the original testator, it would pay once only—at the original testator's death. By way of set-off to this preferential treatment of the settled estate it was provided by the Finance Act of 1894 that an additional rate of 1 per cent., called settlement estate duty, should be paid in addition to the estate duty, at the rate appropriate to the estate, on the first occasion of its passing at death under the settlement. The duty must therefore be regarded as a sort of composition for future payments of estate duty to which the property would become subject in the absence of a settlement. Sir William Harcourt's intention, as expressed in the Budget speech of 1894, was to secure by means of this duty absolute equality of treatment as between settled and non-settled property. "In this manner," he said, "we levy the same amount from the estate as if it were left absolutely, but each beneficiary will contribute according to the extent of his interest by the reduction of his income resulting from the original diminution of the capital."
    The proposition that an immediate payment at the rate of 1 per cent. is an adequate composition for a future payment, or possibly several future payments, according to the character of the disposition and the course of events, at rates varying from 1 to 8 per cent. (the then limits of the Estate Duty Scale) is at first sight somewhat startling. On the other hand, when we remember that the expedient of settling a whole estate is often adopted as an alternative to dividing it in the first instance, that the average age at which a life tenant succeeds is probably much higher than that of the average beneficiary taking free property, and last, but not least, that the difference in value between the fee simple of the property and the life interest or life interests of the tenant or tenants for life passes, in theory at any rate, directly from the settler to the
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    remainderman, it is not unreasonable that a substantial abatement should be made from the present value (calculated on a strictly actuarial basis) of what would probably be the future liability in respect of estate duty, in the event of the whole estate being charged in full every time it passed upon death under the settlement. When, however, every allowance has been made for difference of circumstances, I think there can be no doubt, especially when regard is had to the fact that settlement estate duty is not chargeable where the only life interest is that of a spouse, that the 1 per cent. additional duty was not, even in 1894, when the average rate of estate duty was approximately 5 per cent., anything like the full equivalent for the immunity from further charge enjoyed by the property during the remainder of the settlement. The alterations in the estate duty scale made in 1907 and those which I now propose will together have the effect of raising the average rate of estate duty from about 5 to approximately 7 per cent., and the charge of only 1 per cent. settlement estate duty, which was not in fact a full equivalent for the privilege granted even on the basis of the 1894 rates, clearly cannot be defended in conjunction with the new scale. I propose, therefore, to increase the rate from 1 to 2 per cent. Although the effect of this alteration will ultimately be to double the yield of the present 1 per cent. duty (about £500,000) I can only reckon on £50,000 extra revenue from this source in 1909–10 and £375,000 in 1910–11, since these duties are in most cases not collected until some time after the death.

    ANOMALY CORRECTED.
    I propose at the same time to correct a small anomaly, introduced as an—I believe—accidental effect of the legislation of 1894, which gives rise to a very considerable loss of revenue every year. Where property subject to a life interest does not fall into possession until after the death of the prospective beneficiary, only one estate duty is payable, namely, as in respect of settled property. But where it falls into possession in his lifetime, two estate duties are payable, namely, one on the transmission of the property to him, and one on the transmission of the property from him. It is, of course, a matter of indifference to the ultimate taker whether the decease of the life tenant is prior or subsequent to the decease of his own testator; yet, in the former case, it

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    comes to him charged with two duties, and, in the latter, charged with one duty only. My proposal is that such property should be treated, as before 1894, in the same way in the latter as in the former contingency. The estimated advantage of this alteration to the revenue of the current financial year is £250,000, and £375,000 in 1910–11 and future years.

    LEGACY AND SUCCESSION DUTIES.
    The rate of legacy and succession duties, where the beneficiary is a brother or sister or a descendant of a brother or sister of the deceased, will be raised from 3 per cent. to 5 per cent.; while the other legacy and succession duties, which at present vary from 5 to 10 per cent., according to the degree or absence of relationship, will be charged at the uniform rate of 10 per cent. ["Oh, oh."] Most of them are charged 10 per cent. at present. [An HON. MEMBER: "Not at all."] It is so. The present exemptions from the 1 per cent. legacy and succession duties now chargeable, where the beneficiary is a lineal ancestor or descendant of the deceased, will be abolished, and the duty extended to the case where a husband or wife takes the legacy or succession. In the cases of spouses and lineals, however, I propose to exempt from the new and reimposed duties all legacies and successions of whatever value in cases where the aggregated property passing on the death of the deceased does not exceed £15,000.
    Exemption will also be allowed, whatever may be principal value of the aggregated property, wherever the amount of the legacy or succession itself does not exceed £1,000, or, if the person taking the legacy or succession is the widow of the deceased or a child under the age of 21 years, wherever the amount of such legacy or succession does not exceed £2,000. The changes will, like the new estate duty scale, operate only in the case of persons dying on or after the 30th instant; but as these duties are not as a rule payable until the end of the executor's year, I cannot count on receiving any additional revenue until 1910–11. I estimate the amount which the alterations will produce next year at £1,370,000, and that the yield will in course of time increase to £2,150,000.

    VALUATION FOR PURPOSES OF ESTATE DUTIES.
    Apart from the question of rates, the method of valuation adopted for the purposes of the death duties has necessarily a very important influence on the revenue.
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    Under the present law, agricultural property enjoys the somewhat peculiar privilege that, whatever may be its value in the market, its valuation for death duty purposes cannot exceed 25 years' purchase of the net rental after allowing for expenses of management. I propose to abolish this limitation, and to deal with the class of property to which it applies on the basis applicable to all other property passing upon death—namely, the actual price which would be paid by a willing buyer to a willing seller as on the date upon which the property becomes chargeable to duty.
    Further, the law as to the valuation of large blocks of stocks and shares is not sufficiently clear. It is sometimes contended that, if the whole property were placed on the market on the date of the deceased's death, a "slump" would take place in the value of the securities Of course, no executor would be so imprudent as to take this course. There is no reason why it should not be definitely laid down that stocks and shares are in all cases to be valued at the market price, without any reference to the size of the holding, and I propose to amend the law accordingly. From these two changes in the law relating to valuation, I hope ultimately to derive a considerable accession of revenue, but the effect of the changes will only be felt gradually, and the advantage to be derived from the alteration in the current financial year is scarcely likely to be appreciable.

    DISPOSITIONS INTER VIVOS.
    I now come to the period within which gifts made during the lifetime of the deceased are reckoned as part of the estate for the purposes of estate duty. The loss to the revenue arising from voluntary dispositions inter vivos, made with the purpose of avoiding the death duties, cannot be precisely ascertained; but it is probably very considerable, and I fear that resort to this expedient may become still more common when the rate of duty is raised. I therefore propose to substitute five years for one year, as the period within which property so alienated shall remain liable to duty. I am not sanguine that this reform will do more than operate to check what at present is thought to constitute a considerable leakage of revenue; and I do not therefore feel justified in estimating any positive increase of revenue from the alteration.

    FREE ESTATES.
    My last proposal is to extend to free estates the concession made by section 20 of the Finance Act, 1896, which grants

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    exemption from estate duty in respect of objects of national, scientific, or historic interest forming part of a settled estate. The estate duty in respect of such objects, whether forming part of a free or settled estate, will only become chargeable in future if and when they are actually sold. This concession will, I hope, result in keeping together many collections whose owners are, from various reasons, unable to take advantage of the privilege afforded by the present law, and so keep in the country many national treasures which would otherwise, more especially in view of the prospective change in the United States customs tariff upon such objects, tend to find a home on the other side of the Atlantic.

    STAMP DUTIES.
    Under the head of stamp duties I propose to increase the duty upon conveyances on sale from 10s. to 20s. per cent., an exemption from the increased rate being made in favour of conveyances of stock or marketable securities which, by reason of the greater frequency with which they change hands, in comparison with other kinds of property, bear a disproportionate burthen under the present uniform scale. The greater part of the additional revenue under this head will be derived from transfers of real property. As such property will benefit largely from the decrease of the poor rate, which must necessarily follow as a result of the adoption of a State system of old age pensions and other schemes of social reform, it is equitable that it should be called upon to contribute to the Exchequer expenditure for these purposes. [Some cries of "Speak up."] I am afraid I shall have to appeal to the indulgence of the House. I cannot go right through as I thought, but I will just say what I have to say with regard to stamps. Even after my proposed addition, the transfer duty upon such property will still be low as compared with the rates charged in other communities. In Germany, there are both State and municipal taxes which, in towns like Cologne and Frankfort, at any rate, together amount to not less than 3 per cent.; while, in France, the rates are still higher.
    Conveyances or transfers operating as a voluntary disposition, inter vivos—an expedient largely resorted to as a method of avoiding the death duties—will in future Attract, instead of the present fixed duty of 10s., an ad valorem duty calculated on the worth of the property transferred, at the same rate as is applicable to a con-
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    veyance on sale of property of a similar description, and the same rates will apply to certain instruments chargeable at present with stamp duty as settlements. The rates upon marriage settlements will remain unaltered. As a corollary to the increase of the conveyance duties, duties upon leases will be doubled, except in the case where the 1d. rate is chargeable, which will remain as at present.

    BONDS TO BEARER.
    My next proposal relates to bonds to bearer and other securities transferable by delivery. The duty in these cases is the counterpart of the stamp duty upon the conveyance necessary to transfer securities transferable by deed; but, whereas the latter covers only a single transaction, the duty upon bearer securities covers all the transactions taking place during the life of the bond. It is therefore an anomaly that under the existing law this valuable privilege should be given at the cost of a single transfer. I, accordingly, propose to increase the duty upon such bonds (not being bonds issued by a Colonial Government, upon which the rate will remain as now at 2s. 6d. per cent.) from 10s. to 20s. per cent. of the nominal value, the duty upon bonds issued in lieu of existing bonds being concurrently raised from 2s. 6d. to 5s. per cent.

    STOCK TRANSFERS.
    This completes the list of my proposals relating to stamp duties, with one important exception. The transfer duty upon stocks and shares is at the rate of 10s. per cent. ad valorem, leviable upon the conveyance by which the transfer is effected. There are, however, many transactions in securities which, for one reason or another, are never followed by an actual conveyance. A block of shares may be sold and resold several times in the course of passing from one permanent holder to another, and the whole of these transactions may be covered by a single transfer from the first seller to the final purchaser. In such cases the intermediate transactions escape taxation altogether, except for the stamp duty chargeable upon the broker's contract note—1d. upon transactions between £5 and £100, and 1s. upon larger transactions irrespective of amount, and they may, I think, reasonably be required to make a moderate contribution to the Exchequer.
    Such transactions, being mainly of a speculative character, and worked upon

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    narrow margins, will clearly not bear a rate of duty in any way comparable with that charged upon an actual conveyance. Such an impost would, in the first place, from the point of view of the revenue, defeat its object by rendering the greater portion of such transactions impossible, while, in the second place, it would, in my opinion, be opposed to the public interest as calculated to curtail that free circulation of securities which is a necessary condition of steady prices and an open market. For, although these transactions are in the main speculative, and do, at times, like all speculative transactions, degenerate into mere gambling, it is a mistake to suppose that this is their essential or pervading characteristic. In their proper place they form part of the legitimate machinery for discounting fluctuations in value, necessary, not only to the Stock Exchange, but to every sphere of commercial activity, and the imposition of a penal tax designed to curtail the mischievous developments of the system could scarcely attain its object without inflicting irretrievable damage upon the marketability of securities as a whole.
    The same objections do not, however, apply to a small ad valorem tax, which would operate to check business, if at all, only in the case of operations undertaken upon infinitesimal margins, in which, as a rule, the purely gambling element is most prominent, and which can be dispensed with without seriously endangering the stability of the market. I propose, therefore, that the rate between £5 and £100 should be 6d., instead of 1d.; from £100 to £500 1s. (as at present); from £500 to £1,000 2s., with a further 2s. for every additional £1,000 To prevent those rates affecting what are known as "carry-over" operations with undue severity, a single duty will be charged upon the two transactions involved therein, instead of, as now, the full duty upon each transaction.

    "OPTION NOTES."
    "Option notes" will be charged at similar rates, calculated upon the value of the securities to which the option relates. When a substantive contract follows upon the option and involves the payment of stamp duty upon the contract note, there will be a return of the duty already paid in respect of the option contract. Brokers who are not members of the Stock Exchange, whether acting as agents or principals, will be required to issue similar notes to their clients and such notes will
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    be chargeable with the same duties. The preferential treatment now enjoyed by the so-called "bucket shops"—institutions whose principal object is the encouragement of gambling—in the matter of stamp duties will thus be removed. These additional stamp duties may be expected to yield about £1,450,000 in a full year—of which conveyances, deeds of gift, settlements and leases will account for £850,000, bonds to bearer and other marketable securities for £350,000, and contract notes for £250,000. They will not, however, come into force until the Finance Bill has received the Royal assent. The greater part of the first half-year's revenue will thus be lost, while, in the case of most of the duties, a considerable amount of "fore-stalment" has to be reckoned with, since transactions will no doubt be expedited wherever possible to secure the advantage of the lower rate of duty. I cannot, therefore, safely calculate upon receiving more than £650,000 in 1909–10.
    [Sitting suspended for half an hour.]

    FURTHER TAXATION OF LICENCES.
    Mr. LLOYD-GEORGE Mr. LLOYD-GEORGE [resuming at 23 minutes past six of the clock]: I am exceedingly obliged to you, Sir, and to the House for the indulgence extended to me. I now come to the question of licences. I think I may fairly say that further taxation of licences has been anticipated for some time. It has been generally felt that the State has not received a fair return for the valuable monopoly which it has granted to the trade. If a comparison is instituted with the amount charged for this privilege in a community like that of the United States, one cannot help feeling amazed that the trade has been let off so lightly in this country. Land and licences have this in common, that where they have a value at all it is a monopoly value. No one would pay rent for a plot of land if he could secure an equally valuable piece of ground in the same neighbourhood for nothing; nor would anyone give the slightest consideration for an existing licence if a new licence could be got for the asking. The State for reasons of public utility limits the number of licences in a given neighbourhood, with the result that the holder of one of the licences is able to enjoy the exceptional rate of profit which the possession of the privilege permits him to earn. This point was very effectively put in the able circular issued by the brewers themselves during the passage of the Licensing Bill through this House. I shall quote the

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    words they use, as argument could not have been more forcibly or more fairly put. These are the words which the brewers used in stating their case:—
    "Now, with the exception of that portion of the trade which is done by delivery to private houses and clubs, and that which is done through off-licences, the only channel through which the consumption of excisable liquor can take place is through the licensed houses. Parliament has provided that it shall not be sold in any other way, and as a consequence the existing licensed houses, being in possession of a practical monopoly, have acquired a very high value."
    That is the statement of the case of the brewers themselves. As to the extent of that value I shall be able to afford the Committee some statistical enlightenment in the course of a few minutes, but I should like to premise that during recent years there have been two or three elements which have added very considerably to the value of this monopoly. The first is the growing disinclination of benches of magistrates to issue fresh licences and the steady effort made by benches of magistrates rather to reduce the numbers. The reduction which has been made under the Bill of the right hon. Gentleman in 1904 has undoubtedly contributed to the increase in the value of licences. All this has endowed old licences with a special value, which did not attach to them in the days when new licences were more readily granted. The second element in the enhancement of value has undoubtedly been the tied-house system; and the third has been the conversion of what was an annual licence, determinable by the magistrates on evidence as to the necessities of the neighbourhood, into an interest—I will not call it a freehold—determinable only on misconduct.
    By the Act of 1904 a valuable public right or property was parted with without any commensurate return being obtained. Is the market value of this privilege conferred by the State a sufficiently substantial one to justify a considerable increase in the very light licence duties which are now levied on these houses? Fortunately, we are not left to conjecture in appraising the money worth of this privilege. We have three important tests of its value. The first is that claimed by the trade itself. The trade has repeatedly assured the House of Commons through its well authenticated spokesmen that it assesses the value of the monopoly thus conferred upon it by the State at the enormous sum of 150 millions. I am not sure that this does not apply to licences in England and Wales alone, and that Scotland and Ireland are left out of account in the computation. At 10 years
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    purchase this would mean the annual value of 15 millions conferred by a State monopoly. In return for this the public receive by way of licence duties upon public-houses, beer-houses, and hotels in the United Kingdom, an annual rent of £1,809,000. If all the freeholds of the Kingdom were farmed out on these light and easy terms what fortunes our farmers and farm labourers would divide between them. A farmer's profits are assessed for income-tax purposes at a third of his rent. One ready proof of the difference which the granting of this privilege of exclusive trading makes in the value of a business is to be found in the fact that an ordinary business is generally bought and sold at two and three years' purchase of the profits, whereas the value of a public-house licence is always appraised at from 10 to 12 years' purchase, the difference being attributable entirely to the greater certainty, both as regards turnover and rate of profit, which arises from the restriction upon competition afforded by the licensing system. Another test of value has been supplied by the working of the Act of 1904, where compensation is afforded to the owner of the licence when it is forcibly withdrawn by the action of the magistrates. These houses do not afford, perhaps, the best criterion of the real value of a prosperous public-house. Licences are generally withdrawn from the poorer type of public-house because the licensing magistrates have come to the conclusion that they are not required, and therefore, if the value of a house of that kind is high, what must be the price which would be put upon a house which is required by the neighbourhood, and which is, therefore, doing a good trade. However, let us take this, the least favourable illustration which is available, and here again I quote from the brewers' circular. It gives the cases of 126 houses of this kind spread over London, Essex, and Hertfordshire, and we are assured that these houses must be taken as a fair sample of the whole of the houses valued for compensation in that district. The result, according to this document, was that in these 126 cases the total value of the premises with a licence was £280,870; the value of the premises without the licence was £59,071, or, in other words, the value of the premises without the licence amounted only to 21 per cent. of the value of the same premises with a licence. So much for the value of a licence in a house which is not required by a neighbourhood, a thoroughly pernicious and poisonous influence as a

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    rule, which ought not to be tolerated a single day after its superfluous character has become evident to the authorities.
    Now let us take the case of the thriving house, or rather of the house whose trade proves that it is required by its neighbours. I have had before me a list of 141 licensed premises which have been acquired by the London County Council in connection with street and other improvements between March, 1889, and February, 1907. The total premium value attaching to the sites by reason of the licences has been estimated at £344,550, or an average of £2,443 per site. The acquisition of such sites in connection with the Kings-way and Aldwych has been estimated to have cost the Council in respect of the premium value attaching to the sites of the public-houses acquired, a sum of £132,300. In another instance, the premium value of a public-house site required for the improvement of the northern approach to the Tower Bridge is estimated at £20,000. I might multiply these instances, but I think I have furnished the House with sufficient evidence of the enormous value which this monopoly has created. Anyone who impartially investigates the figures may come to the conclusion that the rent or toll exacted by the public is ludicrously inadequate, and that in the interests of good management of public property that rent ought to be brought up to a figure which, without reaching anything like the proportions of a rack rent, will at any rate be commensurate with that which would be charged by a fair-minded and tolerant landlord, who, without doing himself a gross injustice, still at the same time wishes to afford his tenant not only a reasonable but even a generous margin within which to make a living out of his trade. And when a country requires revenue to provide for the defence of its shores and to supply the urgent social need of its people, that seems to be just the moment when, before imposing fresh taxes on its citizens, it ought to look round and see whether it has farmed its property to the best advantage.

    INADEQUATE ASSESSMENTS.
    Now the legislature has long ago fixed what it considers as a reasonable toll in the case of the little village inn. For a house assessed under Schedule A at £9 a licence of £4 10s. is charged, that is, 50 per cent. of the nominal annual value. As I shall point out later on, this bears no relation
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    to the real value; in the vast majority of cases the assessment is probably less than one-half of what it ought to be on the basis acknowledged by the trade itself, in all its business transactions, so that the real charge imposed upon the licensee of the village inn amounts to something like 25 per cent. of the value. The principle which has been considered good enough for the small village publican we think ought to be extended to the proprietors of the prosperous liquor palaces of our great towns, and our rates of duty will be based generally on that principle. But before I actually give the figures I should like to say a few words on the question of valuation. We realise that by keeping the present assessable value as the basis of computation for our licences there will be a good many anomalies and inequalities. Any man who looks at the list of compensated public-houses, and compares the amount of the compensation given in each case with the annual value, will realise how unequally the present principle of licensing bears upon public-house owners. Here is one house, with an annual value which could hardly exceed £40, receives in compensation money £3,246. Here is another house, with an annual value of nearly £300, receives in compensation money £731. We have therefore come to the conclusion that it is essential, in order to ensure fair treatment as between one publican and another, that there should be a valuation based upon the principles on which publicans for the time being receive compensation, and therefore generally accepted by the trade as an equitable basis for appraising the value of their monopoly. This assessment, when it is complete, will be translated into terms of annual value, and the licence will be levied accordingly. The burdens of some publicans may be lightened, that of others may be increased, but on the whole justice will be done, as each man will be called upon to pay according to the value which he receives from the privilege which the State confers upon him.
    It may well be, however, that it will have the effect of so considerably raising the whole level of the contribution required of the publican as to make it appear oppressive. In that case we undertake, when the valuation is complete, to reconsider the whole scale in the light of the more accurate and scientific figures which will have been secured by the operation of this new assessment. This new valuation will, however, take some months to complete, and meanwhile we propose to levy

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    our duties upon the basis of the valuation upon which the present duties are chargeable.

    PUBLICANS' LICENCES.
    My new scale of duties for the full publican's licence begins, as I have already indicated, like the existing scale, at 50 per cent. of annual value; but, instead of following the existing scale—by gradually diminishing the percentage as the value increases until upon houses having an annual value of £700 the charge amounts to no more than 8½ per cent., above which figure, thanks to the cessation of the scale at that point, the decrease in the rate of the charge in proportion to annual value proceeds with still greater velocity, until, in the case of the highest values, it becomes almost insignificant—we propose to charge an uniform 50 per cent. of annual value throughout, subject to a minimum. The minimum rate in rural districts and in urban areas having a population of less than 2,000 will be £5, which, although only 10s. in excess of the present minimum charge, is, I think, a sufficient duty to exact from the small country inn, which satisfies the legitimate social needs of a scattered population, and whose volume of trade is in many cases not more than sufficient to provide the inn-keeper with a decent subsistence. The same considerations do not, however, apply to the poorer class of premises in the larger urban areas. A very large part of the mischief resulting from the liquor traffic is associated with the small, and often disreputable, house of this kind, which, in fact, ought never to have been licensed. Such houses are, indeed, in many cases, mere survivals from the period before 1872, since which date new licences have not, in fact, been granted, at any rate in England and Wales, to any premises in towns containing a population of not less than 100,000 inhabitants, of a lower annual value than £50; and in other towns, containing a population of not less than 10,000, of a lower annual value than £30. Such houses, where they do exist, have often a turnover quite out of proportion to the character of the premises, and make large profits. We think, therefore, that no hardship will be created by the charge of a minimum duty of £10 in urban areas of between 2,000 and 5,000 inhabitants; £15 between 5,000 and 10,000; £20 between 10,000 and 50,000; £30 between 50,000 and 100,000; and £35 in London and other towns having a population in excess of 100,000.

    BEER RETAILERS' LICENCES.
    So much for the full "on" licences. The next point in importance is the beer-retailers' "on" licence, commonly known as the "beer-house" licence. The same conditions as regards the enjoyment of a monopoly value attach to these licences as to the publicans' licences. The trade done in a beer-house is frequently as extensive and as profitable as the trade done in fully licensed premises, though, of course, as the privilege granted by the licence is a more restricted one, this is not invariably the case. The present fixed charge of £3 10s. for a beer-house licence, without regard to the value of the premises to which it is attached or to the profits which it enables the owner to earn, is, if judged by the standard of what would form a fair and reasonable consideration for so valuable a privilege, absurdly inadequate.
    I propose, therefore, to introduce for this class of licence rates graduated on the same basis as that which is to be made applicable to full "on" licences, the rate being in each case two-thirds of the amount chargeable for a publican's licence in respect of similar premises—that is to say, one-third of the annual value of the premises. The principle of a minimum rate according to the size of the place in which the house is situated will be applied to this as to the public-house licence. The scale will be: For rural districts having a population of under 2,000, £3 10s.; between 2,000 and 5,000, £6 10s.; between 5,000 and 10,000, £10; from 10,000 to 50,000, £13; 50,000 to 100,000, £20; and above 100,000, £23 10s.

    HOTELS AND RESTAURANTS.
    The distinction made by the existing law between hotels and ordinary public-houses works in a very unsatisfactory and arbitrary manner, both from the point of view of the revenue and from the point of view of hotel-keepers. The charge for the hotel licence, properly so-called, is, on the one hand, an extremely low one; but, on the other hand, it is so difficult for the average keeper of a bonâ fide hotel to comply with the conditions laid down for the grant of this licence that the great majority of such hotel-keepers in fact find it necessary to take out the full publican's licence.
    This latter licence, even at the rates at present charged, constitutes in the case of small hotels, at any rate, whose receipts from the sale of liquor are sometimes insignificant compared with the total business done, an undue burden, and it would

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    clearly be inequitable to apply the new scale without qualification to this class of house. I therefore propose to make special concessions to bonâ-fide hotels, inns, and restaurants. I am anxious to draw a deep and clear line for purposes of taxation between the house which supplies all the best traditional objects of the inn and the mere drinking establishment which lives and thrives on "swilling" and "tippling." Under the new system, therefore, a distinction will be drawn between houses whose receipts from the sale of stimulants do not exceed one-third of their total receipts from all sources, and those in the case of which that proportion is exceeded. I have made careful inquiries, as a result of which I am satisfied that the proportion of one-third, at which I suggest the line should be drawn, will cover the case of practically all establishments whose business primarily consists in supplying food and lodging, facilities for recreation, or other services only incidentally connected with the consumption of alcohol. Hotels end restaurants which are mainly drinking places will thus be, as they ought to be, chargeable with the full publican's licence duty, but where the bulk of the business consists in the satisfaction of public requirements in directions other than the supply of stimulants, the rate of duty applicable to the publican's licence will be reduced in proportion as the receipts from the sale of intoxicating liquor diminish. It must, of course, be remembered in this connection that the possession of a licence gives an advantage not only as respects the sale of liquor, but also as respects the other business of a hotel, higher price being obtainable both for food and lodging in licensed premises than in premises not enjoying a licence. This value, no less than the profit directly derived from the sale of liquor itself, is part of the monopoly value of the premises and ought to be taken into account in assessing the duty. I propose to recognise this principle by making the reduction dependent on the proportion which the receipts from intoxicants bear, not to the whole, but to one-half of the total receipts from all classes of business. Thus, a house whose receipts from the sale of liquor amount to one-quarter of its total receipts will pay only one-half, and one whose liquor receipts amount to one-sixth only one-third of the full rate. The effect of this reform will be to tax hotels on a logical basis and to put large hotels for the first time into their proper place as
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    contributors to the revenue. A provision is inserted in the Bill under which the increase in duty will not, in the case of tied houses, fall on the publican. Payments in respect of monopoly value of new licences under the Licensing Act of 1904 will, in future, be taken for the Exchequer, thus removing the temptation to local justices to grant such licences for the sake of the profit accruing to the local authority, which, in some parts of the country at any rate, has resulted in the grant of licences in excess of legitimate public requirements.

    CLUBS.
    The case of clubs remains to be dealt with. The sale of intoxicating liquor in a club is not legally "sale," but "supply," and this method of distribution is under the present law entirely untaxed. Clubs in which liquor is supplied, at present compete to a large extent directly with the ordinary public-house, and this competition of an alternative and untaxed method of distribution is not only unfair to the holders of publican's licences, but likely, in the long run, seriously to encroach on the revenue derived from licence duties. In some cases, particularly where licences have been suppressed under the Act of 1904, clubs have sprung up which are mere public-houses in disguise, some of them financed by the very persons who have received compensation for the trade supposed to be lost by the withdrawal of the licence, but really transferred, with the added privilege of exemption from licence duty, to the house in which the club has been established. A scheme of licence duties for clubs, however, based upon annual value, would be both inequitable and impracticable. The better class of club, from whatever social rank its members may be drawn, possesses, as a rule, much better premises than a club which is mainly a drinking club. A tax upon annual value would, therefore, in all probability, vary almost inversely with the amount of liquor consumed, and it would penalise a club for increasing its accommodation for other than drinking purposes. I therefore propose that the duty should take the form of a poundage upon the amount of the receipts from the sale of liquor. Under this proposal clubs will not be licensed, that is to say they will not be put in the same position as licensed premises; but an obligation will be imposed upon them to keep an account of the receipts from the sale of liquor, and a

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    duty of three-pence in the £ will be imposed on every £ of those receipts. The effect will be that clubs will not be taxed as clubs, but will simply be taxed as drinking clubs.

    REVISION OF EXCISE LIQUOR LICENCES.
    These are, from the point of view of the Revenue, and of public interest, the most important of my proposals relating to licence duties; but I propose to take the opportunity of revising the whole system of Excise liquor licences—a system which is at present full of confusion and anomalies, both in law and practice, and to place it upon a simple and intelligible basis. These licences are divided into three main classes: (1) manufacturers' licences, (2) wholesale dealers' licences, (3) retailers' licences. Speaking generally, no licence of the first two classes requires a justices' licence; but, with a few minor exceptions, all the licences of the third class require such a licence. The considerations to which I have referred relating to monopoly value are, therefore, applicable only to licences of the third class, but this does not, of course, mean that a further contribution to the revenue by way of taxation cannot properly be required from the holders of the other classes of licences. Under the head of manufacturers' licences I propose to substitute for the present fixed duties of £1 and £10 10s. for brewers for sale and distillers of spirits respectively, graduated scales of duty according to the amount produced. In the case of the brewer's licence, the present payment of £l will cover a production of 100 barrels only, and 12s. additional will be charged for every 50 barrels or fraction of 50 barrels above that quantity. The distiller's licence will be £10 for any quantity not exceeding 50,000 proof gallons, with an additional £10 for every additional 25,000 or fraction of 25,000 proof gallons. For the other manufacturers' licences the duties will still be charged at fixed rates, but I propose to increase the licence for rectifiers of spirits from £10 10s. to £15 15s., and that for makers of sweets—a term which in this case does not, of course, mean confectionery, but British-made wines—from £1 to £5 5s. Makers of cider or perry will likewise pay a duty of £5 5s., except when they manufacture solely from fruit which they themselves produce, in which case the duty will not be chargeable. The system of taxing wholesale dealers' licences will be the same as that at present in force, namely, a fixed duty, but the
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    duty will be increased. There is, however, one important change, namely, that these wholesale dealers' licences will not in any case authorise retail sale, and the licences for wholesale dealing and retail sale are kept absolutely distinct. Subject to this qualification, the rates for wine (including sweets) and sweets will remain at £10 10s. and £5 5s. as at present. That for beer will be raised from £3 6s. 1d. to.£10 10s., and spirits from £10 10s. to £15 15s. A licence to deal by wholesale in cider and perry will cost £5 5s.
    The existing additional licences for retail trade, issued in connection with some of the wholesale dealers' licences, will be abolished, and wholesale dealers who desire to engage in retail trade will be required to take out the ordinary retailer's off-licence, subject, however, to a reduction of 25 per cent. in the scheduled rate for that licence. A separate retailer's off-licence will be introduced in the case of spirits, and the spirit retailer will accordingly be relieved from the necessity under which he at present labours, of taking out a wholesale licence which he does not require. The manufacturer's licence will cover the sale by wholesale of his own product, and dealers' licences will not require to be taken out by manufacturers unless they desire to engage in independent business as dealers.

    RETAILERS' LICENCES.
    I now come to retailers' on-licences. With the public-house and beerhouse licences I have already dealt, as also with hotels, restaurants, and clubs, which come under the same category. Theatres will, as at present, pay the same rates as public-houses, but with a maximum of £50 instead of £20. In the case of wine, sweets, and cider, I propose to substitute for the present fixed duties (£3 10s. in the case of wine (including sweets), and £1 5s. in the other cases), a scale according to annual value in four sections, the steps being at £20, £50, and £100. The respective rates for wine will be £4 10s., £6, £9, and £12, and for sweets and cider one-half these rates. Under retailers' off-licences the same principle will be adopted, the rates for spirits will be £14 for premises under £20 annual value, £20 between £20 and £50, £30 between £50 and £100, and £50 above £100. The scale for the off beer licence (including cider and perry) will be £3 10s., £5, £7, or £10, according to the value of the premises, and for wine (including sweets) the same, but off-licences

    531
    for cider alone or sweets alone will cost only £2 irrespective of annual value. The new rates will be applicable to the whole of the United Kingdom, and the anomalies at present existing as between England, Ireland, and Scotland, as regards this class of licence, will be removed. As regards Scotland, there are various minor points in which the adoption of a uniform system throughout the United Kingdom will make a certain amount of difference, but the point which will attract attention is the modification of the conditions under which the retailers' off-licence for spirits is granted. In Scotland, at present, the holder of a grocer's spirit licence can sell wholesale, and can also sell in open vessels and in small quantities, whereas the English grocer can only sell in quart bottles or larger quantities. A great deal of business at present done by the holders of grocers' spirit licences in Scotland is really publican's business, that is to say, they sell small quantities of spirit in little glass noggins which are drunk outside the house and the glass noggin is left on the pavement outside. There is no doubt that a business of this sort is an abuse of the retailer's off-licence, and constitutes an abuse which ought to be suppressed. The present combined beer and wine licences will be abolished, and persons desirous of selling both beer and wine will in future have to take out two separate licences. The rate for passenger vessels will be increased from £5 to £10, the daily rate being raised from £l to £2, while railway restaurant cars, which do not at present pay any licence duty will pay £1. The charge for occasional licences will be raised from 2s. 6d. to 10s. a day for a full licence, and from 1s. to 5s. a day for beer or wine only. I propose that the new rates should come into force on 30th September next, subject to the necessary adjustments with respect to unexpired existing licences, and I estimate that the effect of the changes will be to increase the revenue of the year from licence duties by £2,600,000.
    Mr. AUSTEN CHAMBERLAIN: Is that for the full year?
    Mr. LLOYD-GEORGE: For the full year. As a matter of fact, I should rather anticipate a reduction than an increase in the second year. This will be probably a maximum year. As payment of these duties is made for the whole year in advance the full effect of the charge will be felt in the year in which it takes place.
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    Against this, however, must be set the prejudicial effect upon the yield of the spirit duties which may be expected to be produced should an effort be made (and I am not sufficiently sanguine to think that it will not be made) to shift the new burden to the shoulders of the consumer by reducing the quantity or quality of the spirits supplied. On this aspect of the question I shall have more to say at a later stage.

    TAXATION OF LAND.
    Now I come to the question of land. The first conviction that is borne in upon the Chancellor of the Exchequer who examines land as a subject for taxation is this: that in order to do justice he must draw a broad distinction between land whose value is purely agricultural in its character and composition, and land which has a special value attached to it owing either to the fact of its covering marketable mineral deposits or because of its proximity to any concentration of people. Agricultural land has not, during the past 20 or 30 years, appreciated in value in this country. In some parts it has probably gone down. I know parts of the country where the value has gone up. But there has been an enormous increase in the value of urban land and of mineral property. And a still more important and relevant consideration in examining the respective merits of these two or three classes of claimants to taxation is this. The growth in the value, more especially of urban sites, is due to no expenditure of capital or thought on the part of the ground owner, but entirely owing to the energy and the enterprise of the community. [Cries of "Oh."] Where it is not due to that cause, and where it is due to any expenditure by the urban owner himself, full credit ought to be given to him in taxation, and full credit will be given to him in taxation. I am dealing with cases which are due to the growth of the community, and not to anything done by the urban proprietor. It is undoubtedly one of the worst evils of our present system of land tenure that instead of reaping the benefit of the common endeavour of its citizens a community has always to pay a heavy penalty to its ground landlords for putting up the value of their land. There are other differences between these classes of property which are worth mentioning in this connection, because they have a real bearing upon the problem. There is a remarkable contrast between the attitude adopted by a landowner towards his urban

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    and mineral properties, and that which he generally assumes towards the tenants of his agricultural property. I will mention one or two of them. Any man who is acquainted with the balance-sheets of a great estate must know that the gross receipts do not represent anything like the real net income enjoyed by the landowner. On the contrary, a considerable proportion of those receipts are put back into the land in the shape of fructifying improvements and in maintaining and keeping in good repair structures erected by them which are essential to the proper conduct of the agricultural business upon which rents depend. Urban landlords recognise no obligation of that kind, nor do mineral loyalty owners. They spend nothing in building, in improving, in repairing or in upkeep of structures essential to the proper conduct of the business of the occupiers. The urban landowner, as a rule, recognises no such obligations. I again exclude the urban landowner who really does spend money on his property; that ought to be put to his credit. The rent in the case with which I am dealing is a net rent free from liabilities, or legal obligations. Still worse, the urban landowner is freed in practice from the ordinary social obligations which are acknowledged by every agricultural landowner towards those whose labour makes their wealth.
    It is true in the rural districts that there are good landlords and there are bad landlords. But in this respect there are so many good landlords in the country to set up the standard that even the worst are compelled to follow at a greater or a less distance. But the worst rural landlord in this respect is better than the best urban landlord in so far as the recognition of what is due to the community who produce the rent is concerned. [Cries of "Oh!"] I will point out what I mean. First of all the rural landowner has the obligation to provide buildings and keep them in repair. The urban landowner, as a rule, has neither of these two obligations. There is that essential difference between the two. The urban landlord and the mineral royalty owner are invariably rack-renters. They extort the highest and the heaviest ground rent or royalty they can obtain on the sternest commercial principles. They are never restrained by that sense of personal relationship with their tenants which exercises such a beneficent and moderating influence upon the very same landlord in his dealings with his agricultural tenants. And the distinction is not confined merely to
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    the rent. Take the conditions of the tenancy. I am not here to defend many of the terms which are included in many an agricultural agreement for tenancy. I think many of them are oppressive, irritating, and stupid. But compared with the conditions imposed upon either a colliery owner or upon a town lessee they are the very climax of generosity. Take this case—and it is not by any means irrelevant to the proposals which I shall have to submit to the Committee later on. What agricultural landlord in this country would ever think of letting his farm for a term of years on condition, first of all, that the tenant should pay the most, extortionate rent that he could possibly secure in the market, three, or four, or even five times the real value of the soil; that the tenant should then be compelled to build a house of a certain size and at a certain cost, and in a certain way, and that at the end of the term he, or rather his representatives, should hand that house over in good tenantable repair free from, encumbrances to the representatives of the ground owner who has not spent a penny upon constructing it, and who has received during the whole term of lease the highest rent which he could possibly screw in respect of the site? Why, there is not a landlord in Great Britain who would ever dream of imposing such outrageous conditions upon his tenant. And yet these are the conditions which are imposed every day in respect of urban sites; imposed upon tradesmen who have no choice in the matter; imposed upon professional men and business men who have got to live somewhere within reasonable distance of their offices; imposed even on workmen building a house for themselves, paying for it by monthly instalments out of their wages for 30 years purely in order to be within reasonable distance of the factory or mine or workshop at which they are earning a living.
    This is by no means an imaginary picture which I am drawing. If anyone thinks so I would invite him to examine for himself the evidence given before the Town Holdings Committees in 1888 and the subsequent Committee of the same character held later on—Committees appointed by the Unionist administration of that date. There was the case of the Festiniog quarrymen, who had to build on rocks which could not feed a goat, and upon swamps for which the landlord could not, and did not, receive more than, sometimes, 2s. an acre, and, at the outside, 7s. 6d. an acre. These were let to

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    the quarrymen for building purposes at rents that amounted to £50 an acre. Leases were given for 60 years. All the improvements were effected either by the quarrymen themselves or by the local authority to whom they paid their rates. To build or buy their houses, most of these quarrymen generally borrowed money from building societies. As long as they were in good health and in full employment they were able to pay their monthly instalments. When either health or work gave out they were very hard pressed indeed. But they never got any assistance or sympathy from the landllord. As they paid, the property, instead of increasing in value for them, became of less and less value as it passed year by year into the possession of the landlord. There were many illustrations of that kind given before these Committees, though not all 60 years. Some were 70, some ran up to 90, other were for lives And 21 years.
    You cannot put cases of this kind at all in the same category as that of an agricultural landlord who builds farmhouses and farm buildings, and generally incurs most, if not all, of the capital expenditure in and around a farm, and who by no means, if he is a fair-minded landlord, ever thinks of extorting these monstrous rents out of the necessities of his tenants. I might give other cases where land in the neighbourhood of towns has appreciated in value owing to the growth of the population. I do not wish to multiply instances, because every hon. Member must have in his own mind illustrations, with the details of which he is cognisant, from his own experience and observation of what I am referring to. I might, perhaps, take another case, and I am not sure that you can find a better or a fairer one than that which is provided by the working class suburbs of London. I am referring to the case of Woolwich. Considerable population has been attracted there largely owing to the expenditure of public money upon the Arsenal. If there is any increase in the value of land there, not a penny of that increment is attributable to anything done by the local landowners. Now I would commend Members of the House to a speech delivered by the late Conservative Member for Woolwich, who in his day was one of the most striking figures in this House. This is what he says about Woolwich:—
    "In the parish of Plumstead land used to be let for agricultural purposes for £3 an acre. The income of an estate of 250 acres in 1845 was £750 per annum, and
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    the capital value at 20 years' purchase was £15,000. The Arsenal came to Woolwich; with the Arsenal the necessity for 5,000 houses. And then came the harvest for the landlord. The land, the capital value of which had been £15,000, now brought an income of £14,250 per annum. The ground landlord has received £1,000,000 in ground rents already, and after 20 years hence the Woolwich estates, with all the houses upon them, will revert to the landowner's family, bringing another million, meaning altogether a swap of £15,000 for a sum of £2,000,000."
    There are many cases of a similar character which will readily occur to the memory of every hon. Member who is at all acquainted with the subject. Take well-known properties in Lancashire and Cheshire in regard to which evidence was given. And yet, although the landlord, without any exertion of his own, is now in these cases in receipt of an income which is ten or even a hundred-fold of what he was in the habit of receiving when these properties were purely agricultural in their character, and although he is in addition to that released from all the heavy financial obligations which are attached to the ownership of this land as agricultural property, he does not contribute a penny out of his income towards the local expenditure of the community which has thus made his wealth, in the words of John Stuart Mill, "whilst he was slumbering." Is it too much, is it unfair, is it inequitable, that Parliament should demand a special contribution from these fortunate owners towards the defence of the country and the social needs of the unfortunate in the community, whose efforts have so materially contributed to the opulence which they are enjoying?

    LAND KEPT OUT OF MARKET.
    There is another aspect of this matter which I should like to say a word upon before I come to the actual proposals of the Government. I have dwelt upon the fundamental difference in the demeanour of landowners towards their urban tenants and that which under the inspiration of more high-minded and public-spirited principles guide their conduct towards their agricultural tenants. There is no doubt that the spirit of greed is unconsciously much more dominant and unrestrained in the former case. One disastrous result of this is that land which is essential to the free and healthy development of towns is being kept out of the market in order to enhance its value, and that towns are cramped and their people become overcrowded in dwellings which are costly without being comfortable. You have only to buy an ordnance survey map and put together the

    537
    sheets which include some town of your acquaintance and the land in its immediate vicinity, and you will see at once what I mean. You will find, as a rule, your town or village huddled in one corner of the map, dwellings jammed together as near as the law of the land will permit, with an occasional courtyard, into which the sunshine rarely creeps, but with nothing that would justify the title of "garden." For it is the interest of the landlord to pile together on the land every scrap of bricks and mortar that the law will allow. And yet outside square miles of land unoccupied, or at least unbuilt upon; land in the town seems to let by the grain, as if it were radium. Not merely towns, but villages (and by villages and towns I mean the people who dwell in them) suffer extremely from the difficulty which is experienced in obtaining land, and by the niggardliness with which sites are measured out.
    You cannot help feeling how much healthier and happier the community could have been made in these towns and villages if they had been planned on more spacious and rational principles, with a reasonable allowance of garden for every tenant, which would serve as a playground, as vegetable and flower garden, for the workman and his family, and which would even, in many districts, help materially to solve the problem of unemployment.

    MINING BOYALTIES.
    The same observations apply to the case of mineral royalties. There all the expenditure is incurred by the capitalist, who runs the risk of losing his capital, while the miner risks his life; and I do not think it is too much to ask the royalty owner, who has contributed no capital and runs no risk, to contribute in this emergency to bear the large burden that is cast upon us for the defence of the country, and to help to pay the large sum of money needed to make provision for social needs, for the aged, and for those who have been engaged in digging out mining royalties all their lives.

    UNEARNED INCREMENT.
    My present proposals are proposals both for taxation and for valuation. Although very moderate in character, they will produce an appreciable revenue in the present year and more in future years. The proposals are three in number.
    First, it is proposed to levy a tax on the increment of value accruing to land from the enterprise of the community or the landowner's neighbours. We do not propose to make this tax retrospective.
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    It is to apply to future appreciation in value only, and will not touch any increment already accrued. We begin therefore with a valuation of all land at the price which it may be expected to realise at the present time, and we propose to charge the duty only upon the additional value which the land may hereafter acquire. The valuations upon the difference between which the tax will be chargeable will be valuations of the land itself—apart from buildings and other improvements—and of this difference, the strictly unearned increment, we propose to take one-fifth, or 20 per cent., for the State.
    We start with the valuation of the present moment. No increment that has accrued before the date of the valuation will count. We value the land at its present value, and then count the increment from that point. You get the increment on two bases. You get at it when the land is sold. Then it will be discovered what the actual increment is. We propose to charge 20 per cent. on the increment which the landlord receives, ascertained by comparing what he receives with the valuation to be made immediately after this Bill. It would be also made on the passing of the property upon death, so that there will be an increment of estate duty; and if there is any increment which is not due to expenditure by the landowner himself on improvements, but is due merely to the appreciation of land in the neighbourhood owing to the growth of population or some other cause, then the same charge would be made on that increment. Corporations (which do not die) will pay upon property owned by them at stated intervals of years, being allowed the option of spreading the payment of the duty upon the increment accruing in one period over the following period by annual instalments.
    An HON. MEMBER: What number of years?
    Mr. LLOYD-GEORGE: I will give the particulars later on. Upon the creation of a lease or upon the transfer of an interest in land only such proportion of the increment duty will be payable as the value of the lease or of the transferred interest bears to the value of the fee simple of the land, and increment duty once paid will frank the increment or the portion of the increment in respect of which it has been paid from any further charge of the duty. As regards the duty payable on the occasion of the grant of a lease, provision will be made for payment by instalments, inasmuch as in such circumstances no capital

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    sum is available for payment of the duty. As the standard of comparison is the value of the land at the present date, and the tax will be levied only upon the increment subsequently accruing, the yield in the first year will necessarily be small, and I do not think it safe to estimate for more than £50,000 in 1909–10. The amount will increase steadily in future years, and ultimately become a fruitful source of revenue.

    DUTY ON UNDEVELOPED LAND.
    The second proposal relating to land is the imposition of a tax on the capital value of all land which is not used to the best advantage. The owner of valuable land which is required or likely in the near future to be required for building purposes, who contents himself with an income therefrom wholly incommensurate with the capital value of the land in the hope of recouping himself ultimately in the shape of an increased price, is in a similar position to the investor in securities who re-invests the greater part of his dividends; but while the latter is required to pay income tax both upon the portion of the dividends enjoyed and also upon the portion re-invested, the former escapes taxation upon his accumulating capital altogether, and this although the latter by his self-denial is increasing the wealth of the community, while the former, by with holding from the market land which is required for housing or industry, is creating a speculative inflation of values which is socially mischievous.
    We propose to redress this anomaly by charging an annual duty of ½d. in the £ on the capital value of undeveloped land. The same principle applies to ungotten minerals, which we propose similarly to tax at ½d. in the £, calculated upon the price which the mining rights might be expected to realise if sold in open market at the date of valuation. The tax on undeveloped land will be charged upon un-built-on land only, and all land of which the capital value does not exceed £50 an acre will be exempted, as also any land exceeding that value with respect to which it can be shown to the satisfaction of the Commissioners of Inland Revenue that no part of the value is due to the capability of the land for use for building purposes. Under these provisions all land having a purely agricultural value will be exempt.
    Further exemptions will be made in favour of gardens and pleasure grounds not exceeding an acre in extent, and
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    parks, gardens, and open spaces which are open to the public as of right, or to which reasonable access is granted to the public, where that access is recognised by the Commissioners of Inland Revenue as contributing to the amenity of the locality. Where undeveloped land forms part of a settled estate, provision will be made to enable a limited owner who has not the full enjoyment of the land to charge the duty upon the corpus of the property. The valuation upon which the tax will be charged will be the value of land as a cleared site, deductions being allowed for any expenditure necessary to clear it, and likewise for any value attributable to works of a permanent character executed by, or on behalf of, any person interested in the land within a specified period of the date of valuation, for the purpose of fitting the land for building purposes. Until a valuation has been obtained it is impossible to estimate the yield of the tax with any precision, and the yield in the first year is made still more doubtful by the fact that, pending the completion of the valuation, the tax must be collected provisionally upon the basis of declarations by owners—arrears (if any) to be collected later when the valuation has been completed. But as these declarations will also form the basis for the charge of increment value duty until the valuation is completed, with respect to which an under-declaration may have serious consequences, it may be expected that they will be sufficiently reliable to allow at any rate, a large proportion of the whole amount due to be obtained within the year. I therefore feel justified in estimating that the duty of ½d. in the pound on undeveloped land and ungotten minerals will produce not less than £350,000 in the current financial year.

    REVERSION DUTY.
    My third proposal under the head of land is a 10 per cent. reversion duty upon any benefit accruing to a lessor from the determination of a lease, the value of the benefit to be taken to be the amount (if any) by which the total value of the land at the time the lease falls in exceeds the value of the consideration for the grant of the lease, due regard being had, however, for the case of the reversioner whose interest is less than a freehold. The reversion at the end of a long building lease having no appreciable market value at the time the lease is granted is, when the lease falls in, of the nature of a windfall, and can be made to bear a reasonable tax without hardship. Some consideration

    541
    must, however, be shown to the purchaser of an approaching reversion where the purchase has taken place before the imposition of such a duty was contemplated. I therefore propose to have special provision to deal with that case. Special provision will also be made to meet the case of an increment value, in respect of which increment duty is payable under my first proposal, being included in a reversion. Another case in which special consideration should, I think, be shown is that of a lease determined by agreement between lessor and lessee before its expiration for the purpose of renewal. Towards the termination of a lease the lessee may be willing and even anxious to make improvements in the premises, provided that he can obtain a decent security of tenure at a reasonable rent. His business may be crippled for want of proper accommodation, but he is at the mercy of the ground landlord, who, in many cases, wrings out of him the uttermost farthing before agreeing to a renewal, which is to the interest of both parties. If the parties fail to come to terms the opportunity for an improvement, possibly of great public utility, is at any rate postponed, and perhaps irretrievably lost. The importance of facilitating such renewals to the interests of lessees, of the building trade, of the public generally, and even of the ground landlord himself, can scarcely be exaggerated. Accordingly in cases where a reversion is anticipated in circumstances of this character, and comes under taxation at an earlier date than would have happened in ordinary course, by reason of an agreement entered into with the lessee to enable him to improve the premises, I propose to make a special abatement of duty proportionate to the unexpired period of the original lease which is surrendered, and I have great hopes that this allowance, coupled with the fact that the value of the reversion for the purpose of the duty, will be calculated upon the difference between the consideration for the old and the consideration for the new lease, will induce owners to grant renewals more readily and upon more favourable terms than at present, and so tend to remove one of the most mischievous effects of the leasehold system.
    There are no official statistics of the value of leasehold property, or of the dates upon which existing leases determine, and I am therefore not in a position to give more than a conjectural estimate of the annual yield of this duty. There is, besides, reason to believe that the num-
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    ber of leases falling in from year to year is by no means a constant quantity, and this makes the task of estimating for a particular year still more difficult. On the whole, I do not think that I can in the present year rely on a larger revenue than £100,000 from this source, and I propose, therefore, to estimate the yield of the three land taxes for the current year at £500,000, an amount which, however, must not, as I have already explained, be regarded as any indication of the revenue they will ultimately produce.
    Mr. W. W. RUTHERFORD: What is a lease? How long is a lease?
    Mr. LLOYD-GEORGE: It is perfectly obvious that a tenancy from year to year would not be a lease.
    Mr. RUTHERFORD: But what is?

    VALUATION OF REAL PROPERTY.
    Mr. LLOYD-GEORGE: These proposals necessarily involve a complete reconstruction of the method of valuing property. The existing taxes upon real property are levied upon the annual value of such property as a whole without distinguishing between the value which resides in the land itself and that which has been added to it by the enterprise of the owner in erecting buildings or effecting other improvements. Even apart from this, the methods of valuation vary in different localities, with the result that the incidence of existing burdens is very uneven. The intensely complex character of British land tenure introduces a further complication. There are no official records of the various interests in land, existing rates and taxes being charged upon the occupier, who is left to recover from the other interests (if any) either by a rough-and-ready scheme of statutory deductions from rent or by making such bargain as he is able with his landlord. It now becomes necessary for the purposes both of the increment value duty and of the undeveloped land duty to distinguish between the two elements in the value of real property, while, as the increment value duty and the reversion duty will both of them have to be collected from the particular interests to which those accretions respectively accrue, a complete register of the owners and other persons interested in land, with full details of the various interests, will ultimately be required.
    The preparation of such a register will be a lengthy task which must in the main be proceeded with as each separate pro-

    543
    perty comes under taxation, but the question of valuation is of greater urgency. The existing valuation lists on an annual value basis (even if they represented the true annual values which in many cases they do not) would be of little use for the purpose of determining capital values—the basis of the new duties—and it will therefore be necessary to provide machinery for a complete valuation on a capital basis of the whole of the land in the United Kingdom. I do not think I will enter into particulars now of the method which we propose to follow in valuation. I shall do that when we come to discuss the Resolution in Committee. Now I have disposed of direct taxation.

    INDIRECT TAXATION.
    I am not going at this late hour to enter into any discussion of the principles which ought to guide a Finance Minister in the imposition of indirect taxation. But one thing I am sure will be accepted by every Member of this House, and that is that we ought at any rate to avoid taxes on the necessaries of life. I referred some time ago, in the course of a discussion in this House, to the old age pension officers' reports. There was one thing in those reports which struck me very forcibly, and that was that they all reported that the poorer the people they had to deal with, the more was their food confined to bread and tea, and of the price of that tea, which of course was of the poorest quality, half goes to the tax gatherer. That is always the worst of indirect taxation on the people. The poorer they are the more heavily the tax falls upon them. Tea and sugar are necessaries of life, and I think that the rich man who would wish to spare his own pocket at the expense of the bare pockets of the poor is a very shabby rich man indeed, and therefore I am sure that I carry with me the assent of even the classes upon whom I am putting very heavy burdens, that when we come to indirect taxes, at any rate those two essentials of life ought to be exempt.

    INCREASE OF SPIRIT DUTY.
    There are three other possible sources—beer, spirits, and tobacco. An increase in the beer duty, sufficiently great to justify an addition to the retail price, would produce a very large sum—larger, indeed, than I require for my present purposes—and would have, besides, in all probability, the effect of diverting the consumption of alcohol from beer to spirits—a change
    544
    which would certainly not conduce to the social health of the country. The incidence of a small duty, on the other hand, would, to a large extent, at any rate in the first instance, be upon the liquor trade rather than upon the consumer; and I should not feel justified in imposing such a burden in a year when so considerable an additional contribution is being called for from that trade under the head of licence duties.
    The case of spirits is, however, somewhat different. I am aware that the small increases in the spirit duties which were made by Lord St. Aldwyn during the South African war were disappointing in their financial results, and that any further increase would undoubtedly result in a considerably diminished consumption, which would to a very large extent at any rate nullify the benefit to the revenue which might otherwise be expected to accrue from it. It does not, however, follow from the result of this small experiment that we have reached the absolute limit of the profitable taxation of spirits, or that a substantial increase in the rates of duty would not, in spite of its effects upon consumption, produce an appreciable amount of revenue. I am disposed, at any rate, to try the experiment, which, even, if it ends—to take the most pessimistic view—in no larger revenue being raised from the higher rate upon a diminished consumption, than by the existing rate upon the present consumption, will still, in my view, be conducive to the best interests of the nation. It is perfectly true that the small duties imposed up to the present have not been productive. The reason for that was that the publican, or the retailer, found that, probably by changes in the character of the whisky, or by other means, he was able to get his money in another way, and the consumption decreased by a considerable amount. It is idle, therefore, to put on anything except a fairly heavy tax, and I impose a duty which the publican will find it to his interest to charge. I propose to raise the present duties (Customs and Excise) on spirits by 3s. 9d. per gallon, an amount which will, on the one hand justify an increase in retail prices, and on the other hand, assuming such an increase to be at the rate of a halfpenny per glass, will leave a margin to the publican to recoup himself for loss of profits arising from decreased consumption, and have something over towards mitigating the pressure of the new licence duty. The mere paper increase of a duty

    545
    of that sort would be very considerable, but I do not expect to get anything approximating to that. The right hon. Gentleman knows perfectly well the possibilities of getting more out of spirits. This year there are exceptional circumstances. First of all, the forestalments are very heavy. It is not merely forestalments up to the end of the last financial year, but they have been going on since, so that the wholesale people have got in hand sufficient stock to carry them on comfortably for a good many weeks at any rate. Therefore, we do not get the increase for some weeks, possibly for some months. That will make a very considerable hole in the estimate which I should otherwise have made of the yield of those taxes. Not only that, but I have not the faintest doubt that it will have the effect of decreasing consumption; that will be the inevitable effect. It may drive a good many from spirits to try beer and to expedients of that sort. It will involve a very considerable increase in the price of the commodity, and therefore, I think, must have a very considerable effect in diminishing the actual consumption. Taking all these influences into consideration, I do not feel safe in counting upon receiving more than £1,600,000 additional revenue as the result of the change in 1909–10.

    INCREASE OF TOBACCO DUTY.
    I have still nearly two millions more to find, and for this I must turn to tobacco—from a fiscal point of view, a much healthier source of revenue. The present rate of duty on unmanufactured tobacco containing 10 per cent. or more of moisture is 3s. a pound, and the increase I propose is 8d. a pound, with equivalent additions to the rates for cigars, cigarettes, and manufactured tobacco. Now, one pound of unmanufactured tobacco as imported, produces, after allowance has been made on the one hand for waste in manufacture, and on the other for the moisture which is added in preparing it for sale, nearly 1 1–5 pounds of the tobacco of retail trade, so that an addition of half an ounce to the retail price leaves the tobacco trade with an ample margin to finance the increased duty.
    In estimating the additional yield from the increased rate of duty, regard must be had, as under the spirit duty, to the considerations that one month of the year has already passed, and that the duty-paid stocks are inflated by forestalments. Allowance must also be made—but in this
    546
    case a comparatively small allowance—for decrease of consumption consequent upon the higher rate of duty. My estimate, therefore, is £1,900,000 for 1909–10, and £2,250,000 for a full year.

    FINAL BALANCE SHEET.
    I am now in a position to present my final balance sheet for 1909–10.

    The Revenue, on the present basis of taxation, being

    £148,390,000

    And the Expenditure, on the basis of the Estimates already presented to Parliament

    164,152,000

    The Account, before adjustment, shows, as I have already explained, an anticipated deficit of

    £15,762,000

    To the Revenue side of the Account must be added:—

    Under Customs and Excise:—

    New duty of 3d. a gallon on petrol

    £340,000

    Increase of spirit duties

    1,600,000

    Increase of tobacco duties

    1,900,000

    Revision and increase of liquor licence duties

    2,600,000

    Motor-car licences

    260,000

    Making a total addition under the heads of Customs and Excise of

    £6,700,000

    Under the various Inland Revenue duties the new proposals are estimated to produce:—

    Estate duties

    £2,850,000

    Stamps

    650,000

    Income tax (net).

    3,500,000

    And the new land taxes

    £500,000

    Or a total from new and increased Inland Revenue duties of

    £7,500,000

    These amounts (namely, £6,700,000 from Customs and Excise and £7,500,000 from Inland Revenue) added together give as the total estimated yield of new taxation

    £14,200,000

    547

    Adding these sums to the estimated Revenue on the existing basis

    148,390,000

    We arrive at

    £162,590,000

    as the estimated Revenue of the year.
    To the expenditure side of the account must be added:—

    Under the head of Consolidated Fund Services:—

    The proceeds of the petrol duty and motor car licences which will be paid to the new fund for improvement of roads

    £600,000

    Under Civil Services:—

    The amount required for the first year's grant to the new Development Fund

    £200,000

    For labour exchanges

    100,000

    Making a total addition under Civil Services of

    300,000

    and under Customs and Excise and Inland Revenue

    50,000

    for the payment of valuers and other administrative expenses arising in connection with the proposed taxes on land

    Adding these sums together we arrive at a total additional expenditure of

    £950,000

    which, with the expenditure on the basis of the Estimates already presented

    164,152,000

    increases the total estimated expenditure for the year to

    £165,102,000

    Deducting, under the head of Consolidated Fund Services, the amount of the proposed reduction of the Fixed Debt Charge

    3,000,000

    We arrive at

    £162,102,000

    as the final figure on the Expenditure side of the Account.

    The Total Estimated Revenue thus being

    £162,590,000

    and the Total Estimated Expenditure

    162,102,000

    there remains a margin for contingencies of

    £488,000

    There will be a very considerably increased demand upon the yield of those taxes for the coming year. If the Navy expenditure is at the maximum, which I anticipate, most of the increased expenditure will be absorbed by naval expenditure. The balance will be appropriated to those schemes of social reform which I sketched at the beginning of my observations.
    I have to thank the House for the very great indulgence which they have extended to me and for the patience with which they have listended to me. My task has been an extraordinarily difficult one. It has been as disagreeable a task as could well have been allotted to any Minister of the Crown. But there is one element of supreme satisfaction in it. That is to be found in contemplating the objects for which these new imposts have been created. The money thus raised is to be expended first of all in ensuring the inviolability of our shores. It has also been raised in order not merely to relieve but to prevent unmerited distress within those shores. It is essential that we should make every necessary provision for the defence of our country. But surely it is equally imperative that we should make it a country even better worth defending for all and by all. And it is that this expenditure is for both those purposes that alone could justify the Government. I am told that no Chancellor of the Exchequer has ever been called on to impose such heavy taxes in a time of peace. This, Mr. Emmott, is a War Budget. It is for raising money to wage implacable warfare against poverty and squalidness. I cannot help hoping and believing that before this generation has passed away we shall have advanced a great step towards that good time when poverty and wretchedness and human degradation which always follow in its camp will be as remote to the people of this country as the wolves which once infested its forests.
    The right hon. Gentleman resumed his seat at three minutes before eight of the clock.
    Motion made and Question put.

    SPIRITS.
    1. That in addition to the duties of customs now payable on spirits imported into Great Britain or Ireland there shall on and after 30th April, 1909, be charged the following duties (that is to say):—

    549

    For every gallon computed at

    s.

    d.

    proof of spirits of any description except perfumed spirits

    3

    9

    For every gallon of perfumed spirits

    6

    0

    For every gallon of liqueurs, cordials, mixtures, and other preparations entered in such a manner as to indicate that the strength is not to be tested

    5

    5

    and the duties of customs on the articles hereafter mentioned, being articles in which spirit is contained, or in the manufacture of which spirit is used, shall be proportionately increased and shall be as follows:—

    £

    s.

    d.

    Chloral hydrate

    the pound

    0

    1

    9

    Chloroform

    the pound

    0

    4

    4

    Collodion

    the gallon

    1

    14

    11

    Ether acetic

    the pound

    0

    2

    7

    Ether butyric

    the gallon

    1

    1

    10

    Ether sulphuric

    the gallon

    1

    16

    6

    Ethyl, iodide of

    the gallon

    0

    19

    0

    Ethyl bromide

    the pound

    0

    1

    5

    Ethyl chloride

    the gallon

    1

    1

    10

    THE CHANCELLOR OF THE EXCHEQUER.
    Mr. AUSTEN CHAMBERLAIN: The right hon. Gentleman has rightly said that he has had a task of almost unprecedented difficulty to discharge. I am quite certain that I express the opinion of Members on all sides of the House when I offer him my congratulations upon the manner in which he has discharged that task. But I must say for myself that consequently I also have a task of almost unprecedented difficulty to discharge. We have never had a Budget statement such as that which the Chancellor of the Exchequer has just made. He frankly stated that he has made an innovation, which I think was congenial to the House, by circulating many of the figures which are ordinarily announced by the Chancellor of the Exchequer in his Budget speech. But he has made a much bigger innovation. He sketched a Budget mot for the year only, but for a series of years; and he not only sketched the Budget for a series of years, but he sketched in very general terms a legislative programme trenching, if I may use the phrase without offence, upon the province of almost every one of his colleagues—a programme of such magnitude and complexity that it is not a question of one or two years before it can be carried out; it is much more likely to be two or three Parliaments before that vast programme can be achieved. With a good deal of what he said and with a great number of the objects which he set before the House I, for
    550
    one, heartily sympathise, and for well-considered measures to promote those objects he will probably find as much sympathy on this side of the House as on the side from which he speaks. But I think there is some inconvenience in shadowing forth in this vague manner vast projects which may mean much and may mean little, which are capable of no immediate or early realisation, which may raise great hopes and serve the purposes of an electoral manifesto, but which must recur year after year in our discussions in this House before they can be brought to fruition.
    I am not going to attempt to follow in detail a statement which it took the Chancellor of the Exchequer four and a half hours to make, and which obviously I cannot pretend to have mastered in many of its propositions, though I gave all the attention to the subject demanded by the speech of the right hon. Gentleman. I make no criticism of that speech on account of lack of clearness or lack of detail; but the Chancellor himself will admit that there is an enormous amount more which it is necessary for us to know before we can judge a great many of his propositions, and I hope that he will even now consider in what form he can lay before the House, by tabulated figures and by printed statement, the kind of information which is required to fill in the picture which he has drawn. In saying that, I make this further observation: that, of course, if there are particular resolutions which must be carried in order to avoid the evasion of the duties or taxes to be imposed, we must carry them now. But when we are dealing with an altogether exceptional Budget, we require exceptional time for its discussion; and I think the Chancellor of the Exchequer and the Prime Minister must consider whether it is fair to ask us to proceed, de die in diem, with all the Resolutions of a Budget of this kind, involving a rearrangement of a great number of our taxes, and involving changes of principle which are of first magnitude. Changes of principle, however, are perhaps more readily grasped and more easily understood, but it affects also every kind of trade, mercantile, and financial interest, which are entitled to have time for consideration of the Chancellor's proposals, and whose opinions we ought to know before we express any definite views upon them.
    Having said that, I now desire to make some observations upon what I may call the exordium of the Chancellor of the

    551
    Exchequer. He was face to face with a very large deficit. He dealt very briefly, very summarily, with his estimate of revenue on the basis of existing taxation. I know how dangerous it is to speculate on the future yield of taxes, even when you are Chancellor of the Exchequer, with all the admirable advice that he commands. It is much more dangerous to do so when you have not access to any of that advice; but I cannot help observing that I think the hon. Gentleman has under-estimated the revenue which he will receive from at least two sources of existing taxation. In the first place, he has put the estate duties on the present basis at only £18,370,000. That is less than they produced last year.
    Mr. LLOYD-GEORGdissented.
    Mr. AUSTEN CHAMBERLAIN: I beg pardon; I mean less than they were estimated to produce last year, but more than they actually did produce. I think he might have carried his figure a little higher. It is the misfortune of death duties—a misfortune which is aggravated by every increase in the rate—that they yield a very uncertain revenue and when the right hon. Gentleman congratulates us that at any rate our fiscal system avoids the fluctuations to which some other fiscal systems are subject, I think he will find within the statement which he has presented to the House a good many considerations which should cause him to modify that statement. Death duties fluctuate not merely by the chances of what rich men die in any given year—and those chances do not average themselves out exactly—but they fluctuate also, and very seriously, according to the price of securities. A man who, if he should dip at a moment when securities are high, would make a very handsome contribution to the Exchequer, may have his contribution reduced by a very considerable amount, not merely by the absolute decrease in the capital value of his estate when securities are low, but by the fact that that decrease takes him to a lower scale, and his whole estate is taxed at a lower rate. What the Chancellor of the Exchequer had in mind were the fluctuations which occur in times of bad trade in the revenue from customs duties, on which some foreign countries have hitherto more exclusively depended than we have. We have the same fluctuations here, both in cur Customs and in our Excise, where the
    552
    lesser spending power of the people is reflected in the lesser consumption of the article. I do not think that our system or any system of taxation is immune from the effects of fluctuations caused by the general depression or prosperity of the people, nor do I think the right hon. Gentleman will be able to devise or establish a system which would not have that contingent misfortune attaching to it.
    The Chancellor of the Exchequer turned to the purposes for which the increased expenditure is required, which are, of course, mainly the Navy and old age pensions. Whatever sacrifices we are called upon to make, we do not grudge the money spent in maintaining the defences of this country in a satisfactory condition. The only regret I have to express upon that point is that, after all the brave words of the Chancellor of the Exchequer, after his declaration that to stint the Navy in any way would be not Liberalism but lunacy, he still has made no provision for the battleships which are necessary. The Estimates remain where they were when presented to the House. We still have no assurance that the necessary battleships will be laid down this year, and still less do we see any intention on the part of the Chancellor of the Exchequer—if, as the result of the agitation to which he objects, but to which the Government I am glad to think show some signs of yielding, the ships are laid down—to pay this year's share of the cost out of this year's taxation. That is the first criticism I have to make about this procedure.
    Then the Chancellor of the Exchequer spoke about the burden imposed by the Old Age Pensions Act, and, I suppose by way of defending the Government against any charge of being extravagant or rash in that matter, he said that Amendments moved when that Act was under discussion, which would have cost an additional four millions, were officially supported from this Bench. He should have added that we who supported those Amendments at the same time expressed our willingness to raise the money with which to pay for them. Speaking from my place here on behalf of my colleagues on this Bench, I said that in our opinion it was rash, dangerous, and almost immoral finance to abandon half the sugar duty at a moment when you were incurring that great expenditure, and that if the Government saw their way to do without half the sugar duty for the scheme which they proposed, I would rather devote the half which they

    553
    proposed to give back to the taxpayer to make that scheme better. That was the justification for the attitude which we took in supporting Amendments which would have increased the cost of the scheme. What, after all, is the statement about the Old Age Pensions Act which the Chancellor of the Exchequer has made to us to-day? That it is an incomplete, truncated scheme, incapable of being maintained for any length of time in its present condition—
    Mr. LLOYD-GEORGE: We said that last year.
    Mr. AUSTEN CHAMBERLAIN: I think we laid more emphasis upon that both last year and since, than the Chancellor of the Exchequer and his colleagues have been accustomed to do. It is a truncated scheme, which it is impossible to maintain in its present condition for any length of time; and not only did we undertake then a liability for nine millions without providing more than 1¼ millions to meet the liability, but we in fact undertook a much greater liability, because we established a scheme which would necessarily cast a much higher burden upon us in future years. I congratulate the Chancellor of the Exchequer upon the determination to which he and his colleagues have come in regard to any extension of that Act. It has been our contention from the first that many of the hardest cases were excluded by the age limit, but that the adoption of a non-contributory scheme rendered the enforcement of an age limit, and a very high limit, an absolute necessity. The complaint was not that the Government should have tried to bring in old age pensions, or, indeed, that they should have made special terms for those who were already old, or approaching old, but that they did not begin their constructive scheme at the other end by establishing a system which was workable for all time, and which contemplated the necessities which might arise, and which needed to be dealt with by exceptional and temporary legislation. The Government, and my right hon. Friend, proclaim that there is still a great work to be done, a work which cannot be done on the lines on which they began, but needs to be pursued on the lines which we have always advocated. That scheme must involve the principle of compulsion, the principle of a contribution by the beneficiaries to the benefits which they are ultimately to receive. It must safeguard, as all advocates of old age pensions desire, the position and work of the great friendly societies.
    554
    These were the four principles which he laid down with regard to any extension of the scheme towards which there should be State contributions. The right hon. Gentleman spoke of the German system. I think the country really ought to bear the expense of the Chancellor of the Exchequer's trip last year to Germany. I am sure this House would have voted that gladly if only the Chancellor of the Exchequer would have gone to Germany before he legislated. We on this side of the House, and the hon. Member for Preston on the other side of the House, brought the German system repeatedly before the House. What did the Government say at that time? The Prime Minister, when he made his Budget speech last year, only held the scheme up to reject it. He looked at it from a corner. He only saw a portion of the work it was doing, and he mentioned it only to condemn it.
    The PRIME MINISTER (Mr. Asquith): What I said was "so far as the problem of old age pensions was concerned."
    Mr. A. CHAMBERLAIN: No, Sir. The right hon. Gentleman forces me to argue the question with him.
    The PRIME MINISTER: I am dealing with a matter of fact.
    Mr. A. CHAMBERLAIN: I also wish to deal with it as a matter of fact. The right hon. Gentleman rejected the German system as a guide for us on the ground that it after so many years—30 years—had practically done nothing. He quoted the figure which applied only to old age pensions. He ignorantly or wilfully neglected the much higher figure—
    The PRIME MINISTER: I was referring to old age, and old age alone.
    Mr. A. CHAMBERLAIN: I can only say if the right hon. Gentleman deliberately withheld what has made a success of the German system, and that he spoke only of the temporary and passing phase of that system, and referred only to the people who were aged at the time that the system was first introduced, then he was guilty really of misleading the House of Commons by suppressing the facts which were absolutely material to the case being put before the House.
    The PRIME MINISTER: Because they were irrelevant.
    Mr. A. CHAMBERLAIN: The right hon. Gentleman says they were irrelevant. I do not think anything of the kind. I do

    555
    not think they were irrelevant for a moment. The fact of the matter is that the Chancellor of the Exchequer, starting with old age pensions as the basis of his observations, has brought all these facts into mind in order to foreshadow the various schemes on which the Government would legislate, and for which they would require money. Unemployment insurance is a very important and a very desirable thing. Afforestation on a great scale—of which I will only say at present that it raises a great many more questions than can ever receive adequate consideration at the present time—I was glad to hear the Chancellor of the Exchequer say that he was advised, and agreed with his advisers, that the Government was going to make a great many more inquiries before they began to do anything of a considerable kind. Then he proposes to have a development grant for England. What is called the predominant partner is not to be overlooked in these financial arrangements. This grant will be used for many purposes which the Chancellor of the Exchequer foreshadowed. I think he was perfectly right in saying that what we do to advance agriculture, and promote the interests of agriculture in this country as a whole, is something of a scandal. I really can only think that exists because for the greater portion of the last 60 years or so we have been so much occupied with our industries that we have been accustomed to think of the comparative interests of agriculture as a matter of small consequence. I am one of those who feel that, quite apart from the interests of the individual citizen, which we are quite entitled to say should be considered by this House, the nation as a whole is greatly weakened by the weakness of our agriculture. Anything we can do in reason, and with due regard to all the other interests we have to serve, to promote the development and prosperity of agriculture, would be no mere gain to a section of the community, but a gain to our national strength and national well-being. I am very glad to hear, therefore, that there is to be a sum allotted for that purpose. I am very sorry to see how small that sum is, how small the development grant is in view of the many charges that will necessarily come upon it.
    Mr. LLOYD-GEORGE: It is only a grant for a part of the year, and that is why the total appears small. I am afraid I do not regard it as at all adequate; so
    556
    that I agree with the right hon. Gentleman.
    Mr. A. CHAMBERLAIN: I quite agree, and we may accept it and discuss it as a. token, as an earnest of what is to be done by the House. Still, I am disappointed with the sum, and shocked at the proposal to finance the Development Grant. It means the destruction of the old Sinking Fund, especially at the moment when you are raising a new Sinking Fund. When could you better raise a sum of money for the reduction of debt than when your revenue is so abounding that it has altogether exceeded expectations? I am not here to say that on particular occasions or for a particular purpose I am, not prepared to support the Government in seizing upon the surplus in a particular year and preventing that surplus falling into the Sinking Fund, but I do enter a protest against the proposal once for all to abolish the old Sinking Fund, and that at the very moment when you are raiding the new Sinking Fund. As I am on the Sinking Fund let me say a word about the Chancellor's proposal in regard to the new Sinking Fund. I begin at once by a confession that having regard to the character of the Chancellor, or his Government—I will not be personal—and the difficulties, in which they were in, and the rumours that had spread about, I was greatly surprised by the moderation of the raid he made. I frankly make that admission at once, but how does the Chancellor justify it? He does so in the way that was anticipated by the Prime Minister, on the ground of the reductions the Government have made in the debt in the three years in which they have been in office. The reductions they have made have been due to one or two causes—to the new Sinking Fund, arising from the fixed net charge where I put it of 28 millions, and which they left there with a temporary addition of half a million one year and a million and a half the next year, which additions were not net because in each of these years they took about half of the million from the old Sinking Fund. They have made no attempt to strengthen the permanent provision for the debt. They left that where I placed it. A great portion of the reduction is due to the working of that old Sinking Fund, which they have now destroyed. The credit they claim for what they have done is due to the fact that none of their predecessors had ever been willing to carry into effect such a proposal as the Chancellor has made. Now what happened? They have reduced the debt by

    557
    little over £40,000,000—£40,500,000. That is a very convenient way of speaking of it. It is the popular way, and the one most easily understood, but it does not convey to anyone what is the true state of the case. The national debt, so far as Consols are concerned, are securities. Consols are not capital liability. The owner of £1,000 of Consols has no right now and never will have the right, and his successors never will have the right to bring his scrip for the total sum to the Government, and say, Pay me £1,000 you owe me." But he has a right to get his annuity of 2½ per cent. per annum. It is all very well to talk of 40 millions being struck off the capital liability. Let us ask ourselves by what amount have the annuities been reduced. They have been reduced by just over one million; that is, the Chancellor has reduced the interest which the State has to pay by just over a million, but the Chancellor and the Government feel justified in taking away three millions from the provision made for the further reduction of debt, they are going to reduce the fund by three times the amount by which they have reduced the charges, and the annual liabilities. That is a pretty strong proposal. Looked at from that point of view, I think it is not a satisfactory or as real as when you merely speak of it in the light of the capital liability of the State. I must say I am not prepared for myself or the party to which I belong to associate myself with all the right hon. Gentleman opposite has said, and considering what his predecessors have stated on previous occasions, it is a curious proposal to come from that party. The late Lord Goschen in the first instance reduced the fixed debt charge in recent times. He did it at the moment when he was reducing the interest on debt, when he was converting the debt, and the result of his conversion and nett charge together was that a larger and not a smaller sum was available for the reduction of debt immediately after his operation and immediately before. That has no bearing on the present case. Then you come to the case of Lord St. Aldwyn in 1899. I wonder whether the Chancellor of the Exchequer has refreshed his memory as to the debates of that time, and seen the very high attitude taken by Sir William Harcourt, to whose Budget a few years previously he paid a well merited tribute, as to the iniquity of touching the Sinking Fund for such purposes as this, and as to the line the Liberal party
    558
    would take in similar circumstances. Sir William Harcourt then said:—
    "The Chancellor of the Exchequer up to this time has had a pretty easy life."
    Of course that was applying to circumstances which do not apply in the case of the present Chancellor.
    "He was the heir to a highly solvent estate. He has reduced it to a declaration of partial insolvency."
    Again, Sir William Harcourt said:—
    "In the year 1893, on behalf of the Government of that day, I made this statement: 'We cannot recommend the Committee to meet its liabilities by encroaching further on the fund set apart for the liquidation of the Debt. In our opinion that is a fund not to be tampered with in ordinary times and normal deficiency but reserved for great emergency. That is the keystone of sound and solid finance, and we are not prepared further to weaken its foundation. These are courses which the Government are not prepared to recommend. They only serve to encourage extravagance by concealing and palliating for the moments its effects and therefore promoting its growth. There is in our opinion only one sound and straightforward means of meeting this deficit, and that is by increased taxation. That is the only policy which is worthy of a solvent and wealthy nation which finds itself over-spending.'"
    That was the doctrine of the Liberal party in 1899; it is no longer the policy of the successor of Sir William Harcourt, and they do not propose to act upon it. I will only say further that I am thankful that, having decided to raid the Sinking Fund, they did not raid the new Sinking Fund, and that they did not carry their raids further than they have already done. The right hon. Gentleman the Chancellor of the Exchequer went on in his speech to make an observation which was, to say the least of it, singular in his mouth. He said, and I do not know to what he referred, that he had been subjected to all kinds of scurrility because he was supposed to contemplate economy in certain Departments of the State. I do not know why he referred to that, and I have no comment to make on it; but he went on to say he believed there were great economies to be made in our administration, but that public opinion was not yet ready to support it, and that therefore, although he believed these economies could be made, he was not going to make them now. That is not the way to discharge the duties of Chancellor of the Exchequer. If he believes there are great economies to be made it is his business to show them to the House and the country, and to create a public opinion which would insist upon their being done at once. I must say that a weaker declaration than that indicated, that he must wait for a measure of popular enthusiasm to support him, never came from a Chancellor of the Exchequer.

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    Now I come to the new taxes. This is a subject which will occupy us during a very large portion of this Session, and I think I may safely say will prevent an Autumn Session being held by extending our discussions on these questions nearly to Christmas. I do not propose to examine all his proposals to-night. The Chancellor of the Exchequer said practically: "Here we are in a situation which is unusual. We have not only a very big deficit to meet in the current year, but we require provision for social reform in addition, and a still further largely increased expenditure in the financial year which will follow." Nothing could be worse than for the Chancellor of the Exchequer under such circumstances to leave any doubt as to how those future demands will be met, and it becomes his business to select taxation which will give him not only what he requires, but will also give him the larger revenue he requires in future years. That is a very businesslike proceeding, for which we are very grateful to the Chancellor of the Exchequer; but what a pity he did not convey that idea to the Prime Minister a year ago, when he lightly embarked upon an expenditure of £9,000,000 without giving anyone an idea how he was going to meet the Bill, except by raiding the Sinking Fund. That uncertainty, which the Chancellor of the Exchequer says is the worst thing that could happen for the trade of the country, has prevailed during the whole of the past year, owing to the unsound finance of the Prime Minister.
    The Chancellor of the Exchequer has cast his net widely, and he has dealt with an enormous number of taxes. Little fish as well as big fish have been caught in his net, and his proposals really revolutionise nearly all the taxes with which he deals. I hope the right hon. Gentleman will circulate to us a paper which will show in regard to the increased income tax on larger incomes and the changes in the death duties and the succession duties what will be the cumulative liability of estates of different values. The Chancellor of the Exchequer dealt with the income tax at one point and with the death duties at another, and he dealt with taxation of special classes of land as his third question. We should like to have these different taxes focussed in one place, and, at any rate, illustrations given to show what is the amount of taxation which particular fortunes or particular estates may be called upon to pay. Unless we have
    560
    this information we cannot form any sound judgment as to the proposals he has made. The proposals he puts forward in regard to the big estates are a very heavy addition to the burdens they already bear—a fact which is forgotten by many of those who advocate an ascending scale of taxation. The cumulative effect of all these changes will be very large, and we should like to have some idea what they are. In my opinion the Chancellor of the Exchequer by his proposals is taxing again and again at different points of his Budget the same people in different ways, and those people are comparatively a very small number. There is always a certain amount of danger in imposing a larger portion of the burdens of taxation upon very few people. I hope the Chancellor of the Exchequer will give us further information upon this matter.
    There is another question which is of much greater importance. The Chancellor of the Exchequer quoted an observation made by the Prime Minister last year to the effect that anomalies and inequalities in a tax which might be borne when the tax was temporary became intolerable when permanent, and must be redressed. That is equally true of the tax which ceases to be a small tax and becomes a very high tax, and when the right hon. Gentleman proposes to make the normal income tax 1s. 2d., with a surtax on that upon a great many fortunes, there are other anomalies in regard to this matter to which he must give his attention and with which the House must deal before it parts with this proposal. There is the whole question of levying taxation under Schedule A. As the Committee knows, certain allowances are made to the landlords, amounting to one-sixth and one-eighth for his land and buildings before his tax is assessed. Take, as an illustration, the one-sixth allowed for houses. That was fixed many years ago, when the value of agriculture was, on the whole, higher than it is now. Consequently, one-sixth is a less allowance now than it was then, and the expenses it was intended to meet have not gone down; but, as a matter of fact, have gone up in order to meet the increased expenses of keeping the houses in repair, and so on. One-sixth may have been adequate at the time, although many of those who are best informed on this subject thought it was not. But if it was no more adequate at the time, it must necessarily follow that it is inadequate now. When you are raising

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    this tax, I think it is necessary that you should go into the question of allowance I made in that way, and see their bearing and effect not merely upon the fortunes of individual but upon the well-being of the estates and the dwellers upon them.
    Mr. LLOYD-GEORGE: The right hon. Gentleman has had more experience at the Treasury than I have had. I wish to point out, however, that the difficulty which I found was that whereas one-sixth was too little in one case it was too much in another.
    Mr. AUSTEN CHAMBERLAIN: I am much obliged to the Chancellor of the Exchequer for his interruption, but do not let us discourage the good landlord from such things as cottage building in our effort to get the last penny from him. I think we might remember in that connection the very handsome tribute—unusual from the opposite side of the House—which the Chancellor of the Exchequer paid to agricultural landlords as a whole. When dealing with them the Chancellor of the Exchequer did not, I am bound to say, keep it for the time when he wanted to scourge the town landlords with scorpions. I commend to his supporters in the House and the country the handsome tribute which he paid to agricultural landlords. He by no means exaggerated the interest which the agricultural landlords have taken in the management of their estates or the great public spirit they have shown often at very considerable sacrifice to themselves and altogether outside of legal obligations in order to make their estates happy homes for the people. There was a small concession which the right hon. Gentleman announced, and which I heartily welcome, and that is to extend relief to objects of national and historical interest. I would venture to say this, that the object which the Chancellor of the Exchequer has in view is to relieve individuals of what he believes to be a very considerable hardship in forcing them to sell objects in which they have a sentimental feeling, and which have a special place in their own hearts, but I am afraid that all additional burdens that may be put upon a large estate will tend to force these works of art into the market. I am afraid that this country will retain only a small proportion of these works of art as years go on when they come into the market, and that the proportion will be a decreasing one. Another proposal of the Chancellor of the Exchequer is
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    to make donations into inter vivos more difficult by providing that they shall not effect death duties unless they have taken place at least five years before death. When Sir William Harcourt proposed his death duties he said repeatedly that while his object was to prevent death-bed transfers which were almost fraudulent, it was not his desire to encourage the transfer of donations into inter vivos. He thought that was an admirable thing. I think it is a good thing. I am absolutely wedded to one year. If the Chancellor of the Exchequer can show no reason that one year has proved insufficient, and that a great many donations are made when a man is practically on his death-bed, I should be prepared to consider the point, but I do not think that when donations are made when the man was a sound man and in good health that you should go back upon it. That is not to the interest of the country. It is not to the interest of the country to prevent these gifts passing into inter vivos. Take, for instance, the case of a man who lives to a ripe old age. His son may have won his confidence, and the transfer is made. In ordinary circumstances such a transfer is possible, and I think it is hard to make such a transfer more difficult than it is at present.
    The right hon. Gentleman, for reasons which I do not quite understand, proposes to charge a higher stamp duty on the sale for the conveyance of land. What is the policy of the Government in this respect? Do you think you can make land more easily transferable by taxing it from time to time? What was the justification which the Chancellor of the Exchequer urged for all these additional charges? The additional charges on land come in force at once. At some future time he proposes to relieve local taxation. In another passage of his speech he explains that the burden of local taxation is paid by the poor and not by the land. You cannot have it both ways. The right hon. Gentleman must make up his mind by whom these taxes are paid.
    About the licensing proposal, of the Government I will say very little. I notice the welcome change in the attitude of the Government in respect to that which we advocated in the Licensing Bill of last year. They have now become aware that the growth of clubs is a really serious matter. I mean not the growth of bonâ fide clubs, but of clubs which are nothing more than drinking shops. At the first sight I view most favourably the proposal

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    of the Chancellor of the Exchequer to balance any deficiency in the licensing duties by a poundage on the sale of liquors in clubs. The right hon. Gentleman says that before you can assess these public-houses you must have a new valuation. That is what we tried to impress upon him in the discussion on the Licensing Bill. If we did not succeed in convincing him then, I am glad his own inquiries have convinced him now I should like to know in what spirit and with what objects has the Chancellor of the Exchequer proposed these increased duties. It is not primarily to promote sobriety, for the figures which he himself has quoted show that there is a growing movement in favour of sobriety. That has been going steadily on for the past 10 years and it may be expected to go en for the future, owing to the feeling which now animates all classes of society. We know that his colleagues have advocated these additional duties as a punishment on the trade for having opposed the Licensing Bill of last year. [Cries of "No, no."] I do not know that the Chancellor of the Exchequer has done so, but his colleagues have. I could give half a dozen quotations from their speeches. Take the Lord Advocate as a speciality. Most of his time is spent in going up and down the country in supporting taxational land values, a proposal of his own which has been disavowed by the Government. But when he is not occupied in that duty he indulges in swinging attacks on the publicans and the House of Lords. The Chancellor of the Exchequer made an observation which lent some colour, I will not say to the idea that his proposals were done vindictively, but that they were done with the hope that the effect would be that taxation will destroy a good deal of licences. He said in dealing with small houses, which are often undesirable, that he was going to apply to them a similar scale to other houses, and that would probably put a good many of them out of existence. If the Chancellor of the Exchequer says he did not say that I do not press it against him. It is difficult to follow all that was said. I think it is probable that the scale which the right hon. Gentleman has adopted will put many licences out of existence. I think that taxation driven to the point which makes it impossible for a man to continue his business ceases to become taxation, and really becomes spoliation. It is really difficult to say at what point you are robbing a man as you go in an
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    ascending scale in regard to the profits he makes, but if you deliberately adopt a scale to shut up a business altogether that, I say, ceases to become taxation, and becomes pure robbery of the man so taxed. Then the right hon. Gentleman turned to the urban landlord, and contrasted him very unfavourably with the rural landlord. I doubt very much the general assumption which appeared to underlie the right hon. Gentleman's statement that a great deal of land which could usefully and fairly be disposed of at the present time is being held out of the market in our big towns. I think that if he makes inquiries into the number of vacant houses in these towns-he will find that it is amazing, partly through depression of trade, but largely because of the great development which has gone on outside the towns. That does, not show that land is being improperly withheld, and that towns are being starved for want of land. On the contrary, house owners in some of these cases, are being starved for want of tenants, and local authorities complain of the small yield of the rates in consequence of these vacant houses. Then the right hon. Gentleman said that under our present system it is in the interests of the landlord to crowd his land with the worst class of houses—to put the greatest number of houses on the smallest plot of ground, leaving scarcely any means for the introduction of sunlight. That is not at all what the President of the Local Government Board said the other day in introducing his Town Planning Bill. He said that it was in the interests of the landlord to have the better class of house, and that it is very largely the bad bye-laws which have prevented him from putting these up. All these matters we shall have to go very carefully into at a later stage. I must not deal with them further now. I will just, ask the Chancellor of the Exchequer when he is replying to the Debate to answer two questions dealing with widely different subjects, but both on the same lines. The development grant is to get a surplus whenever there is one. Out of the accumulations of the development grant are you going to meet a deficit, when you get one? You are going to put a special tax, an unearned increment, when your valuations show that property has augmented in value without capital or exertion expended upon it. Are you also going to give any compensation when the process has been the other way—where a man has made an unfortunate speculation, and his land has deteriorated in valued?

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    I only wish the people who talk of such speculation as good speculation would put some of their own money in the land. They would then see that there are two sides to the question. I am not going into the very important proposals which the Chancellor of the Exchequer has made tonight. I come now to the indirect taxation to which he has referred. If there is one principle on which the Government, pledged themselves when they came into office it was that indirect taxation was bad, and that they would not be the instrument of putting it on. They took off 3 millions from the sugar duty last year in order to put 2½ millions on tobacco this year. Was it worth while? Are the people going to benefit? Tobacco is already the most heavily taxed article ad valorem, and I think it is quite possible that the effect on your revenue will be much less satisfactory than the Chancellor of the Exchequer anticipates. Then we come to spirits. The Chancellor is bold, and has manufactured a new Irish grievance. He will remember the Financial Relations Committee, and the plea which from time to time was put forward. Let him work out his figures with regard to the new spirit duty, and I think he will find that he has added fuel to the flames. I congratulate myself that the proceedings of the Government in relation to the trade on this occasion is extended to the trade in all parts of the United Kingdom. We in England are not to be legislated for by our Scotch and Irish fellow Members without being able to mete out to them the measure they accord to us. I desire to ask the Chancellor of the Exchequer at once whether he implied that there were to be duties on alcohol used for commercial purposes?
    Mr. LLOYD-GEORGE: There is an exemption on that now.
    Mr. A. CHAMBERLAIN: The exemption will continue?
    Mr. LLOYD-GEORGE: Yes.
    Mr. A. CHAMBERLAIN: I assumed that was so; but a good many people will be happier when they read that in the papers to-morrow. Take the Budget as a whole, it is for £162,000,000 this year, and a much larger sum next year. Where are the promises of reduction and economy which were made by the present Government? From the Prime Minister downwards every Member of that party accused their predecessors of having inflated Budgets, and they singled out for reduction at
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    different times every tax which was enforced. Well, it is pretty evident that we have come to the end of reduction in taxation under the present régime. It is very evident that all the professions that were made were the offspring of ignorance or of hope destined to be disappointed, and that the present Government have found out, as we found out, that not merely the international competition, but the demands of our own people for better conditions and for improved circumstances make it impossible for anyone to look forward to any permanent reduction in face of the expenditure with which we have to deal.
    Mr. T. G. ASHTON: I commend the right hon. Gentleman the Chancellor of the Exchequer for the very great foresight that he has shown in providing in, his Budget not only for the requirements of this year, but very largely for the increasing requirements of the year which follows, which will be a very much more difficult year to finance than the present year on which we are now engaged. I also congratulate him very heartily on-having framed this very ingenious Budget—for a very ingenious Budget I think it is—for he has so framed it that he has avoided putting a tax upon the industries of the country. At any rate, in the main be has avoided it, for, after all, any taxes that you can raise are to a certain extent taxes on the industries of the country. But I think in the main he has been extremely successful in the way in which he bas avoided putting taxes upon the industries of the country, in spite of the very large amount of money which he has been called upon to raise. I do not always agree with the right hon. Gentleman the Member for East Worcestershire, but there is one thing in which I do agree with him, and that is in deploring the way in which a raid has been made upon the Sinking Fund. The right hon. Gentleman has spoken first of all about the old Sinking Fund, and I must say I was astonished when the Chancellor of the Exchequer made the statement that he was going to appropriate the old Sinking Fund for other purposes than that of paying off the debt of the country. In a certain sense it is to my mind a far more serious thing to appropriate the old Sinking Fund than to deal with the new, and it is more serious for this reason, because with very small exceptions the old Sinking Fund has never been tampered with. It has been quite common—more common than it ought to be—to tamper with the new Sinking Fund, but so far as I know, with very few excep-

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    tions, the old Sinking Fund has never been tampered with. We have, at any rate, felt that the amount of money which arose from the surpluses of good years has gone towards the reduction of debt, which every economist in the House must want to see reduced as rapidly as possible. Now I come to the new Sinking Fund, and when I say it is a mistake to raid the Sinking Fund I would refer to no less a person than the present Prime Minister, who was Chancellor of the Exchequer in 1906. At that time he used these words:—
    "Second and second only to the duty of reducing expenditure is that of making a more adequate provision for the reduction of debt."
    The words are "a more adequate provision," and certainly no more adequate provision has been made for the reduction of debt, except by means of the old Sinking Fund.
    It has happened that we have been passing through three extremely good years, and there have been additions to debt reduction by means of the old Sinking Fund. But I do not think anyone can say, when you have a debt of over 700,000,000 of money, that to reduce the new Sinking Fund, which is, roughly speaking, only about nine millions, is a very large reduction for this country to make year by year in its debt. The Prime Minister last year certainly egged the present Chancellor of the Exchequer on, by what he said, to reduce the new Sinking Fund, and it seems to me that he did so on very inadequate grounds, and some of his reasons, though I think I see why he did it, did not seem to me to be very good. He chose to compare the dead-weight debt of last year with the dead-weight debt of 20 years ago, and I am quite sure that he made a very large number of Members of this House believe—I do not say intentionally, of course—but he did lead them to believe that we had now got over the whole of the expenditure of the Transvaal War, and that we had reduced the debt to an amount equal to that at which it stood before the Transvaal War took place, whereas, as a fact, nothing was further from the case. Instead of taking 20 years ago, the Prime Minister ought to have taken 10 years ago—the year 1899–1900, when the National Debt was 70 millions—when the dead-weight debt was something like 70 millions lower than it is to-day, and the capital liabilities of the nation were 120 millions lower than they are now. It does seem to me that when the capital liabilities of the nation
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    are 120 millions bigger than they were before the Transvaal War is not a time for a big country like this to reduce the Sinking Fund, and certainly not by anything over the surplus which arises in the good years, and which ought to form the old Sinking Fund. We have the authority for that of many eminent financiers, including Lord Cromer himself. The Noble Lord last year, speaking in the House of Lords on the reduction of the debt, said: "When at peace we ought to do our utmost to pay our debt, in order to meet any financial strain that might be put upon us. He hoped nothing would be done to interfere with the Sinking Fund." I think he is undoubtedly a great authority on questions of finance. Of course, I am perfectly aware that my right hon. Friend and most people will say, When he had to find 16½ millions of money, how could he do it otherwise? But I think we ought to make great sacrifices for our Sinking Fund, and that there is a tax which the right hon. Gentleman might have found which would have been extremely appropriate in dealing with the debts of the country. I believe myself that it would have been perfectly justifiable, rather than to reduce the Sinking Fund, to have put on a coal tax, and I will try to show why I think a coal tax would be a perfectly legitimate one for the purpose of reducing the National Debt, and why I should like to see it earmarked against reduction. After all, when you export coal and part with it, you are parting with the permanent assets of the country. This wealth is not like a crop that grows again, and when you get rid of it you get rid of it for ever, and I think you would be perfectly well justified, when you are parting with your assets, as you do in parting with coal, that you should also part with some of your liabilities; for if these liabilities remain, and the assets go, the future of this country will not be a happy one. As to the history of the tax on coal, I confess I was not in favour of the coal tax which was put on, in the time of the war for this reason, that it penalised some coal in this country and left other coal, which was not used for export, untouched; and, if you put a duty on coal at all, it ought to be put on the article, whether for home consumption or foreign export. That is only fair to the coal owners of the country. I find in 1907 the production of coal was 267 million tons, and if you put on a 1d. a ton—not a very large amount—it would yield the large amount of one million one hundred thousand pounds; in other words, if you put

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    5d. a ton on coal, or a ¼d. a cwt., you would get 5½ millions of money, which you might use for the reduction of debt. It would be an easy tax to collect in my belief, because the statistics of coal have to be given by every coal owner every year. It would not be an expensive tax to collect. It would all go into the Exchequer, and would not be like the corn tax, which goes partly into private pockets, and the burden would be very widely distributed, and in my opinion it would be very little felt. Of course, the question comes in about foreign competition. As a matter of fact, with the exception of America, this country produces coal more cheaply than any other country in the world, and therefore it is not likely that it would be affected very much by foreign competition. I regret myself that the question of a coal tax has not been taken up in preference to the reduction of the Sinking Fund.
    I am in favour of almost all the provisions as far as I understand them, but I dislike very much the idea of the super-tax. It is not the amount of the tax that I dislike. I am perfectly willing, if it falls to my lot to have to pay some of the super-tax, to pay a larger share of the taxation of the country. It is only right and just that people who are better off should pay rather more than people who are not so well off, but I object to it mainly on the ground that it penalises the honest man as against the dishonest man. I am perfectly convinced that the Chancellor of the Exchequer will not get anything like the full amount that he honestly ought to get by the imposition of the tax. That is not a matter of theory; it has been found in practice to be the fact. Mr. Pitt, in the exigencies of the great French wars, instituted an income-tax in 1798, and put on a tax of 2s. in the pound, and it was collected by personal declaration. It was taken off when the war ceased, and put on when the war started again, but instead of 2s. in the pound he put on 1s., collecting it at the base, as we do now. The result was that it yielded almost as much as the 2s. tax. That shows the enormous amount of fraud and dishonesty that goes on if you allow people practically to decide their own taxation.
    Lord BALCARRES: The times now are very much better than in 1798.
    Mr. T. G. ASHTON: Not so much better that they would make a difference of half the tax. I feel perfectly confident that if the Chancellor of the Exchequer leaves it to personal declaration the super-tax
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    will not yield what he expects, and he will do grave injustice to the honest man as against the dishonest man. I personally should infinitely prefer that he should have placed the income tax at a higher level all round, and then by means of a regression made allowances to people with smaller incomes from that amount. I am perfectly aware of the objection that you would take a very large amount of money off the market, and perhaps interfere with the money market for a time, and then have to pay it back again, but that is a minor objection which might easily be got over by collecting it at various times of the year. I regret more than I can say that the Chancellor has attempted to put on a super-tax, which I, and others who know more about finance than I do, believe will be to a certain extent a failure. After all, it is not as if the rich man did not pay a very large amount of taxation now on his income and on his capital. We are apt to forget what a very large burden the death duties are upon the capital of the rich man. Sir Henry Primrose, giving evidence before the Income Tax Committee, gave an estimate of what he considered the death duties were equivalent to in income tax, and he made out that the death duties from 1896 to 1905 were equivalent on a small income of £400 a year to 6d. in the £, and from £4,000 to £6,000 a year 1s. in the £ extra, going up to 1s. 3¾d. on an income of £40,000 a year. That is already a very considerable super-tax, and I should very much rather have an ordinary income tax increase after regression for those who do not have quite as large incomes.
    I congratulate the right hon. Gentleman-upon what he is doing in regard to licence duties. The right hon. Gentleman the Member for East Worcestershire said the licence duties were being raised as a punishment to the trade because they would not accept the Licensing Bill. I do not think there is any justification for that charge at all. He said it amounted to robbery if licences as a consequence of this were destroyed. I do not agree with that either. I myself and a great many of my Friends have no doubt advocated a high licence system. For several years past I have always advocated that we should increase the licence duties on public - houses because they were so grossly unjust on the large houses as compared with the small houses. I am very glad now they are all being levelled up to the rate of the small houses. We are told the tax will be something like 50 per cent. That is a high licence, but it

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    is not robbery, and if it has the effect, as I hope, of destroying some of the poorer houses in the back streets of our big towns so much the better. I remember not very long ago having a talk with a chairman of quarter sessions, who is a strong Conservative, and he told me he considered what we wanted more than anything else was this very high licence system which is now proposed. What you want to do, he said, is to get rid of the small public-houses in the slum streets, and compel them to close, as you will do by high licences, and have your public-houses in the large streets, And then you will find a very large number of people who would go into the slum houses where they could not be seen, but would not think of going into houses in the large street where they could be seen. I welcome this because I think it is fair, and because I think it will do something to close some of the worst of our houses, besides at the same time putting a very considerable sum of money into the pocket of the Chancellor of the Exchequer. In most respects I fully endorse the Budget which is placed before us, and I hope it may go through almost in its entirety.
    Mr. SAMUEL ROBERTS: It is many years since we had a Budget statement as important as this. It has been said by the right hon. Gentleman the Member for East Worcestershire, that when the Government came to power three years ago there was one thing at all events that they said they were going to do, and that was to economise. The present Prime Minister when he introduced the first Budget made a very important point in his Budget statement of that time. The Estimates, as the Committee are aware, were practically made by our Administration before we went out of power. The estimated expenditure which the right hon. Gentleman had to budget for amounted to £141,786,000, excluding the local taxation contribution, because that contribution is not a rational expenditure. The right hon. Gentleman said:—
    "These figures appear to me to call for no comment. They speak with an eloquence which needs no rhetorical embroidery. In my opinion they make a return to more thrifty and economical administration the first and paramount duty of the government."
    And yet what do we find? The Government which at that time said its first duty was to reduce that figure have not reduced it, and this year the estimated expenditure amounts to no less than £154,000,000, excluding the local taxation contribution, or something like £13,000,000
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    more than the figure to which the right hon. Gentleman referred. That is my comment on this Budget so far as expenditure goes.
    I quite agree with what the hon. Member for Bedford said with regard to the Sinking Fund. I thought it was always a maxim of the Liberal party that financial purity must be maintained by keeping up the Sinking Fund of this country. We have had the most extraordinary statement this afternoon that not only is the fixed charge reduced by £6,000,000, but that the old Sinking Fund is to be abolished altogether—the old Sinking Fund which has been in operation since 1828, and by which automatically the surplus went over every year to reduce the National Debt. The right hon. Gentleman is going to devote that sum to a new grant to be called the Development Grant. I do not object to the development grant being established, but I object to the old Sinking Fund being extinguished. With regard to what is called the "fixed charge" of £28,000,000, I would point out that it has varied from time to time. It has been as low as £23,000,000 in 1900 and as high as £29,500,000. That fund was established by Sir Stafford Northcote in 1875. When he was Chancellor of the Exchequer he fixed it at £28,000,000. Why? Because he said that it had never been less than £28,000,000 before 1860, when the country was poorer and the revenue was less. Sir Stafford argued in 1875 that if the country was poorer in 1860 à fortiori it could certainly better afford to pay as much off every year as it had done previous to the year 1860. If that was Sir Stafford Northcote's reason there is at the present time very much more reason for keeping the standard up to £28,000,000, because our national revenue has nearly doubled since 1875 when that sum was fixed. Therefore, surely if the country could afford £28,000,000 in 1875, it can much more afford it now.
    May I draw the attention of the Committee to the question of paying off the National Debt, and to what our rivals are doing? What is the condition of their debt? The national debt of Germany is only £193,000,000, or £3 per head of the population, and of the United States of America £183,000,000, or £2 per head of the population. Our deadweight debt—not the total including other capital liabilities—was in the year 1907 £711,000,000, or £16 per head of the population. The national debt of France is higher than ours, but that is the only country that is

    573
    higher. The French national debt amounts to £1,034,000,000, or £26 per head of the population. The national debt of France is owing to the Franco-German War, and to the fact that they have not maintained the proper method of paying it off by a Sinking Fund. At the present time it is proposed to reduce our Sinking Fund, when the £70,000,000 of debt which was created by the South African War is still to be paid off before we get down to the point at which our National Debt was before the war. Therefore, I say, that at the present moment it is very bad financial policy not to maintain the fixed sum of £28,000,000.
    The income tax is the second great reserve which this country has in case of emergency. The Sinking Fund, of course, is the first. It is easy to suspend the Sinking Fund if we want to do so in case of war, but a low income tax is equally important, for if you keep it up at a high rate, you cannot raise money by it at a higher standard when that is necessary. The present Prime Minister and his predecessor, the right hon. Gentleman the Member for East Worcestershire, have both expressed the opinion that the income tax, having been raised for the purpose of the South African War, should be first entitled to reduction when the war was over. These promises have not been fulfilled. We know the opinion of the Prime Minister about it, because two years ago, when he made his first statement, he said:—
    "In regard to the income tax I do not hesitate to associate myself with the declarations of more than one of my predecessors that an income tax of a uniform rate of 1s. in the £ at a time of peace is impossible to justify and difficult to defend. It is a burden on the trade of the country which, in the long run, affects not only profits but wages,"
    That is the opinion of the Prime Minister, and yet he is already raising the income tax in time of peace to 1s. 2d., with a super-tax of 6d. upon incomes over £3,000. I agree with what was said by the hon. Member for Bedford. I think this is a dangerous thing to introduce in the financial system. We are dependent on the declaration of the taxpayers. Where the taxpayers think they are being unjustly dealt with in comparison with other taxpayers it makes them think that they are justified in evading the tax if they can do it. We know that capital has been going out of the country in largely increasing amount. During last year more than half of the capital applications that were raised in that year went to foreign countries and our colonies. We also know that most foreign Parliaments have
    574
    coupons attached to them payable to bearer, and transferable on delivery. There is no means of getting our income tax from these coupons unless the recipient chooses to disclose it; and I am afraid that it will be found that payers of this large income tax will transfer their investments from English to foreign securities, where they can obtain these coupons payable to bearer and transferable on delivery. It is a well known fact that many rich people on the continent in years gone by have made their investments in this country because they considered they were absolutely safe; but the process that has been going on in recent years has been the withdrawal of investments, and they have been withdrawing their investments because they have got a notion that Socialistic methods of legislation are becoming very prevalent in this country, and they do not feel that the capital now is as secure as it was when they invested it. I am afraid that these proposals of the Chancellor of the Exchequer will increase that tendency to withdraw capital from England, and the first person to suffer by that will be the Chancellor of the Exchequer himself.
    Now one word with regard to licences. I am not concerned myself personally in the liquor trade. I am not interested in it at all, and therefore I can speak impartially. Here, again, I am afraid that those engaged in the trade will think that the Chancellor has been punishing them today for their resistance to the Licensing Bill. I am quite sure their feeling will be that these increased duties in the trade, amounting to £2,600,000, are being imposed upon them to punish them for their resistance to the Licensing Bill. I think the trade are being unjustly dealt with. They contribute at present about one-third of the total Exchequer receipts from tax revenue. It amounts to about 38,000,000 of money which the Chancellor receives. This includes an amount of £450,000, which was imposed in the year 1890, and has been imposed now for 19 years. It was imposed in order that that money should be devoted to compensate for licences when they were taken away, but that proposal fell through, but the tax did not fall through. The licence duty continued and has been devoted to technical education and other purposes for which it was not raised. The trade felt that a great injustice was done to them at that time and they still feel it. The charge under that head already has amounted to about 8,000,000 of money. Not only that, but

    575
    there were the extra taxes imposed when the South African War was on. They amounted to 1s. a barrel on beer and 6d. per gallon on proof spirits. This tax was imposed by Sir Michael Hicks-Beach, who was then Chancellor, and he said, when he proposed these taxes, that he regarded them as temporary. They practically now have been merged and made permanent in the general liquor taxation. They amount now to over 2½ millions per year, and on the whole they have contributed since they were put on over £24,000,000, which have turned into the pockets of the Chancellor. In addition to these reasons I should like to mention, which is quite apparent from the figures on the White Paper to-day, that the trade are suffering from the country becoming more sober. A less consumption of beer and spirits is going on. We do not disagree with that, but still that is a matter which ought to be taken into consideration when extra duties to the amount of two millions are being asked to be paid. With regard to the other taxes which the Chancellor proposes, I should like to have more opportunity of studying them in detail than we are able to do on a few minutes' notice, and, therefore, I venture to postpone any further remark I have to make with regard to new taxation.
    Mr. W. H. LEVER: I wish first of all to congratulate the Chancellor of the Exchequer on a most excellent Budget whilst not agreeing with every detail which it contains. It is impossible for any Budget to be produced that would, in all details, be beyond criticism; but I do say that this Budget exceeds all its predecessors in two points which are the basis of all sound taxation: that is, that taxation should rest first of all upon ability; and, secondly, should make for stability. We have here a Budget which has made an effort to ascertain how the large amount of money we require could be obtained with the least hindrance to the trade and commerce of the country and with the least impediment in the way of cheapening the food of the people, and that, further, would give the greatest opportunity for largely increased revenues in succeeding years. The principle of graduated income tax, which was commenced in 1894—for the death duties which have been mentioned by several of the previous speakers are, after all, only another form of differentiated income tax—is the very
    576
    soundest we can possibly have. It embodies the differentiation which always, appeared to me should be made, namely, between earned and unearned income, as well as the amount of the income; and I rejoice that this Budget, when it is carried through—that it will be carried through I have not the slightest doubt—for the first time makes an equality in payment between two classes of the community widely divergent. I have often made a calculation of the amount of taxation of the workmen in receipt of only 20s. a week. Out of that small income he pays—including rates and taxation on tea, sugar, tobacco, and a moderate consumption of alcohol—something like 4s. in the £. If we take the income tax and graduated death duties the millionaire would pay, assuming his estate is a million and the death duty is 15 per cent., and assuming he is a prudent man and wishes to insure so that the amount of death duties payable will be recoverable at his death, it works out that he will pay in the first place an income tax of 1s. 8d. in the pound, which is moderate, I think, in proportion to his wealth, and in the second place his estate will pay death duty at 15 per cent. Assume that an estate of a million is making an average return of 4 per cent., that would be an income of £40,000 a year. Insurance at the rate of 4 per cent. on the sum assured, £150,000, would be £6,000 a year, and adding to the 3s. in the pound the income tax of 1s. 8d., the millionaire would also be paying a little over 4s. in the pound as against the 4s. paid by the workman. Now I am sure it would be a source of satisfaction for any man to know that he is enabled by this Budget to bear his fair proportion of the taxation of this country. It is for the protection of wealth and property and business that our armaments are maintained—our whole system of Government, our system of justice, and the bulk of the expenditure on the Civil Service as well as military armaments. From this expenditure the wealthy have the great advantage of effective protection of their property. The whole machinery of the Government, which is so costly, is mainly beneficial to those who possess large estates. It is said that the effect of these graduated taxes would be to force investments out of the country. The last speaker waxed very eloquent on that subject. If money is so insecure in this country, if investors are flying from this country how is it that every investment we have in this country—Government

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    Consols, railways, commercial investments—are all eagerly sought both by the natives of these isles and by foreigners, although there is a lower rate of return than in any other country of the world? Why is that? It can only be because of the higher security that property has in this country, and which it has enjoyed for so long. To show how eager capital is for ample security we have only to compare the perfect security offered by the British Government to investors who accept 2½ and 2¾ per cent. For the same security with the German Government the investor wants 3 to 3¼ per cent., and so it is all round. The commercial investment in the United Kingdom returns 5 per cent., and is considered good. In the United States the same class of security is offered to investors at 7 per cent. Therefore, so far from our conditions here being of such a character as to force capital out of the country, we have such an excessive capital that the rate of interest is lower, which is always the effect of abundance. A moment of thought will convince us that, even supposing the effect of this were a feeling of insecurity, to what country can the investor go where he would have any better conditions for security than he has here? I cannot think that he would make an exchange on any idle sentiment, any feeling of injustice, because he has no ground for such feeling. The government of the country is costly, and is becoming more costly year by year from various causes and it is an advantage to us to have the great privilege of bearing under this Budget, in proportion to our means, a fair share of the taxation of the country. We all rejoice that this opportunity has been given.
    There is another thought raised by this Budget. It is this: We talked of economy in former years, yet we have had an increased expenditure to bear. How is that increased expenditure accounted for? Do you wish to cut off the old age pension which accounts for the bulk of this great expenditure, or do you wish to cut off the "Dreadnoughts" of the Navy? To my mind there has been no piece of legislation carried through by any great self-respecting nation that so redounds to the honour of the country as the Old Age Pensions Act. That we should be willing—a great, rich, and powerful nation with our national income going up by leaps and bounds, so that we in a very few years can show that it is increasing by hundreds and millions—that these aged people, past 70 years of age, should be thrown either into the poor houses or on to charity, could not be to
    578
    the honour of a great nation. We have barely redeemed our honour by this first instalment; we have merely shown the path on which we are bound to go still further, and I feel sure that hon. Gentlemen and right hon. Gentlemen who taunt us about any doctrines of economy, do not refer in those remarks to any reduction in expenditure on old age pensions, and I am quite willing to admit that they do not desire to reduce expenditure on maintaining the safety of this nation from any attack on the sea. Some mention has been made as to the probable raising of a hornet's nest in Ireland because of the incidence of the taxation of whisky. May I point out that whatever inequality there may have been with reference to the incidence of taxation on spirits between the two countries, it has been entirely removed by the passing of the Old Age Pensions Act, under which Ireland receives a much larger proportion, I think amounting to three millions from that fund. Therefore, I feel that if under this change in the incidence of taxation on whisky Ireland feels that she will be paying on spirits a larger proportion than her share compared with England—the beer tax being left untouched—the very fact that she has a large sum of money to go to the aged poor in Ireland, at any rate removes any ground for the slightest objection or feeling of injustice with regard to that matter.
    There is only one other matter that I should like to refer to, and that is what is called the raiding of the Sinking Fund. I do think it would have been better to have raised increased taxation, and to have left the Sinking Fund untouched. I venture to say that although the income tax goes a long way to remedy inequalities between the rich and the poor, my own view is that it might have gone a little further. It is my view that the income tax ought to commence at 1d. in the £ on incomes of a £1 a week, and up to 2s. in the £ on large incomes. I feel that if we had an income tax graduated in that way, and if we had it collected at the source, as in the case of large limited companies making great profits, and paid on the scale of their profits, we could put our income tax on a sound financial basis, so that in times of stress and emergency, or when a war takes place, it would be very much more elastic than under the present system, and it would permit of the tax being increased or decreased according to national requirements, and would produce permanently a sound source of revenue of enormous dimensions.

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    I rejoice that we, a Free Trade country—and all Free Trade countries must depend on direct taxation as an important source of their taxation—should ensure that the food of the people shall not be a source from which the revenue can carry on the Government of this country. [Cries of "Tea" and "Sugar."] But to ensure that, and to place it beyond all possibility for all time, we might have had made income-tax from a penny to two shillings. With reference to brokers' notes and one or two little items like that, I think if we had a broad comprehensive income-tax some of those smaller details might have been left out. I do not see that they would produce a very large income. I think we would get much more out of a 2s. in the pound income tax on large incomes, and that those little items, which after all hinder trade, might be omitted. There is no doubt that every form of taxation is a hindrance to the property on which it is placed, and the ideal form would be strict and rigid economy, in which the amount of taxation was reduced to a minimum but with all the obligations a great and powerful nation like ours has to meet in all parts of the world. I do feel that the Chancellor of the Exchequer has placed this country under a very great obligation in showing the direction in which one can go with perfect justice to all classes of the community—by taxing luxuries, by taxing wealth, by releasing industry from harassing duties, and taxes on raw materials or on products, by showing the direction in which the revenue can be obtained—and by doing so he has placed the whole-country under a deep debt of gratitude.
    Mr. JOHN REDMOND: I do not desire to enter into anything in the nature of an elaborate criticism of the Budget to-night. According to the practice of recent years, which will, I understand, be carried out this year, on Monday next we will have the opportunity of a full general discussion on the Budget. I have only risen to say a few words in order to make clear at the earliest possible moment the attitude which my colleagues will take on this matter. I listened to the remarks of the hon. Gentleman who has just sat down, the few remarks I have heard with reference to Ireland. He tells us that because, as he says, Ireland is receiving a larger proportion of the old age pension fund than this country, that therefore we ought not to complain of the incidence of the new whisky tax, which will un-
    580
    doubtedly press upon our country. We stand in the position of men who believe that the finding of the Royal Commission on Financial Relations between the two countries holds the field. That Commission, which was composed of a majority of Englishmen, and of the greatest financial experts of this country, declared so far back as 1895 that Ireland was taxed not in accordance with their financial capacity, but between two and three millions more than her fair proportion. When last year the Old Age Pensions Act was passed, and when it was found that Ireland was receiving a large proportion of the amount, there were many people in Ireland who said: Well, at any rate, so far as it goes, this proportion tends to diminish the injustice which Ireland suffers in its financial relations with this country. The advantage which Ireland obtained in that way did not go even appreciably far to remove that injustice, but it went some distance. But now, in this Budget, it is proposed to remove from Ireland that small redress of the financial grievance and to impose on her very serious injustice.
    What has happened in this Budget is exactly what happened in 1853, when the gravest of all injustices was done in point of taxation to our country. In 1853, by the imposition of a largely increased whisky tax, the taxation of Ireland was increased at one blow by £2,000,000 per year, and now you do not propose to put a single additional sixpence on the beverage of this country, while you propose to put an enormously increased taxation on whisky. [An HON. MEMBER: "What about Scotland?"] I am not dealing with Scotland. Scotland has always been very well able to take care of itself, and I may be forgiven if I confine my few remarks on this occasion to my own case. We are bound to resist, by every means in our power, this proposal, which not only sweeps away the advantage which we gain under the Old Age Pensions Bill, and which went to some degree to remedy the injustice of the financial relations between the two countries, but it imposes an additional injustice on us. We will be able to develop this further on Monday. We will be able to go fully into the whole question. I have risen for the purpose of at once declaring, so far as this Budget is concerned, the Government must expect to meet the vigorous opposition of the Irish party.

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    There are other matters connected with the proposals of the right hon. Gentleman to which we object. I think that the imposition of 8d. of an additional tax on tobacco is a cruel thing so far as the poor are concerned. The right hon. Gentleman said that he would not think it right to impose any indirect taxation upon necessaries of life, and he instanced tea and sugar. I agree with him so far as the very poor are concerned that tea and sugar are necessaries of life. I suppose it would seem an extravagant thing for me to say I regard tobacco as a necessity of life. I can assure hon. Members that if they will take the Budgets which have been published in the Report of the Congested Districts Board of the poorest of the poor in the congested districts of Ireland they will see that tobacco is one of those things which the very poorest of the country find it necessary to spend their incomes upon. In those budgets of the very poor of the Irish congested districts the items are tea, sugar, meal, and tobacco. Of course, we are always in discussing a matter of this kind at a disadvantage of talking to men who, however benevolently they may feel to our country, really have no knowledge of it, and are not acquainted with the conditions. But I would appeal to any English Member who has spent any time in the congested districts in the West of Ireland, and who knows the climatic conditions which obtain there, and is acquainted with the lives of the people, whether it is not absolute cruelty to deprive these people to any extent of their tobacco. I do not know whether when we get into Committee on the Budget Bill it will be possible to exclude from this tax twist tobacco, the commonest kind of tobacco used by these poor people. To deprive them in any degree of the consolation of a little tobacco is a cruelty to these men considering the lives they lead.
    There are many things which, in listening to the right hon. Gentleman, struck me from the Irish point of view. It is an unfortunate thing that when the figures are published in connection with the annual Budget statement showing the revenue and expenditure of the year, the distinctive figures for Ireland and Great Britain are not given. These figures are given every year, but they are not published until about the month of July, when it is too late to use them in the Budget discussions. One of the things upon which the right hon. Gentleman congratulated himself was that
    582
    there has been an increase of, I think, a million pounds in the yield of income tax. I should like to know the figure with reference to Ireland. Income tax in Ireland, while it has been an increasing amount in England year after year, has been a diminishing amount in Ireland, and I venture to say that when we get the figures you will find that while there has been an increase of a million pounds from income tax with reference to the rest of the United Kingdom, the yield in Ireland has gone down. You are dealing in the case of Ireland with a poor country, whose population is diminishing, and it is a cruel thing to increase in any degree her taxation. In view of the position we have always taken up since the Report of the Royal Commission in 1895, we are bound to oppose every proposal to increase taxation in our country.
    I should not have spoken at all to-night were it not that I desired at the earliest moment to declare that we will oppose this Budget. It is a most extraordinary Budget. In listening to the speech of the right hon. Gentleman, it seemed as if I were listening to three or four King's Speeches rolled into one. This is not a Budget Bill in the ordinary sense of the word at all. It is a measure containing four or five Bills thrown into one. There is a Valuation Bill for all the land of the country, a Valuation Bill apparently for all the buildings in the towns, a Land Bill, a Bill dealing with town tenants' interests, and a Licensing Bill, all rolled into one. I do not know what the proposal of the Government will be, whether they intend to keep Parliament sitting until Christmas to discuss this measure, or what their object is in proposing a measure of this kind. [An HON. MEMBER on the Opposition Benches: "A dissolution."] Well, I sincerely hope it is a dissolution. [Opposition cheers.] But not from the same point of view as hon. Gentlemen who cheer. I would be glad to see an issue taken by hon. Gentlemen and the House of Lords upon this Bill. I am entirely opposed to the Bill, because it imposes additional taxation upon Ireland, but there is no man in this assembly so anxious as I am to get a clear issue with the House of Lords, and nothing would delight me more than to have an issue taken upon the main lines of this Budget if we could only get to close quarters with the House of Lords. I will say nothing further now, but on Monday it will be the duty of my colleagues and myself to develop our view with reference

    583
    to the Irish case more minutely. I content myself on this occasion by saying most emphatically and clearly that, so far as we are concerned, as this Budget imposes additional unjust taxation upon Ireland we shall oppose it on every possible opportunity.
    Sir FREDERICK BANBURY: I can assure the hon. Member for Waterford that we in this part of the House are thoroughly in agreement with him in everything he has said. We desire a dissolution; we are not afraid to face it; and we agree with the hon. Member that the sooner a dissolution is brought about the better it will be. The hon. Member says that certain figures are presented in July which he has hitherto been prevented from using in the discussion on the Budget because they have been published at so late a period of the year. May I venture to prophesy that when next July comes we shall still be discussing the Budget, and that the hon. Gentleman will have ample opportunity of making himself acquainted with the details which he desires to know. He also told us that this was an extraordinary Budget, and that it was three or four King's Speeches rolled into one. I think it is more than that. It is five or six King's Speeches rolled into one, with the addition of every fad which has ever been referred to upon Radical platforms by Radical enthusiasts. They have nothing to do with the Budget. For two hours we listened to every Radical fad which I have ever heard enunciated, but which had nothing whatever to do with the Budget Question. When the right hon. Gentleman told us that he was going to start model farms, afforestation, colleges for agriculture, colleges for technical something or other, places for improving the breed of cattle, and all sorts of other things, I watched my hon. Friend beside me endeavouring to put them down on paper; but when he got down nine or ten he gave it up, and so did I. I thought I was again in my childhood, and that I was reading the history of Monte Cristo. I thought that here was a benevolent Monte Cristo who was going with a magic wand to redress all the evils of the world, and then I found that we descended to a modest £200,000. It seemed to me that to suggest promoting all these things with £200,000 was descending from the sublime to the ridiculous. I recalled to mind Mr. Hooley; he was a great promoter, who went into the bank-
    584
    ruptcy court; and I am not at all sure that the right hon. Gentleman will not end the days of his party in a similar manner. What did the right hon. Gentleman propose to do? It is quite true that for what he called his development he proposed to take only £200,000 now, but he proposed in future years to appropriate the whole of the old Sinking Fund. ["No."] He proposed to abolish the old Sinking Fund. ["No."] He proposed to use the old Sinking Fund for what he called development. If I am wrong, I am afraid there is no one here to contradict me, the right hon. Gentleman being absent. But I am perfectly certain that that is what he proposed to do. May I ask hon. Members to consider what that means? The old Sinking Fund is the money remaining unspent at the end of the financial year. The possibilities which arise under this project of the right hon. Gentleman are illimitable. There is nothing to prevent the. Chancellor of the Exchequer—I do not say the present Chancellor of the Exchequer will do it, but we do not know who is going to be Chancellor of the Exchequer in the future—there is nothing to prevent the Chancellor of the Exchequer budgeting an over-estimate of the expenditure for the year—absolutely nothing. He may do it deliberately, because he may say to himself: "I want to obtain £3,000,000"—or whatever the sum may be—"for this particular development. I know perfectly well that if I come down to the House of Commons and ask for a Bill to get it I shall be refused. I will overestimate the sum I am going to spend in the current financial year. The result will be that there will be a saving of three millions at the end of the year. That, instead of going to the old Sinking Fund, goes to my development grant, and I obtain £3,000,000"—or whatever the sum may be—"and I obtain it without going to Parliament for the sanction of Parliament for the development of something which I know Parliament would not sanction."
    But that is not all. There are other methods of doing this. The Chancellor of the Exchequer might, with that object in his mind, estimate directly. He may say the estimate is to be £160,000,000. Of that £35,000,000 is for the Navy; £30,000,000, or so, for the Army. He may say: "I intend to see that the money is not spent. I am going to make economies during the present year." That has been done during the present year. If any of my hon.

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    Friends will look at these papers, at the statement which the Chancellor of the Exchequer has published, he will see that there has been a saving of this year of, I believe, £1,200,000. That is, I think, on the Army, and on a variety of small matters which were not contemplated, and which succeeded in reducing the expenditure on the year. In the same way, without overestimating, the Chancellor of the Exchequer might evade the desires of the direct representatives of the people, and obtain large sums of money for doing something which he desired to do, and which is not the desire of the House. I venture to say that never in the history of the House of Commons has such an insane proposal been put before the nation. Well, now we are going to reduce the new Sinking Fund by £3,000,000. I say nothing whatever about the promises of the Radical party, or the speeches with which when they sat on this side of the House they received proposals which we made when we were on that side of the House to reduce the new Sinking Fund. Why? In case of a national emergency, and in case of war. We were told we ought to do nothing of the sort, and here come these apostles of pure finance and reduce in a time when there is no national emergency the amount which we ought to preserve for such national emergencies as may arise, no one knows when! We have been told that there has been a great reduction in the National Debt. Has there? Are the hon. Gentlemen opposite responsible for it? The hon. Gentleman the Member for Paddington wrote an extremely interesting and able letter to one of the newspapers in which he pointed out that the party opposite were not responsible in any kind of way for the reduction of the National Debt. The reduction of the National Debt arises from the application of the new Sinking Fund, which was fixed by my right hon. Friend below me at £28,000,000, and not by my right hon. Friend opposite from an over-estimation of the necessary needs of the year. Automatically that went to reduce the National Debt. It had nothing whatever to do with hon. Gentlemen opposite. They could not have avoided it, or helped it, except, as my right hon. Friend pointed out, it arose out of bad budgeting. Just think of the state of the National Debt at the present moment. According to this Paper here, it stands at £702,000,000. In 1899 it was £628,000,000. That is to say, £74,000,000 less than now. But that did not include
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    the money which we were going to spend upon land purchase in Ireland. That was not passed at that time. We do not know exactly how much we are going to spend on land purchase in Ireland. [An HON. MEMBER made an interruption.] Not quite as much as that; it varies from £120,000,000 to £180,000,000. That is a liability; it is a charge upon the Consolidated Fund. But even if you admit that, we are now something like £74,000,000 above what we were in 1899. In any case, however, it is a fact that the National Debt at the present moment is largely in excess of what it was 10 years ago, and the national expenditure is at the same time largely in excess too. I ask any of the hon. Gentlemen opposite—there are some of them who have been engaged, and who are engaged, in business—if their capital expenditure has increased and their ordinary yearly expenditure has increased; before they begin to take note of the profit and say they are in a better position, do they not say: "We must reduce expenditure." I maintain we are in a worse position both ways. Our capital and annual expenditure has increased, and therefore we are in a far worse position than 10 years ago. Yet this is the time the right hon. Gentleman chooses to come forward and reduce the Sinking Fund. The last hon. Member who spoke on the other side of the House made some very extraordinary statements. He first stated he made a calculation with reference to workmen whose income is 20s. a week. He took tea, sugar, tobacco, and alcohol. I may point out there is no necessity to have alcohol or tobacco, and a great many people sitting close to the hon. Member are inclined to prevent the workmen having alcohol. Then he went on to say he made a calculation about millionaires. He had a good many "ifs" in it. He presumed he had a Sinking Fund, and then he presumed that the death duties would be 15 per cent. He left out of account the legacy and succession duties. If it went to his brother or sister it would not be 15 per cent., but 20 per cent. That shows the sort of calculations the hon. Member makes. He went on to tell us capital was flowing into this country, and he brought forward as an argument in defence of that strange proposition the fact that people were bidding for Consols to yield 2½ and 2¾ per cent. His statement is quite incorrect. Consols at the present moment yield 3 per cent., not ½ per cent.,

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    and therefore the hon. Gentleman, I hope he will excuse me saying so, evidently really knows nothing whatever about what he is talking. Let me point out to the hon. Member the real position. Consols do not yield 2½, but 3 per cent., and they have fallen 5 per cent. since the party opposite came into power. If the Chancellor of the Exchequer cannot find better friends to support his arguments than the hon. Member opposite I have not very much faith in the passing of his proposals. The hon. Member also stated that industries in this country paid 5 per cent., and in the United States 7 per cent. 1s the hon. Member aware that United States Government stock yields less than English Government stock?
    Mr. W. H. LEVER: Yes, I am not only aware of that, but I am also aware of the cause.
    Sir F. BANBURY: United States Government stock yields less and American railways yield no more than English railways. The fact is that railways in the Argentine Republic can obtain money on the same terms as English railways for the first time in the history of the world. If the hon. Member will consult the figures he will find that I am right. For the first time in the history of the world foreign railways can borrow money as cheaply as English railways, although twelve years ago there used to be 20 per cent. difference. The Chancellor of the Exchequer said that borrowing was unsound finance in order to defray the expenditure which he has to meet. I wish to ask him one simple question, and it is whether he considers the suspension of the Sinking Fund borrowing.
    Mr. LLOYD-GEORGEdissented.
    Sir F. BANBURY: The right hon. Gentleman shakes his head, but I am informed that Mr. Gladstone said that it was borrowing, and if the right hon. Gentleman will consider the question for a moment he will see that it is. The suspension of the Sinking Fund means the suspension of the reducing of your liabilities, and if that is not borrowing I do not know what is. Mr. Gladstone says the suspension of the Sinking Fund is borrowing in the strictest sense of the word. The Chancellor of the Exchequer when he came to deal with the question of land said that nobody would pay rent for land if he could get it for nothing. That is quite
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    true. Who would pay the baker sixpence for a loaf if he could get it for nothing? That argument is absurd; and to base all these proposals in regard to the taxation of land upon the undoubted fact that nobody would pay anything if he could get the same thing for nothing, appears to be trifling with the House of Commons. The right hon. Gentleman referred to Woolwich, and it is a very curious thing that this happens to be a place that I know something about. I know that property in Woolwich has depreciated enormously during the last five or six years. The Chancellor of the Exchequer also alluded to somebody in Plumstead who had made a large fortune out of land there. I do not know whether the person he referred to has still got that land. He may have sold it, and the person who has bought it may have paid the full value for it. If so, the person who holds it now has suffered a great loss. I happen to have invested money in property in Woolwich, and I cannot get any offer for it at all. The right hon. Gentleman talked about ungotten minerals. If the right hon. Gentleman will excuse me, I did not quite follow him. I suppose he means shareholders. Possibly we shall have a Bill to provide a third Financial Secretary to look after the burdens which will be cast upon the Treasury, and that he will have a sufficient salary to enhance the dignity of the office. Having got these ungotten minerals, an inspector will say that somebody will give a price for the ungotten minerals, and a charge will be fixed on the unfortunate persons who own these ungotten minerals.
    The right hon. Gentleman said something about the guardians and children. Will the guardians have to show the children? Will the right hon. Gentleman take the word of the guardian in the matter, or will the guardian have to bring the children round with baptismal certificates? They might, after all, be somebody else's children.
    Then comes the great question of ground-rent. The proposals of the right hon. Gentleman seem to be based on the fiction that the landlord rents his ground at an enormous interest, and that the builder—who is thoroughly able to take care of himself—requires to be protected from this rapacious person. It seems to me that when a man has agreed, say, to take four pounds a year in the belief that his descendants will benefit, the State is to step in and take the benefit. I can give the right hon. Gentleman instances

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    in which land has gone down in value. Does he propose to compensate the owners? If not, why should he take from them the interest which they derive? I want to ask the right hon. Gentleman one question. It is a personal question, and I hope he will give me his attention. I understood the right hon. Gentleman to say that when a lease falls in, and if it has increased in value, a tax should be placed upon it. Is that right? If so, I want to ask the right hon. Gentleman this question. I have lived in a small house in London for a good many years. About five years ago I bought the lease of the landlord at a ground-rent of £20 a year. About three years ago in the foolishness of my heart I bought the reversal of the ground-rent. I paid the landlord £2,600 for £20 a year for 21 years. This is the position I shall be in if this Bill becomes law: The value of the house is assessed for the poor at £290 a year. At the end of 21 years the house—unless the country is completely ruined by my right hon. Friend—will be worth £290—it will be worth £270 more at the expiration of the lease than it was before. Am I going to be taxed because I bought the freehold of my own house? I shall be the owner, I shall be the landlord, the lease will fall in to me, and I have already given a long price for the £20 a year. Am I to be taxed in regard to that because some hon. Member opposite has a grievance against certain people who have invested their money in their lands and who want to attack them for motives of spite? The hon. Gentlemen below the Gangway, I expect, and my hon. Friend and I will offer strenuous opposition to what I venture to say is the maddest Budget ever introduced in the House of Commons.
    Mr. A. RICHARDSON: Speaking as one representing an industrial constituency and on behalf of the working classes generally, I would like to express to the Government and to the Chancellor of the Exchequer my gratitude for the splendid Budget brought in this afternoon. Before proceeding further I should like to make reference to an interjection made by the hon. Member for the Walton division of Liverpool. I am sorry the hon. Gentleman is not present now. An hon. Member on the other side made a reference to a Free Trade Budget, and the hon. Member for the Walton Division interjected the words "tea" and; "sugar." I think that was rather an unfortunate remark to come from an hon.
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    Member belonging to the party that increased the tea duty 50 per cent. and imposed a sugar tax increasing the price to the consumer to something like 33 per cent. Some of this some of us will not forget. What brought about the imposition of this tax? Some of us will remember that it was because, if not of a national crime, at least a national blunder—viz., the war in which this country was unfortunately involved. We as representing the working classes do not forget, that although that was a rich man's war, the working classes were called upon to foot the bill. When the bill came to be paid, the first year they put a tax on corn, the second year they put 2d. on tea, the third year they put ½d. on sugar, and the fourth year they put an export tax on coal, and the year after the war they put an additional 2d. on the tea duty, making the taxation so heavy that those classes connected with the industrial population, and especially those men whose incomes were only a sovereign a week and under, were forced to work for two weeks in order to pay the tax on tea and sugar alone. Now that we have a rumour of war and we have to start building these "Dreadnoughts," I am glad the Chancellor of the Exchequer is showing that high courage which he displayed on this side of the House, with such destructive effect against the then Ministry, and is putting into practice the principles which he preached when he sat on this side of the House, now that he sits on the Treasury Bench. I am glad that he, seeing this country has to find large sums of money for these "Dreadnoughts," is placing the burden upon the shoulders of the propertied classes of this country, whose property these "Dreadnoughts" will have to protect. I am glad this Budget is one which makes for social reform based on Free Trade, and is not one based upon Protection and militarism. I should like to have made one or two criticisms of a minor nature, but I will defer them to a later stage, but before sitting down I again express my gratitude and the gratitude of the working people of this country for the Budget which the Chancellor of the Exchequer has introduced.
    Mr. RUSSELL REA: I rise simply with one object, and that is to express my entire dissent from the hostile criticisms which have been made from both sides of the House by almost all the Members who

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    have spoken in regard to the Chancellor of the Exchequer dealing with the old and the new Sinking Fund. Hon. Members have spoken of the old Sinking Fund as an ancient and sacred institution, which was always devoted to the repayment of debt. Nothing could be more absurd. The old Sinking Fund has been the plaything of parties all through, and I am not sorry to see it go. We know where we are with the new Sinking Fund. What did the late Government do with the old Sinking Fund when they were in office?
    When I say the late Government, I mean the 10 years' Government—seven years of peace and three years of war. When Mr. Goschen was at the Exchequer he certainly did use the old Sinking Fund to reduce debt, but from 1896 to 1906 the old Sinking Fund was not raided; it was abolished. The late Government never used the old Sinking Fund. In 1906, when they inherited Sir William Harcourt's magnificent surplus, they raided it by Supplementary Estimates to the extent of 2½ millions, and then there was a realised surplus of over four millions after that, and it all went to the Navy. The next year it was the turn of the Army, and the surplus of 2½ millions which ought to have gone to the reduction of debt went to the Army. The next year it was the turn of the Civil Service, and 2½ millions of the old Sinking Fund was devoted to it. There was another million. I forget what became of that, but it did not go to the old Sinking Fund. Then came another year of peace. There was no other branch of the service to raid the Sinking Fund, so they diverted it before its birth by immense Supplementary Estimates. There were two years of peace after the war when the right hon. Gentleman was at the Exchequer. He did not apply one farthing to the old Sinking Fund.
    Mr. A. CHAMBERLAIN: What does the hon. Gentleman suggest that I did?
    Mr. RUSSELL REA: There has been an account of the old Sinking Fund published this week. None of it went to the old Sinking Fund.
    Mr. A. CHAMBERLAIN: The hon. Gentleman directly attacks me. He speaks of the two years during which I was Chancellor of the Exchequer, and says none of the old Sinking Fund went to the reduction of debt in that time. I diverted nothing from the old Sinking Fund. Three mil-
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    lions of the reduction for which the Government now in office took credit was due to my surplus.
    Mr. RUSSELL REA: In the Return, which is published this week it is stated that nothing was applied during these years to the old Sinking Fund. So far as the right hon. Gentleman's surplus Was concerned—if he means that I withdraw—I admit that that was applied by the Prime Minister to the old Sinking Fund.
    Mr. A. CHAMBERLAIN: I mean for the first year for which I became responsible I had not a surplus but a deficit. I myself never diverted a penny from the old Sinking Fund. The hon. Member is not entitled to base his argument on the allegation that I diverted money which would naturally have gone to the old Sinking Fund for that purpose. I did not.
    Mr. RUSSELL REA: That is quite right, but I did not say so. I said none was applied, and during the whole history of the late Government not a farthing was applied by means of the operation of the old Sinking Fund to the reduction of debt. I admit that the right hon. Gentleman left a surplus, which the Prime Minister devoted to the old Sinking Fund, and during three years the old Sinking Fund has been used by the Prime Minister to pay off more that £12,000,000 of debt. The old Sinking Fund was absolutely the plaything of parties, and it was always manipulated, and I am not sorry to see it diverted to another purpose. But the old and the new Sinking Funds ought to be considered together. My right hon. Friend is reducing the provision for debt from £28,000,000 to £25,000,000. I wish he had reduced it to £23,000,000, and on that I differ entirely from all the criticisms which have been made on both sides of the House up to now. In 1899 Sir Michael Hicks Beach reduced the provision for debt to £23,000,000 a year.
    Mr. G. D. FABER: What was the National Debt then?
    Mr. RUSSELL REA: That is a relative question. It was less than it is now. It is 60 millions more than it was then.
    Mr. G. D. FABER: £120,000,000 less.
    Mr. RUSSELL REA: No, £60,000,000.
    Mr. G. D. FABER: The total National Debt in '99 was £635,000,000. To-day it is £754,000,000.
    Mr. RUSSELL REA: I am speaking of the dead-weight debt. I admitted that it was more, but at that time the market price of Consols was very much higher, and the provision made by the Chancellor of the Exchequer will extinguish far more debt than the provision which was made by Sir Michael Hicks Beach at that date. I am giving Sir Michael Hicks Beach as an example, who in this matter ought to be followed. In 1899, when he reduced the provision to £23,000,000, he used these words:—
    "Now it is not in the interest of the steady reduction of the debt, and I think every one will admit this, that the new Sinking Fund should he allowed to increase to such an extent as this. The new Sinking Fund was never intended to be anything more than a small unappropriated balance of the fixed debt charge. …. When Sir Stafford Northcote established the fixed debt charge in 1874, he never provided more than £5,000,000 a year for its redemption. In the true interests of the Sinking Fund we should reduce the fixed debt charge to £23,000,000. If we do that we shall still have left this year a sum of £5,816,000 for this redemption of debt, a sum greater in proportion to the total amount of the debt than was considered sufficient in past years."
    It may be objected that the total amount of the dead-weight debt at that time was less than now. I admit it was some 60 millions less than now, but, on the other hand, the market price was much higher, and the five millions devoted to repayment of principal by my right hon. Friend will extinguish more debt than the similar amount devoted to that purpose in 1900 by Sir Michael Hicks-Beach. Further, although the nominal amount of the debt be 60 millions more now than it was then, the cost of interest and management will not be half a million more. And again, further, Sir Michael Hicks-Beach had not paid off 12 millions of debt out of the old Sinking Fund, as the late Chancellor of the Exchequer has done. I confess that I wish the Chancellor of the Exchequer had followed Sir Michael Hicks-Beach's example, and reduced the provision for the fixed debt to the same amount. Thrift, both private and national, is doubtless a great virtue, but excessive thrift is not only, like excess in any other virtue, pernicious, but is self-stultifying and self-destructive; it first sterilizes and then paralyses production, and becomes absolute waste. It has been said again and again, not only by hostile critics, but by Members on this side of the House, and by influential writers in the Press, that the credit of the nation and its power to borrow in time of need depends upon our maintaining the Sinking Fund at its present rate, and they point to the low price of Consols as proof of the impaired credit of the nation. Surely recent history should confound
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    such a theory. The low price of Consols, has synchronised with the most active operation of the Sinking Funds known in our history. The highest price of Consols known happened just about the time Sir Michael Hicks Beach performed his operation very similar to that of my right hon. Friend. During the war, when not only were Sinking Funds totally suspended, but debt was leaping up, the prices were higher than in the later time of the greatest repayment of debt. The greatest extravagance any Liberal Government can commit is to pile up excessive Sinking Funds for its successors to raid. The whole financial history of Conservative Governments for 60 years, since the days of Sir Robert Peel, forbid us to believe that they would continue to practice for one single year in office the policy the right hon. Gentleman recommends in opposition. We are surrounded in Europe by great nations whose Governments spend' money year after year which the taxpayers and their representatives decline to furnish, and the issues of loans to balance income and expenditure in times of peace are annual events as regular as the Budgets themselves. This is not our way, and never has been. The solid honesty of British people has forbidden that impatience of taxation, but it is well not to try it too far. In time of peace we pay our way, and something more, steadily all the time. But I would suggest to my right hon. Friend that it is not well to try the patience of the people too far. We are paying our way and paying it steadily, and we are paying very considerably more. And if my right hon. Friend were to reduce the fixed provision for debt to £23,000,000 we should be doing our duty in our generation; we should be doing our duty to our predecessors; we should be honourably acknowledging the obligations they put on us and discharging them, and we should be doing our duty to our successors and to posterity by sensibly reducing the burden we should transmit to them. For these reasons in my criticisms of my right hon. Friend I would rather attach the blame to his excessive prudence in not reducing the fixed provision for debt to £23,000,000.
    Colonel WILLIAMS: In reference to the remarks of the right hon. Gentleman who has just sat down I may remind the House that it has already been pointed out by the right hon. Member for the City of London that it is a most wasteful process to do away with the old Sinking Fund; it

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    not only invites the Chancellor of the Exchequer to estimate too highly, but it also enables savings made for one purpose to be devoted to another. The old sinking function was always the keystone of sound expenditure of the national income. I think that that is incontestable by those who know anything of the way in which national expenditure is managed at this time. The hon. Gentleman who spoke last said that some Chancellor of the Exchequer on this side of the House had raided the old Sinking Fund, first for the Navy and then for the Army and then for the Civil Service. That is quite true, but he forgot that those sums were all taken for the purpose of capital expenditure, and therefore they were taken to save borrowing and not in any way for the relief of expenditure of the year. I am not going into the question as to whether Army and Navy loans are expedient or not; but these were taken not for the expenditure of the year but in order to save borrowing, and therefore it really was the easiest way of getting the money which at that time the House decided should be applied in that way. Certainly one canon of good budgeting has been broken by the Chancellor of the Exchequer to-day. We have always thought that the taxes of the year ought to pay for the needs of the year; that each year has to stand by itself. This is a Budget, as a matter of fact, for at least two years, and it is pledging the finances of the country to be spent in a certain way next year, thus so far prejudicing and making more difficult the task of any future Chancellor of the Exchequer. The right hon. Gentleman, in borrowing for the purposes of next year, is going outside the limit of sound finance. Regarded as a whole, this Budget seems to be an inquisitorial one. It introduces a great deal more inquisitiveness into property of all sorts and kinds. It refers to ungotten minerals. How do we know what minerals are under the ground? Is the Chancellor of the Exchequer going to send an inspector to make borings to see whether there are any minerals? In the same way, with regard to income tax, it will be more inquisitorial than ever it was before. That is not the way to make a tax popular, or get it well paid; on the contrary, the more vexatious and inquisitorial a tax is, the more reluctance there will be to pay it, and the more difficult it will be to collect it.
    Mr. T. M. KETTLE: We on these benches have no interest whatever in mak-
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    ing the passage of this Budget, or of the subsequent Finance. Bill, into law, either smooth or rapid. It has been said by those who have spoken from the point of view of the British democracy that this is the best scheme of public finance that has ever been presented to this House. I do not challenge that at all. It is probably true. The Chancellor of the Exchequer has been extremely fortunate. Not only has he been able to carry into practice and give satisfaction to the claims of abstract social justice, but he has been able, to use the vernacular phrase, to get home on all the past legislative projects of the present Government. His Budget has been a sort of omnibus Bill, a sort of general resurrection of all the slain legislation of past or present Sessions. From that point of view I think there were some notable omissions. I think he could have improved it. Why, for instance, did he not propose a super-tax on plural votes? Perhaps if he were to put a duty on the purchase or it may be on the pawning price of coronets he would have also increased his income and satisfied his principles. He is in the extremely convenient position of asserting his principles and at the same time giving satisfaction to that desire for getting his own back which, I suppose, even the virtuous breast of the present Government is not always free from. From our point of view the present scheme has other defects. I do not want to quarrel with the special joke which is customary on this question for the Chancellor of the Exchequer and which nobody would think of scrutinising too closely. The only reference to Ireland to-night was concerned with motor cars. Let me say quite frankly that I think all of us on these benches are heartily in favour of the extension of that tax in Ireland. I should like him to have some precaution to secure when English and, as a matter of fact, Scottish motor cars go touring in Ireland that the duties or portion of the duties paid by those cars will go to the up-keep and maintenance of Irish roads.
    I come to more serious considerations. The Chancellor of the Exchequer had to justify this afternoon a great and growing increase in the taxation of this country. He justified that by one striking figure, which he quoted. In giving the, great growth of national wealth he took the figures for income tax. Those figures show an increase of 30 or 35 per cent. of the assessments for income tax in Great Britain in the last 15 years. During that same period the assessment of income tax

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    in Ireland has remained absolutely stationary at £48,000,000. The national income, judged by that test, in Ireland is not growing; it is stationary, and possibly it is even declining. That being the case, I think the Chancellor of the Exchequer will not be surprised if we from these Benches at the first moment enter our protest against the scheme which, whatever its merits as applied to this country, however just it may be as between class and class, threatens to impose upon us an increase of taxation which our national resources are not able to bear.
    The Chancellor of the Exchequer expounded the principles upon which this Budget ought to rest. There was one principle of which he made no mention. I heard nothing whatever about founding this Budget upon the maxim of equality of sacrifice. The hon. Member for the Wirrall Division gave us some interesting figures worked out on the basis of the Chancellor's speech, in which he said the net result and the effect of the Budget would be that rich and poor would contribute the same proportion of their incomes. It is not equality of sacrifice if you take 10 per cent. of a poor man's income. You impose an incalculably greater burden upon him, than if you take ten per cent. of a rich man's resources for the same purpose. I heard nothing whatever about an Act in which this House is supposed to be interested—the Act of Union. It was contemplated in the Act of Union—indeed it id explicitly specified—that every Budget presented to this Union Parliament should have regard to the special circumstances of Ireland. I heard no attempt on the part of the Chancellor of the Exchequer to make any estimate, even approximate, of the effect of this new taxation in Ireland. It is true that an annual White Paper is issued some time towards the end of July, which will enable us to work out these figures for Ireland in particular; but we had no indication whatever of the detailed effect of this Budget upon that country. I take just one point in the scheme, and that is with regard to the taxation, in a somewhat modified and restricted form, of land values. Is that scheme to be extended to Ireland? Is there to be any regard whatever to the special circumstances of Ireland with regard to that special problem? When I heard the announcement of the increased tax on spirits, while there is to be no increased tax on beer, I could not help recalling that while that may be an admir-
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    able programme, inspired by the highest possible motives, it will have the incidental effect of penalising Ireland for the benefit of the British democracy, who are varying in their attachment to political parties, but are constant in their attachment to that particular article of consumption. I desire to make one point with regard to the present financial position in Ireland. I can well understand why there might be some vindictive motive behind this Budget as regards Ireland. Expenditure in that country on one purpose of which the Chancellor of the Exchequer spoke at considerable length, has shown the elaborate—I might say the encyclopaedic—ignorance of Irish conditions possessed by the Treasury. When a calculation was made of the probable cost of old age pensions in Ireland, the highest estimate with which the Chancellor of the Exchequer was presented was considerably less than £1,000,000. I think the figure generally taken was about £700,000. We are now informed that the actual amount will be something more than £2,250,000. I should like to ask the Chancellor of the Exchequer this question: Is the specially vindictive provision of his taxation scheme as regards spirit duties a sort of answer to the miscalculation of the cost of old age pensions in Ireland? I do not know whether it is or not. I do not think myself that the fact revealed by the enormous cost of old age pensions in Irelend—the great proportion of the population who, afflicted by feebleness, are unable to contribute anything to the national wealth—is a sign that the country can bear increased taxation. But it has had one incidental effect, at which I heartily rejoice. For the first time this year we are going to have the full benefit of the real theory and basis of the Act of Union. The Act of Union, as presented to the Irish Parliament, and to this Parliament, declared that Ireland was going to get from Great Britain more than she was going to give. That has not been the case. She has always paid the cost of her own government, and, in addition, made a large, though of late years a declining, contribution to the cost of the Imperial system. That contribution last year was just under £2,000,000. The cost of old age pensions was something more than £2,000,000, so that the net result after 100 years of the Act of Union is that while you have brought Ireland to an abject and miserable condition, from the point of view of Empire, the Act of Union has

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    ceased to pay a dividend. After another two years of the finance of this Government no profit will be derived, so far as the Empire is concerned, from Ireland. For our part, we have no interest under the present system, in reducing the expenditure of Ireland. The choice for us is whether money raised in Irish taxation—and it is the only choice—is to be spent upon Imperial "Dreadnoughts" upon the seas, or upon Imperial deadheads in Government offices in London. This Budget has not been framed with any regard whatever to Irish circumstances. In that respect it resembles its predecessors. As my right hon. Friend my Leader announced in an early period of this Debate, we are safeguarding the interests of Ireland. For my part I take it, as I suppose everybody takes it, as a dissolution Budget. I suppose nobody who sees the large schemes of legislation to which this House is committed for the next Session, one of which is a most important Irish measure—an Irish Land Bill—expects that the Finance Bill founded upon this Budget statement will go through, or will even be seriously proceeded with. I cannot speak as an authority upon these matters. I am told that there has never been an instance before of a Finance Bill carried in this House by the use of the closure or of guillotine resolutions. If an attempt is made on these lines to proceed with the Budget I should expect that it will create a precedent—not a very happy precedent—in this respect. For our part we look forward to a dissolution, if such should follow upon this Budget. We have no concern with the swing of the political pendulum in Great Britain. We have our formula for the solution of the financial difficulties of Ireland. We are not greatly concerned in anything else. For all our difficulties we have that formula, it is the old formula, put forward by the whole of the people of Ireland—that is, that you will have to adopt a system, that, whilst securing some contribution to the Empire for Imperial purposes, will place the whole of Irish finance in the hands of the Irish, and will give Ireland an interest in making her taxes equitable and her expenditure economical.
    Mr. A. CHAMBERLAIN: I do not rise to make another speech, but to ask the Chancellor of the Exchequer two questions. My hon. Friends and myself would
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    like to know, firstly, as to what he said in regard to the tax on petrol. Is it intended by the Chancellor of the Exchequer that the tax upon petrol, like the tax upon motor cars, should go to the roads, or is it intended that it should go into the general Imperial revenue? Our attitude towards the tax will depend upon the answer to that question. If it is going to the support of the roads we think it is a very fair proposition; if it is intended to take it for the general revenue then we shall oppose it. The second question is one that I think the right hon. Gentleman will feel is rather in the nature of an appeal to the Chancellor of the Exchequer, which I hope he will be able to respond to, and which I think the Committee will feel will be a convenience to everybody. I think it is obvious that the statement that the Chancellor of the Exchequer has made with reference to his proposals is much more complicated than usual. If you proposed twopence on the income tax, or twopence on tea, that is a matter any of us could carry in our heads. We do not need to see the Resolution in such a case as that to know what it is about; but when you come to such changes as are proposed in the Budget—stamp duties, and many other things—we cannot really know what we are going to discuss until we see the form of the Resolution, and, although it has not been the usual practice—I think it is unusual, I admit I am asking something unusual, but in what I believe are very unusual circumstances—I would ask the right hon. Gentleman to put the Resolution on the Paper. I do not think it can do any harm or cause any revenue to escape from his hands. What I ask is that, as early as possible, he should put his Resolutions on the Paper, so that we may read them and consider them, and not be dependent upon the Resolutions as read from the chair.
    Mr. LLOYD-GEORGE: I think I will take this opportunity of making a general reply upon the Debate, or, at least, such part of the Debate as I heard, and I am sorry I could not have remained here the whole time. I think on the whole I have no reason to complain of the general tenor of the discussion as far as I heard it. We have had to impose very heavy taxation, and the proposals had to be drastic because the amounts to be raised are very considerable. In the circumstances I think the criticisms have been exceedingly fair.
    I wish at once to answer the two ques-

    601
    tions put to me by the right hon. Gentleman. With regard to petrol, my proposal is that the whole of the money raised, whether by increasing the gradation of the scale or by the amount of the petrol duty, should go to the improvement of the roads. They are not going to the local authorities, but to the central authority, and the central authority dispenses the whole of the money, which will amount, as I anticipate, to something like £600,000 in the course of the present year, upon a scheme for the improvement of the roads, but the improvement must be made in reference to motor traffic. I think that is satisfactory to the right hon. Gentleman. He asks me whether I can put the Resolutions on the Paper. As the right hon. Gentleman readily acknowledges that course is unusual, but I do not see why it should not be done. On the contrary, I see every reason why it should be done, because I agree with him: they are novel propositions involving considerable changes, and it is quite impossible for anyone in the House of Commons, even for the right hon. Gentleman who is thoroughly equipped in these things and understands the whole mechanism of Treasury work, to see what the whole bearing of the Resolutions is unless he sees them on the Paper, and has time to consider them. Of course, I need not warn him, he knows perfectly well, the Resolution does not cover the whole proposal. The House has to wait for the Bill in order to see what the whole proposal is. A short resolution may cover what may be involved in about 15 clauses of the Bill, and, therefore, I should warn the Committee and the outside public they must not take the resolution as containing the proposal with all the actual conditions. Subject to that I think I can put these Resolutions upon the Paper to-morrow. I think the request is a perfectly reasonable one, and if I can do that it would give the House a fair opportunity of considering the proposals in all their bearings before we get to the general Debate on Monday next.
    The right hon. Gentleman has asked me two other questions. I think he expressed some doubt in regard to my proposal as to stamps. I cannot explain the whole of these items, but there is a sum of £360,000 which last year was included under the bead of stamp duty, which now comes under Excise. I have got an increase even after deducting that £360,000, and I have budgeted for an increase, and a very
    602
    considerable increase, for stamps in the coming year. I think the right hon. Gentleman will find that, on the whole, I have not been too pessimistic as to the revenue we are likely to receive from stamps. With regard to the death duties, the estimate is made upon an average of three years' working, and there is no other way of arriving at anything like a safe estimate. This item is the most difficult of all to estimate, because in one year we may get as many as nine big estates to deal with, and the next year only four or five; and a few more big estates coming in will make a very big difference in the revenue of the year. It is the most difficult of all the duties to estimate for a year, and the only reliable way is to take it for three years, striking an average, and taking that as the estimate. That is all we have done in this case. The right hon. Gentleman asked me if I would circulate some kind of paper which would show the effect of these taxes, and which would give their effect on all kinds of estates. I am afraid I cannot do that, but if hon. Members wish any further papers circulated to make my proposals clearer I shall be willing to do whatever is possible to comply with a request of that kind. It is of the greatest possible importance that we should thoroughly understand the full effect of all these proposals. I think, on the whole, that covers all the questions which have been put to me by the right hon. Gentleman. With regard to the controversial matters raised by the right hon. Gentleman, I should like to postpone my reply until we have a general Debate. The same observation will apply to the points raised by the hon. Member for Tyrone. I am sorry I was not present to hear the speech of the right hon. and learned Member for Waterford, but I must dissent from the suggestion which has been made that the tax on spirits has been put on as a kind of revenge upon Ireland. I really do not know that it is necessary for me to meet that argument. I fully recognise that poverty in Ireland is appalling, but to suggest that we are going to punish Ireland on this account is really an unutterable suggestion for an hon. Member to make in this House. I have considered Ireland in this matter purely on its merits. These proposals not only affect Ireland, but Scotland as well, and the tax is paid by the consumer. After all, it is not the poor in Ireland who are affected. If I had proposed a tax upon tea I could understand the hon. Members representing

    603
    Ireland making a very fierce protest—especially in the face of the evidence we have that the poorest people in Ireland, when they can hardly get anything else they always have their tea. I apologise to the hon. and learned Member for Waterford, because I was not present when he spoke, but I understand that he protested generally against the tax on spirits and tobacco.
    Mr. JOHN REDMOND: The tax amounts to an increase on the indirect taxation of Ireland, which is 70 per cent. of the whole, whereas it is only 50 per cent. of the whole in England.
    Mr. LLOYD-GEORGE: I want the hon. and learned Gentleman to remember that I propose only that three and a half millions of indirect taxation should be drawn from Ireland. That proportion as between Ireland and this country is in favour of Ireland. It is a fair proportion so far as Ireland is concerned. I would rather not now refer to controversial matters because we must have a full discussion upon them hereafter. The reason why I got up now was to make an appeal to the Committee to pass this resolution now; otherwise there must be a very serious loss to the revenue, while the passing of the Resolution will not in the slightest degree prejudice the discussion on the general Question. We shall probably deal with the Resolution on Monday, and as I say the passing of the Resolution will not in any way prejudice the general discussion.
    Question put, "That, in addition to the duties of Customs now payable on spirits imported into Great Britain or Ireland, there shall, on and after the thirtieth day of April, nineteen hundred and nine, be charged the following duties (that is to say):—

    For every gallon computed at

    s.

    d.

    proof of spirits of any description except perfumed spirits

    3

    9

    For every gallon of perfumed spirits

    6

    0

    For every gallon of liqueurs, cordials, mixtures, and other preparations entered in such a manner as to indicate that the strength is not to be tested

    5

    5

    and the duties of Customs on the articles hereafter mentioned, being articles in which spirit is contained, or in the manufacture of which spirit is used, shall be proportionately increased and shall be as follows:—

    £

    s.

    d.

    Chloral hydrate

    …

    the lb.

    0

    1

    9

    Chloroform

    …

    the lb.

    0

    4

    4

    Collodion

    …

    the gallon

    1

    14

    11

    Ether acetic

    …

    the lb.

    0

    2

    7

    Ether butyric

    …

    the gallon

    1

    1

    10

    Ether sulphuric

    …

    the gallon

    1

    16

    6

    Ethyl, iodide of

    …

    the gallon

    0

    19

    0

    Ethyl bromide

    …

    the lb.

    0

    1

    5

    Ethyl chloride

    …

    the gallon

    1

    1

    10"

    —[The Chancellor of the Exchequer.]
    The Committee divided: Ayes, 281; Noes, 120.

    Division No. 76.]

    AYES.

    [11.35 p.m.

    Acland, Francis Dyke

    Brigg, John

    Crooks, William

    Adkins, W. Ryland D.

    Bright, J. A.

    Cresfield, A. H.

    Agar-Robartes, Hon. T. C. R.

    Brocklehurst, W. B.

    Crossley, William J.

    Agnew, George William

    Brooke, Stopford

    Dalziel, Sir James Henry

    Allen, A. Acland (Christchurch)

    Brunner, J. F. L. (Lancs., Leigh)

    Davies, David (Montgomery Co.)

    Allen, Charles P. (Stroud)

    Bryce, J. Annan

    Davies, Ellis William (Eifion)

    Armstrong, W. C. Heaton

    Buckmaster, Stanley O.

    Davies, Timothy (Fulham)

    Asquith, Rt. Hon. Herbert Henry

    Burt, Rt. Hon. Thomas

    Davies, Sir W. Howell (Bristol, S.)

    Astbury, John Meir

    Buxton, Rt. Hon. Sydney Charles

    Dilke, Rt. Hon. Sir Charles

    Balfour, Robert (Lanark)

    Bytes, William Pollard

    Dobson, Thomas W.

    Baring, Godfrey (Isle of Wight)

    Cameron, Robert

    Duckworth, Sir James

    Barker, Sir John

    Carr-Gomm, H. W.

    Duncan, C. (Barrow-in-Furness)

    Barlow, Sir John E. (Somerset)

    Cawley, Sir Frederick

    Duncan, J. Hastings (York, Otley)

    Barlow, Percy (Bedford)

    Chance, Frederick William

    Dunn, A. Edward (Camborne)

    Barnard, E. B.

    Channing, Sir Francis Allston

    Dunne, Major E. Martin (Walsall)

    Barnes, G. N.

    Cheetham, John Frederick

    Edwards, Enoch (Hanley)

    Barran, Sir John Nicholson

    Cherry, Rt. Hon. R. R.

    Erskine, David C.

    Beale, W. P.

    Churchill, Rt. Hon. Winston S.

    Evans, Sir Samuel T.

    Beauchamp, E.

    Clough, William

    Everett, R. Lacey

    Beck, A. Cecil

    Clynes, J. R.

    Falconer, J.

    Bell, Richard

    Cobbold, Felix Thornley

    Fenwick, Charles

    Benn, Sir J. Williams (Devonport)

    Collins, Stephen (Lambeth)

    Ferens, T. R.

    Benn, W. (Tower Hamlets, St. Gee.)

    Collins, Sir Wm. J. (S. Pancras, W.)

    Ferguson, R. C. Munro

    Berridge, T. H. D.

    Compton-Rickett, Sir J.

    Fuller, John Michael F.

    Birrell, Rt. Hon. Augustine

    Cooper, G. J.

    Fullerton, Hugh

    Black, Arthur W.

    Corbett, C.H. (Sussex, E. Grinstead)

    Gill, A. H.

    Boulton, A. C. F.

    Cotton, Sir H. J. S.

    Glen-Coats, Sir T. (Renfrew, W.)

    Bowerman, C. W.

    Cowan, W. H.

    Glover, Thomas

    Branch, James

    Craig, Herbert J (Tynemouth)

    Goddard, Sir Daniel Ford

    Gooch, George Peabody (Bath)

    M'Laren, Sir C. B. (Leicester)

    Rutherford, V. H. (Brentford)

    Greenwood, G. (Peterborough)

    M'Laren, H. D. (Stafford, W.)

    Samuel, Rt. Hon. H. L. (Cleveland)

    Grey, Rt. Hon. Sir Edward

    Maddison, Frederick

    Samuel, S. M. (Whitechapel)

    Guest, Hon. Ivor Churchill

    Mallet, Charles E.

    Schwann, C. Duncan (Hyde)

    Gulland, John W.

    Manfield, Harry (Northants)

    Scott, A. H. (Ashton-under-Lyne)

    Harcourt, Rt. Hon. L. (Rossendale)

    Markham, Arthur Basil

    Seaverns, J. H.

    Harcourt, Robert V. (Montrose)

    Marks, G. Croydon (Launceston)

    Seely, Colonel

    Hardie, J. Keir (Merthyr Tdyvil)

    Marnham, F. J.

    Shackleton, David James

    Hardy, George A. (Suffolk)

    Mason, A. E. W. (Coventry)

    Shaw, Sir Charles E. (Stafford)

    Harmsworth, Cecil B. (Worcester)

    Massie, J.

    Sherwell, Arthur James

    Harvey, A. G. C. (Rochdale)

    Masterman, C. F. G.

    Shipman, Dr. John G.

    Harwood, George

    Menzies, Walter

    Simon, John Allsebrook

    Haslam, James (Derbyshire)

    Micklem, Nathaniel

    Soames, Arthur Wellesley

    Haslam, Lewis (Monmouth)

    Middlebrook, William

    Soares, Ernest J.

    Haworth, Arthur A.

    Molteno, Percy Alport

    Spicer, Sir Albert

    Hazel, Dr. A. E. W.

    Mond, A.

    Stanley, Albert (Staffs, N.W.)

    Hedges, A. Paget

    Money, L. G. Chiozza

    Stanley, Hon. A. Lyulph (Cheshire)

    Helme, Norval Watson

    Montagu, Hon. E. S.

    Stewart-Smith, D. (Kendal)

    Henderson, Arthur (Durham)

    Morgan, G. Hay (Cornwall)

    Strachey, Sir Edward

    Henderson, J. McD. (Aberdeen, W.)

    Morgan, J. Lloyd (Carmarthen)

    Straus, B. s. (Mile End)

    Henry, Charles S.

    Morrell, Philip

    Summerbell, T.

    Herbert, Col. Sir Ivor (Mon. S.)

    Morse, L. L.

    Sutherland, J. E.

    Herbert, T. Arnold (Wycombe)

    Murray, Capt. Hon. A. C. (Kincard.)

    Taylor, John W. (Durham)

    Higham, John Sharp

    Napier, T. B.

    Taylor, Theodore C. (Radcliffe)

    Hobart, Sir Robert

    Newnes, F. (Notts, Bassetlaw)

    Tennant, Sir Edward (Salisbury)

    Hobhouse, Charles E. H.

    Nicholls, George

    Tennant, H. J. (Berwickshire)

    Hodge, John

    Nicholson, Charles N. (Doncaster)

    Thomas, Sir A. (Glamorgan, E.)

    Holland, Sir William Henry

    Norman, Sir Henry

    Thomasson, Franklin

    Holt, Richard Durning

    Norton, Capt. Cecil William

    Thompson, J. W. H. (Somerset, E.

    Hooper, A. G.

    Nussey, Thomas Willans

    Thorne, G. R. (Wolverhampton)

    Hope, W. H. B. (Somerset, N.)

    Nuttall, Harry

    Tomkinson, James

    Horniman, Emslie John

    O'Donnell, C. J. (Walworth)

    Toulmin, George

    Howard, Hon. Geoffrey

    Parker, James (Halifax)

    Trevelyan, Charles Philips

    Hudson, Walter

    Partington, Oswald

    Ure, Rt. Hon. Alexander

    Hutton, Alfred Eddison

    Pearce, Robert (Staffs, Leek)

    Verney, F. W.

    Hyde, Clarendon G.

    Pearce, William (Limehouse)

    Vivian, Henry

    Idris, T. H. W.

    Pickersgill, Edward Hare

    Walters, John Tudor

    Illingworth, Percy H.

    Pirie, Duncan V.

    Walton, Joseph

    Johnson, John (Gateshead)

    Pollard, Dr. G. H.

    Ward, John (Stoke-on-Trent)

    Jones, Leif (Appleby)

    Ponsonby, Arthur A. W. H.

    Ward, W. Dudley (Southampton)

    Jones, William (Carnarvonshire)

    Price, C. E. (Edinburgh, Central)

    Warner, Thomas Courtenay T.

    Jowett, F. W.

    Price, Sir Robert J. (Norfolk, E.)

    Wason, Rt. Hon. E. (Clackmannan)

    Kearley, Sir Hudson E.

    Priestley, W. E. B. (Bradford, E.)

    Wason, John Cathcart (Orkney)

    Kekewich, Sir George

    Radford, G. H.

    Waterlow, D. S.

    Kelley, George D.

    Rainy, A. Rolland

    Watt, Henry A.

    King, Alfred John (Knutsford)

    Rea, Russell (Gloucester)

    Wedgwood, Josiah C.

    Lamb, Edmund G. (Leominster)

    Rea, Walter Russell (Scarborough)

    Whitbread, S. Howard

    Lambert, George

    Rendall, Athalstan

    White, Sir George (Norfolk)

    Lamont, Norman

    Richards, Thomas (W. Monmouth)

    White, J. Dundas (Dumbartonshire)

    Layland-Barrett, Sir Francis

    Richards, T. F. (Wolverhampton, W.)

    White, Sir Luke (York, E.R.)

    Leese, Sir Joseph F. (Accrington)

    Richardson, A.

    Whitehead, Rowland

    Lehmann, R. C.

    Ridsdale, E. A.

    Whitley, John Henry (Halifax)

    Lever, A. Levy (Essex, Harwich)

    Roberts, Charles H. (Lincoln)

    Williams, J. (Glamorgan)

    Lever, W. H. (Cheshire, Wirral)

    Roberts, G. H. (Norwich)

    Williams, W. Llewelyn (Carmarthen)

    Levy, Sir Maurice

    Roberts, Sir J. H. (Denbighs.)

    Williamson, A.

    Lewis, John Herbert

    Robertson, Sir G. Scott (Bradford)

    Wills, Arthur Walters

    Lloyd-George, Rt. Hon. David

    Robertson, J. M. (Tyneside)

    Wilson, Hon. G. G. (Hull, W.)

    Lough, Rt. Hon. Thomas

    Robinson, S.

    Wilson, John (Durham, Mid)

    Lupton, Arnold

    Robson, Sir William Snowdon

    Wilson, J. H. (Middlesbrough)

    Lyell, Charles Henry

    Roch, Walter F. (Pembroke)

    Wilson, J. W. (Worcestershire, N.)

    Macdonald, J. M. (Falkirk Burghs)

    Roe, Sir Thomas

    Wilson, W. T. (Westhoughton)

    Mackarness, Frederic C.

    Rogers, F. E. Newman

    Wood, T. M'Kinnon

    Maclean, Donald

    Rose, Charles Day

    TELLERS FOR THE AYES.—Mr. Joseph Pease and the Master of Elibank.

    Macnamara, Dr. Thomas J.

    Rowlands, J.

    Macpherson, J. T.

    Runciman, Rt. Hon. Walter

    M'Kenna, Rt. Hon. Reginald

    Russell, Rt. Hon. T. W.

    NOES.

    Abraham, W. (Cork, N.E.)

    Bull, Sir William James

    Devlin, Joseph

    Acland-Hood, Rt. Hon. Sir Alex. F.

    Butcher, Samuel Henry

    Dickson, Rt. Hon. C. Scott-

    Arkwright, John Stanhope

    Carlile, E. Hildred

    Doughty, Sir George

    Ashley, W. W.

    Carson, Rt. Hon. Sir Edward H.

    Douglas, Rt. Hon. A. Akers-

    Balcarres, Lord

    Cave, George

    Du Cros, Arthur

    Baldwin, Stanley

    Cecil, Evelyn (Aston Manor)

    Duffy, William J.

    Banbury, Sir Frederick George

    Cecil, Lord John P. Joicey-

    Duncan, Robert (Lanark, Govan)

    Banner, John S. Harmood-

    Chaplin, Rt. Hon. Henry

    Esmonde, Sir Thomas

    Baring, Capt. Hon. G. (Winchester)

    Clark, George Smith

    Faber, George Denison (York)

    Barrie, H. T. (Londonderry, N.)

    Coates, Major E. F. (Lewisham)

    Fell, Arthur

    Barry, E. (Cork, S.)

    Cochrane, Hon. Thomas H. A. E.

    Fetherstonhaugh, Godfrey

    Beckett, Hon. Gervase

    Craig, Charles Curtis (Antrim, S.)

    Ffrench, Peter

    Bignold, Sir Arthur

    Craig, Captain James (Down, E.)

    Forster, Henry William

    Bowles, G. Stewart

    Craik, Sir Henry

    Gibbs, G. A. (Bristol, West)

    Bridgeman, W. Clive

    Dalrymple, Viscount

    Gooch, Henry Cubitt (Peckham)

    Brotherton, Edward Allen

    Delany, William

    Goulding, Edward Alfred

    606

    607

    Gretton, John

    Mason, James F. (Windsor)

    Redmond, John E. (Waterford)

    Guinness, Hon. R. (Haggerston)

    Meehan, Francis E. (Leitrim, N.)

    Remnant, James Farquharson

    Hamilton, Marquess of

    Meysey-Thompson, E. C.

    Renwick, George

    Harris, Frederick Leverton

    Mooney, J. J.

    Roberts, S. (Sheffield, Ecclesall)

    Harrison-Broadley, H. B.

    Morpeth, Viscount

    Ropner, Colonel Sir Robert

    Hay, Hon. Claude George

    Morrison-Bell, Captain

    Rutherford, John (Lancashire)

    Hayden, John Patrick

    Murphy, John (Kerry, East)

    Rutherford, W. W. (Liverpool)

    Hazleton, Richard

    Nannetti, Joseph P.

    Salter, Arthur Claveil

    Hill, Sir Clement

    Nicholson, Wm. G. (Petersfield)

    Sheehan, Daniel Daniel

    Hogan, Michael

    Nolan, Joseph

    Sheffield, Sir Berkeley George D.

    Hope, James Fitzalan (Sheffield)

    O'Connor, John (Kildare, N.)

    Smith, F. E. (Liverpool, Walton)

    Houston, Robert Paterson

    O'Connor, T. P. (Liverpool)

    Stanier, Beville

    Joyce, Michael

    Oddy, John James

    Starkey, John R.

    Kennedy, Vincent Paul

    O'Doherty, Philip

    Talbot, Lord E. (Chichester)

    Kerry, Earl of

    O'Dowd, John

    Thornton, Percy M.

    Keswick, William

    O'Kelly, Conor (Mayo, N.)

    Valentia, Viscount

    Kettle, Thomas Michael

    O'Kelly, James (Roscommon, N.)

    Walker, Col. W. H. (Lancashire)

    Kilbride, Denis

    O'Malley, William

    Walrond, Hon. Lionel

    Lane-Fox, G. R.

    O'Shaughnessy, P. J.

    White, Patrick (Meath, North)

    Lardner, James Carrige Rushe

    Pease, Herbert Pike (Darlington)

    Williams, Col. R. (Dorset, W.)

    Lockwood, Rt. Hon. Lt.-Col. A. R.

    Peel, Hon. W. R. W.

    Winterton, Earl

    Long, Col. Charles W. (Evesham)

    Philips, John (Longford, S.)

    Wyndham, Rt. Hon. George

    Lonsdale, John Brownlee

    Power, Patrick Joseph

    TELLERS FOR THE NOES.—Mr. Haviland-Burke and Mr. Boland.

    M'Kean, John

    Pretyman, E. G.

    Magnus, Sir Philip

    Rawlinson, John Frederick Peel

    2. Motion made, and Question put, "That in addition to the duty of Excise now payable for every gallon computed at proof of spirits distilled in the United Kingdom there shall, on and after the 30th day of April, 1909, be charged the following duty (that is to say):—

    s.

    d.

    For every gallon of spirits computed at proof

    3

    9

    and so on in proportion for any less quantity."—[The Chancellor of the Exchequer].
    The Committee divided: Ayes, 279; Noes, 121.

    Division No. 77.]

    AYES.

    [11.45 p.m.

    Acland, Francis Dyke

    Cheetham, John Frederick

    Greenwood, G. (Peterborough)

    Adkins, W. Ryland D.

    Cherry, Rt. Hon. R. R.

    Grey, Rt. Hon. Sir Edward

    Agar-Robartes, Hon. T. C. R.

    Churchill, Rt. Hon. Winston S.

    Guest, Hon. Ivor Churchill

    Agnew, George William

    Clough, William

    Gulland, John W.

    Allen, A. Acland (Christchurch)

    Clynes, J. R.

    Harcourt, Rt. Hon. L. (Rossendale)

    Allen, Charles P. (Stroud)

    Cobbold, Felix Thornley

    Harcourt, Robert V. (Montrose)

    Armstrong, W. C. Heaton

    Collins, Stephen (Lambeth)

    Hardie, J. Keir (Merthyr, Tydvil)

    Asquith, Rt. Hon. Herbert Henry

    Collins, Sir Wm. J. (St. Pancras, W.)

    Hardy, George A. (Suffolk)

    Astbury, John Meir

    Compton-Rickett, Sir J.

    Harmsworth, Cecil B. (Worcester)

    Balfour, Robert (Lanark)

    Cooper, G. J.

    Harvey, A. G. C. (Rochdale)

    Baring, Godfrey (Isle of Wight)

    Corbett, C. H. (Sussex, E. Grinstead)

    Harwood, George

    Barker, Sir John

    Cotton, Sir H. J. S.

    Haslam, James (Derbyshire)

    Barlow, Sir John E. (Somerset)

    Cowan, W. H.

    Haslam, Lewis (Monmouth)

    Barlow, Percy (Bedford)

    Craig, Herbert J. (Tynemouth)

    Haworth, Arthur A.

    Barnard, E. B.

    Crooks, William

    Hazel, Dr. A. E. W.

    Barnes, G. N.

    Crosfield, A. H.

    Hedges, A. Paget

    Barran, Sir John Nicholson

    Crossley, William J.

    Helme, Norval Watson

    Beale, W. P.

    Dalziel, Sir James Henry

    Henderson, Arthur (Durham)

    Beauchamp, E.

    Davies, David (Montgomery Co.)

    Henderson, J. McD. (Ab'deen, W.)

    Beck, A. Cecil

    Davies, Ellis William (Efion)

    Henry, Charles S.

    Bell, Richard

    Davies, Timothy (Fulham)

    Herbert, Col. Sir Ivor (Mon. S.)

    Benn, Sir J. Williams (Devonport)

    Davies, Sir W. Howell (Bristol, S.)

    Herbert, T. Arnold (Wycombe)

    Benn, W. (Tower Hamlets, St. Geo.)

    Dilke, Rt. Hon. Sir Charles

    Hobart, Sir Robert

    Berridge T. H. D.

    Dobson, Thomas W.

    Hobhouse, Charles E. H.

    Birrell, Rt. Hon. Augustine

    Duckworth, Sir James

    Hodge, John

    Black, Arthur W.

    Duncan, C. (Barrow-in-Furness)

    Holland, Sir William Henry

    Boulton, A. C. F.

    Duncan, J. Hastings (York, Otley)

    Holt, Richard Durning

    Bowerman, C. W.

    Dunn, A. Edward (Camborne)

    Hooper, A. G.

    Branch, James

    Dunne, Major E. Martin (Walsall)

    Hope, W. H. B. (Somerset, N.)

    Brigg, John

    Edwards, Enoch (Hanley)

    Horniman, Emslie John

    Bright, J. A.

    Erskine, David C.

    Howard, Hon. Geoffrey

    Brocklehurst, W. B.

    Evans, Sir Samuel T.

    Hudson, Walter

    Brooke, Stopford

    Everett, R. Lacey

    Hutton, Alfred Eddison

    Brunner, J. F. L. (Lancs., Leigh)

    Falconer, J.

    Hyde, Clarendon G.

    Bryce, J. Annan

    Fenwick, Charles

    Idris, T. H. W.

    Buckmaster, Stanley O.

    Ferens, T. R.

    Illingworth, Percy H.

    Burt, Rt. Hon. Thomas

    Ferguson, R. C. Munro

    Johnson, John (Gateshead)

    Buxton, Rt. Hon. Sydney Charles

    Fuller, John Michael F.

    Jones, Leif (Appleby)

    Byles, William Pollard

    Fullerton, Hugh

    Jones, William (Carnarvonshire)

    Cameron, Robert

    Gill, A. H.

    Jowett, F. W.

    Carr-Gomm, H. W.

    Glen-Coats, Sir T. (Renfrew, W.)

    Kearley, Sir Hudson E.

    Cawley, Sir Frederick

    Glover, Thomas

    Kekewich, Sir George

    Chance, Frederick William

    Goddard, Sir Daniel Ford

    Kelley, George D.

    Channing, Sir Francis Allston

    Gooch, George Peabody (Bath)

    King, Alfred John (Knutsford)

    Lamb, Edmund G. (Leominster)

    O'Donnell, C. J. (Walworth)

    Stanley, Hon. A. Lyulph (Cheshire)

    Lambert, George

    Parker, James (Halifax)

    Stewart-Smith, D. (Kendal)

    Lament, Norman

    Partington, Oswald

    Strachey, Sir Edward

    Layland-Barrett, Sir Francis

    Pearce, Robert (Staffs, Leek)

    Straus, B. S. (Mile End)

    Leese, Sir Joseph F. (Accrington)

    Pearce, William (Limehouse)

    Summerbell, T.

    Lehmann, R. C.

    Pickersgill, Edward Hare

    Sutherland, J. E.

    Lever, A. Levy (Essex, Harwich)

    Pirie, Duncan V.

    Taylor, John W. (Durham)

    Lever, W. H. (Cheshire, Wirrall)

    Pollard, Dr. G. H.

    Taylor, Theodore C. (Radcliffe)

    Levy, Sir Maurice

    Ponsonby, Arthur A. W. H.

    Tennant, Sir Edward (Salisbury)

    Lewis, John Herbert

    Price, C. E. (Edinburgh, Central)

    Tennant, H. J. (Berwickshire)

    Lloyd-George, Rt. Hon. David

    Price, Sir Robert J. (Norfolk, E.)

    Thomas, Sir A. (Glamorgan, E.)

    Lough, Rt. Hon. Thomas

    Priestley, W. E. B. (Bradford, E.)

    Thomasson, Franklin

    Lupton, Arnold

    Radford, G. H.

    Thompson, J. W. H. (Somerset, E.)

    Lyell, Charles Henry

    Rainy, A. Rolland

    Thorne, G. R. (Wolverhampton)

    Macdonald, J. M. (Falkirk Burghs)

    Rea, Russell (Gloucester)

    Tomkinson, James

    Mackarness, Frederic C.

    Rea, Walter Russell (Scarborough)

    Toulmin, George

    Maclean, Donald

    Rendall, Athelstan

    Trevelyan, Charles Philips

    Macnamara, Dr. Thomas J.

    Richards, Thomas (W. Monmouth)

    Verney, F. W.

    Macpherson, J. T.

    Richards, T. F. (Wolverhampton, W.)

    Vivian, Henry

    M'Kenna, Rt. Hon. Reginald

    Richardson, A.

    Walters, John Tudor

    M'Laren, Sir C. B. (Leicester)

    Ridsdale, E. A.

    Walton, Joseph

    M'Laren, H. D. (Stafford, W.)

    Roberts, Charles H. (Lincoln)

    Ward, John (Stoke-upon-Trent)

    Maddison, Frederick

    Roberts, G. H. (Norwich)

    Ward, W. Dudley (Southampton)

    Mallet, Charles E.

    Roberts, Sir J. H. (Denbighs.)

    Warner, Thomas Courtenay T.

    Manfield, Harry (Northants)

    Robertson, Sir G. Scott (Bradford)

    Wason, Rt Hon. E. (Clackmannan)

    Markham, Arthur Basil

    Robertson, J. M. (Tyneside)

    Wason, John Cathcart (Orkney)

    Marks, G. Croydon (Launceston)

    Robinson, S.

    Waterlow, D. S.

    Marnham, F. J.

    Robson, Sir William Snowdon

    Watt, Henry A.

    Mason, A. E. W. (Coventry)

    Roch, Walter F. (Pembroke)

    Wedgwood, Josiah C.

    Massie, J.

    Roe, Sir Thomas

    White, Sir George (Norfolk)

    Masterman, C. F. G.

    Rogers, F. E. Newman

    White, J. Dundas (Dumbartonshire)

    Menzies, Walter

    Rose, Charles Day

    White, Sir Luke (York, E.R.)

    Micklem, Nathaniel

    Rowlands, J.

    Whitehead, Rowland

    Middlebrook, William

    Runciman, Rt. Hon. Walter

    Whitley, John Henry (Halifax)

    Molteno, Percy Alport

    Russell, Rt. Hon. T. W.

    Wiles, Thomas

    Mond, A.

    Rutherford, V. H. (Brentford)

    Williams, J. (Glamorgan)

    Money, L. G. Chiozza

    Samuel, Rt. Hon. H. L. (Cleveland)

    Williams, W. Llewelyn (Car'th'n)

    Montagu, Hon. E. S.

    Samuel, S. M. (Whitechapel)

    Williamson, A.

    Morgan, G. Hay (Cornwall)

    Schwann, C. Duncan (Hyde)

    Wills, Arthur Waiters

    Morgan, J. Lloyd (Carmarthen)

    Scott, A. H. (Ashton-under-Lyne)

    Wilson, Hon. G. G. (Hull, W.)

    Morrell, Philip

    Seaverns, J. H.

    Wilson, John (Durham, Mid)

    Morse, L. L.

    Seely, Colonel

    Wilson, J. H. (Middlesbrough)

    Murray, Capt. Hon. A. C. (Kincard.)

    Shackleton, David James

    Wilson, J. W. (Worcestershire, N.)

    Napier, T. B.

    Shaw, Sir Charles E. (Stafford)

    Wilson, W. T. (Westhoughton)

    Newnes, F. (Notts, Bassetlaw)

    Sherwell, Arthur James

    Wood, T. M'Kinnon

    Nicholls, George

    Shipman, Dr. John G.

    TELLERS FOR THE AYES.—Mr. Joseph Pease and the Master of Elibank.

    Nicholson, Charles N. (Doncaster)

    Simon, John Allsebrook

    Norman, Sir Henry

    Soames, Arthur Wellesley

    Norton, Capt. Cecil William

    Soares, Ernest J.

    Nussey, Thomas Willans

    Spicer, Sir Albert

    Nuttall, Harry

    Stanley, Albert (Staffs, N.W.)

    NOES.

    Abraham, W. (Cork, N.E.)

    Delany, William

    Kerry, Earl of

    Acland-Hood, Rt. Hon. Sir Alex. F.

    Devlin, Joseph

    Keswick, William

    Arkwright, John Stanhope

    Dickson, Rt. Hon. C. Scott-

    Kettle, Thomas Michael

    Ashley, W. W.

    Doughty, Sir George

    Kilbride, Denis

    Balcarres, Lord

    Douglas, Rt. Hon. A. Akers-

    Lane-Fox, G. R.

    Baldwin, Stanley

    Du Cros, Arthur

    Lardner, James Carrige Rushe

    Banbury, Sir Frederick George

    Duffy, William J.

    Lockwood, Rt. Hon. Lt.-Col. A. R.

    Banner, John S. Harmood-

    Duncan, Robert (Lanark, Govan)

    Long, Col. Charles W. (Evesham)

    Baring, Capt. Hon. G. (Winchester)

    Esmonde, Sir Thomas

    Lonsdale, John Brownlee

    Barrie, H. T. (Londonderry, N.)

    Faber, George Denison (York)

    Lyttelton, Rt. Hon. Alfred

    Barry, E. (Cork, S.)

    Fell, Arthur

    M'Kean, John

    Beckett, Hon. Gervase

    Fetherstonhaugh, Godfrey

    Magnus, Sir Philip

    Bignold, Sir Arthur

    Ffrench, Peter

    Mason, James F. (Windsor)

    Bowles, G. Stewart

    Forster, Henry William

    Meehan, Francis E. (Leitrim, N.)

    Bridgeman, W. Clive

    Gibbs, G. A. (Bristol, West)

    Meysey-Thompson, E. C.

    Brotherton, Edward Allen

    Gooch, Henry Cubitt (Peckham)

    Mooney, J. J.

    Bull, Sir William James

    Goulding, Edward Alfred

    Morpeth, Viscount

    Butcher, Samuel Henry

    Gretton, John

    Morrison-Bell, Captain

    Carlile, E. Hildred

    Guinness, Hon. R. (Haggerston)

    Murphy, John (Kerry, East)

    Carson, Rt. Hon. Sir Edward H.

    Hamilton, Marquess of

    Nannetti, Joseph P.

    Cave, George

    Harris, Frederick Leverton

    Nicholson, Wm. G. (Petersfield)

    Cecil, Evelyn (Aston Manor)

    Harrison-Broadley, H. B.

    Nolan, Joseph

    Cecil, Lord John P. Joicey-

    Hay, Hon. Claude George

    O'Connor, John (Kildare, N.)

    Chaplin, Rt. Hon. Henry

    Hayden, John Patrick

    O'Connor, T. P. (Liverpool)

    Clark, George Smith

    Hazleton, Richard

    Oddy, John James

    Coates, Major E. F. (Lewisham)

    Hill, Sir Clement

    O'Doherty, Philip

    Cochrane, Hon. Thomas H. A. E.

    Hogan, Michael

    O'Dowd, John

    Craig, Charles Curtis (Antrim, S.)

    Hope, James Fitzalan (Sheffield)

    O'Kelly, Conor (Mayo, N.)

    Craig, Captain James (Down, E.)

    Houston, Robert Paterson

    O'Kelly, James (Roscommon, N.)

    Craik, Sir Henry

    Joyce, Michael

    O'Malley, William

    Dalrymple, Viscount

    Kennedy, Vincent Paul

    O'Shaughnessy, P. J.

    610

    611

    Pease, Herbert Pike (Darlington)

    Rutherford, John (Lancashire)

    Walker, Col. W. H. (Lancashire)

    Peel, Hon. W. R. W.

    Rutherford, W. W. (Liverpool)

    Walrond, Hon. Lionel

    Philips, John (Longford, S.)

    Salter, Arthur Clavell

    White, Patrick (Meath, North)

    Power, Patrick Joseph

    Sheehan, Daniel Daniel

    Williams, Col. R. (Dorset, W.)

    Pretyman, E. G.

    Sheffield, Sir Berkeley George D.

    Winterton, Earl

    Rawlinson, John Frederick Peel

    Smith, F. E. (Liverpool, Walton)

    Wyndham, Rt. Hon. George

    Redmond, John E. (Waterford)

    Stanier, Beville

    TELLERS FOR THE NOES.—Mr. Haviland-Burke and Mr. Boland.

    Remnant, James Farquharson

    Starkey, John R.

    Renwick, George

    Talbot, Lord E. (Chichester)

    Roberts, S. (Sheffield, Ecclesall)

    Thornton, Percy M.

    Ropner, Colonel Sir Robert

    Valentia, Viscount

    TOBACCO (IMPORTED).
    3. Motion made, and Question put, "That, in lieu of the duties of Customs now payable on tobacco imported into Great Britain or Ireland, there shall on and after the 30th day of April, 1909, be charged the following duties (that is to say):—
    Upon tobacco unmanufactured, viz:—
    Containing 10 lbs. or more of moisture in every 100 lbs. weight thereof:—

    s.

    d.

    Unstripped

    …

    …

    the pound

    3

    8

    Stripped

    …

    …

    the pound

    3

    8½

    Containing less than 10 lbs. of moisture in every 100 lbs. weight thereof:—

    s.

    d.

    Unstripped

    …

    …

    the pound

    4

    1

    Stripped

    …

    …

    the pound

    4

    1½

    s.

    d.

    Upon tobacco manufactured, viz.:—

    Cigars

    the pound

    7

    0

    Cigarettes

    the pound

    5

    8

    Cavendish or Negrohead

    the pound

    5

    4

    Cavendish or Negrohead manufactured in bond

    the pound

    4

    8

    Other manufactured tobacco,

    the pound

    4

    8

    Snuff containing more than 13 lbs. of moisture in every 100 lbs. weight thereof,

    the pound

    4

    5

    Snuff not containing more than 13 lbs. of moisture in every 100 lbs. weight thereof,

    the pound

    5

    4."

    —[The Chancellor of the Exchequer.]
    The Committee divided: Ayes, 267; Noes, 130.

    Division No. 78.]

    AYES.

    [12.0 p.m.

    Acland, Francis Dyke

    Causton, Rt. Hon. Richard Knight

    Fullerton, Hugh

    Adkins, W. Ryland D.

    Cawley, Sir Frederick

    Gill, A. H.

    Agar-Robartes, Hon. T. C. R.

    Chance, Frederick William

    Glen-Coats, Sir T. (Renfrew, W.)

    Agnew, George William

    Channing, Sir Francis Allston

    Goddard, Sir Daniel Ford

    Allen, A. Acland (Christchurch)

    Cheetham, John Frederick

    Gooch, George Peabody (Bath)

    Armstrong, W. C. Heaton

    Cherry, Rt. Hon. R. R.

    Greenwood, G. (Peterborough)

    Asquith, Rt. Hon. Herbert Henry

    Churchill, Rt. Hon. Winston S.

    Grey, Rt. Hon. Sir Edward

    Astbury, John Meir

    Clough, William

    Guest, Hon. Ivor Churchill

    Balfour, Robert (Lanark)

    Cobbold, Felix Thornley

    Gulland, John W.

    Baring, Godfrey (Isle of Wight)

    Collins, Sir Wm. J. (St. Pancras, W.)

    Harcourt, Rt. Hon. L. (Rossendale)

    Barker, Sir John

    Compton-Rickett, Sir J.

    Harcourt, Robert V. (Montrose)

    Barlow, Sir John E. (Somerset)

    Cooper, G. J.

    Hardie, J. Keir (Merthyr Tydvil)

    Barlow, Percy (Bedford)

    Corbett, C. H. (Sussex, E. Grinstead)

    Hardy, George A. (Suffolk)

    Barnard, E. B.

    Cotton, Sir H. J. S.

    Harmsworth, Cecil B. (Worcester)

    Barnes, G. N.

    Cowan, W H.

    Harvey, A. G. C. (Rochdale)

    Barran, Sir John Nicholson

    Craig, Herbert J. (Tynemouth)

    Harwood, George

    Beale, W. P.

    Crooks, William

    Haslam, James (Derbyshire)

    Beauchamp, E.

    Crosfield, A. H.

    Haslam, Lewis (Monmouth)

    Beck, A. Cecil

    Crossley, William J.

    Haworth, Arthur A.

    Bell, Richard

    Dalziel, Sir James Henry

    Hazel, Dr. A. E. W.

    Benn, Sir J. Williams (Devonport)

    Davies, David (Montgomery Co.)

    Hedges, A. Paget

    Benn, W. (Tower Hamlets, St. Geo.)

    Davies, Ellis William (Eifion)

    Helme, Norval Watson

    Berridge, T. H. D.

    Davies, Timothy (Fulham)

    Henderson, Arthur (Durham)

    Birrell, Rt. Hon. Augustine

    Davies, Sir W. Howell (Bristol, S.)

    Henderson, J. McD. (Ab'deen, W.)

    Black, Arthur W.

    Dobson, Thomas W.

    Henry, Charles S.

    Boulton, A. C. F.

    Duckworth, Sir James

    Herbert, Col. Sir Ivor (Mon. S.)

    Bowerman, C. W.

    Duncan, C. (Barrow-in-Furness)

    Herbert, T. Arnold (Wycombe)

    Branch, James

    Duncan, J. Hastings (York, Otley)

    Hobart, Sir Robert

    Brigg, John

    Dunn, A. Edward (Camborne)

    Hobhouse, Charles E. H.

    Bright, J. A.

    Dunne, Major E. Martin (Walsall)

    Hodge, John

    Brocklehurst, W. B.

    Edwards, Enoch (Hanley)

    Holland, Sir William Henry

    Brooke, Stopford

    Erskine, David C.

    Holt, Richard Durning

    Brunner, J. F. L. (Lancs., Leigh)

    Evans, Sir Samuel T.

    Hooper, A. G.

    Bryce, J. Annan

    Everett, R. Lacey

    Hope, W. H. B. (Somerset, N.)

    Buckmaster, Stanley O.

    Falconer, J.

    Horniman, Elmslie John

    Burt, Rt. Hon. Thomas

    Fenwick, Charles

    Howard, Hon. Geoffrey

    Buxton, Rt. Hon. Sydney Charles

    Ferens, T. R.

    Hutton, Alfred Eddison

    Byles, William Pollard

    Ferguson, R. C. Munro

    Hyde, Clarendon G.

    Carr-Gomm, H. W.

    Fuller, John Michael F.

    Idris, T. H. W.

    Illingworth, Percy H.

    Newnes, F. (Notts, Bassetlaw)

    Soares, Ernest J.

    Johnson, John (Gateshead)

    Nicholls, George

    Spicer, Sir Albert

    Jones, Leif (Appleby)

    Nicholson, Charles N. (Doncaster)

    Stanley, Albert (Staffs, N.W.)

    Jones, William (Carnarvonshire)

    Norman, Sir Henry

    Stanley, Hon. A. Lyulph (Cheshire)

    Kearley, Sir Hudson E.

    Norton, Captain Cecil William

    Stewart-Smith, D. (Kendal)

    Kelley, George D.

    Nussey, Thomas Willans

    Strachey, Sir Edward

    King, Alfred John (Knutsford)

    Nuttall, Harry

    Straus, B. S. (Mile End)

    Lamb, Edmund G. (Leominster)

    O'Donnell, C. J. (Walworth)

    Sutherland, J. E.

    Lambert, George

    Parker, James (Halifax)

    Taylor, Theodore C. (Radcliffe)

    Lamont, Norman

    Partington, Oswald

    Tennant, Sir Edward (Salisbury)

    Layland-Barrett, Sir Francis

    Pearce, Robert (Staffs, Leek)

    Tennant, H. J. (Berwickshire)

    Lea, Hugh Cecil (St. Pancras, E.)

    Pirie, Duncan V.

    Thomas, Sir A. (Glamorgan, E.)

    Leese, Sir Joseph F. (Accrington)

    Pollard, Dr. G. H.

    Thomasson, Franklin

    Lehmann, R. C.

    Ponsonby, Arthur A. W. H.

    Thompson, J. W. H. (Somerset, E.)

    Lever, A. Levy (Essex, Harwich)

    Price, C. E. (Edinburgh, Central)

    Thorne, G. R. (Wolverhampton)

    Lever, W. H. (Cheshire, Wirral)

    Price, Sir Robert J. (Norfolk, E.)

    Tomkinson, James

    Levy, Sir Maurice

    Priestley, W. E. B. (Bradford, E.)

    Toulmin, George

    Lewis, John Herbert

    Radford, G. H.

    Trevelyan, Charles Philips

    Lloyd-George, Rt. Hon. David

    Rainy, A. Rolland

    Ure, Rt. Hon. Alexander

    Lough, Rt. Hon. Thomas

    Rea, Russell (Gloucester)

    Verney, F. W.

    Lupton, Arnold

    Rea, Walter Russell (Scarborough)

    Vivian, Henry

    Lyell, Charles Henry

    Rendall, Athelstan

    Walters, John Tudor

    Macdonald, J. M. (Falkirk Burghs)

    Richards, Thomas (W. Monmouth)

    Walton, Joseph

    Mackarness, Frederic C.

    Richards, T. F. (Wolverhampton, W.)

    Ward, John (Stoke-upon-Trent)

    Maclean, Donald

    Richardson, A.

    Ward, W. Dudley (Southampton)

    Macnamara, Dr. Thomas J.

    Ridsdale, E. A.

    Warner, Thomas Courtenay T.

    Macpherson, J. T.

    Roberts, Charles H. (Lincoln)

    Wason, Rt. Hon. E. (Clackmannan)

    M'Kenna, Rt. Hon. Reginald

    Roberts, Sir J. H. (Denbighs.)

    Wason, John Cathcart (Orkney)

    M'Laren, Sir C. B. (Leicester)

    Robertson, Sir G. Scott (Bradford)

    Waterlow, D. S.

    M'Laren, H. D. (Stafford, W.)

    Robertson, J. M. (Tyneside)

    Watt, Henry A.

    Maddison, Frederick

    Robinson, S.

    Wedgwood, Josiah C.

    Mallet, Charles E.

    Robson, Sir William Snowdon

    White, Sir George (Norfolk)

    Manfield, Harry (Northants)

    Roch, Walter F. (Pembroke)

    White, J. Dundas (Dumbartonshire)

    Markham, Arthur Basil

    Roe, Sir Thomas

    White, Sir Luke (York, E.R.)

    Marks, G. Croydon (Launceston)

    Rogers, F. E. Newman

    Whitehead, Rowland

    Marnham, F. J.

    Rose, Charles Day

    Whitley, John Henry (Halifax)

    Mason, A. E. W. (Coventry)

    Rowlands, J.

    Wiles, Thomas

    Massie, J.

    Runciman, Rt. Hon. Walter

    Williams, J. (Glamorgan)

    Masterman, C. F. G.

    Russell, Rt. Hon. T. W.

    Williams, W. Llewelyn (Car'th'n)

    Menzies, Walter

    Rutherford, V. H. (Brentford)

    Williamson, A.

    Micklem, Nathaniel

    Samuel, Rt. Hon. H. L. (Cleveland)

    Wills, Arthur Walters

    Middlebrook, William

    Samuel, S. M. (Whitechapel)

    Wilson, Hon. G. G. (Hull, W.)

    Molteno, Percy Alport

    Schwann, C. Duncan (Hyde)

    Wilson, John (Durham, Mid)

    Mond, A.

    Scott, A. H. (Ashton-under-Lyne)

    Wilson, J. H. (Middlesbrough)

    Money, L. G. Chiozza

    Seaverns, J. H.

    Wilson, J. W. (Worcestershire, N.)

    Montagu, Hon. E. S.

    Seely, Colonel

    Wood, T. M'Kinnon

    Morgan, G. Hay (Cornwall)

    Shackleton, David James

    Morgan, J. Lloyd (Carmarthen)

    Shaw, Sir Charles E. (Stafford)

    Morrell, Philip

    Sherwell, Arthur James

    TELLERS FOR THE AYES.—Mr. Joseph Pease and the Master of Elibank.

    Morse, L. L.

    Shipman, Dr. John G.

    Murray, Capt. Hon. A. C. (Kincard.)

    Simon, John Allsebrook

    Napier, T. B.

    Soames, Arthur Wellesley

    NOES.

    Abraham, W. (Cork, N.E.)

    Craig, Captain James (Down, E.)

    Hope, James Fitzalan (Sheffield)

    Arkwright, John Stanhope

    Craik, Sir Henry

    Houston, Robert Paterson

    Ashley, W. W.

    Dalrymple, Viscount

    Hudson, Walter

    Balcarres, Lord

    Delany, William

    Jowett, F. W.

    Baldwin, Stanley

    Devlin, Joseph

    Joyce, Michael

    Banbury, Sir Frederick George

    Dickson, Rt. Hon. C. Scott-

    Kennedy, Vincent Paul

    Banner, John S. Harmood-

    Dilke, Rt. Hon. Sir Charles

    Kerry, Earl of

    Baring, Capt. Hon. G. (Winchester)

    Doughty, Sir George

    Keswick, William

    Barrie, H. T. (Londonderry, N.)

    Douglas, Rt. Hon. A. Akers-

    Kettle, Thomas Michael

    Barry, E. (Cork, S.)

    Du Cros, Arthur

    Kilbride, Denis

    Beckett, Hon. Gervase

    Duffy, William J.

    Lane-Fox, G. R.

    Bignold, Sir Arthur

    Duncan, Robert (Lanark, Govan)

    Lardner, James Carrige Rushe

    Boland, John

    Esmonds, Sir Thomas

    Lockwood, Rt. Hon. Lt.-Col. A. R.

    Bowles, G. Stewart

    Faber, George Denison (York)

    Long, Col. Charles W. (Evesham)

    Bridgeman, W. Clive

    Fell, Arthur

    Lonsdale, John Brownlee

    Brotherton, Edward Allen

    Fetherstonhaugh, Godfrey

    Lyttelton, Rt. Hon. Alfred

    Bull, Sir William James

    Ffrench, Peter

    M'Kean, John

    Burke, E. Haviland-

    Gibbs, G. A. (Bristol, West)

    Magnus, Sir Philip

    Butcher, Samuel Henry

    Glover, Thomas

    Mason, James F. (Windsor)

    Carlile, E. Hildred

    Gooch, Henry Cubitt (Peckham)

    Meehan, Francis E. (Leitrim, N.)

    Carson, Rt. Hon. Sir Edward H.

    Goulding, Edward Alfred

    Meysey-Thompson, E. C.

    Cave, George

    Gretton, John

    Mooney, J. J.

    Cecil, Evelyn (Aston Manor)

    Guinness, Hon. R. (Haggerston)

    Morpeth, Viscount

    Cecil, Lord John P. Joicey-

    Hamilton, Marquess of

    Morrison-Bell, Captain

    Chamberlain, Rt. Hon. J. A. (Worc'r.)

    Harris, Frederick Leverton

    Murphy, John (Kerry, East)

    Chaplin, Rt. Hon. Henry

    Harrison-Broadley, H. B.

    Nannetti, Joseph P.

    Clark, George Smith

    Hay, Hon. Claude George

    Nicholson, Wm. G. (Petersfield)

    Clynes, J. R.

    Hayden, John Patrick

    Nelan, Joseph

    Coates, Major E. F. (Lewisham)

    Hazieton, Richard

    O'Connor, John (Kildare, N.)

    Cochrane, Hon. Thomas H. A. E.

    Hill, Sir Clement

    O'Connor, T. P. (Liverpool)

    Craig, Charles Curtis (Antrim, S.)

    Hogan, Michael

    Oddy, John James

    614

    615

    O'Doherty, Philip

    Renwick, George

    Taylor, John W. (Durham)

    O'Dowd, John

    Roberts, G. H. (Norwich)

    Thornton, Percy M.

    O'Kelly, Conor (Mayo, N.)

    Roberts, S. (Sheffield, Ecclesall)

    Valentia, Viscount

    O'Kelly, James (Roscommon, N.)

    Ropner, Colonel Sir Robert

    Walker, Col. W. H. (Lancashire)

    O'Malley, William

    Rutherford, John (Lancashire)

    Walrond, Hon. Lionel

    O'Shaughnessy, P. J.

    Rutherford, W. W. (Liverpool)

    White, Patrick (Meath, North)

    Pease, Herbert Pike (Darlington)

    Salter, Arthur Clavell

    Williams, Col. R. (Dorset, W.)

    Peel, Hon. W. R. W.

    Sheehan, Daniel Daniel

    Wilson, W. T. (Westhoughton)

    Philips, John (Longford, S.)

    Sheffield, Sir Berkeley George D.

    Wyndham, Rt. Hon. George

    Power, Patrick Joseph

    Smith, F. E. (Liverpool, Walton)

    Pretyman, E. G.

    Stanier, Beville

    TELLERS FOR THE NOES.—Alexander Acland-Hood and Mr. Forster.

    Rawlinson, John Frederick Peel

    Starkey, John R.

    Redmond, John E. (Waterford)

    Summerbell, T.

    Remnant, James Farquharson

    Talbot, Lord E. (Chichester)

    TOBACCO (GROWN IN IRELAND).
    4. Motion made, and Question put, "That, in lieu of the duties of Excise now payable on tobacco grown in Ireland, there shall, on and after the 30th day of April, 1909, be charged the following duties (that is to say):—
    Upon tobacco unmanufactured, viz.:—

    Tobacco containing 10 lbs. or more of moisture in every 100

    s.

    d.

    lbs. weight thereof. the pound

    3

    6

    Tobacco containing less than 10 lbs. of moisture in every 100 lbs. weight thereof,

    the pound

    3

    11

    Upon tobacco manufactured, viz.:—

    Cavendish or Negrohead manu-

    s.

    d.

    factured in bond

    the pound

    4

    8

    and that duties of Excise at the same rates shall be charged on tobacco grown in England or Scotland, and that there shall be charged on a licence to be taken out annually by every person growing, cultivating, or curing tobacco in England or Scotland an Excise duty of 5s."—[The Chancellor of the Exchequer.]
    The Committee divided: Ayes, 257; Noes, 125.

    Division No. 79.]

    AYES.

    [12.10 a.m.

    Acland, Francis Dyke

    Collins, Sir Wm. J. (St. Pancras, W.)

    Hazel, Dr. A. E. W.

    Adkins, W. Ryland D.

    Compton-Rickett, Sir J.

    Hedges, A. Paget

    Agar-Robartes, Hon. T. C. R.

    Cooper, G. J.

    Helme, Norval Watson

    Agnew, George William

    Corbett, C. H. (Sussex, E. Grinstead)

    Henderson, Arthur (Durham)

    Allen, A. Acland (Christchurch)

    Cotton, Sir H. J. S.

    Henderson, J. McD. (Ab'deen, W.)

    Armstrong, W. C. Heaton

    Cowan, W. H.

    Henry, Charles S.

    Astbury, John Meir

    Craig, Herbert J. (Tynemouth)

    Herbert, Col. Sir Ivor (Mon. S.)

    Balfour, Robert (Lanark)

    Crooks, William

    Herbert, T. Arnold (Wycombe)

    Baring, Godfrey (Isle of Wight)

    Crossley, William J.

    Hobart, Sir Robert

    Barker, Sir John

    Dalziel, Sir James Henry

    Hobhouse, Charles E. H.

    Barlow, Sir John E. (Somerset)

    Davies, David (Montgomery Co.)

    Hodge, John

    Barlow, Percy (Bedford)

    Davies, Ellis William (Eifion)

    Holland, Sir William Henry

    Barnard, E. B.

    Davies, Timothy (Fulham)

    Holt, Richard Durning

    Barnes, G. N.

    Davies, Sir W. Howell (Bristol, S.)

    Hooper, A. G.

    Barran, Sir John Nicholson

    Dobson, Thomas W.

    Hope, W. H. B. (Somerset, N.)

    Beale, W. P.

    Duckworth, Sir James

    Horniman, Emslie John

    Beauchamp, E.

    Duncan, C. (Barrow-in-Furness)

    Howard, Hon. Geoffrey

    Beck, A. Cecil

    Duncan, J. Hastings (York, Otley)

    Hutton, Alfred Eddison

    Bell, Richard

    Dunn, A. Edward (Camborne)

    Hyde, Clarendon G.

    Benn, Sir J. Williams (Devonport)

    Dunne, Major E. Martin (Walsall)

    Idris, T. H. W.

    Benn, W. (Tower Hamlets, St. Geo.)

    Edwards, Enoch (Hanley)

    Illingworth, Percy H.

    Berridge, T. H. D.

    Erskine, David C.

    Johnson, John (Gateshead)

    Birrell, Rt. Hon. Augustine

    Evans, Sir Samuel T.

    Jones, Leif (Appleby)

    Black, Arthur W.

    Everett, R. Lacey

    Jones, William (Caranrvonshire)

    Boulton, A. C. F.

    Falconer, J.

    Kelley, George D.

    Bowerman, C. W.

    Fenwick, Charles

    King, Alfred John (Knutsford)

    Brigg, John

    Ferens, T. R.

    Lamb, Edmund G. (Leominster)

    Bright, J. A.

    Ferguson, R. C. Munro

    Lambert, George

    Brocklehurst, W. B.

    Fuller, John Michael F.

    Lamont, Norman

    Brooke, Stopford

    Fullerton, Hugh

    Layland-Barrett, Sir Francis

    Brunner, J. F. L. (Lancs., Leigh)

    Gill, A. H.

    Lea, Hugh Cecil (St. Pancras, E.)

    Bryce, J. Annan

    Glen-Coats, Sir T. (Renfrew, W.)

    Leese, Sir Joseph F. (Accrington)

    Buckmaster, Stanley O.

    Goddard, Sir Daniel Ford

    Lehmann, R. C.

    Burt, Rt. Hon. Thomas

    Gooch, George Peabody (Bath)

    Lever, A. Levy (Essex, Harwich)

    Buxton, Rt. Hon. Sydney Charles

    Greenwood, G. (Peterborough)

    Lever, W. H. (Cheshire, Wirral)

    Byles, William Pollard

    Grey, Rt. Hon. Sir Edward

    Levy, Sir Maurice

    Carr-Gomm, H. W.

    Gulland, John W.

    Lewis, John Herbert

    Causton, Rt. Hon. Richard Knight

    Harcourt, Rt. Hon. L. (Rossendale)

    Lloyd-George, Rt. Hon. David

    Cawley, Sir Frederick

    Harcourt, Robert V. (Montrose)

    Lough, Rt. Hon. Thomas

    Chance, Frederick William

    Hardie, J. Keir (Merthyr Tydvil)

    Lupton, Arnold

    Channing, Sir Frederick Allston

    Hardy, George A. (Suffolk)

    Lyell, Charles Henry

    Cheetham, John Frederick

    Harmsworth, Cecil B. (Worcester)

    Macdonald, J. M. (Falkirk Burghs)

    Cherry, Rt. Hon. R. R.

    Harvey, A. G. C. (Rochdale)

    Mackarness, Frederic C.

    Churchill, Rt. Hon. Winston S.

    Haslam, James (Derbyshire)

    Maclean, Donald

    Clough, William

    Haslam, Lewis (Monmouth)

    Macnamara, Dr. Thomas J.

    Cobbold, Felix Thornley

    Haworth, Arthur A.

    Macpherson, J. T.

    M'Kenna, Rt. Hon. Reginald

    Rainy, A. Rolland

    Taylor, Theodore C. (Radcliffe)

    M'Laren, Sir C. B. (Leicester)

    Rea, Russell'(Gloucester)

    Tennant, Sir Edward (Salisbury)

    M'Laren, H. D. (Stafford, W.)

    Rea, Walter Russell (Scarborough)

    Tennant, H. J. (Berwickshire)

    Maddison, Frederick

    Rendall, Althelstan

    Thomas, Sir A. (Glamorgan, E.)

    Mallett, Charles E.

    Richards, Thomas (W. Monmouth)

    Thomasson, Franklin

    Manfield, Harry (Northants)

    Richards, T. F. (Wolverhampton, W.)

    Thompson, J. W. H. (Somerset, E.)

    Markham, Arthur Basil

    Richardson, A.

    Tomkinson, James

    Marks, G. Croydon (Launceston)

    Ridsdale, E. A.

    Toulmin, George

    Marnham, F. J.

    Roberts, Charles H. (Lincoln)

    Trevelyan, Charles Philips

    Massie, J.

    Roberts, Sir J. H. (Denbighs.)

    Ure, Rt. Hon. Alexander

    Masterman, C. F. G.

    Robertson, Sir G. Scott (Bradford)

    Verney, F. W.

    Menzies, Walter

    Robertson, J. M. (Tyneside)

    Vivian, Henry

    Micklem, Nathaniel

    Robinson, S.

    Walters, John Tudor

    Middlebrook, William

    Robson, Sir William Snowdon

    Walton, Joseph

    Monteno, Percy Alport

    Roch, Walter F. (Pembroke)

    Ward, John (Stoke-upon-Trent)

    Mond, A.

    Roe, Sir Thomas

    Ward, W. Dudley (Southampton)

    Money, L. G. Chiozza

    Rogers, F. E. Newman

    Warner, Thomas Courtenay T.

    Montagu, Hon. E. S.

    Rose, Charles Day

    Wason, Rt. Hon. E. (Clackmannan)

    Morgan, G. Hay (Cornwall)

    Rowlands, J.

    Wason, John Cathcart (Orkney)

    Morgan, J. Lloyd (Carmarthen)

    Runciman, Rt. Hon. Walter

    Waterlow, D. S.

    Morrell, Philip

    Russell, Rt. Hon. T. W.

    Watt, Henry A.

    Morse, L. L.

    Rutherford, V. H. (Brentford)

    Wedgwood, Josiah C.

    Murray, Capt. Hon. A. C. (Kincard.)

    Samuel, Rt Hon. H. L. (Cleveland)

    White, Sir George (Norfolk)

    Napier, T. B

    Samuel, S. M. (Whitechapel)

    White, J. Dundas (Dumbartonshire)

    Newnes, F. (Notts, Bassetlaw)

    Scott, A. H. (Ashton-under-Lyne)

    White, Sir Luke (York, E.R.)

    Nicholls, George

    Seaverns, J. H.

    Whitehead, Rowland

    Nicholson, Charles N. (Doncaster)

    Seely, Colonel

    Whitley, John Henry (Halifax)

    Norman, Sir Henry

    Shackleton, David James

    Wiles, Thomas

    Norton, Capt. Cecil William

    Shaw, Sir Charles E. (Stafford)

    Williams, J. (Glamorgan)

    Nussey, Thomas Willans

    Sherwell, Arthur James

    Williams, W. Llewelyn (Carmarthen)

    Nuttall, Harry

    Shipman, Dr. John G.

    Williamson, A.

    O'Donnell, C. J. (Walworth)

    Simon, John Allsebrook

    Wills, Arthur Walters

    Parker, James (Halifax)

    Soames, Arthur Wellesley

    Wilson, Hon. G. G. (Hull, W.)

    Partington, Oswald

    Soares, Ernest J.

    Wilson, John (Durham, Mid)

    Pearce, Robert (Staffs, Leek)

    Spicer, Sir Albert

    Wilson, J. H. (Middlesbrough)

    Pirie, Duncan V.

    Stanley, Albert (Staffs, N.W.)

    Wilson, J. W. (Worcestershire, N.)

    Pollard, Dr. G. H.

    Stanley, Hon. A. Lyulph (Cheshire)

    Wood, T. M'Kinnon

    Ponsonby, Arthur A. W. H.

    Stewart-Smith, D. (Kendal)

    Price, C. E. (Edinburgh, Central)

    Strachey, Sir Edward

    TELLERS FOR THE AYES.—Mr. Joseph Pease and the Master of Elibank.

    Price, Sir Robert J. (Norfolk, E.)

    Straus, B. S. (Mile End)

    Priestley, W. E. B. (Bradford, E.)

    Sutherland, J. E.

    NOES.

    Abraham, W. (Cork, N.E.)

    Faber, George Denison (York)

    Nolan, Joseph

    Arkwright, John Stanhope

    Fell, Arthur

    O'Connor, John (Kildare, N.)

    Ashley, W. W.

    Fetherstonhaugh, Godfrey

    O'Connor, T. P. (Liverpool)

    Balcarres, Lord

    Ffrench, Peter

    Oddy, John James

    Baldwin, Stanley

    Gibbs, G. A. (Bristol, West)

    O'Doherty, Philip

    Banbury, Sir Frederick George

    Glover, Thomas

    O'Dowd, John

    Banner, John S. Harmood-

    Gooch, Henry Cubitt (Peckham)

    O'Kelly, Conor (Mayo, N.)

    Baring, Capt. Hon. G. (Winchester)

    Goulding, Edward Alfred

    O'Kelly, James (Roscommon, N.)

    Barrie, H. T. (Londonderry, N.)

    Gretton, John

    O'Malley, William

    Barry, E. (Cork, S.)

    Guinness, Hon. R. (Haggerston)

    O'Shaughnessy, P. J.

    Beckett, Hon. Gervase

    Hamilton, Marquess of

    Pease, Herbert Pike (Darlington)

    Bignold, Sir Arthur

    Harris, Frederick Leverton

    Peel, Hon. W. R. W.

    Boland, John

    Harrison-Broadley, H. B.

    Philips, John (Longford, S.)

    Bowles, G. Stewart

    Hay, Hon. Claude George

    Power, Patrick Joseph

    Bridgman, W. Clive

    Hayden, John Patrick

    Pretyman, E. G.

    Brotherton, Edward Allen

    Hazleton, Richard

    Rawlinson, John Frederick Peel

    Bull, Sir William James

    Hill, Sir Clement

    Redmond, John E. (Waterford)

    Burke, E. Haviland-

    Hogan, Michael

    Remnant, James Farquharson

    Butcher, Samuel Henry

    Hope, James Fitzalan (Sheffield)

    Renwick, George

    Carlile, E. Hildred

    Houston, Robert Paterson

    Roberts, G. H. (Norwich)

    Carson, Rt. Hon. Sir Edward H.

    Hudson, Walter

    Roberts, S. (Sheffield, Ecclesall)

    Cave, George

    Joyce, Michael

    Ropner, Colonel Sir Robert

    Cecil, Evelyn (Aston Manor)

    Kennedy, Vincent Paul

    Rutherford, John (Lancashire)

    Cecil, Lord John P. Joicey-

    Kerry, Earl of

    Rutherford, W. W. (Liverpool)

    Chamberlain, Rt. Hon. J. A. (Worc'r

    Keswick, William

    Salter, Arthur Clavell

    Clark, George Smith

    Kettle, Thomas Michael

    Sheehan, Daniel Daniel

    Clynes, J. R.

    Kilbride, Denis

    Sheffield, Sir Berkeley George D.

    Coates, Major E. F. (Lewisham)

    Lane-Fox, G. R.

    Smith, F. E. (Liverpool, Walton)

    Cochrane, Hon. Thomas H. A. E.

    Lardner, James Carrige Rushe

    Stanier, Beville

    Craig, Charles Curtis (Antrim, S.)

    Lockwood, Rt. Hon. Lt.-Col. A. R.

    Starkey, John R.

    Craig, Captain James (Down, E.)

    Long, Col. Charles W. (Evesham)

    Summerbell, T.

    Craik, Sir Henry

    Lonsdale, John Brownlee

    Talbot, Lord E. (Chichester)

    Dalrymple, Viscount

    Lyttelton, Rt. Hon. Alfred

    Taylor, John W. (Durham)

    Delany, William

    Magnus, Sir Philip

    Thornton, Percy M.

    Devlin, Joseph

    Mason, James F. (Windsor)

    Valentia, Viscount

    Dickson, Rt. Hon. C. Scott

    Meehan, Francis E. (Leitrim, N.)

    Walker, Col. W. H. (Lancashire)

    Dilke, Rt. Hon. Sir Charles

    Meysey-Thompson, E. C.

    Walrond, Hon. Lionel

    Doughty, Sir George

    Mooney, J. J.

    White, Patrick (Meath, North)

    Douglas, Rt. Hon. A. Akers-

    Morpeth, Viscount

    Wilson, W. T. (Westhoughton)

    Du Cros, Arthur

    Morrison-Bell, Captain

    Duffy, William J.

    Murphy, John (Kerry, East)

    TELLERS FOR THE NOES.—Sir Alexander Acland-Hood and Mr. Forster.

    Duncan, Robert (Lanark, Govan)

    Nannetti, Joseph P.

    Esmonde, Sir Thomas

    Nicholson, Wm. G. (Petersfield)

    MOTOR SPIRIT.
    5. Resolved, that there shall be charged on motor spirit, on and after the 30th day of April, 1909, a Customs import duty of 3d. per gallon, and on and after the first day of June, 1909, an Excise duty of the like amount; and that there shall be charged, on and after the last-mentioned date, on a licence to be taken out annually by a manufacturer of motor spirit, an Excise duty of £1, and on a licence to be taken out annually by a dealer in motor spirit an Excise duty of 5s.—[The Chancellor of the Exchequer.]
    Resolutions to be reported upon Monday next (3rd May). Committee to sit again upon Monday next.
    And, it being after half-past Eleven of the clock on Thursday evening, Mr. Speaker adjourned the House without Question put, in pursuance of the Standing Order.
    Adjourned at Twenty-five minutes after Twelve o'clock.

  Darlington Postmen.
  Darlington Postmen.
  Hampstead Post Office.
  Hampstead Post Office.
  Post Office Servants, Ireland (Weekly Half-Holiday).
  Post Office Servants, Ireland (Weekly Half-Holiday).
  Purchase of Horses by Foreign Agents.
  Purchase of Horses by Foreign Agents.
  Army Meritorious Service Medal.
  Army Meritorious Service Medal.
  War Office Contracts (Women Workers).
  War Office Contracts (Women Workers).
  Military Training (Port Clarence).
  Military Training (Port Clarence).
  Beri Beri.
  Beri Beri.
  Workhouse Maternity Wards.
  Workhouse Maternity Wards.
  Irish Guarantee Fund.
  Irish Guarantee Fund.
  Historical Manuscripts.
  Historical Manuscripts.
  Morocco (British Subjects).
  Morocco (British Subjects).
  Food Supply for Tabriz.
  Food Supply for Tabriz.
  Church Elementary Schools Transferred.
  Church Elementary Schools Transferred.
  United States Navy.
  United States Navy.
  Unemployed Question.
  Unemployed Question.
  Lands at Cullinagh, County Waterford.
  Lands at Cullinagh, County Waterford.
  Labourers' Cottages (Arbitration).
  Labourers' Cottages (Arbitration).
  Crosbie Estate, Ballylongford, North Kerry.
  Crosbie Estate, Ballylongford, North Kerry.
  Blacker-Douglas Estate, Tullihinal, North Kerry.
  Blacker-Douglas Estate, Tullihinal, North Kerry.
  Sub-Tenant Transactions, Granard, County Longford.
  Sub-Tenant Transactions, Granard, County Longford.
  Old Age Pension Withdrawn (Ireland).
  Old Age Pension Withdrawn (Ireland).
  Hopkins Estate, Ballybrophy, Queen's County.
  Hopkins Estate, Ballybrophy, Queen's County.
  Bankruptcy Jurisdiction (Ireland).
  Bankruptcy Jurisdiction (Ireland).
  Galway Assizes.
  Galway Assizes.
  Labourers' Cottage Plots (Ireland).
  Labourers' Cottage Plots (Ireland).
  Wreckage, Blackwater, County Wexford.
  Wreckage, Blackwater, County Wexford.
  Charge against Taxi-Cab Driver.
  Charge against Taxi-Cab Driver.
  Police Clothing (Women Workers).
  Police Clothing (Women Workers).
  Charge of Kidnapping (Barnet).
  Charge of Kidnapping (Barnet).
  Inebriates Bill.
  Inebriates Bill.
ARMY (ANNUAL) BILL.
Returned from the Commons, with the Amendments, agreed to.
ELECTRIC LIGHTING ACTS (AMENDMENT) BILL. [H.L.]
Petition in favour of; of the Lord Mayor, Aldermen, and Citizens of the City of Sheffield; read, and ordered to lie on the Table.
EDUCATION BOARD PROVISIONAL ORDERS CONFIRMATION (BUCKS, &o.) BILL. [H.L.] (No. 35.)
A Bill to confirm certain Provisional Orders made by the Board of Education under the Education Acts, 1870 to 1907, to enable the Councils of the Administrative Counties of Buckingham, Cornwall, Gloucester, Montgomery, and Surrey, to put in force the Lands Clauses Acts:
EDUCATION BOARD PROVISIONAL ORDER CONFIRMATION (LONDON No. 1) BILL. [H.L.] (No. 36.)
A Bill to confirm a Provisional Order made by the Board of Education under the Education Acts, 1870 to 1907, to enable the London County Council to put in force the Lands Clauses Acts: And
EDUCATION BOARD PROVISIONAL ORDER CONFIRMATION (LONDON No. 2) BILL. [H.L.] (No. 37.)
A Bill to confirm a Provisional Order made by the Board of Education under the Education Acts, 1870 to 1907, to enable the London County Council to put in force the Lands Clauses Acts:—Were presented by the Lord Colebrooke (for the Lord President (V. Wolverhampton)); read 1a; to be printed; and referred to the Examiners.
MEAT MARKING BILL. [H.L.] (No. 38.)
A Bill for the purpose of marking all imported meat and for the registration of dealers in such meat: And

MOVEABLE DWELLINGS BILL. [H.L.] (No. 39.)
A Bill to provide for the registration and regulation of moveable dwellings, and

663
for the enforcement of school attendance by children inhabiting such dwellings:— Were presented by the Lord Clifford of Chudleigh; read 1a, and to be printed.

ROMAN CATHOLICS AND THE ROYAL DECLARATION.
THE DUKE OF NORFOLKrose to ask His Majesty's Government what course they had decided to adopt in regard to the Royal Declaration. The noble Duke said: My Lords, in December last the noble Earl the Leader of the House, in reply to a Question by my noble friend Lord Braye, said that the Government had for some time had in anxious consideration whether any solution could be arrived at in regard to the question surrounding the Royal Declaration, and he stated that they had hopes that at some not distant tine they might be able to bring forward something which would prove a satisfactory solution. The noble Earl added that were they able to do so he had the fullest confidence that noble Lords on this side of the House would be in accord with the Government in their desire to remove what was so very deep-felt and heart-burning a grievance to so many loyal subjects of the Crown. Four months have passed since then, and I am sure the noble Earl will not be surprised at my now asking what course His Majesty's Government have decided to adopt in regard to this question. I am specially anxious to do so at the present moment because a Bill has been introduced into another place dealing with this among other subjects; and although, of course, I do not invite the noble Earl to discuss here anything connected with a Bill in another place, yet the fact of there being a Bill before Parliament does undoubtedly give an opportunity to His Majesty's Government of dealing with the question. Therefore I feel that the situation is one which cannot be allowed to remain as it is. I earnestly trust that the noble Earl will be able to give us some assurance that the careful consideration which for some time past, as we have been told, the Government have been giving to the question is now about to bear fruit in some measure that will remove this great grievance—a grievance which, I think, many who are not Roman Catholic subjects of the Crown also feel to be a disgraceful enactment, and which bristles with questions that ought to be set at rest. I beg to ask the Question standing in my name.
THE LORD PRIVY SEAL AND SECRETARY OF STATE FOR THE COLONIES (THE EARL OF CREWE)My Lords, I am obliged to the noble Duke for having postponed for some little time his Question on a subject which he and many others, I know, in this House regard with deep anxiety, and I only wish that I could give a reply which would be more satisfactory to the noble Duke, In considering this question of the Royal Declaration there are two classes of persons whom at no time we can hope to satisfy. At the one end there are those who will not be content unless the Declaration is abolished altogether, or an absolutely colourless Declaration is substituted for it; at the other end there is a class of persons, like the other, I should hope, not a very numerous class, so enamoured with the phraseology of the existing Declaration that they cannot bear to see it altered in any particular. Between these two bodies there exists, I believe, the very great majority of the people of this country who would desire to see enacted, or at any rate be prepared to express themselves content with, some new formula which would make the position of the Sovereign on the solemn occasion of his first meeting his Parliament perfectly clear in relation to this matter, but at the same time would be entirely devoid of those expressions which are so offensive to many millions of His Majesty's subjects and which must be, as we feel, most painful to any Sovereign to utter. Experience, I am sorry to say, has shown us how difficult it is to find a formula of that kind, because within that large class, representing, as I have said I believe it does, the great majority of the people of the country, there is a wide diversity of opinion as to how far the formula ought to go in the direction of stating that the Sovereign repudiates or does not accept the Roman Catholic faith; and before there can be any real hope of arriving at that formula it is necessary to consult with men of very different shades of opinion. That we have done, so far as time has permitted, and I cannot pretend to the House that the result so far has been very encouraging. At the same time, speaking for myself, I do not despair that in process of time some such formula may be discovered, but I regret to be obliged to inform the noble Duke that in our opinion there is no prospect of our being able to propose any legislation on the subject this session.
THE DUKE OF NORFOLK:My Lords, I hope I am not out of order in expressing profound disappointment at the reply to which we have just listened. I do not wish to be ungracious, but if that was all we were to hear to-day why were we told what we were told four months ago? The noble Earl made a statement in December, for which we thanked him at the time, in which he asked those of us who are interested in this question not to take any action pending the deliberations of the official advisers of the Crown. We have complied with that request, but the deliberations of the official advisers of the Crown appear to have been very protracted. No doubt there were many persons interested, but the Government have had four months in which to interview them, and it will be remembered that the noble Earl said at the time that the Government had then been giving consideration to the matter. The Government admitted that the question was one of great importance, and one calling for action. I really feel that our hopes were raised; but after all this, we are now simply told that any hopes we had allowed ourselves to entertain were futile. We are told that although the Government may be glad to do something some day, at present they can do nothing. I cannot help in the strongest way protesting against treatment of this kind. I can assure the noble Earl that his reply will cause profound disappointment and dissatisfaction throughout the Catholic body. We have held our hands since the statement made on behalf of the Government in December, but I do not feel that' can pledge myself as to what action my co-religionists may feel it necessary to take in the future. For myself, I am disappointed and indignant that no further assurance can be given.
THE EARL OF DENBIGH:My Lords, I should like to say a word in support of what has fallen from the noble Duke. I am certain that the reply which we have heard from the Leader of the House will cause very great disappointment to large numbers of His Majesty's subjects. It seemed to me, in listening to the noble Earl's statement, that the Government were going the very best way to avoid any action, because he said that their proceedings consisted in going about asking the views of people of different opinions—in fact, attempting that which is generally agreed upon as the impossible, namely,
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trying to please everybody. I should have thought that the Government, if they had the courage of their opinions, might have stated some definite policy after having made up their minds as to what was fair in the matter, and then have trusted to the reasonable people in the country to support them. To go about it in the way described, trying to please everybody, is to adopt a policy foredoomed to failure; and it is evident that the Catholics of this country will have to wait indefinitely for the removal of what they regard as an intolerable grievance.
House adjourned at twenty minutes before Five o'clock, till Tomorrow, half-past Ten o'clock.