Sitting of 16 May 1911

Preamble
The House met at a Quarter before Three of the clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.
Provisional Order Bills (Standing Orders applicable thereto complied with),—Mr. Speaker laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the following Bill, referred on the First Reading thereof, the Standing Orders which are applicable thereto have been complied with, namely:—
Local Government (Ireland) Provisional Orders (No. 3) Bill.
Ordered, That the Bill be read a second time To-morrow.
Swinton Urban District Council Bill [Lords],
Read the third time, and passed, with Amendments.
Bristol Tramways Bill,
As amended, to be considered To-morrow.
Slough Urban District Water Bill [Lords],
South Lancashire Tramways Bill,
As amended, considered; to be read the third time.
Woking Urban District Council (Basingstoke Canal) Bill,
As amended, to be considered upon Tuesday next.
Sligo and Arigna Railway (Abandonment) Bill (by Order),
Order for Second Reading read, and discharged—Bill withdrawn.
Chester Water Bill [Lords] (by Order),
Second Reading deferred till Tomorrow.
Manchester Ship Canal Bill [Lords] (by Order),
Second Reading deferred till Friday.
Midland Railway Bill [Lords] (by Order),
Second Reading deferred till Tuesday next.
Christ Church, Glasgow, Order Confirmation Bill [Lords],
Read the third time, and passed.
London County Council (Tramways and improvements) Bill.
Reported, with Amendments; Report to he upon the Table, and to be printed.

MESSAGE FROM THE LORDS.
That they haxe passed a Bill, intituled, "An Act to confer further powers upon the Mayor, Aldermen, and Citizens of the city and county of Kingston-upon-Hull in regard to their tramway and water undertakings; and for other purposes."[Kingston-upon-Hull Corporation Bill [Lords.]
And, also, a Bill, intituled, "An Act to confer further powers upon the London, Tilbury, and Southend Railway Company with respect to the electrical working of their railways and otherwise."—[London, Tilbury, and Southend Railway Bill [Lords.]
Kingston-upon-Hull Corporation Bill [Lords],
London, Tilbury, and Southend Railway Bill [Lords],
Read the first time; and referred to the Examiners of Petitions for Private Bills.

TRADE REPORTS (ANNUAL SERIES).
Copies presented of Diplomatic and Consular Reports, Annual Series, Nos. 4648 and 4652 to 4656 [by Command]; to he upon the Table.
PERSIA (No. 1, 1911).
Copy presented of further Correspondence respecting the Affairs of Persia [by Command]; to he upon the Table.
NAVAL AND MARINE PAY AND PENSIONS ACT, 1865.
Copies presented of five Orders in Council, dated 4th May, 1911, under the Act [by Act]; to he upon the Table.

FOREIGN JURISDICTION ACT, 1890.
Copies presented of Orders in Council, dated 4th May, 1911, entitled:—

(1) The Northern Rhodesia Order Council, 1911;

(2) The Southern Rhodesia Order in Council, 1911;

(3) The Bechuanaland Protectorate (Tati District) Order in Council, 1911 [by Act]; to he upon the Table.

MERCHANT SHIPPING ACT, 1894.
Copy presented of Order in Council, dated 4th May, 1911, confirming Ordinance No. 32, of 1910, of the Colony of the Straits Settlements relating to Merchant Shipping [by Act]; to he upon the Table.
TERRITORIAL AND RESERVE FORCES ACT, 1907.
Copy presented of Order in Council, dated 4th May, 1911, transferring certain property to the Forfar County Association [by Act]; to he upon the Table.
NATIONAL INSURANCE BILL (PART II., UNEMPLOYMENT.)
Return ordered, "Containing the Report by Mr. Thomas G. Ackland, Fellow of the Institute of Actuaries and honorary Fellow of the Faculty of Actuaries, on the Scheme for Insurance against Unemployment embodied in Part II. of the National Insurance Bill."—[Mr. Buxton.]
ORAL ANSWERS TO QUESTIONS.

  Persian Baluchistan Chiefs.
  Mr. WEDGWOODasked the Secretary of State for Foreign Affairs, whether the chiefs of Persian Baluchistan are still raiding Persia, in spite of the advent of the new Governor-General; and whether they now pay taxes to or have any political connection with Persia?
  The SECRETARY of STATE for FOREIGN AFFAIRS (Sir Edward Grey): According to reports from His Majesty's representative on the spot, received since the date of the hon. Member's last question on the subject, which was 15th March, the new Governor-General of Kerman, immediately on his arrival at his post, began to make preparations for an expedition to Baluchistan to restore order and subdue the rebellious chief, Bahram Khan. The expedition, consisting of 1,500 men, left Kerman on 18th February for Barn, where is was to be joined by another 1,500 men. On the 12th April news was received at Tehran that this force had taken Bampur fort, and intended to proceed against Fahraj. It may therefore be anticipated that the political supremacy of Persia will be re-established in Persian
  1812
  Baluchistan, but I have no specific information as to how far taxes are being paid in that district to the Persian Government. Four robberies of caravans and one of the post were reported as having taken place in Kerman in January, but according to the latest information received the new Governor-General is maintaining order in the province.

  Archangel Fishery Bill.
  Mr. MITCHELL-THOMSONasked the Secretary of State whether he has any official information showing that the Archangel Fishery Bill has passed the Duma Committee and that the principle of prohibition of all foreign fishing within a 12-mile limit has been adopted; and, if so, whether His Majesty's Government propose to address any representations to the Russian Government on the subject.
  Sir E. GREY: I have received official information that the Fisheries Committee of the Duma has advised the acceptance of the Archangel Fishery Bill. Representations on the subject have already been addressed to the Russian Government to the effect that the three-mile limit cannot be altered without international agreement.

  House of Commons (Treaties).
  Mr. MacNEILLasked on what grounds were the terms of the new opium trade agreement concluded with China not communicated to the House of Commons although Parliament was in Session before the ratification of that treaty; why were the representatives of the people precluded from the gratification of expressing their approval of that measure while still inchoate; what is the reason of the distinction in method of procedure between the ratification of the opium trade agreement by the Government without the taking of the people into its confidence and the proposed Anglo-American arbitration treaty on which it has been promised to take the view of the House of Commons before ratification; what are the principles which govern the communication to the people of proposed treaties with foreign Powers and the obtaining of their consent thereto as a condition precedent to ratification in some cases and the withholding from them in other cases of the knowledge of treaties till their ratification in the name of the people and consequent binding force in matters of national obligation or responsibility have been unalterably determined; and will any, and, if

  1813
  so, what, steps be taken to modify the present control of the Executive over foreign policy?
  Sir E. GREY: The answer to the first question is that the agreement does not require ratification, and that even if it were otherwise it would be consistent with constitutional practice to conclude it before publication. To the second question: that if the course advocated had been followed no agreement at all might have been concluded. To publish terms while still inchoate would often lead to breaking off negotiations. To the third question: that one subject falls within the class of exceptional cases, and the other has followed the general rule. To the fourth question: that the matter is one of constitutional practice and expediency rather than of principle; and that when exceptions have been made, as in the case of the agreement ceding Heligoland to Germany, it has been for exceptional reasons peculiar to the individual case. To the fifth question: that no steps of the 'nature indicated to alter the Constitution are in contemplation.
  Mr. MacNEILL: Will the right hon. Gentleman say under what exceptional category does the Arbitration Treaty between England and the United States fall; what is the distinction with reference to this Treaty which the House is to have the opportunity of sanctioning and the other Treaty in regard to the opium trade which this House had not the opportunity of sanctioning What is the distinction?
  Sir E. GREY: There is no exceptional category as I have said in my answer, but when exceptions are made they are for reasons peculiar to the individual case. When any individual case comes before the House I shall of course be prepared to explain why an exception has been made.
  Mr. MacNEILL: Am T to understand that the exception in this case of the British Treaty with the United States in which this House is to have the power of sanction arises from the fact that the United States Senate have the power of ratification of Treaties, whereas this other power has not, and therefore there is a distinction?
  Sir E. GREY: There is not at present any Treaty in existence, and can be no exception. When it does occur, and if an exception is made, I shall of course be prepared to state why.

  Egyptian Affairs.
  Mr. ORMSBY-GOREasked in what papers the press campaign against the present Egyptian Government and the British occupation, referred to on page 7 of His Majesty's Agent-General's Report [Cd. 5633], was published; whether all such papers were warned under the Press Acts; and what steps were taken by the Government to stop such a campaign?
  Sir E. GREY: I do not know what are the papers referred to particularly in this passage. The names of papers actually warned were given in reply to a question on the 28th of March.
  Mr. ORMSBY-GOREasked the Secretary of State whether the complaints, if any, of the Coptic community in Egypt have ever been brought personally to his notice or to the notice of His Majesty's Agent-General in Egypt by any accredited representative of the Coptic community or Coptic Congress; and whether any such Coptic representative has ever made any request to place the views of Copts personally before him or His Majesty's Agent-General?
  Sir E. GREY: As far as His Majesty's Consul-General in Egypt is concerned, the answer about the complaints of the Copts is contained in Sir Eldon Gorst's Report, and I entirely approve of what he says. I have received a request for a personal interview from Mr. Fanous, who stated that he had been authorised by the Coptic Congress to represent their views; but I consider it better that the question should be dealt with in Egypt.

  Great Britain and United States.
  Mr. HUNTasked if the Government of the United States has consented to refer all questions arising out of the Monroe doctrine in which this country may be concerned to arbitration by any international or other court?
  Sir E. GREY: I have in previous answers explained to the hon. Member that no one can answer questions about the scope of a treaty which is not yet in existence, and I must, therefore, ask him not to put questions of this kind prematurely.
  Mr. HUNT: As the right hon. Gentleman has not answered this question, may I ask whether it is a fact that President Taft has withdrawn the offer of arbitra-

  1815
  tion of all questions that was stated to be made by the Prime Minister? Is it so or not?
  Sir E. GREY: No; I have not heard of any withdrawal.

  Congo.
  Sir GEORGE WHITEasked the Secretary of State whether, in his letter of the 27th ultimo, addressed to the Congo Reform Association, in which he states that the information supplied by the Reverend D. C. Davies, was of too indefinite a character, he had also before him letters from other missionaries, corroborative of Mr. Davies's reports, in which definite charges were made and districts given where the cruelties took place; and whether he is now willing to lay the reports of our consuls upon the Table, some of which have been withheld for more than two years, in order that the House may judge for itself as to the correctness or otherwise of these reports?
  Sir E. GREY: I had before me two letters from other missionaries, but the incidents mentioned in them did not take place in the districts referred to in Mr. Davies's report. Those letters have been forwarded to His Majesty's Consul at Boma for inquiry. As I have already stated, it is my intention to publish Consular reports as soon as I receive those of two Consuls who are now on tour in the Congo.

  United States and Canada.
  Mr. HUNTasked the Secretary of State whether his attention has been called to the fact that a league has been formed in the United States of America for the avowed purpose of bringing about the annexation of Canada to that country; that the present Speaker of the American House of Representatives as well as other Members, and also Members of the American Senate, have openly advocated this policy; and whether he proposes to take any action to avert this plan for breaking up the British Empire?
  Sir E. GREY: The answer to all the questions is in the negative.
  Mr. HUNT: Is it not the fact that the American Foreign Secretary would protest at once most strongly if a responsible Minister in this country proposed to annex part of the United States?
  Mr. SPEAKER: That does not arise out of the question on the Paper.

  Cows (Milk Standard).
  Mr. MEYSEY-THOMPSONasked the Parliamentary Secretary to the Board of Agriculture whether his attention has been called to cases in which an appeal to the cow has not been allowed before any farmer has been convicted and fined on the ground that the percentage of butterfat in his milk has been proved to be below the 3 per cent. standard; and whether he will take steps to secure that no farmer shall suffer from a refusal to be allowed to appeal to such a test?
  The PARLIAMENTARY SECRETARY to the BOARD of AGRICULTURE (Sir Edward Strachey): Yes, sir, but the Board have no power to compel local authorities to adopt this practice.
  Mr. MEYSEY-THOMPSON: Will the hon. Gentleman take care that no legislation affecting British dairymen shall be of such a character as to benefit the foreign producer?
  Sir E. STRACHEY: I will bring the desire of the hon. Member before the President of the Board of Agriculture.
  Viscount HELMSLEY: What steps do the Board of Agriculture mean to take to remedy this position which is admitted on all hands to be unfair?
  Sir E. STRACHEY: I am about to answer a question on that point.
  Mr. MEYSEY-THOMPSONasked whether legislation will be introduced to provide that no fine shall be inflicted on a farmer for selling milk below the 3 per cent. standard where the quality of the milk as offered for sale is identical with its quality as it comes from the cow?
  Sir E. STRACHEY: This reply answers the question the Noble Lord has just asked. This, with other matters connected with this question, are under the consideration of the Board of Agriculture.
  Mr. MEYSEY-THOMPSON: May I ask whether, in cases where an appeal to the cow is made, no fine shall be inflicted upon a farmer where the milk sold is believed to be still in the state in which it was taken from the cow?
  Sir E. STRACHEY: I have already informed the hon. Member that the Board of Agriculture have no power to compel the authorities to adopt the practice which he desires, and I have also informed him that the whole of these questions and their

  1817
  treatment by legislation, or otherwise, is under the consideration of the President of the Board.
  Viscount HELMSLEY: Will the hon. Baronet circularise local authorities, pointing out to them the hardships which may be imposed on farmers unless they are reasonable in the matter?
  Sir E STRACHEY: A circular of that kind was issued by Mr. Hanbury, when he was President of the Board of Agriculture.
  Mr. HUNT: Will the hon. Baronet promise that no farmer shall be fined who is willing to allow his cows to be tested?
  Sir E. STRACHEY: I have no power to make that promise.
  Several hon. Members rose to put further questions.
  Mr SPEAKER: Supplementary questions must not be abused.
  Mr. STANIERasked whether the Board of Agriculture could see their way to have an inquiry into the question of the legal three per cent. basis of butter-fat as to whether or no this is a fair basis on which to standardise the purity of milk?
  Sir E. STRACHEY: The Board are considering whether it would be desirable to adopt the suggestion of the hon. Member.

  Small Holdings.
  Mr. MORRELLasked what are the dates on which the thirteen reports made by the Small Holdings Commissioner in Lancashire were forwarded to the county-council; what schemes have been prepared by the county council or the commissioner to give effect to these reports; and whether any scheme has yet been carried through?
  Sir E. STRACHEY: The thirteen reports were sent to the county council at various dates between July, 1909, and October, 1910. The county council made two compulsory orders for the acquisition of 450 acres, one of which was confirmed as to 181 acres, but the rent awarded was such that the council were unable to take the whole of the land. The other order was abandoned, as the council acquired by agreement 165 acres. In addition four schemes have been prepared for the acquisition of 105 acres by agreement. Two of these have been carried out, and in the case of the other two the land has been purchased, but vacant possession has not yet been obtained.
  Mr. MORRELL: Was the action taken in accordance with any of the reports under Section 3 of the Act, and, if so, with how many of them?
  Sir E. STRACHEY: I think my hon. Friend will see that questions of that sort require notice.
  Mr. MORRELLasked the Parliamentary Secretary to the Board of Agriculture whether he will give particulars of the 181 acres of land for which the Lancashire County Council recently obtained a compulsory hiring order; whether the land had been previously let as a separate holding; if so, at what rent per acre it was let; what is the present rateable value of the land; and what was the amount of the rent per acre fixed by the valuers?
  Sir E. STRACHEY: The land consisted of one holding of 120 acres, and parts of two other holdings of 178 acres and 105 acres respectively. The county council have not informed me whether the land had been previously let as a small holding, but will inquire again. The rent awarded by the valuer was 51s. an acre. When part of a farm is taken it is impossible to give the rateable value of the part taken, as it was not separately assessed by the overseers.

  Reserve of Army Officers.
  Captain CLIVEasked the Under-Secretary of State for War (1) whether the General Reserve of officers is up to its full strength; and, if not, whether he will reconsider the decision, announced in the "London Gazette" of 12th April, to remove a number of officers from the Reserve on the sole ground that they have not reported their address; and (2) whether, seeing that retired officers get no pay for joining the Reserve of officers, he can see his way to alter Royal Warrant, Article 634, which re-quire's them to report their address annually, and to lay down instead that they shall be written to annually from the War Office?
  The UNDER-SECRETARY of STATE for WAR (Colonel Seely): There is no establishment for the 'Reserve of officers. To enable the State to make use of their services on mobilisation at very short notice it is essential that their addresses should be known, and it is held that the best method of securing that the addresses are up to date is that laid down in the Article of the Pay Warrant quoted. In the case under review ninety-five officers had failed to report, and though sixty-three officers

  1819
  reported themselves in reply to an official reminder, no replies were received from thirty-two—these thirty-two officers were accordingly removed from the list.

  Colonel Morgan (Directorships).
  Captain CLIVEasked (1) whether, in view of the fact that Colonel Morgan, C.B., D.S.O., is to place his whole time at the disposal of the War Office, he has been asked to give up the ten directorships now held by him; and (2) whether he is to be allowed to continue as managing director of the Army and Navy House Furnishing Company after he takes up his appointment at the War Office?
  Colonel SEELY: Colonel Morgan will be required to give up all directorships which do not allow of his whole time being at the disposal of the War Office. I am informed that his directorship of the company named entails merely nominal duties, but should it be found in any way to interfere with the performance of his duties under the War Office he will be called upon to resign it.
  Captain CLIVE: Will the right hon. Gentleman explain what kind of directorship it is that entails only nominal duties, and is he aware that Colonel Morgan is described as both managing-director and secretary of the company named?
  Colonel SEELY: I have said if any appointment that this officer holds prevents his giving his full time to the War Office and the new duties imposed upon him he will be called upon to resign it.
  Mr. MacNEILL: Is it on account of his financial experience that he is appointed?
  Sir HENRY DALZIEL: Will the right hon. Gentleman extend the same liberty of action to other Civil Servants that it is proposed to give to Colonel Morgan?
  Colonel SEELY: This is a retired officer, and the rule has always been that they are entitled to hold directorships. I again repeat if it is inconsistent with his duties at the War Office he be asked to resign this or any other directorship.
  Major ANSTRUTHER-GRAY: Under what circumstances was this officer retired?
  Captain CLIVEasked the Under-Secretary of State for War (1) if he was aware that Colonel Morgan, C.B., D.S.O., whom he had lately appointed to a responsible post at the War Office, was the same
  1820
  officer who, as director of supplies at Pretoria during the war, sold oats at a low price to the farm of which he was manager, and thence resold them at a greatly enhanced price; and whether he would reconsider the appointment of this officer to superintend the management of soldiers' messing; and (2) if he was aware that the Royal Commission on War Stores in South Africa, presided over by Mr. Justice Farwell, reported that the conduct of Colonel Morgan, C.B., D.S.O., who had lately received an appointment at the War Office, in arranging for his brother's employment at a large salary, and also in respect of other matters, was open to grave comment; and, seeing that the Lord Chief Justice, in his judgment in Imperial Cold Storage Company v. The King, said that he could not altogether accept the story told by Colonel Morgan in his evidence, whether he would withhold his confirmation of the appointment until this House had had an opportunity of expressing its opinion on it?
  Colonel SEELY: The Report of the Farwell Commission contained comments on Colonel Morgan's action in regard both to the sale to Eloff's Farm and the employment of his brother. The Army Council, after full review of the cases, decided to call upon him to retire. The consideration, however, which moved them to take this course was not suspicion as to the bona fides of Colonel Morgan, such as appears to be implied in the hon. and gallant Member's questions, but regard for the necessity of securing compliance with the Regulations the general spirit of which Colonel Morgan was held to have contravened. As regards the statement of the Lord Chief Justice, it would appear that it was Colonel Morgan's memory of what had passed that he considered was at fault. The selection of this officer for the new post has been made after full consideration of all the circumstances, and no good purpose would be served by delaying the appointment.
  Mr. ARTHUR LEE: Is the War Office still of the opinion expressed by the Financial Secretary that there is no other officer in the Service who is capable of filling this position?
  Colonel SEELY: The Secretary of State considered that this officer was the best qualified of all persons whom he could find to fulfil this particular duty, and he accordingly selected him. So far as I have been able to ascertain, he is probably- the best qualified of any officer whom we could find for the purpose of this particular duty.
  Mr. MORRELL: Was this officer, in fact, responsible for a fraud on the public?
  Colonel SEELY: No, I do not think that is so. I do not think it is fair to pursue this officer vindictively. He has suffered very much for an error of judgment, and I do not think it would be right now, in the interest of the public service, to vindictively pursue an officer who committed an error of judgment when he is found to be the most capable person to perform a particular service.
  Colonel HICKMAN: Is it not a fact that when aspersions on this officer's character were published in "The Times" and other newspapers when he was on full pay, he took the first possible opportunity of bringing a libel action against "The Times," and won his case?
  Colonel SEELY: I believe that is the case. Colonel Morgan completely cleared his character in the courts of law.
  Mr. CROOKS: Has the right hon. Gentleman's attention been called to the fact that a quartermaster only on suspicion was dismissed without a pension, and that no right of appeal and no chance to secure reinstatement into the Army is granted to a non-commissioned officer? Why should we not have sacked this man?
  Colonel SEELY: As long as I hold my present post there shall be no distinction of persons in these matters. I have said, I believe, Colonel Morgan is the best officer for the post, that he cleared his character in the courts of law, and that it would be against the interests of the public service to pursue him with vindictive hate, and I cannot advise the Secretary of State to alter the decision he has come to.
  Captain CLIVE: Is it in consequence of the usefulness of Colonel Morgan in the case of the Imperial Cold Storage Co. v. the King that he was offered this new post?
  Colonel SEELY: No; he was chosen because he was considered to be the best officer for the post.
  Colonel HICKMANasked the Under-Secretary of State for War whether he is aware that, in the trial of an action brought by the Imperial Cold Storage Company, Limited, against the Crown, in the King's Bench Division, in the autumn of 1909, the then Attorney-General, Sir W. Robson, K.C., M.P., now Lord Robson, in his final speech drew attention to
  1822
  the fact that in his opinion the evidence in that case had absolutely disproved any slight aspersions against Colonel Morgan resulting from the Report of the War Stores Commission; if he will say whether this was brought to the notice of the Secretary of State by Sir W. Robson; and whether Colonel Morgan's appointment as messing adviser was due to the opinion that he had been somewhat harshly treated in addition to his special qualifications and ability?
  Colonel SEELY: As regards the first two parts of the question, the reply is in the affirmative. As regards the last part of the question this officer was selected because of his exceptional qualifications for the post.

  Vaccination (Arrest of Staff-Quartermaster-Sergeant H. B.Strickley).
  Mr. POINTERasked the Under-Secretary of State for War whether his attention has been drawn to the case of Staff Quartermaster-Sergeant H. B. Strickley, of the Army Ordnance Corps, at present serving in the Orange Free State, who has been twice placed under arrest, court-martialled, and sentenced to lose five years' seniority, because he refused to have his four children vaccinated, on the ground that they had been certified free from disease and fit to embark for South Africa by Major Boyle, of the Royal Army Medical Corps, and also that he had secured exemption orders for each of them under the 1898 and 1907 Vaccination Acts; and whether he will state under what law or regulation this action was taken; (2), whether be is aware that, during the period of arrest of Staff-Quartermaster-Sergeant H. B. Strickley, for refusal to submit to the vaccination of his children, a sentry was placed over his wife and children by the order of the General Officer Commanding, Orange Free State, and that orders were issued that they were not to communicate with other married families, although they were perfectly healthy; whether, on the day following the promulgation of the sentence of the district court-martial, Major Oldfield attended at Strickley's quarters with a vehicle and party to turn the wife and children out; whether it was only to escape that experience that Strickley consented to have the children vaccinated; whether the children were not allowed to attend the military school at Tempe until they were vaccinated; and whether he will say under what law or regulations the

  1823
  privacy of home life was disturbed by these various acts; and (3), whether he will lay upon the Table of the House a copy of the proceedings of the district court martial at Tempe, on the 8th March, 1911, whereby Staff-Quartermaster-Sergeant H. B. Strickley was deprived of five years' seniority for refusing to have his four children vaccinated?
  Colonel SEELY: I would refer to the reply to a question put yesterday by my hon. Friend the Member for Ross and Cromarty, giving full particulars as to this case. As the court-martial proceedings were quashed, it would not be proper to lay them.

  "Army Review."
  Viscount CASTLEREAGHasked the Under-Secretary of State for War whether the Army Council have decided to publish a periodical entitled "The Army Review"; whether it is proposed that this periodical shall be self-supporting; and, if not, whether he will consider the advisability of expending any such sums on the extension of the Service periodicals which already exist rather than in establishing a, competitive and official journal?
  Colonel SEELY: It has been decided by the Army Council to enlarge the scope of the quarterly official publication entitled "Recent Publications of Military Interest," which will in future be called "The Army Review." It will be printed at: the public expense, but it is hoped that the moneys derived from its sale will eventually cover the cost of publication. The advisability of utilising existing journals was fully considered, but it was decided that the purpose in view could not be attained without establishing an official journal.
  Mr. ASHLEY: Who will take charge of the publication?
  Colonel SEELY: I cannot say at present, but I have no doubt he will be an eminent and distinguished man.
  Viscount CASTLEREAGH: What are the actual considerations which led to the decision to enlarge the present periodical?
  Colonel SEELY: We ask our officers now to keep themselves abreast of modern information in regard to the science of war. The periodical contains many items of interest, and it was thought that the
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  officers could not really keep abreast of the time without having the official publication.
  Mr. ASHLEY: Is it proposed to pay?
  Colonel SEELY: No, Sir; it is not proposed to pay.

  Gunlayers (Allowance).
  Mr. NEWMANasked the Under-Secretary of State for War whether he is aware that the practice of making an allowance of 2d. per day to gunlayers who had been awarded a good conduct stripe has been abolished; has a similar policy been adopted in other branches of the Service; and what steps, if any, have been taken to give such encouragement to good conduct as was provided by the system which has been abandoned?
  Colonel SEELY: Gunlayers, like all other soldiers, at one time drew good conduct pay according to the number of good conduct badges they possessed. There was never any special good conduct rate for gunlayers. On the introduction of service pay in 1904 the principle of giving extra pay in respect of good conduct and of withdrawing it in respect of misconduct was abandoned and has not been re-introduced. This applies to all branches of the Service.

  Army Majors (Retirement).
  Sir REGINALD POLE-CAREWasked the Under-Secretary of State for War whether, under the Royal Warrant of 1881, majors in the Army were placed on the retired list at the age of forty-eight with a pension of £300 a year; whether, in April, 1909, that warrant was altered, and majors are now compelled to serve for the same pension till the age of fifty; and whether, seeing that the Amendment of 1909 changed the conditions of service under which officers had joined and been serving for twenty-eight years, he would consider the desirability of making the retirement of majors optional on the terms of the warrant under which they joined the service?
  Colonel SEELY: Will the hon. and gallant Member kindly refer to the reply given to a similar question put by the hon. Member for York on this subject on Monday, 13th March, to which I have nothing to add.
  Sir R. POLE-CAREW: May I ask the right hon. Gentleman how he reconciles that answer with the decision arrived at as regards Territorial adjutants in whose

  1825
  case one day precludes them from participating in the advantage given to those who were appointed after a certain date?
  Colonel SEELY: I would ask the hon. and gallant Gentleman to give notice of any further particular points on which he wishes information. I have nothing to add to the answer to which I have referred him.
  Mr. MacNEILL: Has the right hon. Gentleman read the memorandum and correspondence on this subject? A great act of injustice has been done.

  Cavalry Regiments.
  Sir R. POLE-CAREWasked the Under-Secretary of State for War, having regard to the fact that, under the scheme of linking Cavalry regiments introduced in 1903, every regiment in a normal cycle of twenty-eight years is intended to receive fourteen years' home and fourteen years' foreign service, that the 7th Hussars have already completed sixteen years' foreign service compared with eight years and a-half at home, and that if sent to India this next autumn they will have served thirty years abroad as against nine years at home, whether he will consider the advisability of a modification of the linking system whereby another Hussar regiment could be detailed for India in. their stead?
  Colonel SEELY: I have nothing to add to the reply given in reply to a similar question on the 20th of last month.
  Captain FABER: May I ask if the officers and men were warned beforehand that they would have to serve thirty years abroad?
  Colonel SEELY: I do not suppose it was possible to warn them at that time. I have explained fully how it has arisen. It is regrettable, but unavoidable.
  Sir R. POLE-CAREW: Surely it is not impossible to see that an act of justice should be done to the officers and men.
  Colonel SEELY: No, Sir; but the hon. and gallant Gentleman knows that what he calls an act of justice would cause also what he would think an act of injustice to other corps.
  Sir R. POLE-CAREW: How would it be an act of injustice to other corps?
  Captain FABER: How long has the present linking system been in force?
  Colonel SEELY: I could not say exactly.

  Air Battalion (Officers).
  Mr. ASHLEYasked the Under-Secretary of State for War if he will state what extra daily pay is granted to officers who join the air battalion?
  Colonel SEELY: Officers other than of the Royal Engineers who are selected for duty with the air battalion, draw extra pay under Article 187 of the Royal Warrant for Pay, etc.—namely, subalterns 4s. a day; captains 6s. a day; and majors, it any, 9s. a day.
  Mr. ASHLEY: Can the right hon. Gentleman say whether officers connected with the Engineers draw extra pay?
  Colonel SEELY: They do not draw anything extra.
  Mr. ASHLEY: Should they not receive extra pay for risking their lives?
  Colonel SEELY: Well, some people risk their lives like the Leader of the Opposition, and get nothing. I fully admit that this is not a final arrangement. It was an arrangement which was made when the matter was in its infancy. I quite admit that it is not adequate remuneration.

  Scotland (Population).
  Mr. DUNCAN MILLARasked the Lord Advocate whether he could give the figures showing the population of each of the rural parishes of Scotland and each of the counties of Scotland, excluding towns and burghs of a population exceeding 5,000, for each of the last five Census periods, including the recent Census, and indicating the increase or decrease for each period?
  The LORD ADVOCATE (Mr. Ure): The preliminary report of the Scottish Census, much of which is already in the printers' hands, will, I think, contain the substance of the information desired by ray hon. Friend as regards 1901 and 1911, in a form which can be compared with similar information published in earlier Census reports.

  Emigration (Scotland).
  Mr. KEIR HARDIEasked the Lord Advocate whether he can state the number of emigrants from Scotland that went from British ports to Canada, New Zealand, Australia, and the United States respectively, during the month of April, and what proportion of these were farm hands?
  The PRESIDENT of the BOARD of TRADE (Mr. Buxton): During the month of April, 1911, 8,149 passengers stated to be of Scottish nationality sailed from ports in the United Kingdom for ports in British North America, 722 for ports in Australia, 90 for ports in New Zealand, and 3,808 for ports in the United States. Total, 12,769. Of this number, 636 were described as engaged in agricultural occupations.

  Aliens (Scotland),
  Mr. WHITEHOUSEasked how many aliens are included in the Census Returns for Scotland; and how many annually settle in Scotland?
  Mr. URE: The answer to the first part of the question cannot be given until the returns of the recent Census throughout Scotland have been tabulated. As regards the second part no information, so far as I am aware, is available.

  Advocate-Depute.
  Mr. MARKHAMasked the Lord Advocate if there is an precedent since that of Roger Montgommery for an advocate-depute continuing to hold office and receive £700 a year from the public funds after such depute's election to the Imperial Parliament?
  Mr. URE: The answer to the hon. Member's question is in the negative.

  Imported Milk.
  Mr. MEYSEY-THOMPSONasked the President of the Local Government Board (1) if he will state in how many cases have the analyses of milk imported from foreign countries proved unsatisfactory; and what steps have been taken to prevent milk being sold in this country which has either been proved to be impure or which has not been subject to the same degree of inspection as milk produced in this country; and (2) how many analyses of foreign milk imported into this country have been made during the last three years?
  The PRESIDENT of the LOCAL GOVERNMENT BOARD (Mr. Burns): I will answer these questions together. Some 140 analyses have been made during the past three years of milk imported into this country. Only eight samples were reported against, and proceedings were taken in three cases, in two of which fines were imposed.
  Mr. MEYSEY-THOMPSON: May I ask the right hon. Gentleman whether foreign
  1828
  countries have been exporting milk to this country, and whether it is allowed to be consumed here on the analysis which has been made abroad?
  Mr. BURNS: The foreign milk imported in this country is mainly used by confectioners, who use it chiefly for the manufacture of milk chocolate. It is superintended on arrival by the medical officers at the ports, and it is frequently inspected on the way, sometimes at Vauxhall and sometimes at Waterloo, both by the local officers and the Local Government Board officers.
  Mr. M EYSEY-THOMPSON: May I ask whether the milk can be sold in this country?
  Mr. BURNS: Certainly.
  Mr. C. BATHURST: Does this analysis include desiccated milk or only liquid milk?
  Mr. BURNS: The question refers only to liquid milk.
  Captain FABERasked the President of the Local Government Board if he can state whether, having regard to the public health, he will take steps to see that no milk is imported into this country unless its production and inspection are under the same conditions as in this country?
  Mr. BURNS: At the present moment the question is not a pressing one, as I understand that milk is not now being imported into this country. I am, however, considering in what way the milk supply of the country, whether imported or home produced, may be further safeguarded.
  Captain FABER: How many inspectors have we abroad?
  Mr. BURNS: At this moment none. The Local Government Board inspectors sometimes when on holidays keep their eyes open.
  Captain FABER: Do they never look after the milk which is sent to this country except when they are on holidays?
  Mr. BURNS: No. They look after the milk brought to this country whenever it arrives here.

  Clock Face, Lancashire (Drainage).
  Viscount WOLMERasked the President of the Local Government Board whether he is aware that the main cesspool at Clock Face, Lancashire, has not been cleaned out for nearly two years; that on 26th April

  1829
  last the cesspool overflowed and flooded neighbouring gardens, yards, and fields, with putrifying sewage; whether he will inquire from the Whiston Rural District Council by what date they anticipate that the drainage arrangements about to be initiated will be completed; and what compensation they propose to make to those inhabitants who have suffered in the meanwhile?
  Mr. BURNS: I am informed that, although the tank referred to has not been completely emptied for the period named, it had been kept in working order until last month, when some flooding resulted from the outlet pipe from the tank becoming blocked. I have arranged for the local inquiry into the application of the district council for sanction to a loan in respect of the cost of the new scheme of sewerage and sewage disposal to be held on 30th instant, and I understand that the engineer for that scheme thinks it can be completed within six months from the date of the contract for its execution.

  Railway Facilities (Merthyr to Barry).
  Mr. KEIR HARDIEasked the President of the Board of Trade, whether he is aware that the Great Western Railway Company refuses to issue week-end tickets from Merthyr to Barry, whilst doing so to other towns on each side of the Bristol Channel; whether his Department has any powers to interfere in the matter; and, if not, whether he will seek for fresh powers to enable him to compel railway companies to treat all towns alike?
  Mr. BUXTON: The Great Western Railway Company have no line of their own to Barry, and they inform me that no application has been made to them for through week-end tickets between Merthyr and Barry. They add that they do not book ordinary passengers through from Merthyr to Barry, but such passengers are booked by the Taff Vale route between those places.
  Mr. KEIR HARDIE: Is the right hon. Gentleman not aware that the Chambers of Commerce of Merthyr, Aberdare, and Barry have all petitioned in favour of this reform?
  Mr. BUXTON: That has not come to my notice.

  Prussian State Railways.
  Mr. CHIOZZA MONEYasked the President of the Board of Trade (1) if he was aware that the Prussian State Railway
  1830
  administration are vigorously pursuing a policy of electrifying the Prussian railway system; and seeing that electric railways in Germany will facilitate the supply of cheap electric power to industry and greatly increase German productive power, what steps he proposed to take to confer similar advantages upon. British railway traffic and British industry; and (2) if, in view of the importance of the subject, he would present to the House a translation of the Report to the Prussian Diet by the State Railway administration upon the economy and advantages of electric traction for long-distance railway traffic?
  Mr. BUXTON: I will answer my hon. Friend's two questions together. I am aware that it is proposed to equip certain sections of main line on the Prussian State Railways for electric traction. I do not think that we have so far any reason to be disappointed with the progress of electric traction in. this country, and the Railways (Electrical Power) Act, 1903, provides facilities for its introduction on railways. But Parliament has not been inclined to encourage the supply of energy by a railway company to other industries. I will see if I can obtain a copy of the report to which my hon. Friend refers, and. will consider his suggestion.

  Financial Relations Committee (Great Britain and Ireland).
  Mr. GINNELLasked the Prime Minister, whether there is any and, if so, what precedent for the appointment by one country of a Committee to investigate its financial relations with another country, with a view to the readjustment of their political and financial relations, without consulting any representative of the other country regarding the composition of the Committee or giving it any effective representation on that body?
  The CHIEF SECRETARY for IRELAND (Mr. Birrell)rose to reply.
  Mr. GINNELL: This question is addressed to the Prime Minister, as it belongs to his Department. As a Member of this House I claim the common courtesy of a reply.
  The PRIME MINISTER (Mr. Asquith): I would ask my right hon. Friend (Mr. Birrell) to answer the question.
  Mr. GINNELL: If it is convenient to the right hon. Gentleman, I. will postpone it until to-morrow.
  The PRIME MINISTER: It comes to the same thing.
  Mr. BIRRELL: My right hon. Friend has asked me to reply to the question.
  Mr. GI NNELL: I beg to ask for a reply from the Minister to whom the question is addressed.
  Mr. SPEAKER: Obviously, in the opinion of the Prime Minister, it does not come within his Department. If he thought it did, I have not the slightest doubt he would be prepared to answer it. The reason why he has asked the Chief Secretary to the Lord-Lieutenant to answer it is because, in the opinion of the Prime Minister, it comes within the Department of the Chief Secretary.
  Mr. BIRRELL: The Committee now sitting has not been appointed by the country, but by the Cabinet.
  Mr. MOORE: Was any Member of this House consulted on the question of this Committee before it was appointed?
  Mr. BIRRELL: Certainly not.
  Mr. GINNELLasked the Prime Minister whether the Government accept or reject the unanimous findings of the Financial Relations Commission that identity of rates of taxation in two countries does not necessarily involve equality of burden, and that the true measure of the taxable capacity of a country is its surplus revenue after having provided the necessaries of life for its inhabitants; and, seeing that all Treasury officials and a majority of the secret Committee on this subject reject these principles, what measures, if any, are taken to ensure that the statistics, calculations, and information prepared for the Committee shall be in accordance with those principles?
  Mr. BIRRELL: I am not prepared to discuss the questions referred to in the first part of the question. The Committee will obtain such information as they may think necessary in order to enable them to discharge their duty, the nature of which I have already explained.
  Mr. GINNELLasked the Prime Minister whether all the documents and information submitted to the Committee on Irish Financial Relations will be submitted simultaneously to this House?
  Mr. BIRRELL: No, Sir.
  Mr. GINNELL: I must ask leave later to move the Adjournment of the House.
  The HON. MEMBERasked the Prime Minister what time limit is imposed upon the secret ex parte Committee investigating Ireland's financial relations for the sole benefit of the Cabinet; when will the result be communicated to other Members of Parliament; and will it be communicated to all Members simultaneously?
  Mr. BIRRELL: The Committee have not been tied down to any particular date for completing their task. As regards the remainder of the question, I have nothing to add to my reply of 6th April.
  Mr. EDGAR JONES: Under the circumstances will the Committee state the financial relations of Scotland and Wales separately while about it?
  Mr. BIRRELL: No; we do not ask for that.
  Mr. MOORE: If this Committee reports that it is impossible to devise a financial scheme, will that be communicated to the House?
  Mr. BIRRELL: I think it most probable that the Cabinet would assume then the responsibility of dealing with the matter themselves.

  Land Purchase (Ireland).
  Mr. NEWMANasked the Prime Minister whether his attention has been drawn to the total of advances made under the Irish Land Purchase Acts, 1903 and 1909, respectively, to the period ending 31st August last, which shows that under the Act of 1903 a sum of £35,292,216 was advanced, as compared with £36,805, the total advanced under the Act of 1909; and what measures the Government intend to take to remove the consequent deadlock in respect of the transfer of land from landlord to tenant occupiers?
  Mr. BIRRELL: The Rules prescribing the procedure and the forms to be used in proceedings under the Irish Land Act, 1909, were not issued until May, 1910. The figures quoted by the hon. Member represent the advances made under the Act between June and the end of August last. In the financial year ended 31st March last the purchase money advanced by the Land Commission amounted to over seven millions, of which over £400,000 was in respect of sales under the Act of 1909.
  Mr. GINNELLasked the Chief Secretary for Ireland if he will state the average number of years' purchase of rent, first

  1833
  and second term respectively, paid by purchasing tenants in Ireland under the Land Purchase Acts of 1885, 1891, 1896, 1903, and 1909, respectively?
  Mr. BIRRELL: Neither the Irish Land Commission nor the Estates Commissioners, in the preparation of their statistics, distinguish between first and second term judicial rents in cases of proceedings under the Land Purchase Acts. In the tables appearing in the Appendix to the Annual Reports of the Irish Land Commission full particulars are given as to the number of years' purchase in all cases where advances have been made by them under the Land Purchase Acts. In the tables appearing in the Appendix to the Annual Reports of the Estates Commissioners similar information is also given both for "zone" and "non-zone" cases. The hon. Member will also find information on the subject in a foot-note appended to House of Commons Paper No. 90 of 1903.
  Mr. AUGUSTINE ROCHEasked whether Mr. R. E. Hudson, agent to Sir J. Arnott, has signed an agreement to purchase a holding on the Arnott estate, Bandon, which has been in possession of Mr. James Corcoran for over forty-five years; whether Mr. Corcoran paid a yearly rent of £12 for this holding, which the agent proposes to buy over his head for a sum of £141 to be advanced by the Estates Commissioners; whether, seeing that Mr. Hudson states in his purchase agreement that he has been residing on the lands since 1889, inquiries will be immediately set on foot to test the bona fides of this whole transaction; and whether, in view of the policy of land purchase, agents will be assisted to buy up lands which they do not occupy so that they may afterwards let them at a profit rent to tenants?
  Mr. BIRRELL: Mr. R. E. Hudson has signed an agreement under the Irish Land Act, 1909, for the purchase of about three and a-half acres of the lands of Coolfadda on the Arnott Estate for the sum of £141. The agreement stated that Mr. Hudson has been residing on, and in occupation of, this holding since 25th March, 1889, and that there is no other person in occupation of it. The Commissioners have no information as regards the other matters referred to in the question, but when the estate is being dealt with in order of priority due inquiries will be made by them.
  Mr. AUGUSTINE ROCHEasked whether the holding on the Arnott estate,
  1834
  Coolfadda, Bandon, from which Mr. John Desmond was evicted in 1903, remained unoccupied till the sale of the estate; whether Mr. Craig, a sub-agent on the estate, signed for this holding and now proposes to purchase it; and whether, in face of such conduct, an inquiry will be immediately instituted into the methods by which the sale of this whole estate was carried through?
  Mr. BIRRELL: The estate of Sir John Arnott at Coolfadda is the subject of direct sale proceedings under the Irish Land Act, 1909. James Craig signed an agreement for the purchase of his holding, comprising about six acres, for the sum of £259. The tenancy is stated to have been created in March, 1906. The Estates Commissioners received an application from John Desmond for reinstatement, but ascertained, on inquiry, that the holding was a town park, and had been sub-let to Desmond's mother by a Miss Wheeler, an aunt of Mr. Craig the present occupier. The Desmonds tried to get a rent fixed under the Land Purchase Acts, but the case was dismissed, and the Desmonds were subsequently evicted. Not being a case to which the Land Law Acts applied, the Commissioners had no power to consider John Desmond's application for reinstatement.
  Mr. O'DONNELL: Owing to the peculiar condition of this estate will the right hon. Gentleman make inquires?
  Mr. BIRRELL: I have already made inquiries into the matter. I will inquire again.
  Mr. DUFFYasked whether any request was addressed by the Congested Districts Board to Mr. Shaw Taylor, of Castle Taylor, Ardrahan, county Galway, in reference to the grazing farm at Shegganagh Kinvarra, containing about 500 acres; was the farm offered for sale to the Board; and, if so, with what result?
  Mr. BIRRELL: The Congested Districts Board communicated with Mr. Shaw Taylor with reference to the farm referred to, and were informed that he did not wish to sell it.
  Mr. DUFFYasked whether any negotiations have taken place between the Congested Districts Board and the agent of the Blake Forster estate at Crushva, Towns, and Mount Scribe, representing the Scottish Insurance Company, in reference to the sale of the property; and, if so, what was the result?
  Mr. BIRRELL: The Blake Forster estate, county Galway, has been offered for sale to the Congested Districts Board, and will be inspected as soon as practicable.
  Mr. DUFFYasked whether the Blake Forster estate, Kinvarra, has been inspected by the Congested Districts Board with a view to purchase; whether the Chief Secretary is aware that the estate is one very congested and the most of it held in rundale; and whether, in view of the condition of this property, he will ask the Congested Districts Board to deal with it immediately?
  Mr. BIRRELL: The estate referred to has not yet been inspected. It will be dealt with as soon as practicable.
  Mr. DUFFYasked whether the claims of the evicted tenants for the farm of Ballybranagan Kinvarra, and the mansion and lands of Hermitage, Kinvarra, have been considered; and what do the Estates Commissioners propose doing for them?
  Mr. BIRRELL: The lands referred to are included in the estate of Blake Forster offered to the Congested Districts Board, and will be inspected as soon as practicable. Unless the Board acquire the estate they cannot consider the claims of evicted tenants. The Estates Commissioners are unable to identify the evicted tenants referred to from the particulars given in the question.
  Mr. DELANYasked whether a man named Thomas Abraham, Ballymooney, Tullamore, has applied for an advance of £7,000 to purchase his holding at Ballymooney, King's County, on the Digby, Geashill, estate; whether his brother, Frederick Abraham, has applied for an advance of £3,334 to purchase a farm on the Sandes estate, at Kilcavan, Mountmellick, Queen's County; whether he is aware that both brothers reside at Ballymooney, and work those farms jointly as one farm; and can he say, under those circumstances, whether the Estates Commissioners are prepared to sanction the advances above-mentioned?
  Mr. BIRRELL: Thomas and Frederick Abraham have applied for advances for the purchase of their holdings on the Digby and Sandes estates, as stated in the question. The estates have not yet reached their turn to be dealt with, but when so reached the Estates Commissioners will cause due inquiry to be made into the matter referred to by the hon. Member.
  Mr. HAYDENasked whether he is aware that the estate of George A. Newcomen, situated in the townlands of Carrowcrin, Lisgobbin, Derrycummy, Culleen, and Ballinaboy, in the parish of Kilbride, county Roscommon, has been on offer to the Estates Commissioners for the past four years, and that the Commissioners obtained the consent of the Congested Districts Board under the Act of 1909 to continue negotiations; and if so, whether he can explain the cause of the delay in bringing these negotiations to a termination?
  Mr. BIRRELL: Formal proceedings for the sale to the Estates Commissioners of 629 acres of untenanted land situated on the estate of G. A. Newcomen, county Roscommon, were instituted in January, 1908. The Congested Districts Board have consented under Section 58 of the Irish Land Act, 1909, to the Commissioners entering into an agreement for the purchase of this estate. The estate has not yet been reached in order of priority, but when so reached it will be dealt with as rapidly as possible.
  Mr. HUGH LAWasked the Chief Secretary whether he is aware that negotiations for the sale and purchase of the Downstrands portion of the Marquis Conyngham's estate in county Donegal have been going on for over seven years; that a purchase agreement was come to as far back as May, 1908; that this agreement would have been carried into effect but for delay on the part of the owner in lodging the agreement with the Estates Commissioners within a reasonable time prior to the Act of 1909; and whether, under these circumstances, and in view of the fact that there is untenanted land in this district suitable for the enlargement of holdings, the Congested Districts Board will now proceed at once with the purchase of this portion of the estate?
  Mr. BIRRELL: I would refer the hon. Member to the reply given to his question on this subject on 4th April. The Congested Districts Board recently decided to make an offer for the Downstrands portion of the estate if they were furnished with the necessary particulars to enable a valuation to be made.
  Mr. LAW: May I ask whether the Congested Districts Board fully considered the circumstances of this particular portion, which is separated from the rest of the estate, and applications for which were forwarded by the tenants seven years ago?
  Mr. BIRRELL: I will consider that case. As I understand, it is that particular portion of the estate which they are prepared to deal with.
  Mr. SCANLANasked the Chief Secretary what steps the Congested Districts Board have taken or propose to take in reference to the estate of Owen Phibs, D.L., near Collooney, county Sligo, and comprising the townlands of Knoxpark, Carrickneggatt, Ardcotton, and Kilnamonagh; whether he is aware of the fact that the tenants in these townlands petitioned the Board in February 1911, for the purpose of asking the Board to purchase the property in question; if he will state whether the Board have approached Major O'Hara for the sale of his estate, comprising the townlands of Elon, Largon, Kinnagrelly, and Beela, near Collooney; whether Major O'Hara has agreed to sell to the Board; and, if not, what steps the Board intend to adopt?
  Mr. BIRRELL: The Congested Districts Board informed Mr. Phibs that they were willing to negotiate for the purchase of his estate, but it has not yet been offered to them. The tenants on this estate petitioned the Board to purchase the property in January, 1910, not in February, 1909, as stated. Proceedings for the sale of the lands of Bella and Kinnagrelly, on the estate of Major C. K. O'Hara, direct from the vendor to the tenants under Section 1 of the Irish Land Act, 1903, are pending before the Estates Commissioners. The estate will be dealt with in. order of priority. The Commissioners cannot identify the lands of Elon and Largon as pending before them for sale under the Land Purchase Acts.

  Bagot-Rush Treaty.
  Mr. HUNTasked the Prime Minister whether, in view of the fact that President Taft has definitely stated that his object is to prevent preferential trade and commercial union within the British Empire, and that Mr. Meyer, the American Naval Secretary, in his published statement has not attempted to deny that America has trebly violated the Bagot-Rush treaty by reason of the number, size, and armament of American war vessels now stationed on the Great Lakes, he can see his way to give a day before Whitsuntide, or immediately afterwards, for the consideration of these questions?
  The PRIME MINISTER: I must refer the hon. Gentleman to the answer given to him on 4th May by my right hon. Friend
  1838
  the Secretary of State for Foreign Affairs. I do not see my way to give a day for the consideration of these questions.
  Mr. HUNT: Will the right hon. Gentleman consider the expediency of requesting the Leader of the Opposition to demand a day?

  Local Government Board (Appointments).
  Viscount CASTLEREAGHasked the Prime Minister whether his attention has been,drawn to the regulations issued by Local Government Board, in which the Board intimate generally that in future, unless very special grounds are shown, they will not be prepared to sanction the appointment to any office, in respect of which their sanction may be requested, of any person who is or has been within twelve months a member of the council making the appointment; and whether he will consider the propriety of adopting a similar policy in future public appointments?
  The PRIME MINISTER: I must refer the Noble Lord to the answer which I gave yesterday to the hon. Member for Bow and Bromley.
  Viscount HELMSLEY: Will the right hon. Gentleman say in what he compares the two cases which are not analogous?
  The PRIME MINISTER: That is a matter for argument.

  Admiralty Contracts (Fair-Wages Clause).
  Mr. BARNESasked the First Lord of the Admiralty if he is yet in a position to state the result of his inquiry into the allegations against the firm of Messrs. Gwynnes, engineers, of Hammersmith, of non-compliance with the Fair-Wages Clause in their Government contracts?
  The FIRST LORD of the ADMIRALTY (Mr McKenna): Many of the allegations which have reached the Admiralty do not refer to Admiralty work, and where they do, the investigations showed that Messrs. Gwynnes have complied with the terms of the Fair-Wages Clause.
  Mr. TYSON WILSONasked the First Lord of the Admiralty if he is aware that it is the rule and the custom of the building trade at Portsmouth to pay men extra for working overtime, whether worked at the request of the employer or not, and that Mr. Davis, who has the contract for the carpenters' and joiners' work at Portsmouth Dockyard, discharged two joiners from the job 'because they would not work

  1839
  overtime for the ordinary rate of pay; and whether he will make inquiries into this violation of the Fair-Wages Clause?
  Mr. McKENNA: From inquiries made I find that the rule and the custom of the building trade at Portsmouth is only to pay extra for overtime when worked at the request of the employer. The two joiners referred to were not discharged for the reason suggested, but owing to the work drawing to a close. No violation of the Fair-Wages Clause has occurred.
  Mr. TYSON WILSON: I can supply the right hon. Gentleman with a copy of the rules, from which he will see that that is not accurate.
  Mr. McKENNA: I have inquired into this case and seen the rules, and certainly from the document I have seen overtime would not be paid except when worked at the request of the employers.
  Mr. TYSON WILSON: I will supply the right hon. Gentleman with the rules. I have them with me.
  Mr. J. WARD: Is not it a fact that the Department always does support the contractors against the men?
  Mr. McKENNA: No. I can assure my hon. Friend that I investigate all these cases as carefully as I can, and whenever I find the contractors at fault I act accordingly. In this case the contractors have not done anything that they were not fully justified in doing.
  Mr. WARD: Can the right hon. Gentleman describe to me one case in which he decided in favour of the men?
  Mr. McKENNA: Yes. If the hon. Gentleman will put down a question on the Paper I shall be happy to give him a long list.
  Mr. TYSON WILSON: Does the right hon. Gentleman consult the men at all in connection with this matter?
  Mr. McKENNA: Yes. I understand that in this particular case the men were consulted upon the point and expressed themselves as satisfied.

  Telephones.
  Mr. ASTORasked the Postmaster-General whether the National Telephone Company are refusing to supply applicants with telephones on the Gerrard Exchange, and whether the Post Office is refusing to supply applicants with telephones on the Mayfair Exchange; and, if
  1840
  so, whether he will take immediate steps to enable inhabitants in the neighbour-hoods of those exchanges to instal instruments?
  The POSTMASTER-GENERAL (Mr. Herbert Samuel): I understand that the existing equipment at the National Telephone Company's Gerrard Exchange is working to its full capacity; and the same is practically true of the Post Office Mayfair Exchange. New apparatus is, however, now being added at Mayfair to provide accommodation for additional subscribers, and is expected to be ready next month. As soon as the Gerrard Exchange comes into my hands steps will be taken to provide additional accommodation there also. The company state that they are unable to undertake any extension at present.

  Postal Facilities (Mere).
  Mr. CHARLES BATHURSTasked the Postmaster-General when he proposes to improve the postal facilities and to provide telephonic facilities at Mere, in Wilts, in the interests of its growing trade and industry?
  Mr. HERBERT SAMUEL: Improvements of the postal services will be carried out next week. I am having a canvass made for telephone subscribers at Mere; but am not yet in a position to decide whether an exchange there would be justified.

  Stamping Conveyances (Ireland).
  Mr. HORNERasked the Secretary to the Treasury whether he is aware that all voluntary conveyances in Ireland have to be presented personally or by agent at the office of the solicitor of the Inland Revenue, Dublin, for adjudication before being stamped; and whether, in order to save expense, he will have some arrangement made by which these documents may be sent direct by post to the solicitor of the Inland Revenue, Dublin, and that when the documents are adjudicated on, the decisions shall be communicated by letter to the parties who sent the documents, and that these parties may be at liberty to remit the amount of the duty direct by letter to Dublin?
  The FINANCIAL SECRETARY to the TREASURY (Mr. Hobhouse): I beg to refer to the concluding sentence in the reply given to the hon. Member for North East Cork on 13th February last. I am informed that the necessary arrangements for giving early effect to the course indicated therein are now in progress.

  Customs Preventive Staff.
  Mr. KEIR HARDIEasked the Secretary to the Treasury if he will state why the preventive men of His Majesty's Customs, Cardiff, when ordered to Fishguard to perform duties in connection with the arrival of the boat from New York, are not paid for the overtime they make to which they are entitled under Paragraph 100 of the Establishment Code; will he take steps to see that when the attendance at Fish-guard, together with attendance at Cardiff, exceeds forty-eight hours in any one week these men receive overtime pay at the usual rate; and will he see that overtime rate is paid when attendance is given between 6 p.m. and 6 a.m. at the merchants' request?
  Mr. HOBHOUSE: The officers receive subsistence allowance while absent from Cardiff and also overtime pay for any work, whether performed at Cardiff or at Fishguard, in excess of forty-eight hours a week. This is all that they are entitled to under the regulations governing overtime pay, including the one referred to. The attendance being required in the interests of the Crown, no charge for overtime is made on the merchant.
  Mr. DOUGLAS HALLasked whether the Financial Secretary to the Treasury is aware that discontent prevails among preventive men at the stagnation in the process of promotion into the class of preventive officers; and whether, in view of the inability to carry into practice the spirit of the Goschen Minute of 1891, he can see his way to recommend that preventive men who have reached the maximum salary and passed a qualifying examination as preventive officers should receive increased pay equivalent to that paid to the lower section of preventive officers?
  Mr. HOBHOUSE: I beg to refer the hon. Member to my reply to a question on this subject addressed to me on 1st March last by the Noble Lord the Member for Newton.

  Tobacco.
  Mr. LAURENCE HARDYasked what quantity of offal tobacco or snuff is now supplied from the King's warehouses; and at what price is it sold at the present time?
  Mr. HOBHOUSE: The quantity of tobacco refuse deposited varies considerably from year to year. In 1910 the quantity so deposited, consisting of tobacco
  1842
  stalks, shorts, and offal snuff, amounted to 1,352 tons. The prices obtained vary for the different kinds of refuse and at different ports.
  Mr. LAURENCE HARDYasked whether tobacco extract is entirely prohibited from importation into this country; and, if so, whether, in view of the increasing demand for nicotine for manufacturing purposes, the Board of Customs can admit its introduction under proper regulations?
  Mr. HOBHOUSE: Tobacco extracts are by law prohibited to be imported into this country, except in transit., but this prohibition is not held to apply to nicotine, which may be imported for home use.
  Mr. LAURENCE HARDYasked how many nicotine factories are now in existence within the United Kingdom; and how many factories where the privilege of manufacturing sheep dip, etc., in bond is made use of?
  Mr. HOBHOUSE: There are four bonded warehouses approved for the manufacture of nicotine. Three of these nicotine factories and four other bonded premises are approved for sheep-dip manufacture.
  Mr. LAURENCE HARDYasked what is the present formula now demanded by the Board of Customs in connection with denaturing tobacco; and whether the Board would be willing to admit sulphur and any other matter of a curative property as an efficient alternative?
  Mr. HOBHOUSE: There are various formulae, according to the use to which the tobacco is to be put, but sulphur alone is not regarded as an adequate denaturant. The Board of Customs and Excise are prepared to consider applications to vary the prescribed formulae, and, if the hon. Member is interested in the subject, perhaps he will place himself in communication with them.

  Road Board (Ireland).
  Mr. HAYDENasked whether, in view of the facts that the county councils of Ireland have disapproved of the schema submitted by the Road Board and that the taxes are being paid and the fund accumulating without benefit to anybody, the Road Board will either prepare a new scheme or invite the General Council of County Councils of Ireland to do so?
  Mr. HOBHOUSE: The county councils of Ireland have not disapproved of any

  1843
  scheme submitted by the Road Board. At a conference in Dublin in March last the chairman of the Board made some suggestions which he described as made for the consideration of county councils, but the question whether any scheme will be formulated or proposed on the basis of these suggestions is entirely for the county councils, and the Board have no present intention of taking any action in the matter. Grants are being made in Ireland as rapidly as the details of applications can be dealt with.
  Captain CRAIG: Arising out of the answer, is the right hon. Gentleman aware that the General Council of County Councils of Ireland only represent Nationalist county councils, which refused to confine themselves to matters relating to the true benefits of Ireland, and constituted themselves a society for promoting Home Rule?
  Mr. HOBHOUSE: No; I am not aware of any such matter.
  Mr. HAYDENasked whether, amongst the conditions laid clown by the Road Board for grants to Irish county councils, there was one requiring a contribution from the county councils of Ireland; and whether he will state if the Road Board is vested with powers to lay down any such condition?
  Mr. HOBHOUSE: The grants made by the Road Board towards works of road improvement are contributions in aid of expenditure proposed to be incurred by highway authorities. The amount of the grant in each case is within the discretion of the Road Board, subject to the approval of the Treasury.
  Mr. LANE-FOX: Will the House have an opportunity of discussing this matter?
  Mr. HOBHOUSE: It is a matter which can be discussed on the Estimates.

  Natural History Museum.
  Mr. CARLILEasked the hon. Member for Southampton, as representing the First Commissioner of Works, whether the Trustees of the British Museum are strongly opposed to the proposed use of a site adjoining the Natural History Museum for other purposes than an extension of the buildings of the latter museum; and, if so, whether the Government can give an assurance that the site referred to shall be kept available for such extension, which is already urgently required; and that its use shall not be diverted to any other purpose as has been suggested?
  The TREASURER of the HOUSEHOLD (Mr. Dudley Ward): The reply to the first question is in the affirmative. The attitude of His Majesty's Government on the subject will be best understood by reference to the papers which will be in the hands of hon. Members in a day or two.

  Income Tax (Mortgagees).
  Mr. KEIR HARDIEasked the Chancellor of the Exchequer whether he is aware that it is customary amongst a certain class of solicitors and moneylenders in South Wales to compel mortgagees to pay Income Tax on their mortgage, and to threaten to foreclose the bond unless they do so; and what steps he proposes taking to put an end to this practice?
  The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George): I am afraid I cannot give an answer at present. I am under the impression that a letter was sent to the hon. Member asking him to postpone his question.
  Mr. KEIR HARDIE: I will put it down again for Monday next.

  National Insurance Bill.
  Mr. W. R. PEELasked whether the Chancellor of the Exchequer will state what payments will be required of the employer under the Invalidity Insurance Bill in respect of half-timers and home-workers whose remuneration may vary from 2s. 6d. to 5s. per week?
  Mr. LLOYD GEORGE: I was under the impression that all the questions on the Paper to be addressed to me to-day were postponed.
  Mr. PEEL: I will certainly postpone my question—shall I say until to-morrow?
  Mr. LLOYD GEORGE: Thank you.

  Horse Traffic (Great Southern and Western Railway, Ireland).
  Mr. FIELDasked whether the Chief Secretary will have inquiries made through the Department of Agriculture in Ireland respecting the cause of the repeated delays in the transit of horses on the Great Southern and Western Railway; whether he is aware that horses loaded at Thurles station about twelve o'clock noon on 2nd May last were detained in the wagons, without drink or food, in rainy weather until 7.30 the following morning, when they were delivered at Waterford, a distance of fifty-five miles; and whether

  1845
  measures will be taken to prevent the recurrence of such treatment to dumb animals?
  Mr. BIRRELL: The Department of Agriculture have no information of the occurrence of repeated delays in the transit of horses on the Great Southern and Western Railway, but inquiries will be made. The Department understand that on 2nd May two waggons containing horses left Thurles for Waterford. The animals were booked at goods train rate, and were despatched by goods train at 3.58 p.m. During the journey the animals were watered at Clonmel, where they remained till 2.40 a.m. awaiting train connection with Waterford. They reached the latter place at 4.20 a.m., but the owners did not arrive to take delivery till 7 a.m. The railway company were prepared, as usual, to despatch a special through train with live stock from Thurles Fair to Waterford, but sufficient animals were not offered for this purpose.
  Mr. P. J. POWER: May I ask the right hon. Gentleman whether, owing to the frequency of delays in transit of horses between Thurles and Cashel and Clonmel, he will have those inquiries made as soon as possible?
  Mr. BIRRELL: Certainly; undoubtedly I will.

  Petty Sessions Clerkship (Falcarragh, County Donegal).
  Captain CRAIGasked the Chief Secretary for Ireland if he is aware that at Falcarragh petty sessions, held on Tuesday, 25th April, a Roman Catholic magistrate named Colgan voted for a Protestant candidate for the petty session clerkship; if he is aware that the same night Mr. Colgan's house was attacked by a Nationalist crowd and wrecked, and Mr. Colgan's effigy burned in the street; and will he state what action the police have taken in the matter, and if any arrests have been made.
  Mr. LAW: Before the right hon. Gentleman answers the question, may I ask whether he is not aware that the damage done on this occasion was done by some children who followed, as I understand, the band, which is a custom that prevails; and that the total damage done to the premises amounted to a sum of 1s. 9d.?
  Mr. BIRRELL: The hon. Member will see that a pane of glass was broken, and perhaps the 1s. 9d. is compensation for that. The answer to the question on the Paper is as follows: The voting at this
  1846
  election does not appear to have run on religious lines, as three Catholics voted for one candidate and two for another. It was a contest between the son of the late clerk, who happened to be a Protestant, and another candidate who had relatives in the village. Mr. Colgan, who lives in Falcarragh, voted for the son of the former clerk. On the night of the election a small crowd assembled and threw stones at Mr. Colgan's house, breaking two panes of glass. A bag of straw, supposed to represent him, was lit opposite the house, but the police quickly extinguished it. No arrests were made as the police were unable to identify the stone throwers owing to the darkness.
  Captain CRAIG: Can the right hon. Gentleman say if this case has any parallel in "happy Quebec"?
  Mr. BIRRELL: Things of this kind happen wherever foolish people live.
  Captain CRAIG: Are not the foolish people the Nationalist party, to whom the right hon. Gentleman proposes to give Home Rule?
  Mr. BIRRELL: It applies to all parties.
  Mr. MOORE: Is it not the fact that the Nationalist band turned out to intimidate this man?
  Mr. BIRRELL: I have not got any reference to a band.

  Fair Rent Applications (Enniskillen, County Fermanagh.)
  Captain CRAIGasked the Chief Secretary for Ireland if he can state the reason. for the delay in fixing those fair rents for which applications were heard at Enniskillen on 18th February last; and if he will see that this is done before the next list at Enniskillen is entered on, so that the parties may have some idea of the average rate of reduction, with a view to settlement?
  Mr. BIRRELL: The decisions would have been announced at an earlier date but for the illness of the Chairman of the Sub-Commission in question. It is expected that judgment will be given in the fair rent cases referred to during the present week.

  Evicted Tenants' Reinstatement (John Bernard Magee).
  Captain CRAIGasked the Chief Secretary for Ireland the number of acres and the amount of capital, free and advanced,

  1847
  given to John Bernard Magee, an evicted tenant on the demesne at Lurgan, county Armagh; if John Bernard Magee has since sold the farm and the stock which was given him as a free gift subject to the provisions of the Act; what was the amount of the purchase money; if this man is now living on the proceeds near Downpatrick; and if it is intended to give him another farm?
  Mr. BIRRELL: John B. Magee, an evicted tenant, was allotted some thirty acres on lands acquired by the Estates Commissioners. The purchase money of the holding is £679, which includes £160 sanctioned for buildings and repayable as part of the land purchase annuity. The Commissioners also expended £25 as a grant for the purchase of stock. The Commissioners are informed that Magee sold his interest in the holding for £370, and they have required the £25 grant expended for stock to be repaid. It is not the intention of the Commissioners to give Magee any other holding.
  Captain CRAIG: May I ask why people of this sort are chosen to give farms and free grants when immediately afterwards they turn round and sell them, and why not more care should be taken in selecting people to whom those farms are given and to see that they are respectable people?
  Mr. BIRRELL: I quite admit what the hon. Gentleman says except that I do not think it is an indication of a man's respectability that, having got a farm, he sells it. I do hope that in future great care will be taken to see that no advances are made to persons except to those who really and honestly intend to live on and cultivate the land.
  Mr. LARDNER: Can the right hon. Gentleman give us any information as to why this evicted tenant had to sell his evicted farm in Armagh, and leave for another county?
  Mr. BIRRELL: No, Sir.

  Old Age Pensions.
  Mr. SCANLANasked the Chief Secretary for Ireland on what evidence the Local Government Board proceeded in disallowing the pension awarded to Bartholomew Deignan, of Aughamore, Sligo, by the Sligo (No. 2) sub-committee?
  Mr. BIRRELL: The Local Government Board allowed the pension officer's appeal
  1848
  against the decision of the Sligo No. 2 Pension Sub-committee on the ground that there was no evidence of Bartholomew Deignan having attained the statutory age.

FINANCIAL RELATIONS. COMMITTEE (GREAT BRITAIN AND IRELAND).
Mr. GINNELL: Arising out of the answer just given, I beg to ask leave to move the adjournment of the House to call attention to a definite matter of urgent public importance—namely, the ex parte and secret character of the committee investigating Ireland's financial relations for the sole benefit of the Cabinet; and the refusal of the Government to submit to this House simultaneously all the information submitted or to be submitted to that Committee.
Mr. SPEAKER: I do not think that the matter which the hon. Member proposes to bring before the House is an urgent matter. I understand that this Committee has been appointed by the Cabinet to advise them. Whether the Cabinet will eventually present the Report of that Committee to Parliament or not is another question, but there could be no urgency about the matter. The Cabinet are entitled to take the best advice, and they have selected those persons whom they think will give the best advice.
Mr. GINNELL: The Committee is sitting and the urgency consists in that fact and that it is proposed to pass legislation on their findings. Now or never is the time to call the attention of this House to the matter.
Mr. SPEAKER: Supposing the hon. Member is successful in carrying the Adjournment of the House, what effect would that have? The Committee would still continue to sit. The Committee is appointed by the Cabinet for their own purposes, and surely the Cabinet are entitled to derive all the assistance they can from the considerations of the Committee. The action of the hon. Member would have no effect upon the position of the Cabinet or on the assistance which the Committee would give.
Mr. GINNELL: The object of the Motion would be to have a public Commission appointed in continuation of the Financial Relations Commission of 1894–5.
Mr. SPEAKER: That may or may not be a very proper object, but I do not think

1849
it would be carried out by the suggestion of the hon. Member in moving the Adjournment of the House. If the hon. Member puts a Motion down and can find time to raise the question in that way, it would be dealt with by Resolution on a clear issue.

BUSINESS OF THE HOUSE.
Mr. BALFOUR: Perhaps the Government would tell us what Supply they propose to take on Thursday next.
The PRIME MINISTER: On Thursday we shall take the Reports of the Navy and Army Votes already passed in Committee, and on the Paper to-day—other than Navy Vote No. 12—namely, Navy Votes 7, 11, 13, 14, and Army Votes 13, 14, 15. I hope the Reports of these Votes will be taken formally. We shall then take the Revenue Vote 3—Post Office.
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.]

BILL PRESENTED.
  SLAUGHTER OF ANIMALS BILL.
  "To amend the Law relating to the slaughtering of animals for human food," presented by Mr. George Greenwood; supported by Colonel Lockwood, Mr. Watt, Mr. Cowan, Mr. John Robertson, Mr. Ainsworth, and Mr. Lansbury; to be read a second time upon Tuesday next, and to be printed.

  WAYS AND MEANS.
  Considered in Committee.
  [Mr. EMMOTT in the Chair.]
  (IN THE COMMITTEE.)

  FINANCIAL STATEMENT.
  The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George): The figures which have already been printed and circulated in reference to last year will have revealed the fact that there was a Realised Surplus upon the finance of that year of £5,607,000. As I shall point out, this is practically the surplus of two years, and not of one. The year was 'an abnormal one. It was abnormal in respect
  1850
  of the fact that there were very considerable arrears that appertained properly to the previous year, which had not been collected, and that therefore a good deal of the taxation belonging to last year was thrown into the present year. We are still suffering from the delay and the consequent confusion that resulted from the exceptional financial experience that we passed through. We shall not be able this year to collect the whole of our Super-tax. The same thing will apply to the Land Taxes; the delay will affect them seriously. The Estate Duties also are affected, as I explained in some answers which I gave to questions yesterday. The Licence Duties have also been affected owing to the same circumstance. If the normal arrears of Income Tax had been collected last year the surplus would have been nearly £08,500,000. That, as I have already explained to the House, is for two years and not one.

  SAVINGS IN EXPENDITURE.
  The surplus, as far as last year is concerned, is attributable to two things. First of all, you have the savings in expenditure, which, in spite of very heavy Supplementary Estimates, amounted to £1,238,000. You have besides the improvement in revenue over the Estimates amounting to £4,060,000. I would recall that when I made my Budget statement last year I was blamed for taking too sanguine a view of the prospects of trade, and I was told that I had based my Estimates on too bright and too hopeful a forecast. As a matter of fact, I erred on the side of over caution. All the items subject to trade fluctuations, except two, and there are special reasons in those two cases, exceeded the Estimates. Those two were sugar and tea, which, although they both exceeded the receipts of the previous year, did not quite come up to the Estimates. In both cases you had a comparative poor harvest, with consequent higher prices. The increase in price was slight, but still it affected consumption. That in itself is a significant fact. In addition to that, there was a considerable withholding of tea when it was understood that there was a large realised surplus, because the tea trade were not quite sure what might happen. They therefore withheld clear-antes to a considerable extent. But for that, the Tea Estimate would have been nearly realised. The same thing applies to sugar.
  Taking all the other taxes which Constitute the best index to the condition of

  1851
  our trade, and its prosperity or otherwise—spirits, beer, wine, tobacco, Post Office, Mint—although I took a very cheerful estimate of the trade prospects of the year and fashioned my Estimates accordingly, the Estimates were considerably exceeded in each and all of those cases. The Death Duties were the only case in which there was an appreciable disappointment in the matter of revenue. Although the result in that case is disappointing, the cause is full of cheer. The failure of the Death Duties to come up to the estimate was entirely due to the abnormally low death-rate of last year. It was lower by 6.4 per cent. than the average for the previous three years. It is very remarkable that when the death-rate was lower by 6.4 per cent. the receipts from Death Duties fell exactly 6 per cent. below my Budget Estimate. That shows the extreme accuracy with which the Estimates have been prepared. That leaves me with a realised surplus of £5,607,000.

  BUILDING SANATORIA FOR CONSUMPTIVES.
  Before I come to the Estimates for this year, I will state what I propose to do with that £5,607,000. As the Committee will probably have already conjectured, I propose to devote £1,500,000 to the building of sanatoria for consumptives in this country.
  An application has been made to the Treasury by the Colonial Office for an advance in respect of developments in Uganda. The Committee will recollect the financial responsibilities which we undertook in connection with the construction of the Uganda Railway. That railway was constructed very largely for diplomatic reasons, but there is every prospect that it will be a commercial success. It runs through a wild country, but a country of extreme fertility. In fact there is no limit to the possibilities of that great tract of country which is now under our flag. But the Colonial Office is anxious that a little more money should be spent on development there, and not merely for that purpose, but for utilising the expenditure already incurred. They propose that a small light railway about thirty miles in length should be constructed as a feeder between Nairobi and the Thika River. As everybody who has watched the development of a country like this knows, a railway is never a real success until the feeders are constructed and working. This is a small railway of that kind, and will help to feed the main line.
  1852
  The other object for which the Colonial Office want to borrow money is in connection with Kilindini, which, I am told, is one of the finest natural harbours in the world. At the present moment, owing to the fact that there are very crude facilities in that very fine natural harbour, it costs large sums of money to load and unload. It is proposed to construct a deep water jetty for the purpose of facilitating transport there.
  4.0 P.M.
  The third object of the loan will be for a healthy water supply for Mombasa. The population suffers a great deal at present owing to the fact that the water supply is bad. The matter is obviously of the first importance. If we are really going to develop a country of that kind, and enable people to go out as pioneers, we must, if possible, arrange for conditions which are not detrimental to their health. The Colonial Office has applied for a loan of £250,000. There is every prospect of it being re-paid, because there is now a balance on the working of the railways. They propose to pay 3½ per cent. interest, with 1 per cent. towards the Sinking fund. Therefore I will propose to the House that £250,000 should be taken out of the surplus by way of loan for this purpose in that country. As the country knows, we are not confining our operations to development in Uganda.

  DEVELOPMENT FUND.
  A couple of years ago the House of Commons passed a Bill for the purpose of development operations in this country, for light railways, afforestation, small holdings, and generally for assisting more particularly in the development of our awn rural resources. Amongst other proposals we had a proposal for setting aside a sum of £2,500,000 to be invested for capital purposes, for instance, the purchase of land, and anything that would be treated by a business concern as capital expenditure. We proposed that that sum should be spread over five years. We have already paid £500,000 into the capital account. We have got £2,000,000 left. I propose that £1,500,000 should be taken out of the surplus of this year for the purpose of wiping out, except £500,000, of what remains of that statutory liability. With regard to the remaining £500,000, inasmuch as there is something like £500,000 or £600,000 which ought to have been collected last year, and which was paid this year into the account of the Income Tax I propose that that £500,000 should be paid

  1853
  out of the revenue this year for the purpose of wiping out the balance. That means that there will be: £1,500,000 for Sanatoria, £250,000 for Uganda, and £1,500,000 for development on capital account. That gives, £3,250,000, and leaves a balance of £2,357,000 to pay into the Old Sinking Fund. That disposes of the finance of last year.

  EXPENDITURE, 1911–12.
  I now come to the expenditure of 1911–12. There are five items of expenditure to which I shall have to call special attention. Most of them, but not all, are known to the House. The first is a very considerable and exceptional increase in Navy expenditure. Naval expenditure this year is up by £4,006,000. That represents a total increase in three years of £12,204,000. [HON. MEMBERS: "Shame."] This expenditure has now reached the gigantic figure of £44,392,000. When the Unionist Government left power in 1892 the naval expenditure was £14,240,000. In the course of twenty years it has gone up from fourteen millions to forty-four millions. I hope and believe it has reached its climax—for reasons to which I shall refer later on. The next item of exceptional expenditure is old age pensions. Last year, including paupers for one quarter, the total cost came to £9,798,000. This year it has gone to £12,415,000. The original intention of the Government, which I announced in my financial statement of 1909, was to recover from the Board of Guardians all the money saved to the rates by that expenditure. That would have amounted to £1,500,000. Now the Government have undertaken the whole responsibility, and to that extent it is a boon to local ratepayers. It is a very considerable boon, but you cannot have a boon to the local ratepayer under these conditions without having a burden upon the Imperial taxpayer. I want the House to bear that in mind.
  The other item of expenditure where there appears to be a considerable increase is the Post Office. It has gone up by £1,401,000. The automatic increase, which is not exceptional, I think, would be about £600,000. There is £798,000 due to the taking over of the National Telephone business. I can give particulars later, but I do not want to dwell upon it now. The other exceptional expenditure this year will be in connection with the Coronation, and will add to the total something like £300,000, spread over various items.

  PAYMENT OF MEMBERS.
  I come to two new items of expenditure. One is insurance, where the expenditure for this year—I hope the Bill will be passed—will be about £50,000. I come now to the last exceptional new expenditure, and that is in reference to the payment of Members. The Prime Minister gave a definite promise immediately in front of the election. He gave it from this box just as we were going to the country, so as to make perfectly clear what the effect of a favourable answer would be. He gave immediately after the election a similar pledge that he proposed dealing with this problem, and dealing with it this year. I am not going to argue the question, because that would obviously be out of place in a financial statement. I will only say this is the only Parliament, I think, in the world where Members are not paid, except Italy, where they have free travelling. It is very difficult for Members to attend to their ordinary avocations and public affairs at the same time. Those who are able to attend at all to public affairs find their time affected very seriously by attending to Parliamentary duties. I have examined and will give the scale of payment of Members abroad and in the Colonies. The United States of America heads the list with £1,500 per annum. [HON. MEMBERS "Hear hear."] I note that hon. Gentlemen agree that that is a very cheerful figure, but I am afraid we shall have to part from it. They get not merely £1,500 per annum, but what they call, I believe, limited travelling expenses. This means that those who live in California are paid mileage for going round Cape Horn.
  In France they get £600 per annum and free travelling on the State railways. But as most of the railway companies are in private hands, the boon is not a very valuable one. I believe also there is a right of pension at the age of fifty-five if a member has served four years. Austria is a little more niggardly. They pay 16s. 8d. per day, and they insist upon attendance. They give travelling expenses, except to Viennese Members, Belgium pays £160 per annum, and free passes. Germany pays £150 per annum, subject to a deduction of 30s. for each day's absence, with free railway passes. In Italy there is no salary, but there are free passes on the railways and on certain steamers. In the Dominion of Canada the pay is £500 per Session, with travelling expenses. In the Dominion of New Zealand the pay is £300 per annum, with

  1855
  travelling expenses. In the Commonwealth of Australia the pay is £600 per annum, and I think free passes, but I am not quite sure. In the Union of South Africa the pay is £400 per annum, but I cannot find whether there is included free railway travelling.
  We do not propose to be as generous as the United States of America, or to be as just as Germany. We propose to take a course somewhere between, and to follow the precedent of some of the Colonies. We propose to fix the pay at £400 per annum, but without any travelling expenses, and no pension. [HON. MEMBERS: "Oh."] I am sorry to disappoint hon. Members. There are 670 Members of this House. There are thirty-eight in receipt of salaries either as Ministers, or as officers of the House, or as officers of the Household. They will be excluded. [HON. MEMBERS: "Hear, hear."] That cheer seems to have in it somewhat of malicious satisfaction. I heard no cheer from the Treasury Bench. That would come to something like £250,000 per annum. That is the remaining exceptional item of expenditure. I will just read out the figures, so that those who have their papers may be able to fill them in. I will come to the National Debt balance in a moment. The Development and Road Improvement Funds are £1,280,000; other Consolidated Fund services, £1,707,000; payments to Local Taxation Account, £9,549,000; the total Consolidated Fund Service is £37,036,000; the Army, £27,690,000; the Navy, £44,392,000; Old Age Pensions, £12,415,000; other Civil Services, £34,373,000; Customs and Inland Revenue, £3,995,000; Post Office Services, £21,082,000; total Supply Service, £143,948,000; Payment of Members, £250,000; Insurance, £50,000. The total with the provision for the National Debt, which I am now coming to, will be £181,284,000.

  REDUCTION OF DEBT.
  Now that brings me straight to the consideration of the National Debt. I propose to leave the fixed debt charge at £24,500,000. Now I think the House will be anxious to know exactly what that means in the way Of reducing debt. Out of that fixed debt charge £6,855,000 will be applied to the reduction of capital liability. We are having in addition to that, repayment of other capital liabilities, £2,325,000, but there will be fresh borrowing for the telegraphs and other
  1856
  purposes of £1,575,000, so the net payment will be £750,000. To the Old Sinking Fund we pay £2,357,000; for China indemnity, Suez Canal shares, and other small miscellaneous items another £500,000 is paid to the reduction of debt.
  We propose to put £1,500,000 to pay off capital liability of the Development Fund out of the Old Sinking Fund and another £500,000 out of the revenue for the year, which will be £2,000,000. So that we this year make provision for the reduction of our capital liability to the extent of £12,452,000. Now we have been criticised very severely, and especially in the last few years, on the assumption that the Government have done nothing for the reduction of debt. You might imagine that we had ceased to deal with the National Debt altogether in the last two or three years and that we have raided the Sinking Fund for the purposes I think of bribery and corruption. [HON. MEMBERS: "Hear, hear."] I am glad to have that assent, which shows I shall not be wasting time at any rate in giving a few more figures.
  As a matter of fact, in five years, and including this provision for the sixth year, making six years, this Administration has reduced our capital liabilities, or is making provision for reducing our capital liabilities, to a larger extent than during any other period in history in the same number of years. The Prime Minister reduced or made provision for reducing our capital liabilities during the three years he held the office I have the honour to hold of £42,360,000. Mr. Gladstone in his palmiest days never accomplished that. Take the most brilliant episode in his career as Chancellor of the Exchequer, between 1859 and 1866. During that seven years he reduced the National Debt by £25,000,000. Between 1868 and 1874 the National Debt was reduced by £26,500,000. My right hon. Friend in the three years he held the office reduced the National Debt by £42,360,000. That was a very remarkable achievement and quite unprecedented in the history of this country.
  An HON. MEMBER: "Or any other."
  Mr. LLOYD GEORGE: I am not quite sure about the United States of America after the war. I cannot hope to emulate that very 'brilliant achievement, and I plead in mitigation of criticism that I had greater difficulties to contend With.
  Naval expenditure has gone up 37½ per cent. in the period I have presided over the Exchequer; Pensions,

  1857
  quite a new charge, have added £13,000,000 to the difficulties of the Treasury. But despite these difficulties during the three years I have had charge of the national expenditure I have succeeded in reducing, or, including this year, I am making provision for reducing the national indebtedness by £26,000,000. In addition to that, I have provided £2,500,000 for wiping out the capital liability which this House created in the Development Fund, so that for reducing our capital liability altogether, I have succeeded in providing £28,700,000 in three years. Taking the two sums together, that means a provision in six years in the lifetime of the present Administration for the reduction of the capital indebtedness of this country of the enormous sum of £70,000,000. That represents a reduction in the annual interest we have to find of something like £2,000,000 a year. Well now, I thought it was due to the Government in face of some of the criticisms that had been directed against it, not merely in this House but outside, just to point out the fact that we have in these five or six years wiped out more debt than any Administration that ever existed in this country, and I think we are entitled at all events to put that on record.

  INCREASED NAVAL EXPENDITURE.
  So much for expenditure. I now come to the income of the year, and before I deal with that income I have a few more words to say on this subject. If the House will bear with me just for a few minutes. I should very much like to review the position of the revenue and the expenditure to-day as compared with our position three years ago. Then when I stood at this box I was faced with very great and immediate exigencies and greater prospects of increases in the expenditure of the country. There were the great naval exigencies. We were committed to an exceptional shipbuilding programme; there was no prospect of any diminution, but on the contrary of a gradual growth for some years. By that time we knew approximately what the expenses of the new departure in Old Age Pensions would be. We had a demand for a further Grant in Aid of local taxation. We were committed, in fact both parties were committed, to a great scheme of Insurance, and although we were committed to a contributory scheme, both parties were committed to supplement this contribution by a Grant from the State. In addition to that, we had the problem of unemployment, which was much more
  1858
  acute at that moment, and we had come to the conclusion that instead of giving these sporadic Grants of £200,000 or £300,000 a year in relief of distress and the setting up of works—the most wasteful and extravagant methods and I think the most demoralising way of spending public money—it was fan: better to put the thing upon some more rational and firm and businesslike footing by setting up a kind of Development Commission, and by also doing something for the improvement of the roads of the country and by setting up Labour Exchanges.
  All these things were within sight. The country was committed to them. Both parties were committed to them, and any Chancellor of the Exchequer standing at this box three years ago must have had these things in his mind; and the Government decided when raising taxation not merely to raise taxes sufficient to satisfy the immediate needs of the year, but also to raise taxes that would develop and extend so as to cover the whole of the expenditure then in sight. That was the policy. How far has that succeeded? We had to find all these exceptional sums of money, we had also to keep up the payments of debt at the same time as to sustain our credit in the market. Now how far have we succeeded? In the last two years we had exceptional expenditure on the Navy, Pensions and Unemployment. We have been able to pay each. We have paid them all, and we have a balance of £5,000,000 or £8,000,000, according to the view which is taken of the credit, and we have also paid that enormous sum of money in reduction of debt. That is the record of two years. We have borne the whole exceptional strain of the last two years.

  RELIEF OF TAXATION.
  Now I come to the greatest strain of all. How did our policy bear this? The finance of this year represents such a strain upon the revenue as it has never been put to before. The strain upon the Budget of 1908 was much greater than was anticipated. I did not anticipate all that. I did not anticipate having to find the whole of the Grant towards pensions, including paupers. On the contrary, I made it quite clear in the statement of 1909, that it was the intention of the Government that it should be divided; so we took upon ourselves a strain of £1,500,000 above what we anticipated. I say, frankly, I did not anticipate that the naval expenditure this year would have gone up by £4,000,000—that imposed another exceptional and

  1859
  great strain upon our resources. How did we bear it? We have had to bear it before our taxes have had time to mature. The Super-tax has not matured; the Death Duties have not reached the limit of full strength; the Land Taxes are only just beginning. Now the result is that I am driven to propose alterations this year not very substantial, but—they are all in the direction in relief to the taxpayer. So that it has stood all this exceptional strain, and we are able at the same time to set aside something like £12,000,000 for the reduction of debt, and give a very small relief in two or three small things. At any rate they do give a relief in respect of one or two particular instances. That has been done without injuring the trade or industries of this country. Had the burden been so severe as to cripple industry, although the Budget had succeeded as a machine for extracting money, it would really have been a failure.

  IMPORVED TRADE.
  But what is the position. Our trade has gone up by leaps and bounds. In 1908 our foreign trade was £1,050,000,000, and last year it was £1,213,000,000. So that there has been an enormous increase. [An HON. MEMBER: "Can you keep it?"] I hope so, and we certainly shall keep it if you play no tricks with it. Our foreign trade has increased enormously. It is not merely our foreign trade. Take everything that indicates prosperity at home. We have got an enormous increase in bankers' clearances, and larger railway traffic. The best test of all is the index of unemployment. In April, 1909, when I produced the Budget which excited so much controversy, the figures were 8.2, and that is very high. From that moment employment steadily improved. I am making no comments. I am stating a simple and very gratifying fact. I am certain that if the figures for unemployment had become worse, everybody would have said, "It is due to that Budget." Under those circumstances why am I not entitled to take credit for this. In April, 1911, the figures for unemployment instead of being 8.2 are 2.8, which is a most happy reversal of decimals. Trade is brisk, and our prosperity is greater. There is not a single symptom of trade bending under an undue burden, and the activity is greater than it was two or three years ago, in fact it is as great as it ever has been in the wonderful history of British industry and
  1860
  commerce. I may be asked, what about the building trade? That was the trade which was "marching to its doom." In April, 1909, we had unemployment very high in that trade, it was 11.4. It has now come down to 5.1. There is a steady improvement, and that is the lowest in the building trade for eight years. Therefore I am entitled to say, at any rate, the Budget instrument of 1909, which has produced enormous Revenue that is still growing, which has enabled us to meet exceptional demands upon the Treasury of this country, which has enabled us to clear off from £26,000,000 to £28,000,000 of debt; which has enabled us to face the future with confidence, so far from damaging the industries of the country, has given new hope and new encouragement, and trade is going on prospering.

  REVENUE ESTIMATE.
  Now I come to the estimate of the Revenue for the year. The Estimate of the Revenue for the year, as the right hon. Gentleman opposite knows, depends very largely upon the trade outlook. If that outlook is dark you proceed to estimate accordingly, and you estimate for a diminishing dwindling Revenue on everything which is in the slightest degree affected by the movement of trade. Therefore, you have to form some opinion as to what is the trade prospect. I have made careful inquiries this year as I did last year. Last year I came to the conclusion that trade was likely to be good and that we were marching on towards a trade boom. That estimate turned out to be accurate. Encouraged by the success of that first prophecy, I am now going to venture upon another. After careful inquiries again, I have come to the conclusion, on very high authority, that the prospect, of a continuance of good trade is excellent, that trade can hold its own, and the indications of the trade barometer are "Set Fair," with a possible increase in trade prosperity. As hon. and right hon. Gentlemen know very well, the condition of trade depends very largely in this and other countries upon the harvest. The harvests gathered in already are on the whole excellent. The crops are exceptionally promising, except in Russia, and the present indications are "Outlook for crops unusually favourable."
  In addition to that we have a spirit, of enterprise abroad. I referred to that point last year. In the United States alone there is some hesitancy observable for reasons that I cannot very well com-

  1861
  ment upon, but there has been so great an improvement in the last few months in the financial position there that it must prevail over timid or sulking interests. Even in the United States of America the prospects are better than they were. There is in addition to that a great output of gold, and the lending countries of the world are advancing freely to South America and other places for the purpose of developing their resources. That has in itself an enormous effect upon the trade of our country, because our trade is more international than the trade of any other country in the world. France has been advancing, Germany has been advancing, and we have been advancing money to South America and other countries for development, and all that will come back to us in trade and in a reduced cost of food, which makes for good trade. The price of food is going down, and therefore the people have more money to spend upon other commodities. That creates trade, and that is one of the most hopeful symptoms in the whole outlook. Railway traffic is improving, and the receipts of the railways are greater than they ever were before in the history of this country. All our great trades are active, employment is good, and in my estimate I am reckoning on a sunny year.

  CUSTOMS AND EXCISE.
  Now I come to the figures. The first figures I have to deal with are those relating to Customs and Excise, and in this respect the first difficulty always is in estimating the duty on spirits. They are most volatile in more senses than one, and during the last two or three years they have been exceptionally difficult to estimate. The first year, as the Committee knows very well, our estimate was falsified to a very considerable extent. We could not tell to what extent that was due to lessened consumption, and how much was due to the fact that the trade were exhausting their cellars because of the political unrest and because there was no certainty as to what might happen. Last year proved that. a good deal of the exceptional fall in 1909 was due to what I call "cellarage," and the fact that they were clearing out their cellars to the very lowest keg rather than take any more spirits out of bond until they were quite sure what was going to happen to the 14s. 9d. duty. Last year they replenished those stocks, but not altogether. This is very difficult to find out. We have very able officials, who have done their very best to find out exactly what has
  1862
  happened, and they have come to the conclusion that although the trade have replenished their stocks, the estimate which the hon. Member for Ayr Burghs (Mr. Younger) gave me across the floor of the House is on the whole accurate—namely, that they never fill up their stocks to what they used to be before that date, and therefore, although they have not really replenished their depleted stocks and put them in the position they were prior to 1909, I believe they have been restocking, and they have done as much restocking as they are likely to do. Those are the facts or rather the conjectures upon which I am going to base my Estimate, and therefore I am estimating that about £1,000,000 of this amount last year was due to restocking, that that process is at an end, and I am not going to get anything more out of that.
  Mr. AUSTEN CHAMBERLAIN: What was the increase last year? Can the right hon. Gentleman give me the figures?
  Mr. LLOYD GEORGE: I am sorry I cannot give the figures, but I think the amount was £3,000,000. At any rate it was a very considerable amount, something like £3,000,000 or £4,000,000. I am allowing £1,000,000 for restocking, and that has gone. I am not going to get that this year, and I am allowing for what was indicated by the right hon. Gentleman opposite in his speech in the year 1904 or 1905. I think the right hon. Gentleman opposite was the first to comment on the fact that there seemed to be a sort of set steady tendency in the way of less drinking not only on the part of the middle classes but on the part of the working clases as well. He pointed out that for the first time trade did not bring an increased consumption of intoxicating liquors, and he came to the conclusion that this was due to a real change in the habits of the people. I think everything that has happened since has confirmed that forecast, and although this is a year of exceptional prosperity I am still going to make an allowance of 1½ per cent. for a decrease in drinking. That will bring my Estimate to £21,400,000 for this year for spirits, Customs and Excise together.

  SPIRIT DUTY.
  I should like to say one word before I leave here about the effect of the extra 3s. 9d. duty. Supposing the old duty had been retained, what would have happened in the ordinary course to the revenue? I think, making the ordinary allowance of 3 or 4 per cent. for a reduction due to bad

  1863
  trade, 2 per cent. for moderate trade, and the 1½ per cent. which we make this year, we would have found the quantity this year would have been 35,660,000 gallons, and the revenue we would have received would have been £19,600,000 upon the old basis. What is the actual fact? Instead of the quantity being 35,660,000 gallons this year it will be 29,040,000 gallons; but, instead of a revenue of £19,600,000, we shall have a revenue of £21,400,000. There will, therefore, be a decrease in the quantity of spirits consumed by the country of 6,600,000 gallons, with an increase in the revenue of £1,800,000. That is the only item of revenue, except the Liquor Licences, upon which I propose to comment. £21,400,000 for spirits. £12,662,000 for beer. I have estimated there for a slight reduction. Wine, £1,100,000. There, again, there is a slight reduction due very largely to events in France. Tea, £6,300,000.
  I am estimating for an increase in the Tea Duty of £371,000. Cocoa, chicory, and coffee, £585,000. Sugar, £3,446,000; I am estimating there for an increase of £420,000, because I believe the harvest is promising. Fruit, £500,000. Tobacco, £17,350,000 — an increase of £273,000. Motor spirit, £510,000—an increase of £70,000. Other articles of Customs, £25,000. Liquor Licences I put at £4,200,000; monopoly values at £10,000; other licences at £850,000. The Railway Duty at £315,000. Patent medicines, etc., £347,000— a decrease of £2,000. The total Customs and Excise Estimate is £69,600,000—a decrease of £333,000. The only observation I make about the Liquor Licences is that in the Revenue Bill, which was passed in my absence, there were very substantial concessions made to the licensees. It is very difficult to estimate what they will cost the revenue, because it depends very largely upon valuation, but our view is they will cost something like £500,000 a year.

  DEATH DUTIES.
  I now come to the Inland Revenue. I estimate that the Death Duties, the old and new duties together, will proclace £25,150,000. That is an increase on the true revenue of last year, after deducting arrears, of £1,078,000. Stamps are much more difficult to estimate. Last year there was very great activity on the Stock Exchange. At the beginning of the year there was an oil boom and a rubber boom, bet there was a much more interesting boom at the end of the year, and that was the
  1864
  boom in British railway shares. There were many reasons which contributed to their depreciation, and, amongst others, was a sort of general tendency to run down British securities. In the Press, on the platform, and, as I happen to know, even within the sacred precincts of the City there was a sort of tendency to advise people to keep off. Suddenly somebody discovered this country was not ruined, in spite of new financial burdens, and an old fiscal system, and they said, "After all, the old country is not a bad investment." So they started to buy, and, as always happens, when one man made a discovery in the City, everybody else rushed in, and there was a great boom in railway shares. I have no doubt, as in all booms, there was an inflation at the moment, but even at the present time railway shares have gone up 10, 20, and 33 per cent. That was very satisfactory to the shareholders. It was still more satisfactory to the Stock Exchange, and even the Revenue had its share of that satisfaction, and we had a very considerable interest in it.
  An HON. MEMBER: More capable directors.
  Mr. LLOYD GEORGE: Were they less capable last year than they are this year 'I I am surprised, after they have been there so long, that people should only just discover they have any capacity. You cannot, depend on these booms in the coming year, and therefore it is very difficult to estimate. I cannot prophesy the next boom. No one can. The man who could would be a multi-millionaire. Therefore, the safest course is to anticipate a falling off from Stock Exchange stamps. The Estimate for 1911–12 will therefore be £9,600,000 for stamps. That represents a decrease of £184,000 on the Exchequer receipts for 1910–11. May I point out that that decrease would be still greater but for the improvement in the Real Estate market. I now come to the Inhabited House Duty. There will be a slight increase of about £10,000, making £2,700,000. The ordinary Income. Tax will be £41,300,000, including the arrears of last year, and the Super-tax will be 23,000,000, making the Income Tax for this year £44,300,000. With regard to the Super-tax, I ought to say there has been no time yet to thoroughly investigate the returns. It is proposed this should be done this year, but it will involve some delay in collection, and, as there has been so much said about delay, I think it better to warn the Committee of this in advance, so that it will not be thought at the end

  1865
  of the year that the delay was due to some nefarious purpose on my part.

  LAND VALUE DUTIES.
  I now come to the Land Value Duties. The really productive duty, as we anticipated, will be the Increment Value Duty, but that cannot fructify until the valuation is more complete. The valuation has been held back by a variety of circumstances, and it will take some time, as we anticipated, to complete it. Even then it must take a few years for the increased value to grow and to ripen, but it is welling up. It has not yet reached beyond the high rim of deductions to be provided, but this year we hope to get about £50,000 from the Increment Value Duty. The same observation applies to the Undeveloped Land Duty. This year we hope to be able to complete the valuation of most of the undeveloped urban sites and to collect part of the Undeveloped Land Duty in respect of them. That will produce £200,000 this year. We expect the Reversion Duty will yield £50,000, and the Mineral Rights Duty £400,000, of which £80,000 will be arrears. We expect the total Land Value Duties will amount to £700,000.
  Mr. AUSTEN CHAMBERLAINmade a remark which was inaudible.
  Mr. LLOYD GEORGE: That is the Inhabited House Duty and Land Taxes together–22,700,000.
  Mr. AUSTEN CHAMBERLAIN: They produced £4,000,000 last year.
  Mr. LLOYD GEORGE: Yes, but we had not collected the Inhabited House Duty last year. I think that is the explanation. There were arrears of Inhabited House Duty last year. We had not collected them at all. The Estimate for the Post Office this year is £25,740,000, an increase of £1,390,000 over last year. My right hon. Friend reminds me that is an increase due very largely to the revenue we shall receive from the National Telephone business the last quarter of the year. The Estimate for Crown Lands is £500,000. We now come to the Suez Canal shares and other miscellaneous items. Last year we received £1,235,000. This year we expect to receive £1,226,000. That indicates a reduction in the amount to be received under this head. We expect a small increase from the Suez Canal shares, and the decrease is attributable entirely to the repayment of the loan to the Viceroy of Wu Chang which comes to an end. The two largest items in the miscellaneous
  1866
  collection are the Fee and Patent Stamps and the Mint; and altogether they are expected to produce £2,200,000. That is £404,000 less than the Exchequer receipts of last year. The falling off is mainly in the Mint receipts. The estimated total of the non-tax revenue is £29,666,000; the estimated total of the tax revenue is £152,050,000, making a total of £181,716,000 revenue. The expenditure has already been stated at £181,284,000. That leaves a surplus of £432,000, and therefore it will not be necessary to impose any fresh taxation.

  COCOA DUTY.
  5.0 P.M.
  I have one or two alterations which I propose shall be made in certain taxes. The first is in relation to the Cocoa Duty. I had no idea that cocoa was so exhilarating a beverage as the cheers of hon. Members would seem to indicate. There is no doubt at the present moment there is an element of protection in this duty, and I may in a sentence tell the Committee what it is due to. Chocolate contains ingredients which, separately, are either not taxable at all or are taxed at a lower rate than manufactured cocoa. But still chocolate is taxed at the same rate as manufactured cocoa. For instance, you may have milk in chocolate that is not dutiable at all, and you may have sugar in it that is dutiable at a much lower rate than cocoa. Still, chocolate per pound is liable to the same rate as manufactured cocoa without any of these ingredients. The result is that there is a protective flavour in chocolate. On the other hand, there is no drawback on the export, so that, on the whole, the manufacturer of cocoa and chocolate in this country is handicapped by the present arrangement. I think he ought to feel very grateful to hon. and right hon. Gentlemen opposite for removing that embarrassment to his trade. What we propose is to put cocoa on exactly the same footing as any other industry in this country. That involves subjecting chocolate to duty, according to its ingredients, and giving the usual drawback on export. The loss of duty to the Revenue will be £20,000. The loss in drawback will be £25,000—a loss to the Revenue in all of £45,000.

  LIQUOR LICENCE DUTIES.
  The other alteration I propose to make is ill the Liquor Licence Duties. There is a charge now made in respect of liquor licences in respect of areas which are in no sense part of the premises in which

  1867
  intoxicating liquors are sold. A case which was raised repeatedly in this House was that known as the case of the "remote stable," a stable which has nothing whatever to do with the premises. So long as the duties were low it did not really matter very much one way or the other, but now that the duties have been increased it may make a very considerable difference, and a licensee may be paying in respect of premises which are used by him for a totally different business—a business having nothing to do with his licence for the sale of intoxicating liquors. We propose to modify this condition. The provision has to be carefully drafted, otherwise it may be done in such a way as to let out the whole of my revenue. Therefore I hope the Committee will not press me at the present moment for the actual terms in which the modifications will be announced. I have the draft here, but I have not examined it sufficiently to read out to the House exactly what is involved. It will involve a loss to the Revenue of at least £50,000, so that there is £45,000 for cocoa and another £50,000 for licences.

  STAMP DUTIES.
  There is another alteration in stamps which has been pressed upon me by some very important interests in the City. At the present moment all marketable securities passing by delivery pay the same Stamp Duty of 1 per cent., no matter what the term of the obligation may be. There has been of late a tendency, especially in the United States, to borrow on short-dated obligations, and the 1 per cent. duty practically kills our business in these short-dated securities. The revenue gets nothing out of it and the City gets nothing out of it. The contention is that it has driven the business out: that it does not pay. I therefore propose that there shall be the following rates per £100 secured—namely, 2s. 6d. if repayable in one year, and 5s. if repayable in two or three years. There must be some provisions, of course, to safeguard the revenue. I cannot tell what the effect will be in the matter of the duty. I am not going to estimate either for a loss or for an increase. In any event, it must be trivial; it cannot dislocate or disarrange the revenue for the year. For the moment I content myself with announcing the alteration to the House. That is the end of the alterations I propose. The revenue, therefore, will be £181,621,000 and the expenditure £181,284,000. That will leave a surplus,
  1868
  after making these deductions, of £337,000 to meet contingencies.

  NATIONAL INSURANCE.
  Before I sit down I should like to say one word about the finance of the National Insurance Bill. It affects the finance of the future.I promise not to detain the Committee very long, but I think that, on the whole, not merely the Committee, but the public are anxious to know whether there is any prospect of increased taxation as the result of our undertaking this new gigantic liability. This has been a year of exceptional expenditure—some of it temporary. No sane person could possibly wish—and I do not think any sound person will expect a continuance of our present inflated naval and military expenditure. If half the rhetoric which has been spent on the peace campaign were genuine—and I believe it is all sincere—there would be an enormous reduction of armaments as an immediate effect, and we should be able to spend more money on perfecting our education, reducing the burden of rates, reorganising rural life and industry, and effecting some improvement in the squalid homes of the people. But I am not building on that foundation at all. There have been just as promising campaigns which have ended in nothing. I am building purely on facts, when I come to look at the financial prospects of the next few years.
  The extra four "Dreadnoughts"—the contingent four—will be off our hands this year. They will not be a charge upon us next year. In addition to that there will be a fall in the statutory provision for German shipbuilding, and that will involve a necessary reduction in our naval armaments unless some new menace which we cannot foresee is imposed on us. The First Lord of the Admiralty, and I think the Prime Minister, have already indicated that we have reached the climax in our naval expenditure, and next year we may look forward to a substantial reduction, to be followed in the succeeding year by a still greater reduction.
  Can we finance insurance without fresh taxation? I will be perfectly frank with the Committee. The answer to that depends entirely upon the Departments and on the House of Commons. Can they keep down the expenditure? The Departments cannot keep down expenditure without the House of Commons, with which rests the primary—the first and the last—responsibility. The Exchequer is pressed from two quarters—it is pressed to spend more and to charge less. You

  1869
  cannot do both. If you raise more money for any purpose you must find it somewhere. More expenditure means more taxation, and if every man when he proposed an increase of expenditure had in his mind the necessity for finding the cash for the purpose, I am perfectly certain there are many proposals made in this House which would never be advanced. The Committee will forgive me for speaking very frankly. There is a tendency when there is a Debate on any particular purpose which involves expenditure to consider each case separately without any reference to other demands. That is a thing you cannot do. It is said "this is a good case." But I would respectfully say that that is not the point. The whole question is, what, is the general position—what can we afford? There is too much attention paid to the case; and too little to the cash. I respectfully appeal to the House of Commons on this point. I do not suggest for one moment that one side is more to blame than the other. Whenever there is a demand for increased expenditure it is the duty of the House of Commons to review the whole financial position and not merely each separate item for which special taxation is asked.
  I am going to make a special appeal on behalf of the National Insurance Bill because I have some recollection of the carrying of the Old Age Pensions Bill. On my old original plan I could easily finance the Insurance Bill without a penny being taken out of taxation. The matter, however, was taken out of my hands and out of the hands of the Government. The insurance could have been easily financed out of the Budget of 1909 without any increased taxation if the original plans had been adopted. The House has, if I may say so, been considering each item separately without taking into account the whole of the finance. Pressure was brought to bear on the Government to find £1,500.000, which had been intended, for the moment at any rate, to be placed on local rates—out of the Exchequer. I want the House to bear that in mind. The same thing applies to the Land Taxes.
  What about the present Bill. There are difficulties in the insurance part—I am referring now purely to finance. There is always a temptation, whenever there is a difficulty of that kind, to solve it by increasing the State, Grant. It is said, "Let us go to the State," exactly as if taxes were like the gentle rain from Heaven coming down from somewhere without anybody interfering or putting their hands
  1870
  into their pocket, and forgetting that all those clouds of t axes have to evaporate out of the taxpayers' pockets to begin with. And when we come to consider the finance of the insurance scheme I have no doubt, some one will suggest "another half million from the State: surely it can afford, that," and there will be another proposal for £300,000, and "that, is nothing to the State." Surely the most extravagant way to cross a ravine is to build golden bridges over it. That is really the danger which we are liable to fall into when we come to consider a question of this kind.
  I believe, and I still say so after considering carefully, that we can finance the National Insurance Bill without increasing the taxation of this country by a single penny, always provided that no additional demand is made upon the Exchequer in the meantime. Next year we shall have to find £2,500,000, and I believe we can find it. The following year we shall have to find £4,126,000, and the following year £4,781,000, and I believe we can find all that money without increased taxation. provided the conditions which I have ventured to lay down are strictly adhered to. In Germany the German contribution to the whole scheme is £2,500,000. Ours is very nearly £19,000,000. Surely that is lavish enough, and I respectfully warn the House of Commons—and I am sure nobody will think that I am not doing what. I really consider to be my duty in doing so—I respectfully warn and urge the House of Commons to consider the danger of the policy of moving increased demands in order to be able to go down to the constituencies and say. "I proposed this or I voted against that," and then casting the responsibility and the abuse for finding the money upon the poor Minister. It is really the House of Commons alone which is responsible, and I warn the House of Commons that any attempt to increase benefit must increase the extent of taxation. I appeal to Members therefore to assist the Government in resisting every inducement to place fresh burdens for this purpose upon the taxpayer in addition to the generous provision made for it. I beg to move:

  CUSTOMS DUTY ON TEA.
  "That the Customs Duty now charged on Tea shall continue to be charged until the first day of July nineteen hundred and twelve, that is to say:—
  "Tea, the pound—fivepence."
  Mr. AUSTEN CHAMBERLAIN: The right hon. Gentleman made an unusually

  1871
  short but I think I may also say, an unusually interesting statement in opening his Budget to-day. If he will allow me to add one other complimentary epithet to what I have already said, I would say that he has succeeded in being particularly clear and lucid in the account which he has given to the House. This is after all the occasion on which the Finance Minister as a business man makes a business statement to the country of its revenue, expenditure, and liabilities. And I think the highest praise to a Minister on such an occasion is to say that he has been clear and lucid and conveyed to the Members who listened to him a true state of our affairs. The Chancellor of the Exchequer has been able to make a statement which in many respects must have been extremely satisfactory, and I join with him in rejoicing at the improved prosperity of the country. I agree with him that at the moment the prospects are fair, and I hope they may so continue, for the whole position is infinitely better than it has been in the past few years. I suspect, however, that there is still large room for improvement before we can congratulate ourselves upon widespread and general comfort and well-being among our people.
  The right hon. Gentleman concluded his speech with an appeal and a warning to the House in regard to the large measure of Assurance which he introduced the other day and the expenditure which was involved by it. I have too often made somewhat of a similar appeal to criticise what the Chancellor has said or to do otherwise than assure him that as far as I and my Friends on this Bench are concerned we shall scan all the proposals with respect to the Assurance Bill with a due sense of responsibility, not only for making that scheme a good and sound one but for the finances of the country. The Chancellor of the Exchequer would not wish it, and indeed it would not be proper at this stage to attempt to reopen the discussion of the other day or to endeavour to speak of the merits or demerits of that proposal, and all I will say is for the present that the more information that the Chancellor of the Exchequer can afford as to the cost of the various items of his proposal and as to the different details in it, so that we may know in each case what we get and how much we pay, the better we shall be pleased, and the better I think the House of Commons will do its work.
  1872
  I only refer to the Chancellor's appeal on this occasion to make another appeal to him with regard to it. I hope that the Government too will walk cautiously. I hope that they too will not hurry the House for this year. For my own part I cannot but say that launching out on so vast a scheme as an Invalidity and Sickness Insurance is a scheme involving not merely such great financial responsibility for the State as well as for individuals, but also such numberless details of administrative and executive control that I think they would be well advised to consider seriously whether they would attempt in the same Session of Parliament to press their unemployment proposals. They are of far more restricted scope; they tax everyone not for the benefit of everyone but for the benefit of the few; they rest upon far more problematical grounds, and they are not supported by any such experience as we have to guide us in regard to assurance. That is my justification for mentioning the matter, as it forms a far more hazardous experiment. I cannot say more upon the subject. All I do appeal for at this moment in the strongest possible way is that the House—the whole House—should have a full opportunity of discussing this scheme in which every Member of this House takes I may say a personal interest and to which partly by past experience and partly by recent study an unusually large number of Members have qualified themselves to bring aid and good counsel to the Government. In these matters I believe that the House should have the fullest opportunity for their consideration, and that if there is no time for both the Government should not try to hurry through the whole scheme, but should leave the unemployment part which stands by itself to be considered by itself at another time.
  I come back to hat is immediately germane to our discussion this afternoon—I come hack to the account which the Chancellor has given of our finance and to the proposals which he has made. I think perhaps it will be convenient, at any rate I am sure the Committee will allow me, to reverse in some sort the order of the right hon. Gentleman and to begin by making some observations upon the changes which he proposes or which he does not propose to effect. I listened with no surprise hut with considerable amusement to his announcement that he proposed to amend the Cocoa Duty. We were quite prepared for that announcement in the Chancellor's usual organs in the Press. The announcements were made in the way in which the

  1873
  Chancellor usually makes them in the Press in advance of his communications to the House.
  Mr. LLOYD GEORGE: I do not repudiate the idea that I do communicate with the Press, but I always communicate with it quite openly, and whatever I have communicated to the Press has been in my own name, and I stand the racket, as I did the day before last. But I have not communicated directly of indirectly with the Press upon this question. If I had I should be quite unworthy of my office, because that is the last thing a Chancellor of the Exchequer should do.
  Mr. AUSTEN CHAMBERLAIN:I agree that it is, and I am very glad to hear from the right hon. Gentleman that he has made no communication whatever.
  Mr. LLOYD GEORGE: No, I did not.
  Mr. A. CHAMBERLAIN: Then I suppose it was intelligent anticipation of the Debate.
  Mr. LLOYD GEORGE: It was only an inference.
  Mr. A. CHAMBERLAIN: The Treasury has always prided itself, and rightly, that no secret in connection with the Budget has ever leaked out. It is a very high tribute to pay when you remember how many people—I speak of the Treasury and the Treasury Departments, and I am not confining myself to the men in the Treasury building alone—when you think how many people are in the secrets of the Chancellor, and it is the pride of the Department, which I hope we may long retain untarnished. I was not surprised but amused at the Chancellor of the Exchequer saying that he was going to amend the Cocoa Duty. The Government's conscience has not been particularly tender upon this point, and this is strange as they adhere to Free Trade. They have taken a good many years to do away with the protection which the Cocoa Duty confers, and they only do it new because it has become extremely inconvenient to their friends behind them when they go electioneering to be asked "What about the Cocoa Duty?" Of course if the system of this country is to be what it nominally now is—a system under which no British producer is to have any preference over his foreign rivals, there is no justification for maintaining the Cocoa Duties at their present rates. But I myself, who take a different view of what would be financial wisdom, have never
  1874
  attacked the Cocoa Duties, and have never sought to have them altered considering what they have done. They have built up a great and prosperous industry in this country. I am reminded of a speech of Mr. Gladstone on one of his great Budgets—I think in the early sixties. On that occasion—I am speaking from memory, and am not certain about it—he proposed a readjustment of the Tobacco Duty, and then he claimed that the preference he gave to the home manufacturer would amply compensate him in the first place for the revenue restrictions under which he worked, and over and above that would enable him to pay good wages to the people employed in the trade, many of whom were women and young persons.
  That is one of the things that the Cocoa Duties have done with the old and great established manufacturers. The duties have enabled them to pay good wages and build up, as we know, an extremely prosperous business. I accept their word for it that they are now in a position to be perfectly independent of any such protection, and do not care to have it continued. I quite accept that when it comes to the old-established and now strongly-established and prosperous firms, but it is not true of some of the smaller firms who have started late, who have had to struggle against very keen home competition, and to whom the small measure of protection which they derived from the duties has been of enormous service in establishing their businesses. The alteration of the duties will hit them very hard by the removal of that protection and it will do that for the sake of financial purism or the political convenience of hon. Gentlemen opposite. No one will buy his chocolate any cheaper in consequence of the alteration which the Chancellor is going to make. As regards the drawback the Chancellor is doing a long delayed justice and nothing more. I do not know why, when the Cocoa Duties were imposed, no drawback was given unless it was because at that time there was no export trade, and no one thought it worth asking for, but they are clearly entitled on all the principles of our finance to have that drawback. It has hampered them unduly and improperly, against the interests of the nation as well as their own, and I heartily support the proposal to give them a drawback. I have nothing to say about the proposal in regard to stamps except that the Chancellor's object was certainly meritorious, and equally meritorious and proper was the alteration which he fore-

  1875
  shadowed in regard to the licensing of licensed premises. The object of the Chancellor of the Exchequer is to exclude which have hitherto been valued with licensed premises, where in fact they have nothing to do with the licensed premises. There have been many cases of hardship which were pointed out, largely on this side, during the passage of the licensing Clauses, and I am very glad the Chancellor has seen his way, a little late in the day, but better late than never, to remedy that injustice. But there will be great disappointment that that is the only alteration which the Chancellor of the Exchequer proposes in regard to licences. I am not going to attempt to cover the whole ground to-day, but licence holders in particular, who undoubtedly and admittedly—I think it is avowed by the Chancellor himself—suffer an injustice under what he has made the law are apparently to receive no relief. Theirs is a pressing and an urgent case which I expected to hear the Chancellor deal with to-day and of which he must be prepared to hear a great deal more before these discussions close, of which he will hear so much more that I hope he will himself think it well to bring proposals before the Committee on the subject.
  I go back to the earlier portions of the Chancellor's speech, and turn to his survey of the year. I hope when he comes to reply on the Debate he will be good enough to tell us in broad outline how the £1,200,000 was saved on the expenditure of the year. It is always pleasant to take credit for savings, but their merit sometimes depends on how they are made, whether they are in fact true savings resulting from the more economic use of money, or whether they be due to errors of estimates on the part of the spending Departments, or to the postponement of work which it was anticipated would be done in the year but which is now left over to be provided for in some other year. The Chancellor told us that there had been considerable arrears of Income Tax at the beginning of the year, and he pointed out the other day that that was merely the fulfilment of a prophecy which he had made when he produced the Budget of last year, and when he estimated that £2,000,000 additional arrears of ordinary Income Tax would be outstanding at the end of the year. I told him then that I thought that wholly unnecessary, and that it was a gross overestimate of the amount of Income Tax
  1876
  which would be outstanding. As a matter of fact, it has been a pretty accurate estimate, but for that slack collection is responsible. When you look at the amount of money which was collected on account of Income Tax in the week immediately closing the financial year, the £600,000 or £700,000 that the railway companies were asked to withhold—
  Mr. LLOYD GEORGE: Under six.
  Mr. AUSTEN CHAMBERLAIN: I am told £680,000.
  Mr. LLOYD GEORGE: That was the total amount. I was not aware of it at the time of the Debate; £680,000, it is true, was the amount involved at the beginning. Some of them paid before the end of the financial year, and something between £500,000 and £600,000 is the amount passed over to this year.
  Mr. AUSTEN CHAMBERLAIN: I am much obliged, but for the purpose of my immediate argument the lower the figure the better it suits me, because what I was observing was that the money withheld by request by the railway companies was a very small fraction of what, quite obviously, might have been collected in March, but which was in fact not collected till April. The Chancellor of the Exchequer said there is a great hardship in asking people to pay two Income Taxes within one year. That would be so if they had paid their Income Tax regularly in the previous years; but when you remember that they only had to pay two Income Taxes in one year because they had not paid at all in the previous year, the grievance of the taxpayer is very much less. But in any case, put it as high as you like, do you think you improve it by forcing him to pay in the first week of April instead of the last week in March The Income Tax authorities are convicted of slackness in collection in March and the arrears that fall into this year, a nod is as good as a wink to a blind horse—though they have, happily, fulfilled the prophecy of the Chancellor of the Exchequer a year ago, are a sign of had collection and bad work, and are not really a credit to the Chancellor or to the officers who work under him. I believe those arrears ought to be entirely cleared off within the present year, and though I quite agree with the Chancellor that Super-tax must still be in arrear, I imagine he has estimated for reduction of arrears of Super-tax in the current year, and that in due course, and without any

  1877
  undue pressure, with ordinary zeal and exertion, these two will be brought down to the normal figure of such arrears as there must always be within a comparatively short space of time.
  The Chancellor ended the two years with a surplus of £5,600,000, which would habitually have gone to the Old Sinking Fund, but he proposes to divert the larger portion of it to other objects. With the objects themselves I find myself in hearty sympathy. The provision of £1,500,000 for sanatoria, the loan to Uganda, the payment to the Development Grant, are all excellent objects and I am glad to see money devoted to them. In particular I am glad that the Chancellor was led to call attention to the success of the Uganda Railway. It seems a good many years ago now that Lord Rosebery said we were engaged in pegging out claims for posterity. We pegged out our claims, and the next work was to develop them, and it fell to the lot of the Unionist Government in. the first instance to start that development work in the great new African dominion which had come under our sway. The most gigantic work of the kind undertaken was the Uganda Railway, and many of us who were in the House or followed politics at that time will remember now with interest and with some satisfaction the criticisms which the then Government received from the party opposite for building that railway. No expenditure ever better justified itself. Apart from its political and diplomatic importance, it has shown once again the truth of the old statement that no honestly constructed railway ever fails for long to pay. It was undoubtedly a very expensive railway, but it was a well built railway. For two or three years already it has more than paid its running expenses, and with feeders such as the right hon. Gentleman and the Colonial Office now propose to construct, I believe it will in time become a most valuable possession of the British Crown, and I rejoice to think that the work which our party began and for which they were responsible, in the midst of a great deal of criticism and not a little abuse, is now justified and continued by our successors. These are all good objects, but the result of them is that instead of paying a little over £5,500,000 to the Old Sinking Fund the Chancellor has reduced the contribution, not for one year, hut for two, which he makes to the Old Sinking Fund to £2,300,000.
  That brings me to what he said about debt. The Government have paid off un-
  1878
  doubtedly a large amount of debt, and they take to themselves great credit for having done so. The Prime Minister and the present Chancellor of the Exchequer, when they discuss these transactions, take up an altogether boastful attitude. They pile million upon million in rather a reckless manner I am going to suggest, and they say what fine fellows they are and what a great work they have accomplished. Take an example. The right hon. Gentleman says he provides in the present year £12,500,000 for the reduction of debt. How does he make that out? First of all, he has withdrawn from the Old Sinking Fund the £1,500,000 for what he calls the Development Fund Capital account. That is not debt at all. That was a charge upon revenue at the rate of £500,000 a year for, so many years. Therefore he is not paying off debt in the first place, and he is not entitled to count that £1,500,000 as part of his £12,500,000. But, in the second place, how does he pay it all, even if he were entitled to count it as debt? By taking money which was going to debt in any case. As a matter of fact, he subtracts money which ought to go to debt, which in the normal course would go to debt, to pay what was intended to be a charge out of the Revenue set up by him only two years ago. That is not all. He adds to that the terminable annuities and the military and naval works, public buildings, telegraphs, and so forth. We always kept these separate from the charge for the fixed debt, what is habitually called debt, for which there is nothing to show, meaning thereby that against that debt we have only the British Empire to set as an asset.
  We have not got a particular asset like the block of Government buildings in Whitehall or the docks at Portsmouth or Malta or Colombo. These were separate funds set up and increased automatically as the borrowings increased, and were charged to naval and military expenditure. They appear in I he Naval and Military Votes and they ought to be kept entirely separate, I think, from the provision for the dead-weight-debt. That is the usual phrase which we use as to the fixed debt charge. If you take away these sums from the £12,500,000 which the right hon. Gentleman mentioned we come to £9,000,000. I ask the Committee to look at it a little farther. How shall we measure the merits of the Government in this matter of reduction? Surely just as we would measure the merits of an individual, namely, by the sacrifice he makes in a good cause. The Chancellor of the Exchequer is living in

  1879
  prosperous times. He has got a growing revenue. Both he and his predecessor have been fortunate in that respect, apart even from the increased taxation. What additional sacrifice have they made in order to pay off debt snore swiftly? How much have they added to the Sinking Fund? Not a penny. They have not increased the provision which was made by their predecessors in much harder times. On the contrary, the better the times the lower the amount they give. They have not only not increased the amount, but save decreased it.
  What is the National Debt? It is ordinarily spoken of as a capital sum of so many hundred millions. But it is not so many hundred millions repayable on demand, Or at any time, unless the State wishes to repay it. The obligation of the State is not to repay the capital but to pay interest at the rate of 2½ per cent., and the amount of relief given to the State is the amount of interest you have saved in respect of debt paid off. The annual interest has been reduced to the tune of £2,000,000 a year. They have reduced the Sinking Fund—that is the fund provided for paying off debt—not merely two and a-half but three and a-half millions, nearly double the amount they have saved in interest. I do not grudge the Chancellor of the Exchequer the credit due to him when he speaks of the number of millions he has paid off. On the contrary, I think any Chancellor of the Exchequer in his position would take pleasure and pride in making a statement of that kind. But I do think when one sees how little they have done in the way of sacrifice for the purpose of clearing off debt, and how very ready they are on the slightest provocation to deduct from the Sinking Fund, they ought to be a little more modest in the claims they put forward.
  On the actual finance of the past two years I have very little to say. I hope the Chancellor of the Exchequer will take an early opportunity of making a full statement to us—I do not press for it to-night—about the finance in connection with the purchase of the telephones, an undertaking for which the Government is responsible, and which is now maturing. We shall be glad to be informed how the Chancellor proposes to meet the expenditure. It has been before us for years, and I have no doubt he has got his plans fully matured. The right hon. Gentleman spoke not only with a good deal of satisfaction about the results of his Budget, but he claimed for
  1880
  it that it had produced the money he required without injury to trade or commerce. I think it is a little early to judge of the effects of the changes which have been made. By his own confession they have not begun to be felt, or they are just beginning to be felt. What will strike the House most in regard to the Land Taxes, about which on both sides of the House we spent so much time, is that at present they cost a good deal more to collect than they bring in. I am talking of the Land Taxes only. I wish the Chancellor of the Exchequer could have said with equal confidence and wills a clear conscience that he had raised his money without injustice to individuals. That is a consideration which the Chancellor of the Exchequer ought to bear in mind, and I am afraid that too often in his great need for money to finance the great social schemes of the Government justice to individuals has given way to the great requirements of the State.
  I wish to say a word as to the revenue from the duties on spirits. Spirits, as the Chancellor of the Exchequer said, are very volatile. They have forced the right hon. Gentleman to become a quick-change artist. He plays many parts with admirable spirit. Hon. Members will recollect that the increase in the Spirit Duties was proposed as a fiscal instrument which would produce a large amount of revenue. If I remember aright, the right hon. Gentleman anticipated an increased revenue from that source of £1,500,000, but by the end of the Session the Chancellor had come to take an entirely different view. He said that financially they were almost a failure. I do not wish to exaggerate. He said that financially they were a great disappointment, and that they were going to bring in but a very small part of the revenue anticipated from them. In a most interesting speech one in which he spoke from the very depth of his feelings, the right hon. Gentleman said that at any rate it would be his lasting satisfaction that, if he had not got the money for the Exchequer, he had enforced sobriety on the people, that he had done something, to cure the Scotch of the pernicious habit of drinking their national beverage, and to prevail on them to take Saxon beer instead, or to give up alcoholic liquor altogether. It was a most touching and impassioned speech, and here we have the Chancellor coming down and saying that the movement in the direction of temperance, which was first detected by myself, is still proceeding, and that it indicates a change in the habits of

  1881
  the people. But the whisky trade is booming. He said that the £1,600,000 which he expected first of all, fell to £800,000, but now he is going to get £1,800,000, so that temperance has gone by the board and the finance is up in the air. [An HON. MEMBER: "The consumption is less."] The right hon. Gentleman has lessened consumption. It is quite true that but for the increased duties he would not have got his £1,800,000. It is quite-true that he gets it on a less consumption than he would have got it under the old duties, but he is getting it on a much greater consumption than he expected to have when he announced to the House that if he were to leave the House next day, it would be a lasting satisfaction to him to have lessened the consumption. I think he almost wished to have on his tombstone that he had reduced the whisky-drinking habits of the people.
  On the expenditure side of the Budget I have little to say. There are only two observations that I will make. Whilst none of us want to spend any more on the Army and Navy than is required, we on this side of the House wish to spend the amount which is necessary, and we do not grudge the sacrifices which it involves. I was glad the Chancellor of the Exchequer did not speculate quite as wildly about the reduction of the Navy Estimates this year as he did a year ago. I think until we know more of the actions of foreign Powers it is dangerous to hold out hopes of our own expenditure being reduced. We are not the masters. We do not lead in this matter; we follow; and by force we have got to spend the money which is necessary for the defence of our Empire. I wish I felt quite certain that the Government were spending what is required for an efficient Army, and especially for the Territorial Force, and for the proper upkeep arid maintenance of the buildings, and so forth, in which our soldiers are housed. It is very easy to put pressure on a War Minister, and it is not difficult for him to put pressure on his subordinates, to cut down expenditure in these matters. If that is done, you are not paying for the current expenditure, and the charges will come upon us with added weight in later years.
  There is only one other subject on which I need say a word. In addition to the small changes which he proposes to make, the Chancellor of the Exchequer is going to provide money for the payment of Members. He said that immediately before the General Election, so that the people might know what was in store, the
  1882
  Government announced that they would make such a proposal in the present Parliament. Another mandate! Does the right hon. Gentleman seriously think that one in 10,000 of the electors who went to the poll voted on the question whether Members of this House should have a. salary or not? For my own part I am opposed absolutely and utterly to the proposal to put this House on a salaried basis. I believe we have the only Parliament, or the only Parliament but one, whose Members are the unpaid servants of their people. Cannot we keep to that proud and unique position? It has been the making of our country. Never throughout its long career has there been any difficulty in getting voluntary services for the public from its citizens—rich men and poor men alike. That has been the case, not only in this House, but in every local board throughout the country, on juries, and elsewhere, and if you are going to pay Members of this House, are you also going to pay the members of county councils and district councils and every new authority you set up, or every old authority on which you put added stress of labour? The right hon. Gentleman talked of the additional burden of labour put upon Members during the last few years, and said that made it increasingly difficult for men who have any other business to look after to take part in the affairs of this House. That is true. It is a great misfortune, but it is one of the gravest of all reasons for not asking the House to sit the inordinate length of time we have been asked to sit in the last two years. You are depriving the country thereby year by year to a greater extent of the services of men who cannot give the whole of their time, but who would willingly give what they could, and who would bring to this House the knowledge experience, and public spirit which are invaluable in our counsels.
  6.0 P.M
  Do you think you are going to compensate them or make it possible for them to come, if it is not possible now, by offering them a stipend of £400 a year? That may be sufficient to make it easy, to make it even vital for a particular class or particular classes of hon. Gentlemen to enter this assembly, but it is not enough to compensate and no payment can be enough to compensate those of whom I have been speaking for the strain and stress to which public life exposes them. You must have due regard to the capacity of its Members so as not to overtax their capacity for

  1883
  work, and not to make too large a demand upon the time of those who without payment and in the discharge of the public duty are ready to come here and take their part as legislators. Does it come well from a Chancellor of the Exchequer, who appeals to this House in the most solemn way not to rush into any fresh expenditure and not to press upon him any alteration in the provision for the insurance of the poor and the needy against sickness or invalidity which will cost more money, in the very speech in which he makes the appeal to us to harden our hearts against the cries of distress, to come at the same time to propose that we should vote ourselves salaries, we who ought to be the guardians of the people's purse, and not the recipients of the people's money?
  Mr. RAMSAY MACDONALD: I do not propose to offer many observations with respect to the proposals that we have just heard, and the observations that I do propose to offer will be of the most general character, even with respect to the point which was last mentioned by the right hon Gentleman (Mr. Austen Chamberlain) who has just sat down. I should like to say first of all, with reference to the appeal which the Chancellor made that this House should be careful of its expenditure, that while that appeal is a very good one it must not be allowed to stand alone. It is perfectly true, as he said, that public expenditure is going up very steadily. He might in some respects have said rather rapidly. That is one side. The other side that ought to be examined is this, that the national income is going up very rapidly and very steadily, and when this national income is analysed it is found that the great mass of the people of the country, the wage-earners of the country, and those in that position, are not receiving such a large proportionate share of that income as the classes—that is a word I do not like to use, but it is very convenient on occasions—upon whose backs a wise adjustment of taxation would place far and away the most substantial burden.
  I hope that the Chancellor will not weary in well-doing, because even if he has got to mount up gradually this taxation he ought to be aware of the fact that t he pockets into which he has occasionally to dip his hand, the pockets of the classes of the country, are fuller now than ever they were and more capacious than ever they were. Then there is this one single fact, that while the national income is in-
  1884
  creasing so rapidly and while all the stocks and shares which furnish a magnificent description of prosperity have been developing, the wages of the people of the country have actually been falling. That is the wages measured in actual pounds, shillings, and pence, and still more so the real wages measured in relation to the capacity that they give to the individual to increase his standard of living have been falling. Never was a Chancellor of the Exchequer in a better position than is my right hon. Friend to turn boldly and honestly to the people who bear the greater amount of taxation and say that if he has to ask them to bear more burdens, Providence has undoubtedly blessed them with much more benefits than ever He has done with the corresponding classes in any previous period of our financial history.
  With reference to an observation which has fallen from the right hon. Gentleman who preceded me I would beg the Chancellor of the Exchequer not hastily to make up his mind as to whether he is or is not going to divide the insurance scheme which is before this House at the present moment. I am not saying that I am in favour of keeping the two sections together. I am not committing myself at all. I think there is a great deal to be said for the division of the scheme and there is a great deal to he said for keeping the scheme together; and might I say, with reference to rumours that are about and that formed the subject of inquiry in this House, yesterday I think, that we put no pressure on the Chancellor of the Exchequer to unify and to bring in his two schemes under one Bill. So far as we are concerned the question is open to us. There is much to be said in favour of division and there is much to be said for keeping them together. I hope the Chancellor of the Exchequer will not lightly or in a hurry make up his mind regarding the division of his scheme.
  Then as regards the finances of that scheme, I would like to impress upon the Chancellor of the Exchequer that if we do find, after the careful inquiries we are now making and after the examination which the scheme is now undergoing at our hands and the hands of our expert advisers, the trades unions and other friends whose services are available for us, that we have to ask for a further contribution from the State, the finances of the family are just as important as the finances of the State, and that if he is

  1885
  going to take a proportion from the average income of a working man so large that it means the reduction of the standard of his family life, he is doing far more harm to the State than if he had got to impose extra taxation in order to prevent that sort of thing. We have always got to remember that ultimately the well-being of the State depends upon its family efficiency; if a Chancellor of the Exchequer in order to save putting a burden upon the ordinary taxpayer puts too heavy a burden upon the bread-winner then he would do an incalculable amount of harm which will probably not be voiced by influential parties in this House, but which will certainly be shown as the years go on in the deterioration of the human material with which the nation has got to deal.
  My final point is with reference to the payment of Members. Candidly I confess that the payment of Members is a very thorny and very ticklish subject for a Member of the Labour party to touch on. I think it was a candid Member of the party opposite who said in a letter which I read some months ago in the "Manchester Guardian," if my memory does not play me traitor more than it usually does, that if he and his party liked they could make great party capital out of the payment of Members, because they could turn to the country and say we—he mentioned especially the Labour party in particular—have come into the House for the purpose of finding salaries for ourselves. We know perfectly well that that can be said. I am afraid it will he said. We will take the responsibility for it, and we will explain our position to our constituents. The right hon. Gentleman said that the work that has been done in this House has been voluntary work, that we have had Gentlemen who have been engaged in business, and have given part of their lives to business and part of their lives to public work. Might I say—I do not want to be offensive—that that has not been the rule with Ministers. And may I supplement that by saying that there are some hon. Members of this House who sit on neither of the Front. Benches who give as much value to the country if they receive £400 a year as some right hon. Gentlemen sitting on the Front Benches give value to the country for £5,000 a year. As I say, I do not want to be offensive.
  But when those questions are raised they must be supplemented by our point of view, and if it is going to be made a taunt to us, and to my hon. Friends who sit around me in particular, and with whom
  1886
  I am very proud to be associated in public work, and who were quite conspicuous long before they came into this House, if that taunt is going to be levelled at us the right hon. Gentlemen must expect that we will follow it up and ask the constituencies and the country to look at the other side of the question. But he has enunciated a most extraordinary proposition this afternoon. He has coolly told us that the Government should regulate this business not according to the needs of the country, but according to the convenience of Members of this House. Supposing, for instance, that the business of legislation is becoming so great that men were required to devote the whole of their lives to it. "Oh," says the right hon. Gentleman, "let us knock our heads against this brick wall. Why should we admit the logic of facts? Let us sleep in an ideal world all by ourselves. We must not admit the necessity of a lifework. We must keep legislation as a byproduct of a few leisurely business men and a few rich landlords who are able to give more time to it." How does it work out if we look into history? What man is there whose name is revered on either side of the House and in the annals of the country who has not been one of those men against whom the taunt is thrown that they are professional politicians at 400 a year or any other sum?
  Mr. A. CHAMBERLAIN: The hon. Member is mixing up his answer to other people with his answer to me. I made no taunt against him, and I have never made any taunt against any professional politician.
  Mr. RAMSAY MACDONALD: The particular phrase I am using at the moment has never, so far as I am aware, dropped from the right hon. Gentleman. I should be very sorry to seem to associate him with it, but he knows perfectly well that it is part and parcel of the argument which he has been addressing, and the only point I want to make is this, that as a historical fact the men whom we honour most have been, strictly speaking, professional politicians. Mr. Gladstone was a professional politician, and I might say, without in the least reflecting on the right hon. Gentleman—and I am perfectly prepared to apply the same adjective to myself—that he himself is one, and the very fact that he could rise at that box without any notice at all to follow my right hon. Friend (Mr. Lloyd George) in the admirable way he has done shows that finance is not a sort of by-product of a busy life spent

  1887
  mainly in other matters. We are delighted that it should be so, and all that we claim, and all that we urge upon the right hon. Gentleman, is to let him extend his view of political responsibility and political demands.
  Whether we like it or not, we must have a wider choice of professional politicians, and I believe you will agree with me when I say that amongst men of poor circumstances, men who cannot come into this House and stay in this House without outside aid, there are those who give admirable service to the country, whose experience is precisely the experience we would like to have here, whose ability to put their case would command the respect of all sides of the House, and who, consequently, ought to be men who represent, at any rate, some constituencies, in order that the House may have the benefit of their valuable experience and great ability. All that means, if I may say so, that the economic foundation of being a Member of Parliament has got to be changed. We are to have an income such as is given by trade unions with which I am associated, about £350 per annum. It is not easy for many hon. Gentlemen opposite to realise what such an income means; indeed, it is absolutely impossible for some of them to understand what it means to be a Member of this House, to do one's duty, and to try and live on the amount which we get, keeping two houses, one here and another perhaps in the North of England, or paying lodgings in London, and frequently paying railway fares to go home, and so on. It is absolutely impossible, I say, for very many hon. Members opposite to understand what an enormous and unnecessary struggle this entails. If the Committee will allow me, I will make one personal reference. I have known what it was to live in the City of London on an income that was not more than 15s. a week; but nothing in that experience was like trying to live as a Member of the House of Commons, and appearing in public and performing all the duties of the position on the exceedingly limited income which the trade unions supply to some of the hon. Members with whom I am associated.
  I have always taken the view, and I repeat it this afternoon, that it is an exceedingly bad thing for trade unions to provide income for the maintenance of Members of Parliament. We are not trade union servants here in this House. Members of the Labour party ought to be national servants. If the Members of the
  1888
  Labour party are to receive an income for the performance of their duties here, that income should come from the nation and not from any section of the nation. Hon. Gentlemen opposite are even opposing the continuance of the present unsatisfactory, incomplete, and objectionable salary. I am afraid, however, I have been led into, the discussion of details on this, which is not the proper occasion for such a discussion. I understand that we are to have another and a separate opportunity of discussing this matter, and then I shall pursue the subject, if I should be so fortunate as to catch the Chairman's eye. What I do wish to say is, that so far as I myself am concerned, I take upon myself the responsibility—I am afraid there will be possible misunderstandings and misrepresentations—of saying to the Chancellor of the Exchequer that as regards the payment of Members, we believe that he is doing the right thing, and that he is opening a much wider door to enable members of all classes of the community to serve the State, and to give it the benefit of whatever ability they possess. If the constituencies do not want them they will reject them, but undoubtedly every psychological influence which should surround them, and every economic influence which should surround them, ought to make in the direction of causing them to regard themselves as national servants instead of mere pettifogging servants of sectional interests, whether of landlords, or brewers, or trade unions. These are all equally wrong from the point of view of this House. This proposal involves certain economic consequences, which, I am glad to say, the Chancellor of the Exchequer has boldly faced this afternoon.
  Sir FREDERICK BANBURY: The hon. Gentleman who has just sat down said Members on this side of the House regarded Members of his party as professional politicians. That is not my view at all. As far as I can remember, the vast majority of Members on this side of the House, and the vast majority of people opposed to the payment of Members, have never founded their objection to the proposal on any such ground as the hon. Member has mentioned. I have always understood that Members of the Labour party, because certain sections of the community desired to have them here, have been returned to represent them. My objection to payment of Members is that it will encourage those who are able to speak, who have practised elocution, but who

  1889
  have been unsuccessful either at the Bar or in other professions, to endeavour to be returned, and get £400 a year. Besides, there is a possibility, which will not be overlooked, that this payment of Members may lead to something else besides a nominal £400 a year. There will be chance of appointments, a matter which will not be overlooked by the Member who is going to get his salary, and he will think that, if he finds favour with the party in power, he may receive an appointment as well. It is that possibility which I think will alter the character of this House very greatly. I do not propose to follow the hon. Member into his detailed criticism of this subject, which I presume will have to be brought up in Committee of Supply for discussion. I should have thought that as it is a question of policy and of finance, or only partially a question of finance, it should have been embodied in a Bill on which a broader discussion could be taken, and should not have been introduced in this manner in the Budget, to be followed, I suppose, by a vote in Committee of Supply, and a possible discussion upon the Appropriation Bill. Perhaps the Financial Secretary to the Treasury (Mr. Hobhouse) will tell us what exact procedure he intends to follow with regard to this innovation of the payment of Members.
  The Budget statement of the right hon. Gentleman as unfolded to us makes very little change in taxation. As to the change in the cocoa duty, alluded to by my right hon. Friend, I shall say nothing. In reference to the change in the duty put upon short bonds imported from abroad, I think the right hon. Gentleman is pursuing a wise policy. I am glad he has found out that he has been losing revenue, and I think he has followed a wise course in reducing the duty to one-eighth one year, and one-quarter for two or three years. In regard to the Sinking Fund, I think that is a very important subject in view of the discussion that took place a short time ago upon the Income Tax. I am sorry the Chancellor of the Exchequer is not in his place at the moment to hear the few words which I have to say on that subject. The Chancellor of the Exchequer admits that, the sum which is appropriated, and, can be used for the purpose of the Sinking Fund, is £5,500,000, instead of £8,500,000. That shows perfectly well that the collection of the tax has not been speeded up in any kind of way, but has been, I think, purposely left over in order that the money, which ought to have gone to the
  1890
  Sinking Fund, may be used in the revenue of the present year. It is a very large amount of money, £3,000,000, and I think it shows a great laxity on the part of the right hon. Gentleman and his officials to allow such a large amount to accumulate.
  Of the £5,500,000, apparently there is to be devoted £2,500,000 to the repayment of the Debt, and, of the other £3,500,000, £1,500,000 is to go to what the right hon. Gentleman calls the payment of the Development Fund Grant, and £1,500,000 to the provision of sanatoria and £250,000 to the loan to Uganda. As to the £1,500,000 which is to be devoted to the repayment of the Development Grant, that is not a repayment at all. The Development Fund Grant is a sum which was to be paid out of the revenue of the year—I think half a million a year—to do certain things. Therefore, what the right hon. Gentleman has done is to take money which ought to go to the repayment of the Debt, and use it for the purpose of revenue.
  The sum which is devoted to the loan to Uganda is, I think, all right, because the Committee must remember that the Old Sinking Fund has not only reference to Consols, but to the general repayment of the debt, for the statute says it must, be devoted to the repayment of the debt. There is an impression that it means the purchase of Consols, but it does not mean anything of the sort; it means the repayment of the pebt, in whatever form it may happen to be. One word on a statement of the right hon. Gentleman with regard to the attitude I have taken up upon this Sinking Fund question. My attitude has always been very clear on the Sinking Fund. I have looked up a former speech of mine, made on 1st May, 1899, in which I said that I had no objection to the reduction of the New Sinking Fund—which had nothing to do with the Old Sinking Fund—even £25,000,000, or £23,000,000, provided that it was done at a time when the Debt was small, and when the burden did not press heavily on the people. I ask hon. Gentlemen to look at the difference between now and then. At that time the dead weight of the National Debt was £613,000,000. I would ask the right hon. Gentleman when he replies to give us the amount of the dead weight at the present moment. That has always been done in every Budget statement, but the Chancellor of the Exchequer omitted to do so to-day. I think it will be in the interest of those Members who are interested in financial questions to know the actual amount. As far as I can gather

  1891
  from Whittaker the dead weight of the National Debt last year was £713,000,000, or £100,000,000 more than in 1899. In addition we owe £90,000,000 on Irish land, so that there is nearly an increase of £200,000,000. In addition our annual expenditure is over £180,000,000 instead of £130,000,000, and Consols are 81½ instead of 111.
  At that particular period of 1899 there was a very great outcry about purchasing Consols because they were such a high price and so much above par, and there was a great deal said at the time for using the Old Sinking Fund for other purposes. This is rather an important point. The price of Consols being very different at present, it might be, and I am inclined to think it would be, wise finance to redeem Consols now in preference to any other form of security, because they stand at something like 19 per cent. below par. Therefore you are getting the advantage of that if at a future time you should have to redeem them at par. I am perfectly aware there is no obligation to redeem Consols, but to pay annuities. There is a provision that before 1921 or 1923 imposing the obligation that you must not pay, but after that date you can repay, but there is no obligation to do so. If there was an obligation to repay in 1923 I should not be standing here rather condoning the purposes to which the right hon. Gentleman is devoting the Old Sinking Fund, but to say that you must devote it to the repayment of Consols because in a short time they would reach a price of 100. Notwithstanding that, it is important and ought to be very carefully considered as to whether or not it would not be good financial wisdom to redeem Consols when they are very much below par. The right hon. Gentleman estimates-that the Death Duties will bring in £25,500,000. That is a very large sum, even out of the enormous expenditure of £181,000,000. I should like to draw the attention of the Committee to the fact that we are living on our capital, that the Death Duties are a dead burden upon industry, and that there must come a time when they will not go on yielding the amount they do now unless there is an enormous increase in those duties. As a matter of fact, we are doing in this matter what a foolish spendthrift does, spending our capital.
  I think that the Chancellor of the Exchequer, in view of the fact that he closed his speech with a very wise appeal to the House of Commons to be more economical,
  1892
  might consider also whether it is wise to spend our capital as we are doing at the present moment. I cannot understand why the Super-tax cannot be collected. The right hon. Gentleman said that it was owing to the delay that occurred two years ago in introducing the Budget. That, after all, was his own fault or the fault of the hon. and learned Member for Waterford. I cannot see why it is so, and I should like some explanation upon the point. The right horn Gentleman also said that there was a great decrease in the percentage of unemployment. I should like to know how far that percentage has been arrived at by emigration. As I understand, during the last two or three years there has been a very great increasee in emigration from this country. If the working population of our country is smaller than it was two years ago, and if the employment was exactly the same, the natural result would be that as a large number of the people who wanted employment had gone out of the country the percentage of unemployed would decrease. I do not say that that accounts for it all, but I think before the Chancellor of the Exchequer proceeds to consider, as apparently he did, that the fall was entirely due to the prosperity of the country, he ought to investigate whether or not it is due to the great increase in emigration which has taken place.
  With regard to the appeal by the right hon. Gentleman to the House to be more economical, I must say I heartily approve. I listened to it with a considerable amount of surprise, because of all the extravagant Members of the House of Commons whom I have ever met in my time, I have always put down the Chancellor of the Exchequer at the head. He struck me as one of those beings who look at the future with a rosy view, and that he was under the impression that all he had to do was to wave his wand and down from Heaven pleasant showers of money would be sent. Apparently responsibility has altered his views, and he now takes the view which has been held by every Chancellor of the Exchequer in the past. I was not suprised to find that the hon. Member for Leicester did not take the view of the Chancellor of the Exchequer, and entered a caveat at once for his party, and that they were not going to sit down and support the doctrine of economy. He said that the national income was increasing. I am not sure that it is increasing, but it is a very dangerous doctrine if by virtue of sobriety and industry and thrift a person succeeds in

  1893
  saving a certain amount of money that it is immediately to become the object of hon. Gentlemen below the Gangway who would like to provide some of those earnings and savings for themselves. I hope the influence of the Chancellor of the Exchequer will be exercised to inculcate upon Members behind him some idea that they must eventually put a limit to the great expenditure that is going on.
  I should like to ask how it is proposed to deal with the appropriation of the Old Sinking Fund. I presume that there will have to be a clause in the Finance Bill dealing with it, because a provision of £1,500,000 cannot be considered a redemption of debt. Here the suggestion of the Chancellor of the Exchequer is perfectly open, it is made to the House of Commons, and it is for them to confirm it. That is very different to the endeavour to induce people to postpone the payment of their taxes without the consent of the House of Commons, or even the knowledge of the House of Commons in order that the revenue of one year should be swollen at the expense of the other. If we are going to make any alteration in the use of the Old Sinking Fund I think we ought to do it with very great care, because unless we are very careful the temptation to a Chancellor of the Exchequer to over estimate his expenses and under estimate his income in order to have a surplus for use is one to which he is almost certain to succumb, and it is one which will be very dangerous to the finances of this country if it is persisted in. With the change of view on the part of the right hon. Gentleman as to economy perhaps my appeal may have some weight.
  My right hon. Friend the late Chancellor of the Exchequer seemed to have some little doubt as to the exact amount held over by the railway companies. The amount was £680,000. A certain number of the railway companies, being honest, paid up, notwithstanding the request that they should not pay up. There is one other question, and that is I understood from the Chancellor of the Exchequer that next year the amount of money which he will have to provide for the Insurance Bill is something over £2,000,000. I cannot understand how he arrives at that sum. It is quite true that the Bill will not be in operation until the beginning of May, and that therefore there will only be eleven months in the year instead of twelve. But I understood from the right hon. Gentleman that thirteen millions of people will come under this Bill—nine million males
  1894
  and four million females, and that there would be paid by the State a contribution of twopence per head per week for the thirteen millions of people. I make that out to be over £5,000,000 of money, and I want to know where I am making the mistake.
  Mr. HOBHOUSEmade a remark which was inaudible.
  Sir F. BANBURY: I cannot understand it. Surely if there is to be a contribution from three sources, the employés, the employers and the State, and if you are going to have the scheme based on actuarial calculations, all those three people must contribute every week equally. Unless you do that, I cannot see where you are going to get financial assistance. It is very much the case of the superannuation funds of the great railway companies. In those cases so much is contributed by the employeé and by the company, and the company pay their contribution every year in exact proportion to what the employeé pays. I should be much obliged if this is explained. After all, we are, under this Budget, dealing with the question of how are we to find the money when the Insurance Bill becomes law. Therefore we really ought to know what the amount is to be. It is the more important, because the Chancellor of the Exchequer has told us that next year he will be able to provide the insurance without finding any fresh sources of taxation. Whether that is to be done by a reduction in the amount proposed for the Navy, or whether it is to be clone by an increase in the produce of the taxes I do not quite know. We on this side, and many on the other side, will certainly deprecate any attempt to reduce the amount spent on the Navy. To my mind it opens a very alarming vista, if, for the sake of the Insurance Bill, we are to reduce the amount spent on the far greater insurance, the insurance of our safety, our first line of defence, the Navy.
  Mr. LOUGH: I am glad to have a second opportunity of congratulating the Chancellor of the Exchequer on laying before the Committee a statement which I think will be eminently reassuring to the great trading interests of the country. One can hardly take in the broad outline of the figures which the Chancellor of the Exchequer presented without a strong feeling of gratification at being associated with a State which can show such extraordinary figures. We may comment on them freely, seeing that the right hon. Gentleman the

  1895
  Member for East Worcestershire (Mr. Austen Chamberlain) appears to take the same cheerful view of the situation as far as the immediate future of trade is concerned. The figures show an income of nearly £182,000,000 on which the Chancellor of the Exchequer may calculate with such accuracy that with only slight changes, and without imposing new taxation or straining any of the resources of the State, he can rely upon next year bringing in the same good results. I think that is a most satisfactory feature. It is a great pity there was so much contention over the financial part of the first of the three Budgets which the right hon. Gentleman has laid before the House. The last two have been eminently reassuring, and if the right hon. Gentleman goes on in this way with his Budget statements, as I hope he will for many years to come, he will be looked upon by the country as a steady-going financier in whose hands all the great interests are perfectly safe.
  The words in which the Motion has been put from the Chair enables me to raise a small practical point which I have already mentioned to the Chancellor of the Exchequer, and which I was disappointed he did not deal with in his statement. I feel so strongly on the matter that, if it would advance the object I have in view, I would move an Amendment in order to get it discussed. But I will not adopt that course, because there will be an equally good opportunity in connection with the Finance Bill. The Motion is that the Tea Duty shall be levied at a certain rate until 1st July, 1912. I would like to substitute for 1912, the year 1914 or 1915. Speaking as a business man, I think one of the greatest blots on our financial system is the great uncertainty produced in the commercial world by the Budget scares, which derange the commerce of this great country in every sphere, and are caused entirely by this House and its incapacity to take a sensible view of business. I should like to see the Chancellor of the Exchequer fix this tax, not for the shortest time possible, but for the longest time that could be done with due regard to the exigencies of the political party handling the finance. The same thing should be done with the Sugar Tax, the Tobacco Tax, and all these other great taxes. From what the right hon. Gentleman has told us, it is perfectly clear that he will not
  1896
  be able to take off any taxation next year. From the use he is going to make of the money, great benefit will evidently go to those classes of the community who might be supposed to benefit by a reduction of the Tea Duty or the Sugar Duty. As the Chancellor of the Exchequer is giving them to benefit of insurance, and the other great benefits to which he has referred, he might, I think, consider the great difficulties into which the country is plunged by the uncertainty which is now created every year.
  There was a great meeting held a few days ago in the City of London, attended by the chief representatives of all the great trades concerned, in reference to this matter. The Chancellor of the Exchequer will cause other great meetings to be held in other parts of the country, if he does not take some such step as I am suggesting to protect the trades from this unnecessary uncertainty. In a little chat which I had with him, the right hon. Gentleman told me that there was a constitutional difficulty in the way—that we must have one tax to discuss freely in the House of Commons, on which the whole subject could be opened up. That is not a constitutional difficulty, and could easily be got over. We could put up a sham tax. We could agree to have a perfectly open discussion, and at the same time the great interests involved might be reassured by the course I have suggested. I wish the Chancellor of the Exchequer would consider the matter between now and the introduction of the Bill, in order to see whether, as he is giving the country no reduction of taxation he cannot at least give the trades an assurance that the Budget scares and the harm they do shall not occur so frequently as they do at present. The extent to which they disturb the industry of the country is not fully realised. The arrangements for commerce have to be on settled lines. A great number of people live by this system of distribution out of which the Chancellor of the Exchequer collects the noble revenue of £69,000,000. If for one month, or two months, or, as happened last year, for six months, trade is convulsed, even if there is not ranch reason for the convulsion, much injury and suffering is caused to large classes of the population which we in this House might well manage to avoid.
  There is so little change in the fiscal position caused by the Budget of the year, that

  1897
  we have apparently only one matter to discuss, namely, payment of Members. As I have always been an advocate of this principle, having put it in all my election addresses, of which I have issued six to the same Constituency, and always been returned upon them, perhaps I may say a word in reply to the remarks of the right hon. Gentleman the Member for East Worcestershire on the subject. Nothing could be more appropriate than that on the very day after we have dealt, I hope finally, with the difficulty in which we in this House find ourselves in regard to the House of Lords in dealing with the affairs of the country, the Chancellor of the Exchequer should make this far-reaching proposal. I am one of those who believe that payment of Members will not diminish the utility or the dignity of this House, but that it will have exactly the opposite effect. The Chancellor of the Exchequer said he would not go into the merits of the question, and he did not do so when he made his precise proposal. But towards the end of his speech, in a few eloquent sentences, he made an appeal to us, and I think there was a strange connection between that appeal and his proposal to pay Members of Parliament. He appealed to us to take this matter of expenditure seriously in hand. He appealed to the private Members; he said that we had full control; he asked us to exercise the authority that rests in our hands, and to help him to introduce a more economical system. Looking at the position of the private Member to-day, one might almost think that the Chancellor of the Exchequer was chaffing us. What control have we over expenditure at the present moment? What control have we over anything?
  The House is run by the two Front Benches. If one effect of this proposal is that we shall re-establish the House of Commons in this country—that is, a House of Commnos in which the private Member paid for his services, renders good service to the State—the proposal of to-day will make the Chancellor of the Exchequer famous for all time. The right hon. Member for East Worcestershire said that this country had always produced a band of volunteers ready to do the work. I suppose he meant that the country would always produce a band of 670 volunteers, ready to come here to bear the charges, the travelling expenses, and the cost of a house in London, and to do all the work necessary for the State. There could not be a statement more ludicrously removed from the fact. There are no such 670
  1898
  volunteers. Practically one-third of the House is paid already. But the present system is secret, extravagant, and almost corrupt. It is a splendid suggestion that it should be changed in on blow to such a simple system that the country will understand. When the right hon. Gentleman opposite was speaking about the unpaid Member, I could not help thinking about his own salary. I do not think that any objection to the private Member being paid should be urged in this House by any Member who receives, or has ever received, a salary. The contention that Ministers give a sort of service that the private Member does not give, will not bear looking into for one moment.
  The CHAIRMAN: It does not seem to` me that the general discussion on the Budget is the right time at which to discuss the general principle of payment of Members. This is the occasion on which we discuss the finance of the year; but I cannot remember any other occasion on which we have discussed a principle of this kind in this way. I do not think we ought to do so on this occasion. Hon. Members can say that they object to this or that point in the Budget, but to discuss the matter in a general way, as the right hon. Gentleman is now doing, would not be advisable.
  Mr. AUSTEN CHAMBERLAIN: The postion in which the Committee finds itself is really a very peculiar one. We have had no opportunity of discussing this question hitherto. The Prime Minister, when asked, has told us to wait for the Budget. We are given to understand that the proposal will not be embodied in the Finance Bill; therefore we shall not have the ordinary opportunity for discussing it later. Under these circumstances I would ask you whether, the case being so exceptional, you do not think that a proposal of this kind, made in the Chancellor of the Exchequer's Budget statement, is a fit subject for the general discussion which follows upon that statement. I put it as an exceptional case, having regard to the fact that we have had no opportunity to discuss it before, that we shall apparently have very little opportunity afterwards, and that the Prime Minister himself has always pointed to this occasion as the one on which we were to be told the truth and to be able to discuss it.
  Mr. LOUGH: Of course, no one would differ from the expression of opinion which you have given. But would it not be con-

  1899
  venient that we should have a statement as to what opportunity for discussion there will be? If we do not take the opportunity which seems to be presented now, another opportunity may never occur.
  7.0 P.M.
  The CHAIRMAN: I am governed, of course, entirely by the ordinary rule of revelancy. I cannot remember any other occasion on which we had a discussion on a question similar to this upon the Budget statement. I do not think that we ought to depart from general practice in this regard. In reference to the point raised by both right hon. Gentlemen—for the point put to me by both is practically the same—as to what opportunity will be given for the discussion of this question, that, of course, does not rest with me. I do not know myself whether the Government intend bringing in a Bill or not—
  Mr. A. CHAMBERLAIN: No.
  The CHAIRMAN: Or whether they intend to bring in a Supplementary Estimate. But whether it be one or the other clearly that would be the proper occasion on which this principle should be discussed, and not now.
  Mr. A. CHAMBERLAIN: On a point of Order. May I put one further consideration. You are necessarily, as you say, governed by precedents largely. I submit to you there is no precedent in this case. I do not think that it is possible to recall a case where an announcement of this character has been made as part of the Budget statement. I submit, therefore, that the precedents of which you are thinking do not cover such a case.
  Mr. CHIOZZA MONEY: On a point of Order. The right hon. Gentleman and the hon. Member the Member for Leicester (Mr. Ramsey MacDonald), have already discussed this subject at some length, and I think it will be the general- opinion of the Committee that it would be very desirable to go on with that discussion to a certain point.
  The CHAIRMAN: I am very sorry I cannot see my way to depart from the ordinary rules in regard to this matter. It is not a question for me to decide as to what opportunities of discussion ought to be given. I do think that that is a question that might be, and ought to be, put to the Government. Beyond that I cannot go.
  Mr. CHIOZZA MONEY: Could not the Government announce now what they propose to do.
  Mr. J. W. WILSON: It is hardly a point of order that. I desire to put, but may I express the hope that some word will be conveyed to the Government on this matter. You, Sir, have ruled out of order—and correctly so, technically, I think—a discussion on the payment of Members. This is the first day's discussion on the Budget, and the first day's discussion generally ranges over a very wide area. I hope opportunity will be given for discussion. I think there is reason for some Supplementary Estimate, or something being brought forward if, as I understand, this payment is to be made retrospective from 1st January for instance. It is really a subject that needs to be brought before the House in specific form either by Resolution or other method.
  The FINANCIAL SECRETARY to the TREASURY (Mr. Hobhouse): May I be allowed to intervene for a moment? The Government certainly will offer no opposition if the Chairman now thinks this a convenient opportunity for discussion. The Government certainly would raise no technical objection or opposition if the Chairman rules that this time is convenient, notwithstanding precedent or absolute precedent, for discussion of this particular question. I can make no suggestion to the Chairman, of course, but I certainly shall raise no technical opposition at all. Upon the first question perhaps I may be allowed to confirm the statement of the Prime Minister—namely, that we propose to proceed by means of Estimate and not by Bill. At all events, when the Estimate is submitted the House will have a full opportunity for discussion on this particular subject. If the Chairman rules that he must follow precedent, and cannot permit the discussion to take place now, the Government certainly will afford every opportunity for full discussion upon the subject by means of an Estimate laid before the House. We certainly do not desire in any way whatever to prevent the fullest possible discussion—and that, both from the point of view of the Opposition, and also from the point of view of the exceeding good case which we think we have.
  Mr. A. LEE: Does the right hon. Gentleman mean that we can have one day's discussion in Committee of Supply?
  Mr. HOBHOUSE: I would not like for the moment to suggest that the discussion will last only for one day or not. I do not want to commit the Government to an undue curtailment of time, nor at the same time can I pledge the Government to an extended discussion. Certainly we do not wish in any way to Burke or shirk discussion.
  Mr. LOUGH: May I appeal to you, Mr. Chairman, to reconsider your decision in view of the statement we have had on behalf of the Government, and in view of the fact that this proposal is largely a financial proposal. There is the total amount—there is the amount of the salary, and other things which make this as it seems to me eminently a financial proposal, and surely you cannot rule out the discussion entirely? The right hon. Gentleman the Member for East Worcestershire and the hon. Gentleman the Member for Leicester have mentioned this matter, and therefore a certain amount of latitude has been allowed, and if I may say so should be continued. I plead with you most respectfully to give us as much latitude as possible.
  Mr. HAROLD CAWLEY: Would a discussion on the amount of salary as part of the principle be in order?
  The CHAIRMAN: The question of amount is certainly in order to some extent. With regard to the general question, it is quite clear to me, having heard this discussion, that we ought to keep to our general rule. There ought to be—I think I may say that—opportunity given for discussion of this matter. Clearly that opportunity ought to be either on the Estimate or on the Bill—but not now. We did not discuss the Old Age Pensions on the Budget, except incidentally. We discussed them in that case upon the Bill. There have been similar cases of grants in Committee of Supply even in my time. There was the £100,000 for building schools, mentioned, I think, in the Budget, but not discussed at length. Then, of course, there was a Grant, for unemployment incidentally mentioned in the Budget. If all these questions are to be made the subject of a prolonged Debate in the Budget discussion we shall be departing from our own rule, and I think that on the whole we shall find it very inconvenient. I am very sorry I cannot go beyond that.
  Mr. LOUGH: I bow entirely to your decision, Mr. Emmott, but may I remind the Committee of two points which you will
  1902
  allow me to repeat my allusion to. The one is the very interesting and important statement made by the right hon. Gentleman the Financial Secretary to the Treasury that the procedure is to be not by Bill, but by Estimate, and that it is a Budget matter. The Government, I think, are pursuing a very wise course in that respect, especially if they pursue it in the spirit that the right hon. Gentleman has mentioned, because he has said that at every stage the Government is willing to give full opportunity for discussion. Seeing that the Government has said that, I would appeal to them strongly not to allow undue delay, but to put the matter through as quickly as they can. Then you said that within certain limits—and I will carefully observe them—the amount of the salary might be discussed. I am glad that the Government have not approached this matter in a shabby fashion. I do not think that they have mentioned at all too large an amount. The Chancellor of the Exchequer made that good by reference to the practice in other countries which are not so rich as ours.
  I believe when the Government come co consider this question closely, which we cannot do here having regard to your ruling, that they will find that the thing will have to be settled in just the way the salaries of Civil servants are settled, and in respect to the onerous character of the work done in comparison with the payment that is made for similar work in other places. I think the Government have proceeded pretty fairly. If I suggest any Amendment it would be £500 instead of £400. They have not offered too much. I have given a good deal of thought to the question myself, and when one considers that the whole amount involved is only £250,000 out of the Budget of £180,000,000, I believe that it will be found to be not a bad investment for the nation. I close by simply referring to one point. The Chancellor of the Exchequer appealed to us in dealing with the growing figures to think of the taxpayer, and to endeavour to reduce the expenditure. But what can we do in these matters? The Government naturally think of themselves. Our opportunities of touching these subjects are of a most scanty and ineffective character. If Members were paid for their work, and made to do it, and made to give the necessary time to it, I believe the change would be a wholesome one, and in the interest of the country. I believe it would turn out to be one that would result as well in economy for the taxpayer.
  Mr. AUSTEN CHAMBERLAIN: May I ask the Financial Secretary to the Treasury just to tell us what the Government propose in regard to the progress of the Budget. I forgot to say anything about it in the one or two observations that I made. It is for the convenience of the Committee that we should understand exactly how we shall be situated. I presume that to-night the Government do not want anything except the Tea Duty Resolution, and to-morrow the Income Tax Resolution. And that would permit the Committee, following the usual practice, to renew the general discussion. After the Tea Duty to-night no other business, I take it, will be taken?
  Mr. HOBHOUSE: The right hon. Gentleman I think very accurately has represented the course the Government intend to take. If the discussion ends before eleven o'clock there is no intention of taking any further business. The general discussion will be resumed to-morrow on the Income Tax Resolution, and that will conclude the business to-morrow.
  Mr. YOUNGER: If I believed it possible that the prediction of the right hon. Gentleman opposite would be fulfilled that the payment of Members in this House would reduce the power of the two Front Benches, particularly of the Front Bench opposite, I would only he too glad to see Members paid. But I am afraid I do not take that view. Still I am not going to enter into a discussion on that point. I entertain the very strongest objection to the proposal, and shall carry my faith to the Lobby when the time comes. With regard to what the right hon. Gentleman said about stereotyping certain duties for as long a period of years as would conveniently be regarded as fair and reasonable there is no doubt a good deal to be said for it from a commercial point of view. Everybody knows that uncertainty about the duties to be introduced into the Budgets of the last year or two created a great deal of commercial confusion. It is the desire of every one, I should say, to avoid that. But at the same time this House must retain its control over certain taxation, when we have really given away our control over certain other taxes. We have only retained control over the Income Tax and the Tea Duty. As we have to pass each year these Votes involving sums of £50,000,000 or £52,000,000 it appears to me a consideration—which must present itself to this House—that it is desirable, even necessary, to hold some sort of con-
  1904
  trol of this kind over the Government by way of finance. It is a more important thing than even the commercial stability to which the right hon. Gentleman referred.
  I do not propose for a single moment to traverse the whole statement of the right hon. Gentleman the Chancellor of the Exchequer. I take leave to congratulate him on the position in which he finds himself. As one who has been actively opposed to him for some time, I heartily welcome his return to the House in the condition of health and strength in which we are pleased to see him. We missed him very much in the Debates on the Revenue Bill, and we welcome his return to his accustomed place among us. The right hon. Gentleman referred to myself in dealing with the question of Spirit Duty. I do not pretend to be an authority on the Spirit Duty. I have no connection with the spirit business, and do not know very much about it. But I do think that the right hon. Gentleman, so far as my knowledge goes, has taken a fairly accurate view of the situation. I believe that the repletion of stocks has gone on to a certain extent during the past twelve months, and that probably it has reached its limit. The allowance of something like £1,000,000 in all probability will be borne out in practice.
  I should like to warn the right hon. Gentleman that there are certain factors against even the estimate which he has submitted to the House, and if he does not take some steps to prevent the continuance of what, I am told, has become a very ordinary practice, he will find his estimate somewhat astray. This is a rather serious question. I know nothing of it myself. It was only the other day I heard of it and I mention it now when the right hon. Gentleman in dealing with this estimate for next year gave the figures on which he based his calculation, which showed a tax revenue of £21,400,000 out of 29,000,000 gallons. I do not know whether he has been informed that a very bad practice has arisen in blending cheap grain spirits, which are used now much more largely than before, with some sort of article which I believe is called basis wine, and which is being used to break down the strength of those spirits instead of distilled water. That particular article made from raisins contains from 22 to 24 per cent. of crude spirit, and pays about a shilling duty; and it must be very obvious. that if spirits of 15 or 20 overproof are broken down by an article of that kind

  1905
  instead of distilled water, the revenue stands to lose unless it is controlled by putting a higher tax upon this basis wine. The use of this basis wine has the advantage—I am told has the great advantage—that so far as taste is concerned it practically converts the new raw crude spirit into a mild and delicate article. So that the revenue loses and the consumer loses. Although the right hon. Gentleman has told us he is getting back his revenue from spirits, I do not believe he is getting the same advantage now that the duty is 14s. 9d. as when the duty was only 11s. I make that statement about this new article because I do not think it is fair to good, honest traders that this kind of thing should go on and they will in turn be forced to adopt the same course of action if they are to compete with those who are underselling them.
  With regard to the Licence Duties and the concession which the right hon. Gentleman has offered to make with regard to valuation, or rather as to the definition of premises, the Secretary to the Treasury promised to look into that when the Revenue Bill was before the House. I am very glad we are to have that, but the right hon. Gentleman declined to say, and I think quite rightly, how he intended to frame his Clause. When I spoke to the House some time ago I gave instances, bad enough in all conscience, but I heard of a case the other day in which a licence holder was not only charged licence duty upon his house, but also on a farm which he rented, and on which he sold no spirits. I am very grateful that the right hon. Gentleman has made up his mind to remedy that anomaly. He told us to-day that he estimated his revenue from Licence Duty at £4,200,000. I do not think he told us exactly what the yield was in the last year.
  Mr. LLOYD GEORGE: I think it was £4.120,000. The actual yield, or the previous yield, was £4,770.000.
  Mr. YOUNGER: Does the right hon. Gentleman mean that in 1909–10 it was £4.700,000 and in 1910–11 only £4,120,000?
  Mr. LLOYD GEORGE: We did not collect in 1909–10 because we had no power in the Budget of last year to collect it. Therefore the test is what the value was. There was the Wrigglesworth case of £770,000, which brought the revenue down to £4,120,000.
  Mr. YOUNGER: That practically brings out the right hon. Gentleman's original
  1906
  estimate in 1909. He expected £2,100,000 and an increased revenue out of his taxes of over £2,000,000. That included the wholesale licences. He now expects that and the yield will be about the same. Then this Estimate of next year gives. back the allowance on the Wrigglesworth case. I am told that the concession which the right hon. Gentleman and the Financial Secretary was kind enough to intimate to the House is going to a large extent to be off-shot by the fact that the Inland Revenue officials are screwing up, valuations on which repayment is to be-made. I aim informed that they are looking into the valuations with a strictness which the right hon. Gentleman did not intend, and that they are not proposing to pay back the actual amount exactly in excess of what ought to have been charged if the law had not been altered but they are beginning fresh valuations with a view of not paying back what they ought to pay back. I hope the right hon. Gentleman will look into that. These concessions are material and important, and the right hon. Gentleman must not run away with the idea that the pressure of these taxes is, not severe.
  The exaction of these taxes, particularly in respect to the minimum duty on the small houses in England and Scotland are very severe, and they are crushing these poor people and drawing the very life blood out of them. There was a rapacious biblical person named TiglathPileser—a gentleman whose exactions were probably more extreme than any other gentleman of the same character, but he left Hezekiah something. But the right hon. Gentleman excels TiglathPileser, for he is bleeding these people white, and I certainly hope he may do something or other to mitigate the severity of the minimum duty he is charging. This-minimum might be claimed to be fair and reasonable when the rateable value was taken on a certain basis, but surely there ought to be a reduction made under the system now adopted. I should also like to say that there was great disappointment, and it was very deeply felt that no progress was yet made with the preparation of the-register of any licences. I am not blaming the right hon. Gentleman. What I say is that there was great disappointment. As a matter of fact. I suppose it is hardly completed yet even so far as the £500 houses are concerned. It was said in 1909 that this 50 per cent. charge on annual rateable value would only last a comparatively

  1907
  short time, and that within a year or two there would be a Government register of annual licensed values, a much more correct basis, and that after that the tax would be upon a licensed value. It will be another year before the right hon. Gentleman has this ready. I do not know whether he is told how extraordinarily these values have turned out, but I may tell him frankly I think the whole thing is going to smash up. Only the minimum comes in now because the houses over £500 are returned as of no licence value. How is the right hon. Gentleman to tax these if they have no licence value—how are they to pay the tax at all. Is £250 the minimum to apply to all houses of that kind, and, if not, why not? This is a very serious question, and it raises a difficulty which is a very serious one.
  I always thought if we could get a reasonable basis of taxation based upon the trade people are doing it would be fair and reasonable, and the only fair way to tax a man is on the capacity of his business. But if we are to have a system of valuation with large anomalies of that kind the right hon. Gentleman's difficulties will be greater than those of his predecessors. I hope the right hon. Gentleman will give some attention to this because he may have either to alter the system on which these licence values are decided and fixed, or to find some other basis on which he can put that taxation. I am very much obliged to the right hon. Gentleman for his concession, but he must not expect to get through this Budget without having to review these taxes. These burdens do not fall anything like evenly. They are extremely harsh in many respects, and I think the right hon. Gentleman must admit that there are cases of great hardship, and although I recognise the difficulty frankly, at the same time I hope if we can bring before him any real case in which he ought to give some further concession and relief he will do so.
  Mr. BALFOUR: I do not rise to continue the line of argument put before the Committee with such admirable force and moderation by my hon. Friend who has just sat down, but I rise to put a single question to the Chancellor of the Exchequer, not upon the merits of his Budget or any parts of his Budget, but upon procedure. I was not in the House when certain questions were put to you, Mr. Emmott, and when you gave certain rulings with regard to the discussion of
  1908
  payment of Members. I understand you then ruled that payment of Members or the merits of payment of Members did not naturally and properly fall under the discussion of the Budget, which indeed provides the money which could be used for payment of Members, as the objects of Budgets are not the expenditure of money but the raising of the money.
  If I may say so respectfully, I am sure that ruling is in accordance with the whole practice and tradition of the House. I do not see how we could get through the Budget Debates if the objects for which the money is to be used were to be discussed as well as the objects for which the money is raised. At the same time I might remind the Chancellor of the Exchequer of an answer given by the Prime Minister—I do not think there was the least pledge upon the subject—but which did raise expectations that upon the Budget there would be an opportunity for dealing with payment of Members. I do not know whether the Prime Minister really intended that. It does not alter the situation, and as regards this Debate I have not risen to suggest for a moment that by common consent the Chairman might be asked to modify the ordinary procedure of this House. I do, however, think that we have a right to ask the Government what opportunity they are going to give us to discuss payment of Members, whether that opportunity will come soon, and whether when it comes, it will be ample in its character. Otherwise there will be considerable disappointment to many hon. Members who have come down here expecting the question to be raised, and who are anxious to give their views upon it. Several hon. Members have already been permitted to touch upon it, and if that line of discussion is now stopped I think the Government might very properly tell us what opportunities we shall have for dealing with this very important question.
  Mr. LLOYD GEORGE: I think the request of the Leader of the Opposition is a very reasonable one. He has stated the practice of the House quite correctly, for it is not in accordance with precedent, on the introduction of the Budget, to discuss each item which is set forth in the Budget statement, whether it is new or old. The Leader of the Opposition stated very truly that the Government ought now to be in a position to inform the House when there will be an opportunity of discussing the subject. The intention of the Government

  1909
  is not to introduce a Bill this year dealing with payment of Members, but to put down a Supplementary Estimate for the amount. There will then be an opportunity on that Vote to discuss the subject fully, both in Committee and on the Report stage. I can promise on behalf of the Government that there will be a full opportunity this Session of discussing the question.
  Mr. BALFOUR: I want to make this matter quite clear. I understand the Government have decided to proceed this year with this question by Estimate alone. I should be prepared to comment upon that decision, but I do not think it would be in order at this stage. I understand the Government have not come to any decision as to what permanent form payment of Members is to take. I wish to ask whether the Chancellor of the Exchequer thinks a single day in Committee of Supply, followed, possibly, by a discussion on Report, is really enough to deal with a question so complicated as payment of Members. I do not press for an answer now, but I suppose there will be an extra day.
  Mr. LLOYD GEORGE: I think the right hon. Gentleman had better address that question to the Prime Minister, and then, no doubt, he will receive an answer. I will let the Prime Minister know the view of the Leader of the Opposition on this point, and I have not the faintest doubt he will give the opportunity which the right hon. Gentleman has asked for.
  Mr. AINSWORTH: I understand that for t he future stables will not be included in the valuation of an hotel. I hope that principle will be carried further. May I point out to the Chancellor of the Exchequer that if he is right in excluding stables from the valuation of hotels, he ought to bear in mind the fact that in all first-class hotel buildings there is a great deal of expenditure of capital that has nothing at all to do with the part of the premises used for the, sale of intoxicating drinks. The more you spend on the buildings of the higher class of hotels, the less is the value of the part devoted to the sale of liquor. I wish to ask the Chancellor of the Exchequer not to consider a stable as part of the valuation of an hotel, on which the licence is to be calculated, and to remember that the higher class the hotel the less is the quantity of liquor likely to be sold. By valuing a licence according to the money spent on the building he will be imposing a higher licence on a first-class hotel than on one that deals chiefly in intoxicating
  1910
  liquors. I am glad the right hon. Gentleman has acknowledged the validity of this argument by agreeing that stables are not to be included in the valuation of an hotel. The standard which has been laid down is that in a plaec where not more than one-third of the receipts have been received from the sale of liquor, the licence is placed on the lower scale. I want the right hon. Gentleman to raise that proportion from one-third to one-half. I can assure him that in my own Constituency there are a number of hotels largely patronised by visitors in the summer which are not able to show that the sale of drink is less than one-third of the total receipts, and therefore they are licensed on the higher scale. I hope the Chancellor of the Exchequer will take into his earnest consideration the arguments which the hon. Member for Ayr Burghs has brought before his notice, and when considering the valuation of the property I trust everything will be excluded that is not germane to the licensed premises.
  Mr. EYRES-MONSELL: I rise to bring a specific case before the attention of the right hon. Gentleman which I consider to be a great hardship in the collection of the Income Tax. I would rather have raised this question in the form of an Amendment, but as the hon. Member for North Islington (Mr. Lough) reminded us it is just as well to seize all the opportunities one has of bringing points forward. On this side of the House we do not seem to have very much luck in the question of Amendments. If one makes an actuarial examination of the Amendments and Clauses which were put down to the Revenue Bill, one discovers that the odds were 53 to I against any particular Amendment being raised. We had 160 new Clauses down for discussion in regard to the Revenue Bill, and only three were discussed, the rest being what the Prime Minister described as "an exuberant. efflorescence of legislative fecundity," and they were not allowed to be discussed by the party opposite who pay such lip service to the principles of free speech. May I remind the Chancellor of the Exchequer of an illustration which he used when discussing the Budget of 1909. He said his proposals were like a wide grating put across the river which caught the big fish and let the little fish go through. I am sure the illustration was quite worthy of him, but I want to tell the right hon. Gentleman that he is not letting all the little

  1911
  fish through, and I wish to bring to his notice the fact that he has caught a very small fish which nobody wishes to be caught, and I am going to ask the right hon. Gentleman to let it go. The case I refer to comes under the Income Tax of 1s. 2d. in the pound, which is being charged on the pensions given to the widows of army and navy officers. I have a case of this kind in my hands. Two years ago it was decided to deduct Income Tax at the rate of 1s. 2d. on the full pension if these widows in receipt of the pensions were residing abroad for any other reason than for the benefit of their health. It appears that the Paymaster-General's Department refrained from charging this tax for two years, hoping the order might be cancelled, but in November last year they were told to get in the two back years' taxes in the four months ending 31st March last. The lady in question was therefore charged £9 6s. 8d. on her pension during that time, and in future she is going to be charged £1 3s. 4d. quarterly. That lady's pension is £80, and she has no other means whatsoever. I do not think the widow of an officer should be asked where she is living or for what reason she is living abroad. If this lady had said she was living abroad because of ill-health, she would have got a rebate, but, because she was honest and said it was not due to ill-health but to causes of economy that she was living abroad, she had to pay the full 1s. 2d. in the £. It is a monstrous thing that high rate should be charged on a total income of £80.
  The Chancellor of the Exchequer said some very nice things in introducing his National Insurance Scheme about soldiers and sailors who have been incapacitated from further service. He said he thought it a great scandal better provision was not made for them by the State which they had tried to serve. I am sure those words will be fully appreciated in the Army and Navy. I can at all events answer for the Navy. I am sure they will be appreciated, but I am quite sure what would be more appreciated would be the knowledge to soldiers and sailors that those for whom they were responsible and those whom they have to leave behind on their death would be generously, fairly, and honourably treated by the State which they had done their very best to serve. I wish the First Lord of the Admiralty were here to join with me and plead this case with the Chancellor of the Exchequer. He knows, as I know, that the Navy is judged by
  1912
  small things as well as by big things, and I hope, if he does hear of this, he will try and get this evident injustice removed. The Chancellor of the Exchequer in his Budget speech this afternoon said too much attention is generally given to a case and too little is given to cash. I do not think cash enters very much into this. It will only cost the Treasury a few £5 notes to remove this injustice, and I do ask the right hon. Gentleman to remember a good old maxim we have: "Don't spoil a good ship for a ha'porth of tar."
  Mr. CHIOZZA MONEY: The hon. and gallant Gentleman who has just sat down will forgive me if I pass from the interesting case to which he has referred in order to deal with the speech of the right hon. Gentleman the Member for East Worcestershire (Mr. Austen Chamberlain). I hardly think the right hon. Gentleman did justice to the case of the Cocoa Duty. I can quite understand right hon. and hon. Gentlemen opposite may not be too pleased that the element of protection attaching to the Cocoa Duty should be abolished. It has furnished them with a weapon which they have not been slow to use on thousands of platforms throughout the country, and I daresay they view with great dismay the destruction of that argument. It is perfectly true that with regard to imports there was a distinct flavour of protection about the Cocoa Duty. That has never been denied by any well-informed person. On the other hand, the right hon. Gentleman did not do full justice at least to the fact that the absence of a drawback in connection with the Cocoa Duty did our cocoa trade an extraordinary amount of injury. We have one means of gauging the injury that was done to the cocoa trade. There is a country not far removed from us—Holland—which also has a cocoa trade, and which has the great advantage of absolute free trade in cocoa. What has been the result? The cocoa manufacturers of Holland, who are certainly not superior to our manufacturers in point of ability, have been able to build up an export trade in cocoa which is several times greater than the export trade of this country. When, therefore the right hon. Gentleman pursued the argument that the present position of the trade in this country is largely due to the protective flavour attaching to the Cocoa Duty, he neglected that most pertinent point. I am one of those who hope that the entire removal of the protectionist element in this con-

  1913
  nection will extend our cocoa business, and will put it on level terms with many other trades in this country which have got an exceedingly successful export trade. When I use the term cocoa, I am using it generally to cover the other commodities, chocolate, etc.
  I now pass to another point, in connection with which I hardly think the right hon. Gentleman did justice to the case. One could hardly expect him to express enthusiasm with regard to the remarkable success of the Budget of 1909 in meeting the increased calls upon the Exchequer of this country. I was always one of those who held that, when once the finances of this country were straightened out and when taxes were imposed with due regard to ability to bear taxation, from that point Budgets might easily become humdrum Budgets. Why is the Budget of this year a humdrum Budget? Because of the Budget of 1909 which preceded it. When once taxes are placed fairly according to capacity to bear taxation, then with expanding prosperity and with an expanding national income—I admit it very much surprised me to hear the hon. Baronet the Member for the City of London (Sir F. Banbury) deplore that—we may hope and may be justified in hoping that without additional taxation the revenue of the country will be able to bear any legitimate calls upon expenditure. I should like to express some little doubt with regard to the continuance of any prolonged period of the present high condition of prosperity. There is just a shade of doubt exhibiting itself with reference to the Trade Returns of the last two months. Anyone who examines those returns carefully will not fail to note there is a diminution, or at any rate a check, in the rate of importation, especially of raw materials, and, whilst it is early and whilst indeed it would be wrong to be dogmatic upon such evidence as yet appears, still I think it right to express some slight warning, and say it may be that the anticipation of the Chancellor of the Exchequer may not be borne out.
  We have to put against that this fact: I do not think the Chancellor of the Exchequer has over-estimated the figures he has placed before us. If we turn to the increase of the Income Tax, for example, although it has reached in the Estimate the extraordinary figure of over £44,000,000 yield, thus making the Income Tax the main instrument of taxation in this country. I think it very likely indeed that figure will be exceeded. I shall not be surprised myself if it is well over £45,000,000. In-
  1914
  deed, the Income Tax has become, as it ought to become in every country, the main and proper instrument of taxation. A hundred years ago, I believe, Pitt was mobbed on this way to this House when he first suggested the Income Tax, and for many years the Income Tax was spoken of as something to be regarded as a war reserve. We have now come to realise, I think, that all taxes, even the Death Duties, really resolve themselves into Income Tax, because they can only be paid out of income. That means that the legitimate and, indeed, the wise thing is to take stock of the incomes of the people of the country and to inquire how far the burden should be apportioned amongst them. Having done that, the course of Budget-making in the future simply resolves itself into a percentage more or a percentage less. When that operation is once effected a Budget discussion almost becomes unnecessary, and the whole question of the finances of the country really resolves itself into the discussion of policy in expenditure and not into a discussion of policy in the means of raising revenue. That settled fairly once and for all, the whole financial discussion resolves itself into what the country needs and what the country ought to spend upon its needs.
  I plead once more for greater simplicity in our taxation, and, in spite of the beneficial measures which all parties in this House are joining together to pass in connection with insurance and other matters, I hope it may soon be found possible to entirely abolish our indirect taxation in connection with food. Indeed, I will go further and say I hope the time will come when a civilised State will refuse to impose indirect taxation of any sort or kind. It may be long, perhaps, before we can rule out such a thing as alcohol in that connection, but, apart from that, we ought at any rate to do nothing to interfere with business and to do as little as possible to interfere with contracts made between one man and another. If we take the small instance the Chancellor of the Exchequer is correcting this year, which is a simple matter of readjustment of a tax in connection with contracts, it reminds us of the extraordinary amount of injury that may be done to trade by the imposition of a quite trifling duty. After all, it is surely better to set men perfectly free to carry on industry and commerce, and then, having set them free and having allowed them to pursue their peaceful avocations without disturbance and to gain an income, when the income is made to take

  1915
  from it that which you are bound to take and not to interfere until that point is reached.
  8.0 P.M.
  The right hon. Gentleman the Chancellor of the Exchequer made a very interesting appeal at the end of his speech for economy. I have yet to learn that economy is the same thing as saving. Literally, the word "economy" means wisdom in expenditure. It is derived from a word connected with household management, and, if economy means anything, it means wise expenditure rather than either wise or unwise saving of expenditure. It does not take a wise man to save, but it takes a wise man to spend money well. Why is it we find ourselves at the beginning of the twentieth century compelled to levy in some respects a high rate of taxation. I would urge upon the Committee that we have to levy taxes in the present very largely because we did not spend enough money in the past. We are to-day, because Lord Beaconsfield bought the Suez Canal shares and made that particular item of expenditure, gaining in interest almost as much as he paid originally for the shares. Take, again, the Uganda Railway. The promoters of it 'were condemned for unwise expenditure. I believe the Uganda Railway will bring not only cent. per cent., but much more to the British Empire. It was a case of wise expenditure. Take again another current instance. Before the Prussian Diet there is a Bill for expending a large amount of money upon the electrification of the Prussian railways. That is economy. It is not saving; it is wise expenditure. What will be the result of that electrification of the Prussian Railways? The Prussian trader will gain even greater advantages than he now possesses, and that is saying a great deal. In addition to pouring out a great amount of power for the working of long-distance traffic on the Prussian railways, they will be able to supply power cheaply both for domestic and industrial purposes, the results of which will be marked on the trade and industry of Germany before many years are passed. We are not making such expenditure in this country, and, because Germany is making it, both countries will have something to reflect upon in the course of the next ten or fifteen years. Take another case. The United States of America are spending immense sums on the Panama Canal.
  1916
  That is economy, because the expenditure will fructify in the pockets of the United States, and will add much to the wealth not only of the United States but of the world at large. It is because we have not spent money as a community, collectively, sufficiently in the past that we find ourselves in our present position to-day—a position in which the Chancellor of the Exchequer, when he rises to make his Budget statement, has only a few millions of money with which to begin the revenue of the year. There is scarcely a State in the world the Chancellor of th Exchequer of which is in a similar position.
  Take the German Empire, the State and the Imperial expenditure. There we find that the railways alone bring in a net revenue of fifty millions a year, and the revenues of State railways in Germany pay for the armaments of the Empire. The Chancellor of the Exchequer of this country is not in that favourable position, and I do seriously suggest to the Committee that if we do not look forward, in matters of this kind, if we do not have regard to the building up of such national revenue, then the need for taxation in time to come, combined with the advance of this nation, will put us in a comparatively inferior position to those States of the world—and they are many—which are building up revenues of this kind. I should like to endorse what was said by the hon. Member for Leicester (Mr. Ramsay Macdonald) with regard to the comparative position of profits and wages in this country. It is true that the national income has increased, but it is not true that that increase of income has been sufficiently shared by the wage-earners of this country.
  We should seriously take that into account in considering the Budget of `he right hon. Gentleman, and in considering the proposed social reforms which are now before the House. It was, I think, the late Sir Robert Giffen who said that when the nation was spending less than 10 per cent. of its income upon national purposes it was high time it took thought whether it was spending enough for such purposes. What are we spending at the present time? According to a paper circulated by the right hon. Gentleman the expenditure of this country, properly so-called, reaches £181,000,000. But it does nothing of the kind, because that figure includes the out-goings of the Post Office, all of which come in again as revenue, and more besides. As a matter of fact, the real national expenditure is not more than about £160,000,000.

  1917
  The national income at this time cannot be less than about £2,000,000.000. Take the dictum of Sir Robert Giffen, and you will find we spend considerably less than 10 per cent. of the national income on national purposes. It. is for this reason that I venture to indulge in this slight difference of opinion as to the concluding part of the speech of the Chancellor of the Exchequer.
  It is true we ought to weigh the spending of every halfpenny and every penny. We should not spend anything more, as a nation, than is necessary. But when that is said, who can deny that there is more than one social question in this country which calls aloud for expenditure—expenditure which, if not made, may check the progress of this country among the nations of the world, and reduce its comparative position on earth. Again and again, it is argued that the Government of this country ought, to be a poor Government. I deny that proposition. I believe that the Government of a rich State should be rich, and I believe it is because in the past we have neglected to put our hands to so many social problems, because we have been afraid of the spending of money, it is because of that, in our cities where eight-tenths of the population reside, there are so many evidences of poverty in a land which we know is teeming with wealth. I hope the Chancellor of the Exchequer will forgive me for these few remarks discounting what he said in the concluding part of his speech. It is not because I do not believe in economy, but I do believe that the proper interpretation of economy is wise expenditure rather than unwise saving.
  Mr. SAMUEL ROBERTS: I wish to allude in the first place to the concluding part of the speech of the Chancellor of the Exchequer, in which the right hon. Gentleman made a remarkable appeal to the Committee that it should in dealing with his Insurance Bill review the whole financial situation, and that groups of Members or individual Members should not press points upon him without having regard to what the general effect would be if their propositions were accepted. I regard that principle as one of very great importance financially, and as one which ought to be inculcated by every Chancellor of the Exchequer. The responsibility for expenditure must be upon individual Members and on groups of Members, and if they press their claim without regard to what the effect will be on the taxation of the country if they are accepted, the expendi-
  1918
  ture of the country is certain to grow by leaps and bounds. It is a principle which the Chancellor of the Exchequer would do well to apply generally, not only to his Insurance Bill, but to the whole expenditure of the country. I sometimes think that the Government of the day, and I ant here speaking of all Governments, would find it useful if they had what in some local bodies is called a Consultative Committee—a small committee composed of the Chairmen of the Spending Departments, who, before any Estimates are laid before the council or local authority, have to pass those Estimates with regard to their total effect on the rating of the district. That is the sort of thing which, to my mind, is required in our national finance. We want to consider what the general effect will be before claims are pressed by individual Members or groups of Members, and I can only say that, so far as we on this side of the House are concerned, that appeal of the Chancellor of the Exchequer will be listened to, certainly with regard to his Insurance Bill.
  I want to say a few words with regard to the Budget. When that is introduced think we are called upon to consider the general trend of finance, and I should like to recall to the Chancellor of the Exchequer what took place five years ago, when the present Prime Minister, in 1906, introduced his Budget. That Budget contained Estimates which the right hon. Gentleman took over from the late Conservative Government. Those Estimates amounted to £141,000,000. The right hon. Gentleman said that that was far too much, that we, on our part, had run up the expenditure of the country to a very extravagant point, and he added these words:—
  "In my opinion they make a return to a more thrifty and economical administration, the first and paramount duty of the Government."
  But there has been no return. Every Budget since then has shown an increase. The last two Budgets have shown a very large increase. Taking the figures of 1905–6, the last year for which the Conservative administration was responsible, and comparing it with the £181,000,000 estimated for by the Chancellor of the Exchequer this afternoon, we see an increase of £31,000,000, or 20 per cent.; while if you take the figures for 1896, with which the present Prime Minister compared his Budget of 1906, you get an increase of the total expenditure in fifteen years of 69 per cent. In my opinion that is a very dangerous thing, and it calls for grave and serious

  1919
  thought on our part. I should like to deal with the manner in which these increases have been brought about. Of course, we all admit that the large increase with regard to the Navy is absolutely necessary and justifiable.
  It is the very first duty of this Committee to look after the defence of this country, and if it is necessary, as, unfortunately, it is at the present time, that our naval expenditure should be abnormal, in order to ensure the safety of the country, that expenditure will be heartily voted on this side of the House, at any rate. The great increase has grown, however, in the different classes of the Civil Service. In Classes 1 to 7 I make out that the increase during the last five years, exclusive of the cost of old age pensions, has been £6,195,000. The large increase has been in Class 4 for Education and Science and Arts. I am not saying anything against that. I agree that that is necessary expenditure, but still it represents nearly £3,000,000. There has been an increase in the item for Law and Justice of 2786,000; Miscellaneous, £136,000; Foreign and Colonial Services, £130,000; Salaries and Expenditure on the Civil Department, £1,272,000; and Public Works and Buildings, £883,000. These are the ways in which the expenditure has been run up. They may be very proper, but in my opinion these increases have grown up from grants being given and increases of salaries being granted to the officials appointed without due regard being had to what the effect would be on general expenditure. The right hon. Gentleman will pardon me if I cleat with the most important tax which he has to deal with, but about which there has not been much said namely, the Income Tax. An Income Tax of 1s. 2d. in the in time of profound peace, which we hope may last a very long time, is, I hold, too high, and that is the opinion of the Prime Minister, or rather it was his pinion five years ago when he introduced his Budget and when the Income Tax was 1s. He then said:—
  "In regard to the Income Tax I do not hesitate to associate myself with the declaration of more than one of my predecessors that an Income Tax at the uniform rate of 1/- in the £ at a time of peace is impossible to justify and difficult to defend."
  The right hon. Gentleman has heard those words before I have no doubt. The opinion of Mr. Gladstone, as the Committee knows very well, was that in time of peace the Income Tax ought not to be more than 4d. That was in 1865, and afterwards,
  1920
  in 1873, he promised to abolish it altogether. But here we do not seem to have any prospect of a reduction of a uniform Income Tax of 1s. 2d., and there is no hope of anything of the kind being held out. 1s. 2d., I may remind the Committee, was the general rate of Income Tax in both the Crimean War and the Boer War, and since it was reimposed by Sir Robert Peel in 1843 it has only twice exceeded 1s. 2d. —namely, it was 1s. 4d. in 1855, during the Crimean War, and 1s. 3d. during the Boer War for the year 1902–3. We all know what Mr. Gladstone's opinion was, and that he thought that the tax was a demoralising one, which was vexatious both to trade and to industry. But he had another reason why the tax should be kept low, and this reason obtains at the present time. Mr. Gladstone regarded the Income Tax as one of our great national reserves in times of emergency, of which we have two—namely, the fixed contribution towards the Sinking Fund and the Income Tax. In order to keep these national reserves at a very high pitch the Income Tax ought to be kept low and the Sinking Fund high. Why? Because if you keep your Income Tax low you can in times of emergency easily raise it and obtain a very large income. On the other hand, if you keep your fixed fund which goes to the Sinking Fund high you can suspend your Sinking Fund and also get a very large amount of money for your emergency. At the present moment what are we doing? We are keeping the Income Tax abnormally high, and the right hon. Gentleman is at the same time reducing the fixed sum set apart for the Sinking Fund from£28,000,000 to £24,500,000. That sum was fixed by the late Sir Stafford Northcote in the year 1875 as the proper sum for the service of the Sinking Fund, and his reason was that before 1860 there had never been a less sum set apart for that fund.
  While I am dealing with the Income Tax I should like to draw the right hon. Gentleman's attention to a class which I think is hit very much by this high rate of 1s. 2d. in the £. I refer to those in the middle class whose incomes range from £300 to £500 or £700 a year. The Committee are aware that abatements are allowed, but there is no reduction from the 1s. 2d. if that income is unearned. A great many of our middle class have saved money by work—by professional and other work—and they have retired on their savings—earned money—which have been invested. The money is equally earned with that on

  1921
  which 9d. is the sum charged to the Income Taxpayers who are getting their money at the present time. On the other hand these people have earned this money, they have invested it, and they have to pay the high rate of 1s. 2d. in the £, although, of course, the abatement is allowed. There are a great Many of these people. Perhaps the right hon. Gentleman has seen a book which the hon. Gentleman the Member for East Northants (Mr. Chiozza Money) has written, called "Riches and Poverty." It is a useful book, although I do not agree with the doctrines it contains, but I think the hon. Member is very often correct in his figures, and in that book he says that there are 1,100,000 payers of Income Tax. But the Committee will be astonished to hear that out of that large number as many as 820,000 only earn incomes between £160 and £700 a year. That is to say, a large part of the Income Taxpayers are people of small means, between £160 a year and £700 a year. They are entitled to abatement and differentiation, but it comes to this if you work it out, that those who are not entitled to the 9d. rate but are charged the whole of the 1s. 2d. have to pay a very high rate indeed, amounting to from 6d. to above 9d. in the £ on their whole income. I should very much agree, though I quite understand the difficulty of the Chancellor of the Exchequer in the present year, that if some further abatement could be made in cases of this kind, where the money is not exactly earned but has been earned and invested, the matter is very worthy of consideration. I should like to make some suggestions with regard to the large amount which we collect on our Customs. We collect £33,140,000 in Customs Duties, principally on tea, tobacco, and spirits, and on a few small things. Does it not seem an extraordinary thing that these things are taxed to the tune of £33,000,000 a year? They are things which we cannot produce in this country, and the whole tax falls on the consumer. Supposing we were starting afresh, does it not seem an extraordinary thing that we should tax all these articles of use and at the same time allow to come into the country absolutely free of duty, as we did last year ending 31st December, £156,000,000 of mainly or wholly manufactured goods? They compete with our industries, but we let them come in absolutely free. I hold that if you put a moderate tax of 10 per cent. on these manufactured goods almost the whole of them will come in and you will get £15,000,000 revenue. That is my view, and
  1922
  it is the view of the hon. Member (Mr. Chiozza Money). I congratulate the right hon. Gentleman on his very lucid statement. I can assure him that from our side of the House he will not have any difficulties, and with regard to his Bill he may depend upon it that we shall do our best to assist him, and certainly I think that the appeal which he has made is a most reasonable and proper one that in our demands we should have regard to the general financial situation.
  Mr. GODFREY COLLINS: The hon. Member (Mr. Samuel Roberts) is very concerned as to the size of the Income Tax. I have always felt that it is a fairly small tax. I have felt for many years past that the wealthy classes in this country do not pay their fair share of taxation, and I am glad that in the last few years the Income Tax has been considerably increased. I see no reason why in future years, if the necessity should arise, Income Tax should not be still further increased. The hon. Member told us that if we imposed a 10 per cent. tax on manufactured goods the revenue would benefit to the extent of £15,000,000. In the country we are always told that Tariff Reform would increase employment, but in this House when we come to deal with finance we are told to look to Tariff Reform as a method of raising revenue. I shall be glad if the hon. Member will explain how he can raise £15,000,000 by taxing these goods as they come in while at the same time giving employment in this country.
  Mr. SAMUEL ROBERTS: Other countries find they can do it. They can both tax pretty fairly and at the same time receive a larger revenue.
  Mr. GODFREY COLLINS: I am dealing with our experience in this country of these goods coming in. How can you bring in fifteen millions of revenue as well as at the same time giving increased employment? It seems to me that the Whisky Tax of the past few years provides a very good object lesson as to what will happen if taxation is put on articles of daily use. We well know that it has been very difficult to forecast the exact revenue that has been received from this tax during the past two years. We had the right hon. Gentleman (Mr. Austen Chamberlain) saying last year that the increased Whisky Tax was a failure—not for this year only, but a permanent failure. This afternoon he told us that the Whisky Duty is booming. That is a considerable difference in the attitude

  1923
  of the right hon. Gentleman in the short space of twelve months. I grant that it is very difficult to assume correctly the role of a prophet when you are dealing with financial matters. I think the short experience which we have had during the past two years should warn hon. Members opposite not to rely in future on the taxation of manufactured goods.
  It is very difficult indeed to forecast the exact revenue which will be received in the coffers of the State year by year. We have during the past two weeks received considerable support from hon. Members opposite for the National Insurance Bill. They say they will support it in a wholehearted way. They also wish us to increase expenditure on the Army and the Navy. They take no exception to Old Age Pensions. But directly we come to find the money for these services we part company most acutely. It is well known that there is a certain type of men who are always willing to share good things with you when your pockets are full, but directly you ask them to pay their share you find that your so-called friends readily desert you. The depth of the sincerity of the party opposite in the matter of the Insurance Bill and Old Age Pensions is determined by the measure of support they will give us in raising the necessary revenue. Anyone who raises revenue by increased taxation is bound to raise odium and unpopularity against him. We ask them to share with us the odium and unpopularity which is bound to accrue to a party or to individuals if they increase the taxation required to meet the needs of the nation as a whole.
  I know very well they will tell us that the way to raise the revenue required is by Tariff Reform. We have had now eight Budgets since the Tariff Reform cry was raised, and Free Trade is still going strong and raising the money required without in any sense bearing upon the industry of this country. The Leader of the Opposition has more than once told us that we should be forced to broaden the basis of our taxation. Undoubtedly the basis has been broadened, but not in that particular way that the party opposite desire. We have asked them time and again to state their case, to lay their cards on the table, and to let us know exactly what they mean by Tariff Reform. In my own Constituency they appealed for support by offering taxation of foreign refined sugar. I do not know whether hon. Members opposite will support a tax on
  1924
  foreign refined sugar coming into this country. [An HON. MEMBER: "Yes."] In other words, they are quite prepared to put a tax upon the food of the people.
  Mr. KEBTY-FLETCHER: You are doing that now.
  Mr. GODFREY COLLINS: I take it that the hon. Member is not going to oppose us in that matter. He would also vote for a tax upon sugar.
  Mr. KEBTY-FLETCHER: We would tax foreign refined sugar, but if you refine it in Liverpool or Greenock we would not put a tax on it. That is our position.
  Mr. GODFREY COLLINS: In other words, you are quite prepared to give protection to the refined sugar manufacturer in Liverpool or Greenock. I quite appreciate that that would be the result, but the benefit of your taxation would not be to increase wages in those factories. It would lead to the profits of the refiners being largely swelled at the expense of the poor people of this country. There are a number of electors in ray Constituency who are sugar refiners. They realise that the result of the Tariff Reform policy would be, not to benefit the people as a whole, but to benefit their own particular pockets at the expense of the general taxpayers. I am proud to say that two of these sugar refiners came on to my platform on the Free Trade ticket at the last election. I thank the hon. Gentleman for interrupting me when I spoke of foreign refined sugar. Tariff Reformers argue that the basis of the necessity for a fiscal change is the necessity of raising revenue. I venture to say that the Budget of this afternoon, and the Budgets of the last three years, will be the death knell of the Tariff Reform cry in this country.
  Mr. DUKE: I hope the House will appreciate that the Debate this afternoon illustrates the absolute impotence of the House of Commons in matters of finance at the present time. The Committee listened this afternoon to a Budget speech which it would be impertinence to praise. It was a speech of great lucidity and charm introducing a Budget involving a charge of £182,000,000. I can cast my recollection back to a time thirty years ago when, sitting in the gallery of this House, I heard Mr. Gladstone discuss a Budget where the taxation was somewhere between £70,000,000 and £80,000,000. Mr. Gladstone spoke with trepidation of the possible future when it might reach

  1925
  £100,000,000. This Budget is far removed from the economic views and strict control which Mr. Gladstone expressed and exercised over matters of finance. The present Government came into office at a time when the expenditure of this country was more than 20 per cent. less than it is to-day. The present Prime Minister, in his election address before the 1906 election, condemned the expenditure of that time as expenditure which sapped practically the resources of the country and withdrew from the commerce of the country vast sums of money which ought to circulate in commerce and in providing wages for industry. He may have been right or he may have been wrong. I think he was wrong at that time, but if he was wrong, he has not been candid in the meantime, except in so far as he has been responsible for successive Budgets which have contradicted these protestations.
  I do not desire to make a mere debating speech and leave out of sight the great and beneficent expenditure which has been adding to the Budget of this country in recent times. One looks at the expenditure on old age pensions and at the projected expenditure on sickness and invalidity insurance, and I do not think we can doubt that it is beneficent expenditure marking a great advance in the social life of this country. But the expenditure which was part of the nominal expenditure at all times has gone on increasing, and I think the House of Commons is entitled to have from time to time from the Government something in the nature of a complete review of the responsibilities and burdens imposed, or proposed to be imposed, on the country. I have had the gratification, from the intellectual point of view, of listening to two of the right hon. Gentleman's Budget speeches. I daresay he, in the exercise of his responsibility and with the view to performing his duties, has taken some account of the position of the country and its capacity to bear the burdens, and also same account of the question whether the purposes to which these huge sums of money are being annually applied are purposes which are justified by the return which the public gets. That is not shown in practical experience in any of the methods of control over the expenditure of the country. A Budget of £182,000,000 is introduced, and the Debate which follows is a perfunctory Debate, dealing with isolated topics rather than with the wide question of the raising of the money and
  1926
  the control of expenditure. During the years that I have been a Member the House has not taken steps to secure, and this Committee is not in a position to secure, that either the money which is raised shall be raised in the best manner, or that the purposes to which it is applied are the purposes to which it is properly applied. Take the enormous amount of the Civil Service Estimates. I would ask whether the country is getting a proper return for what is spent on education? What grip does the House of Commons take of that expenditure, in order to see that we are spending the right amount and that we are getting a proper return? There is a cant phrase which is sometimes used about the watchdog of the Exchequer. It may be set against the cant phrase about the watchdog of the House of Commons. If there is any watchdog, he does not reside in this neighbourhood. The right hon. Gentleman admonished us against courting popularity by inviting Governments to make expenditure. No Government that I have known have made any expenditure they did not want to make. Every Government with which I have had practical acquaintance were strong enough, if they believed that certain expenditure could not be justified, to refuse to sanction the expenditure.
  But except for any resolution which may be found in the Chancellor of the Exchequer himself, the control of this House and Committee over the expenditure of money to the tune of £182,000,000 is an absolute farce. There is not a ha'porth of reality in it. This House or this Committee, so far as it exercises control over expenditure, exercises it in the direction of inflating expenditure. The right hon. Gentleman admonishes us against that, but I cannot put out of mind, in connection with those topics, that during the last four years, no doubt with highly beneficial objects in view, His Majesty's Government from time to time has gained great popularity and deserved great popularity by the expenditure of vast sums of money, and if the maxim of self-denial, which is presented to us here from the Benches where responsibility really dwells, is to be practised it will have to begin further back, and the Government who have the responsibility and the power will have to take care that the duty which the House of Commons cannot discharge is discharged somehow. As my hon. Friend the Member for Sheffield was dealing with this subject, that as finance must some day

  1927
  become a non-party question, as the magnitude of the public burden must take the expenditure of public money out of the old domain of party politics, unless the country is to be ruined by a game of beggar my neighbour between parties and politicians, I could not help wishing that the right hon. Gentleman, who has such a mastery of the position, should apply himself to that question of seeing whether there is not some means by which the public could take control of its expenditure as well as of its burden, in a time when nothing is acclaimed so loudly as the absolute control of the public of its own affairs. The right hon. Gentleman would find it difficult, perhaps, but it is not beyond the bounds of statesmanship. If the expenditure of these great sums is to be taken outside of the contests of party life, if we are not to be brandishing on platforms the trophies of our successes against the Chancellor of the Exchequer, the right hon. Gentleman should devise some means by which responsibility would be again shared between His Majesty's Government and this House.
  There are one or two matters which I should like to refer to on questions of detail in this Budget. One is with regard to the plaudits with which the finance of His Majesty's Government has been, I will not say overwhelmed, but at any rate attended during this discussion. It has been said that this Budget is the test of, to put it briefly, in a sentence, Liberal finance, as contrasted with the finance of this side of the House. I take that to mean that this Budget is a test of how the taxes which were a bone of contention in the Budget of 1909 meet the growing charges of that social expenditure on which His Majesty's Government has been engaged—£12,000,000 at the present time, and the greater part of £20,000,000 in view. The taxes about which the country was stirred from end to end were the Land Taxes. Those were the taxes which raised the great constitutional controversy, the taxes which threatened to bring down the House of Lords, and which have divided the constituencies in this country from end to end with a powerful and manifest cleavage. What is the contribution of those taxes which cause so much present evil, and have been the root of so much permanent controversy to these great social objects which His Majesty's Government pursues, and as I think, rightly pursues? If all turns out well, it may be that in the course of the
  1928
  next year they will contribute £700,000. When praise of this system of finance is founded on facts of that kind, it exposes the hollowness of the pretence. The great contribution to these purposes of social reform and social amelioration is being made by the wealthy class of this country, who pay taxes upon considerable incomes. The great contribution is the contribution of Income Tax. There was a certain contribution, no doubt, from the new Whisky Duty, but the great contribution has been from the new Income Taxpayers. [An HON. MEMBER: "Death Duties."] Death Duties are another branch of the same class of taxation on the propertied classes of the country.
  All those burdens were cheerfully taken up, as far as I am aware. I do not suggest that there was not the grudging which a taxpayer always has against taxes, but nobody threatened any political violence. Personal dissatisfaction there may be, but when the credit of this system of finance is founded upon its applicability to meet the burdens which His Majesty's Government has to face in respect of these great matters, we contrast the result of the Land Taxes which were the root of all the trouble in the country with the immense sum which is supplied from other sources. There is one other matter. I spoke of the omnipotence of His Majesty's Government with regard to this matter, as I believe it is omnipotent in the present state of our public affairs with respect to every matter which is presented in Parliament. Could you have a more distinct badge of it than the fact that this question of payment. of Members of Parliament, which has been the subject of debate in the political experience of every man in this House, and which divided parties for years before any of us here took any part in public life, is to be dealt with as an item in the Budget, and a Budget which an hon. Gentleman opposite, who I might say is a revolutionist compared with whom the Chancellor of the Exchequer is an exceedingly moderate man, a Budget which the hon. Member for East Northampton (Mr. Chiozza Money) described as a humdrum Budget? We have had a great deal of discussion as to what can be done by a cautious' Budget. This is an excellent, object lesson, for here we have a Budget providing for payment of Members of Parliament, a subject which for the last fifty years at any rate, was one of the dividing questions between the Radical party in this country and the general body of our countrymen.
  Mr. ELLIS DAVIES: The Chancellor of the Exchequer spoke of the increasing wealth of the country and of the expanding trade and revenue. He also made a reference, which I thought was very pathetic to anyone who realised its significance. He referred to the increase which had taken place in the price of tea, adding that in consequence of that there was a decrease in consumption. That no doubt shows really what a narrow margin there is between the incomes of the poorer classes of the community and what they have to spend on the necessaries of life. On that point I understand that the real discussion of the Committee is with regard to the Tea Duty. I have only tried to point out that while the Chancellor 'Of the Exchequer in the present state of things can hardly be expected to abolish the whole of the Food Taxes, it should be impressed on the Committee, and through the Committee on the country, that at the present moment the poorer classes of the community are contributing through the Food Taxes practically £10,000,000 a year in taxation. I believe that reference has already been made in the course of the discussion to-day to the fact that while there is an enormous increase in the wealth of the country—there has been an increase of £170,000,000 within the last ten years, in the income assessable for Income Tax—while that increase has taken place in the incomes of the Income Tax classes, there has been no increase in the wages of the workers, while, on the other hand, there has been an increase in the price of food. Under these circumstances, I think it is important to impress upon the Government the necessity of considering to what extent, how far, and how soon they can either substantially reduce, if not altogether abolish, the duty upon food. By abolishing the duty on food to the extent of £10,000,000, including the tea duty, you will increase the purchasing capacity of the working classes of this country by £10,000,000. It would mean better food for them and increased trade, and with that increased trade there would he an increase of their wages, and an increase of their social benefits in the course of a very few years.
  9.0 P.M.
  Mr. COOPER: I want to confine my few remarks to the remission of the Cocoa Duties. Had it been in order to have diverted the course of this Debate I could have referred to the subject of Tariff Reform, upon which we on these Benches were challenged a few moments ago by
  1930
  the hon. Member for Greenock (Mr, G. P. Collins). That, however, would not be in order, and I shall confine my observation entirely to the subject of the Cocoa Duties. I am sure the Chancellor of the Exchequer himself will recognise that it is rather a difficult matter to deal with, even on the broad principles, because from the very nature of the circumstances it was impossible for the right hon. Gentleman himself this afternoon to do more than give a bare outline of the general proposals by which this remission is to be carried into effect. In the first place there is a sum of £25,000, which he calculates will be lost by the Government in allowing the drawback on cocoa and chocolate to manufacturers in this country who do an export trade. For my part I think the Chancellor of the Exchequer is acting in the very best interests of the country, of the industry, and of the people working in it, in making that remission. I do not want to make too much of this aspect of the question, but I think as a matter of fact his action is in entire conformity with the fiscal reform principles which we on these Benches never tire of putting before the House. So far as it is possible to get any reliable information on the question of the cocoa industry generally, I have ascertained that there are just forty amnufacturers of cocoa and chocolate in this country. But I do not find that there are more than six out of that number who are doing any export trade. The fact is worth noting. So that while admittedly the Government are doing the right thing in remitting £25,000, as explained to us to-day, yet nevertheless there are some thirty odd firms in this country who will not benefit from that remission, whose trade is more particularly directed to the chocolate industry as opposed to the prepared cocoa, and whose trade is almost entirely in the home market of the United Kingdom. To these firms I submit that this remission of £25,000 is going to have no beneficial effect. I want to look at the other item, namely, the £20,000, which the Chancellor of the Exchequer calculates he will lose by a more careful differentiation between the duty that will in future be charged on the raw and manufactured cocoa. He most carefully explained that the object was to clear away the protective nature which, it was admitted by the Prime Minister some time ago, and quite frankly by the Chancellor of the Exchequer this afternoon, has un-

  1931
  doubtedly up to to-day existed in that particular industry. In the imposition, or the adjustment, or the remission of duties on any goods whatever, there are three reasons for taking off those duties. The first is for revenue purposes, and, obviously, no one will deny that there is no intention, in remitting these taxes, of trying to make revenue. The second reason is to protect the industry, or the labour of this country, that is, I would say, to benefit the industry or the labour in some direction or another. I did not hear the Chancellor of the Exchequer make any suggestion that the remission of these duties could possibly be calculated to have that effect. One very prominent manufacturer of cocoa in this country, who is a very ardent supporter of the Government, made the suggestion that the entire removal of all the cocoa duties would involve no loss to the manufacturer. I am referring to the famous letter which appeared about eighteen months ago in the "Standard," and which was mentioned very frequently in the course of our Debate last July.
  That authority—and I am sure nobody opposite will deny that one is justified in treating him as an authority—pointed out and emphasised that the difference between the duties on the raw and manufactured articles was not primarily designed to give the home manufacturer the advantage, but to place him on an equality with foreign competitors in the home market. That is his statement, that is his idea, that is his admission. Am I not absolutely justified and correct in concluding from that statement that on the other hand, if you take away that difference which was primarily designed to place the cocoa manufacturers on an equality with foreign competitors, it is a logical conclusion to say that the manufacturers of this country are going to suffer to the extent by which you remove that difference between the raw and manufactured cocoa. I think that is a perfectly fair and uncontrovertible argument. The third reason for this remission is to benefit the consumer. For my part I have no recollection that the Chancellor of the Exchequer made any reference to the effect of it upon the price of cocoa and chocolate in this country, but I have been told that he did make some admission that the change would not have any effect in regard to the price of the articles. As a matter of fact it is very obvious that if you are going to take off
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  anything more than a farthing, a halfpenny, or three farthings per pound, when you come down to an ounce or two ounces, the quantities usually purchased by poorer people, and not a pound or half-pound as purchased by the more wealthy, that you cannot split up this small remission which the Government are going to make. Of those three reasons, and I can conceive no other fair and honourable reasons for which duties like this should be altered, not one fits in with the remission of this £20,000.
  We recollect the ardour with which so many hon. Members opposite attacked these duties last July. I remember the hon. Member for Tyneside (Mr. J. M. Roberstson) begging the Government to try in the last Budget to remove the taxes on cocoa in particular, because, as he said, he looked upon the duties as a useful weapon in the hands of Tariff Reformers. I believe I am arguing perfectly fairly when I say that I can see no statesmanlike nor genuine reason why the remission of the £20,000 should be made, and as it does not come under any of the three reasons, we are driven to the conclusion that the remission is being made solely in the interests of party tactics. If I am wrong in that surmise I do hope, that if a responsible Minister does not take the question up, that some hon. Member opposite will point out under which of the reasons to which I have referred, or have failed to refer to, or what logical reason there is for the remission of the £20,000. The point to which I am now brought is this—that, having admitted the drawback to be wise and to be beneficial, and a principle which the Government might well adopt on a very much wider scale, we find that some thirty-two or thirty-three firms in this country, of which two to my knowledge are employing 2,000 hands, who are not engaged in the export trade, must inevitably be injured by the remission of this protection. The trade of those firms has during the last twenty-five years been built up under the protection of those different duties. The hon. Member for East Northampton (Mr. Chiozza Money) made a very brief reference to the cocoa question, and used an argument to this effect—that since the Dutch can carry on such a huge worldwide trade in this industry under what he terms a Free Trade system, so, he maintains, that we in this country, under a Free Trade system as regards cocoa, can equally carry on a large world-wide trade.

  1933
  As far as the manufacture of cocoa as opposed to chocolate is concerned, I admit that there is a good deal in that argument, but the moment you apply it to chocolate it absolutely breaks down. You do not find in Holland any Holland firm doing any large world-wide trade in chocolates, but you do in cocoa. [An HON. MEMBER: "They do it in chocolate."] There is another point which is rather more detailed, and that is with regard to cocoa butter. The hon. Member did not mention it, and I have no doubt it is a subject upon which hon. Members below the Gangway are absolutely ignorant. I have read a good many references that have been made by their supporters in the Midlands to this subject, and the remarks they have made have proved to me the ignorance with which they spoke upon it. [An HON. MEMBER: "We could not be ignorant after reading your book."] That has often passed my mind while studying this subject. I have no interest in it, but I have been studying it for this reason, that I was very much impressed last July with the strong attitude taken up by the Free Trade party, and admittedly taken up by them from the point of view of party tactics, because of the weapon the Cocoa Duties have been in the hands of Tariff Reformers. As the Budget approached, we never heard a question asked by any Free Trader about them. We heard no movement of any description going on, and it was then absolutely certain to me that the Chancellor of the Exchequer was going to deal with it in some way, and that hon. Members who support the Free Trade policy must have been well aware of it, or else they would not have remained so silent. With regard to this subject of cocoa butter, I have often wondered who it was that agitated in the year 1896 for the original imposition of the penny tax. I admit it is not very relevant, perhaps, but that tax, unless I am wrong in my views on the subject:, cannot be other than of a protective nature, and it is a curious fact that the two large producers in this country of cocoa butter are two of the most prominent supporters of the party who sit on the benches opposite. While they have agitated so continuously for the remission of these duties on cocoa, I wonder they have not been equally honest with themselves and with the people of the country, and urged the remission of the penny duty on cocoa butter, in which these two firms are so much more interested than anybody else. The Chancellor of the Exchequer, in endeavouring
  1934
  to remove the protective nature of these duties will not fulfil the very object he has set out to achieve unless he includes the remission of the duty on cocoa butter. How are the Customs officials to differentiate, as they will have to do, between cocoa butter, on which there is a duty of one penny, and milk fats, on which there is no duty? The remission of this duty is unquestionably the natural outcome of the pressure which has been put upon the Chancellor of the Exchequer by his supporters, in order to take from Tariff Reformers an argument of which, I frankly confess, I have made great use, and so have we all. But if the Chancellor of the Exchequer thinks that he is going to deprive us of the powerful argument we have enjoyed he is very much mistaken. The very fact that he has taken this action will air the subject and bring it to the attention of people who had never studied it before. The more they study it the more will they see the absolute fallacy of the Free Trade principle which is to-day being instilled into the cocoa industry by the Chancellor of the Exchequer.
  Mr. POINTER: It will be obvious to every Member of the Committee that we on these benches are more or less in the position of political Oliver Twists. Whatever the Chancellor of the Exchequer brings forward we shall always find it falling short of what we desire. So far as the present Budget is concerned, there are many points in it that we should have liked to have seen extended, and there are many articles which we should have liked to have seen withdrawn altogether from the purview of taxation. Our position in regard to the duties to which the hon. Member has just referred, in a somewhat technical and involved argument, is exactly the position which we take in regard to all indirect taxation. We shall welcome the time when any Chancellor of the Exchequer will say that he is going to abolish all indirect taxation. But we shall not hail with delight any such statement if it is accompanied by the declaration that the desires of hon. Members opposite are to be satisfied, namely, that for the indirect taxation of food and other commodities there is to be substituted a tax upon the £156,000,000 of manufactured goods which come into this country. It is a very peculiar argument to put forward under the guise of concern for the working classes to say that, while you take off the tax on their food you want to arrange

  1935
  some scientific system which the workers will not find out unless they are told about it by which you can get back in another way that which you are professing to give them by the abolition of indirect taxation on food. We hold that the workers are paying even now, in proportion to their income, a greater amount of taxation than any other section of the community.
  I listened with great interest and respect to the remarks of my colleague in the representation of Sheffield (Mr. S. Roberts). It seemed to me that his observations were rather in the nature of a funeral dirge. The ground of his complaint was that the Income Tax was too high, and he suggested that any Chancellor of the Exchequer who desired to follow a sound financial policy ought to keep the Sinking Fund high and the Income Tax low, so that in time of stress the Sinking Fund would be a harbour of refuge for a distressed Chancellor of the Exchequer, and the Income Tax might be raised in time of financial difficulty. Up to a certain point I agree with the hon. Member. But while it may be desirable to keep down the ordinary Income Tax, that can only be done by a further inflation of the Super-tax and other taxes of that description, such as the Estates Duties. I know that hon. Members opposite will not agree to that, but I put it forward as a very important point from the standpoint of the workers. Taking the indirect taxation on sugar, tea, cocoa, and the other articles which bulk so largely in the necessities of their life, they pay, in proportion to their income, more than any other class of society. Therefore we want to see indirect taxation utterly abolished. From that standpoint, of course, we think—
  Sir F. BANBURY: Do you want to pay nothing?
  Mr. POINTER: If the hon. Baronet is asking my personal opinion—and in this I am speaking my personal opinion only—I would abolish all indirect taxation. I would have no taxes but what were direct in their incidence, right from the lowest person who was called upon to pay at all, with a progressive stiffening as the income that was received by that person grew. But we at least recognise that these things have to be a matter of slow growth. While it is true that we are in the position of Oliver Twist, there is no reason why we should not look at the position as it pre-
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  sents itself to us from the immediate practical standpoint. I want in passing to seize upon a remark made by, I believe, the hon. Gentleman the Member for Exeter. He rather ridiculed the idea of the Land Taxes. He said that the total yield this year was to be £700,000. He seemed to be asking the question all the while: "Is it worth it?" Was it worth while to promote a constitutional crisis merely to get £700,000? He seemed to think that if we had been getting about £7,000,000, or possibly £70,000,000, then it might have been all right to have promoted a constitutional crisis. But for a beggarly £700,000, obviously, he thought, it was not worth the turmoil. I would give the advice to the hon. and learned Member to follow the good advice that was tendered to one hon. Gentleman opposite some time ago by the Prime Minister, and that is to "wait and see."
  It appears to me that there is something in these Land Taxes more than hon. Gentlemen opposite will admit. At least it passes my comprehension why they fought against the matter so strenuously. I have not forgotten the long nights of 1909, nor that the hon. Baronet and others kept us here night after night while they fought strenuously with their backs to the wall because they thought that the machinery that was to be put-into operation was too big and clumsy for the result that was going to accrue. But was it not rather that they knew that these Land Taxes were such that when they were got into proper working order they would make a very big demand from the people whose special privileges the hon. Baronet and his Friends are so fond of defending in this House. Therefore, it does appear to me that we on these benches, with all our eagerness for the abolition of indirect taxation, are justified in being a little lenient with the Chancellor of the Exchequer, who does not exactly rush into the extreme of granting us all that we want, in the full knowledge that the time is coming, and before long, when the Land Taxes mature that there will be liberated a great amount of money which can be used. I trust it will be used in lightening the burden of the workers, and to bring about the total abolition of indirect taxation.
  There is one other matter I want to draw the attention of the right hon. Gentleman who now sits upon the Treasury Bench (Mr. Hobhouse) to. It arises out of the closing remarks of the Chancellor of the Exchequer this afternoon. He was very

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  eager that we should not trouble him with demands for increases here and there. He said we might put forward arguments that it was only a small, and insignificant amount, and that therefore we might press him upon that account to accept our solicitations. He went on to say that probably the number of these small amounts that in the aggregate might come along might place him in. difficulties, and force him to choose between refusing the requests or raising extra taxation. I trust that amongst the things he had in his mind he did not include the cost attendant upon the Amendment of the Old Age Pensions Act, which the right hon. Gentleman who is now upon the Treasury Bench has promised us shall take place within a very short time. I may be permitted to indicate the nature of the change I have in my mind. Several hon. Members sitting upon the opposite side, and some upon this, have drawn the attention of the Treasury upon more than one occasion to cases of great hardship in which certain persons—women, say,—who, although they were English themselves, because they have married a foreign husband, have been declared aliens and outside the operation of this Old Age Pensions Act.
  Another case which came within my own knowledge is that of a man living in my Constituency. He went out to one of his sons in Canada, and, after a stay, came back, being away altogether five months. He finds now that his three months' stay abroad has constituted him an alien. He is in the anomalous position that he will have to live to the age of ninety-three before he can claim his old age pension as the Act is at present administered. I trust that the right hon. Gentleman will tell us if he can whether provision has been made in the present Budget for the increased cost attendant upon that change which it appears to me is very desirable and, indeed, urgently necessary. If that change is made I believe the Government will deserve, and I think they will receive, the gratitude, not, perhaps, of a great number of people, but at least of a number, be it small or large, who are in urgent need and against whom this anomalous application of the Clause falls at the present time with great severity.
  Mr. KEBTY-FLETCHER: The Chancellor of the Exchequer this afternoon delivered a lecture to the House on the necessity of keeping down the expenditure. But a few moments before he pro-
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  posed the setting aside of a quarter of a million for the payment of Members. It strikes me that this House should have more control over the present expenditure. "Tacking" like this should not be. These subjects should not be thrown into the Budget, but ought to be brought in in a special Bill. It is just like two years ago. We had the "tacking" in the Budget of that year of the licensing clauses. This year we have the old age pensions brought in. It is a most unsound way, in my opinion, of conducting the business of the nation for the Chancellor to throw into a Budget far-reaching measures of this kind. The payment of Members will be money thrown away. The work of this House has been done very well up to the present by the voluntary services of the Members. Now we are going to have introduced into this Chamber glib-tongued, loose-lipped, street-corner orators, instead of having our affairs conducted as they have been conducted in the past. But it will not end where it has commenced. We find that these doles do not stand still. In America they are getting £1,500 a year and travelling expenses; a secretary thrown in, and a room in the House. There is no cessation of expenditure. On the hustings we hear from Radicals large and loud-tongued advocacy of retrenchment. When they come to this House—
  The DEPUTY-CHAIRMAN (Mr. Whitley): It has already been ruled that the principle of the payment of Members must be argued on another occasion.
  Mr. KEBTY-FLETCHER: I was not aware of that. I suggest that a Finance Committee should be formed to deal with all this expenditure. In city councils, and on other similar bodies there are finance committees. I think we would not have a £180,000,000 Budget—which will in fact be soon £200,000,000—if we had commercial men in this House analysing the expenditure. I am not talking about the hon. Members on this side of the House only. There are very able commercial men on the other side, men connected with shipping and manufactures. If they were put on a Finance Committee to analyse the expenditure I think we would save many millions in the course of the year. The Chancellor of the Exchequer said that there was more work in the country. It is not so. There is more work, but it is in Canada! We have been exporting abroad nearly five thousand men weekly. There are towns in Scotland near Dundee that have been depopulated. [An HON. MEMBER: "Why?"]

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  Through the Budget of 1909. It killed the building trade and threw very many men out of work. The Chancellor of the Exchequer's figures were fallacious. They were Free Trade figures, and so were bound to be fallacious. I hope the Chancellor of the Exchequer will take into consideration the suggestion that he should tell the commercial world to the best of his ability what he will put taxes on next year. If he is going to give relief on tea, coffee, sugar and cocoa, the least he might do is to tell the commercial world what he intends to attack next. That would be a fair way instead of creating a feeling of unrest and leaving doubts in the minds of people as to what industries are next to suffer. We have had a long speech from an hon. Member on the cocoa trade. The "Daily News" in this respect has been much to blame. It cannot be called ignorant, like Radical interrupters at meetings. The "Daily News" knows very well that the cocoa trade is a protected trade, but its action in its attitude to that trade was on a par with its conduct in its hints to the electors to ride to the poll on Tory motor cars. I congratulate the Chancellor of the Exchequer on the statesmanlike way he handled matters in regard to the Uganda Railway. That project was bitterly opposed when it was first introduced into this House, and the Government's attitude to-day only shows how frequently time proves people to he in the wrong.
  The Chancellor of the Exchequer made a great point, with regard to the reduction of debt. He congratulated himself upon the reduction which the Liberal Government have made, and he referred to the reductions made by Mr. Gladstone, but it is not comparable to contrast a reduction on an eighty million Budget with a reduction on a hundred and eighty million Budget. Another reduction of the capital account for which he took credit was the item in regard to the Development Fund, but that is not a capital reduction at all; he puts it on with one hand and takes it off with the other. That is not a reduction in the sense we understand reduction. We are told this is a humdrum Budget. So it is, and I presume it is better to have a humdrum Budget like this than a Marathon Budget like that of 1909. We suggest on this side that the Chancellor of the Exchequer has omitted to avail of one source of revenue which he might have obtained from a tax on the £150,000,000 of manufactured goods
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  coming into this country. Ten per cent. on that, if these articles continued to come in, would mean £15,000,000. If they were kept out we would have no unemployment.
  Mr. WILLIAM CROOKS: There you are.
  Mr. KEBTY-FLETCHER: The hon. Member for Woolwich at last has come to see the beauty of Tariff Reform.
  Mr. W. CROOKS: No. It is your beautiful theory I have seen.
  Mr. KEBTY-FLETCHER: We know that the Labour Members are food taxers. They tax the food of the people; they are going to vote for the Ministerialists to keep taxes on the food of the people. When we ask them to tax manufactured goods, such as silks and satins used by the rich, they refuse. The Labour Members are responsible for the state of destitution and degradation that we have in England, because, as Free Traders, they support taxes on the food of the poor while they let the manufactures used by the rich come in free. What sense is there in allowing expensive silks and satins to come into this country free while you put a tax on tea, sugar, and cocoa. We suggest, on this side of the House, that if sugar be manufactured in this country in refineries in Liverpool and elsewhere it should not be taxed for manufacturing purposes. The Labour Members will be surprised to hear that it was twice passed in their annual congress that sugar should be free. I hope the Chancellor of the Exchequer will take this point into consideration, and that he will agree that a preference should be given to sugar manufactured in this country. The Radical party gave a preference to the cocoa trade and the tobacco trade, and the result is that if you go to buy cigarettes and cocoa you will find them of English manufacture, and workmen in these trades are living under good conditions and are getting good wages. I hope the right hon. Gentleman will consider the advisability of dealing with these matters in a businesslike way by giving a preference to these trades instead of continuing to worship the fetish of Free Trade.
  Mr. TIMOTHY DAVIES: I will not follow the arguments of the hon. Gentleman who has just sat down, but I might refer to one or two points he made. He asked why there are so many people emigrating from Scotland. I think at another time and on another occasion we shall be

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  able to show him why so many people are leaving that country. Very likely if the House of Lords had passed the Small Holders Bill for Scotland three or four years ago we should have less emigration than we have to-day. With regard to unemployment, the hon. Gentleman mentioned the building trade. The building trade of this country is in a better position now than it was ten years ago. Figures prove that, and if the hon. Gentleman will only read the report of the Board of Trade and the reports of the "Labour Gazette" he will find that in the building trade in London at the present time unemployment is lower than it was ten years ago.
  Mr. KEBTY-FLETCHER: I was not talking of percentages. I admit the percentage is lower, but the number of people employed in the building trade is lower.
  Mr. T. DAVIES: If the percentage is lower, less people are out of employment.
  Mr. KEBTY-FLETCHER: No, they emigrated.
  Mr. T. DAVIES: The hon. Member for Walsall gave us an interesting lecture on the Cocoa Union. I believe the hon. Gentleman went up and down the country denouncing the duty on cocoa as a protective duty. Now they propose to take the protective character away from the Cocoa Duty, and even that does not please the hon. Gentleman opposite. When we leave the tax on cocoa they are not pleased. The hon. and learned Member for Exeter (Mr. Duke) said there was no objection to any part of the Budget of 1909 except the Land Clauses, but those hon. Members who were in the House when the 1909 Budget was passed know that many other Clauses were objected to besides the Land Clauses. I am very glad that this Budget has been introduced and that the Chancellor of the Exchequer has seen his way clear to take away the protective character of the duty on cocoa. That has undoubtedly cleared the field for us as Free Traders, and I hope, if there is anything still lurking in any of our duties of a protective character, that they will follow the example of the Cocoa Duties. The Budget of 1909 has produced for us a surplus of £5,607,000, and this has been achieved after meeting the great increase in our expenditure upon the Navy during the last two years and the Old Age Pension scheme, which cost over £9,000,000 last year and will cost £12,000,000 this year.
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  Notwithstanding all this, the Chancellor of the Exchequer is not asking for a single new tax to cover all that expenditure. I say that is a triumph for the Free Trade Budget of 1909, because all this expenditure has been met without resorting to a tax on either manufactured goods or the food of the people.
  The Government are shown in a very favourable light with reference to the amount of the National Debt which has been paid off since the Liberal party came into power, because in six years they have paid off £70,000,000 of the National Debt. How much did the Conservative Government deal with the debt? They put £100,000,000 on the National Debt, whereas we shall have by the end of this year cleared off £70,000,000 of it. Another statement we welcome from the Chancellor of the Exchequer is that the Navy expenditure has now reached its climax, and we have something equal to a promise from the Government that, at any rate next year, the Navy expenditure will be reduced considerably. We rejoice at that promise, and hope it will be fulfilled. We are pleased to hear that we may look forward confidently to a surplus next year, and that the Government will be able to provide for the great scheme of insurance which is now before the House without putting on a single halfpenny more tax on food or any other of the necessities of the people. I believe we shall be able to go on under our present system without putting any more taxes on. I trust that next year the Chancellor of the Exchequer will be able to take a little, if not the whole of the tax off tea. That is a tax which presses very heavily upon the poorest classes of the community, to whom a penny or twopence as a tax upon tea means a great deal. Then there is the question of a person with a small income, part of which is earned and part unearned. I believe it is the custom now to the deduction from the earned income. I think it is only fair that the remission should be equally deducted from the earned and unearned income. I am very glad that the Chancellor of the Exchequer has been able to bring in a Budget this year without asking for a single new tax.
  Colonel BURN: It is the great event of the year when the Budget is introduced, because taxation must affect everybody. We are all interested in taxation whether high or low, rich or poor. The Income Tax for many years has always been looked upon as a legitimate source of

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  revenue for the country, but let me remind the House that only four years ago the Prime Minister said that an Income Tax of 1s. in the £ was impossible to justify and difficult to defend. Now we have got an Income Tax at 1s. 2d. in the £. [An HON. MEMBER: "It is 9d."] Yes, it is 9d. for some classes, but for others it is 1s. 2d., and that is a very heavy taxation. People with moderate incomes have to reduce their expenditure in order to pay this tax, and that means that in some way or another unemployment, which, although it may be small, is all in that direction. I defy any hon. Member sitting on the benches opposite to deny that proposition and to say that if the Income Tax is high it can be met in any other way except reducing expenditure by knocking off one or two extra hands. The Land Taxes have also been mentioned by the hon. Member for Montgomeryshire. There is no doubt that the land is hit very hard by the Budget, and we are beginning to live on our capital. You tax the capital value of land, and by doing that you do not collect revenue, because it has all to be valued at enormous cost to the State and for some time to come it will not bring any return to the Exchequer. Not only this, but the owner of land, whether he be a small or a large owner, has to pay for the valuation of that land. He has to answer the questions that are put on Form IV., and he has to give information which costs him money to get. The small man who owns the plot of land on which his cottage stands is hit, and it is the poor man who is most hit in proportion to what he has. You are taxing the capital value of land, and it means that for the first time in the history of this nation property is being confiscated by taxation instead of by direct transfer. I know full well there are many hon. Members below the Gangway opposite who rejoice to think that some time in the future they will see land taxed 20s. in the £. I know that that will please many hon. Members as well, but Land Nationalisation is a scheme of which I do not think any sane or sensible person ever dreams. We all know what Mr. Gladstone said of Land Nationalisation, and I think he is respected by everybody on both sides of the House. He said:—
  "Land Nationalisation with compensation is folly; without compensation it is robbery."
  I also quote the father of a right hon. Gentleman who sits on the Treasury Bench
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  to-day. The late Sir William Harcourt said:—
  "A man's title to his land is the same as his title to the coat on his back."
  10.0 P.M.
  It is being filched away from the people now, because the tax is on the capital value and not on the annual value. We think there are many untaxed sources of revenue which might well be experimented on. Why is it that a man who neither drinks wine nor spirits nor beer and does not smoke escape taxation? Why does he not assist the Revenue of the country? There are many possibilities of taxation and many untaxed sources which might bring large revenue to the Exchequer. Why should not a halfpenny per dozen be put on soda water, ginger beer, and aerated waters generally? It is a luxury; it is the luxury of the total abstainer. Why should he not assist the Revenue of the country the same as those who like their glass of beer or whatever else it may be? You are putting a tax upon wines and spirits. Why do you not, if you wish to get more revenue, tax the wines used by the rich instead of the beer used by the working-class and poorer people? If you want more money, you might have further taxation on the higher classes of wine. While you tax tobacco, surely it would be fair and equitable to put a tax on high- priced tobacco and on cigars, and not to tax all alike, so that the working man who smokes tobacco at 3d. or 3½d. per oz. has to pay the same tax as the man who smokes expensive cigars or refined tobacco. I think those matters want some attention, and I feel certain, if they were only attended to and there was a graduated tax in those cases, the poorer workers would be legs hard hit, and those who cat afford it would have to pay a little more for their wine and tobacco. We believe that our method of taxation would relieve the already overburdened taxpayer in this country and that we should make the foreigner assist our revenue. An hon. Gentleman this evening said manufactured goods came into this country to the extent of £156,000,000. We do not for a moment imagine that a 10 per cent. tax on those manufactured goods will keep the whole of them out, but if we keep out one-half, we shall get £7,500,000 paid into the Exchequer, and it would leave the other 275,000,000 worth of goods to be made in this country. We believe there is capital in this country, and all you want is some security for the investor. You want to keep his money in this country, and not have

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  him invest it abroad in factories and works paying foreign workmen, and not a penny of the labour being done by the British workman. We believe it is all a question of work. We know that all the world over the prices of the necessaries of life have risen in the last few years. They have risen considerably in the last ten or fifteen years. If you study the "Board of Trade Gazette," which I am sure hon. Members below the Gangway opposite believe to be perfectly true, you will see that in the year 1908–9 the wages of the members of the trade unions, numbering over 1,000,000, decreased by no less a sum than £66,000 a week. What do you find in the Consul's Report for Germany? Read the report in a Blue Book sent by Sir Francis Oppenheimer, himself a Free Trader, and you will find he said that in Germany the food prices and the prices of the necessaries of life have gone up by 25 per cent. in the last seventeen or eighteen years, but during the same period the wages of the workmen in Germany have risen by 37 per cent.
  We maintain that the rise of prices all the world over is a movement that nothing can stop except by the wages rising in a greater proportion, and we say that, if we have work in this country for our own people—British work for British workmen—then we shall do away with these inequalities, or at any rate do away with them to the largest possible extent. We who believe in Tariff Reform do not for one moment say it is a cure for all ills. That would be absurd. There will always be a certain percentage of the population who probably do not want to work, and I say it is a matter for the Government to make them work in some way. But if the maximum of work in this country is done by British workmen, then we shall have more peace and contentment, and we shall see poorer classes raised up. That is one reason why we who sit on this side of the House advocate Tariff Reform. If I did not believe it would raise the people up and better their surroundings and the lives of their children, I should never, for one moment, advocate it. But I am convinced, in my own mind, that the only way in which we can secure an amelioration of the conditions obtaining in this country is to set out on the path trodden by the rest of the world. I believe we must take what is best from foreign nations, and then we shall see the poorest of our people once more enjoy a measure of prosperity with more life and happiness in their homes.
  Mr. CROOKS: I should not have spoken to-night but for certain speeches which have been delivered on the other side. I could not soberly accept statements which were put forward in them. The last speaker referred to the fact that £156,000,000 of manufactured goods brought into this country, if compelled to pay a duty of 10 per cent., would bring into our Exchequer £15,000,000, and he said, "If the goods come in, you will get that amount, while if they remain outside, you will get the work." When I uttered a cheer he suggested that I had at last admired the beauty of Tariff Reform. I suggest that my admiration would be for any man who could accept that statement as either practicable or workable. You cannot keep the money for bringing the goods in and at the same time have it for keeping them out. You imagine that if by taxing the foreigner's goods you keep them out, you will have the work of making them in this country, and your argument is that if you reduce the importation of foreign manuactured goods our workmen here will be kept fully employed. I venture to assert that there is nothing in that argument.
  The last speaker drew a picture of what good it was going to do for the homes of the working classes, and he said he would not advocate Tariff Reform if he did not think that would be the result. I do not for one moment believe that it will be the result. I would like to point out that while we import £156,000,000 worth of goods we export something like £320,000,000 worth. If you tax a foreigner and keep out his goods, what is to prevent him taxing you and keeping out your goods? [An HON. MEMBER "He does."] No, he does not. If he did that you would not be able to send to him twice as much as you receive. It is perfectly true that you might have the work to do in this country, but under such circumstances I think your workmen would have plenty of time in which to do it. They do not shut our goods out at the present time because we are not a decadent nation.
  Great patriots talk as if we in this country had no initiative and no inventive capacity. I venture to assert that in no previous page of our history was there so much inventive and ingenious capacity as there is in our land to-day. You cannot have it both ways. You cannot keep goods out and you cannot at the same time derive the advantage you now have of their coming in. I remember in bygone days a

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  man who said to the working men of this country, "What do I propose to do? I propose to put a 10 per cent. duty on foreign manufactured goods and this will realise ten million sterling. It will be for the industrial community to say what shall be done with that ten millions. "He also said, "You will do more. You will keep the goods out." I wonder how it will be possible to keep the goods out and at the same time to realise this £10,000,000. [An HON. MEMBER "Who said it would?"] My authority is the right hon. Gentleman the Member for West Birmingham, the Gentleman who first started Tariff Reform for the relief of the working classes of this country. I remember an interjection in the House here to the effect that a penny loaf was dear if you had not a penny with which to pay for it. Perhaps some hon. Members now here do not know what my reply was. It was, "If you make it 1½d. it is not any more easy to obtain it."
  We have also heard the wonderful story about sugar. Tariff Reformers put a duty on sugar, and we were told that its abolition would mean throwing thousands of people out of work. Are there any hon. Members here present who can go back forty years and can remember the price of jam. Will they compare the price now with what it then was Why in those days if a workman's child saw a pot of jam in his mother's cupboard he would think they were going to have company on a Sunday. Jam every day was a thing never heard of. Such reckless extravagance was unknown.
  Colonel YATE: When did the reduction in the Sugar Duty take place? Did that reduce the price of sugar to working men?
  Mr. CROOKS: I should think it did.
  Colonel YATE: Well, I went round to make inquiries at the grocers' shops in my neighbourhood, and they told me that the reduction of duty was so infinitesimal as to make it impossible to give any reduction in price to working men. They already sold sugar at 2d. per lb., and any relief from a reduction of the duty went to the wholesale dealers and to the manufacturers of jam.
  Mr. CROOKS: Can the hon. Member remember the day when sugar was 6d. per lb.? It was his party that put a tax upon sugar. It was a small tax, perhaps, but the effect was that in those days the commonest beet sugar cost 4d. per lb., and loaf sugar went up as high as 6d. and 8d.
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  per pound. But all that is ancient history. One would have thought the great historic party to which the hon. Member belongs would have looked up these particulars. One hon. Member who spoke earlier in the Debate said that the tax on sugar had ruined the trade. As a positive fact it was the taking off of that tax that hurt the refiners of this country more than anything else. It was said that when the duty was taken off sugar many works ceased to exist; that the refiners who used to make a lot of money out of the drawback ceased to import, and that down at St. George's in-the-East hundreds of men were thrown out of employment. I took the trouble to take a census of the men employed in the houses closed after the tax had been taken off sugar, and I found the total did' not exceed 400. At this very moment while I am speaking there are between 1,500 and 1,800 men employed in the sugar refining industry in London. That seems to be news to hon. Gentlemen, but if they go to Tate's they will find 1,000 men employed, and at Albemarle's 700 or 800. If you add to that number the people engaged in the mineral water, jam, and confectionery works, it will be largely increased, and then you ask me to vote for Tariff Reform when no living soul can tell me what is Tariff Reform. Hon. Members have not made up their minds what raw material is. What is raw material to a Tariff Reformer? I do not know, but all I have got to say is that it is a curious way of raising the revenue of the country to make it more difficult for the poor to live, while mouthing the poor all the time, The poor working man! And we are charged with keeping him down of all people in the world—we who have tried to lift him up. It would be a relief to us, and lift an enormous responsibility from us, if the working men could be benefited. We live among these people, and we do not go to them only at election time. We have to stop, and we should hear them ask, "What about the reduction of the cost of living." But hon. Members ask us to make the poor poorer and the rich richer by their scheme, and as I said not long ago if there were only forty Members in this House against Tariff Reform we should fight it to a finish. When I ask what raw material is, I get not a word in reply. If I go to the English farmer and ask, "Do you believe in the importation of foreign hides?" he says, "No, certainly not. We can raise enough cattle to supply hides for the whole country. Look at the prices we

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  can get for hides if we keep the foreigner out." I then go to Bermondsey and ask the manufacturer, and he says, "the more hides imported the better." I tell him the farmer says that hides ought to be kept out, and he rejoins the farmer is a selfish man. Then I go to the boot maker and ask him, "Is leather raw material," and he at once says "Yes," but the tanner says it is a highly finished manufactured article. When I tell the tanner that the shoemaker says it is a raw material, he says "he is a selfish humbug." That is the way the argument goes on, and where do you want to take us? I think I could set hon. Members as many questions as would take them five or six Sessions, with the help of the House of Lords to get through. The fact is the moment you touch the question you are in difficulties, but let me tell the Chancellor of the Exchequer that he is on right lines, and if he does not take hon. Members' advice the people will agree with him. I stated in my simple way at a meeting at a place in the North called Crooks—it may have been my ancestral home, but if so the title deeds are lost—that at this moment it is with the greatest difficulty in the world that the working man makes both ends meet, and a squeaky voice cried out, "Both ends meat. We are glad to get one end bread and the other meat." It strikes me if we get Tariff Reform we shall have one end bone and no bread at the other end.
  Mr. ARTHUR STRAUSS: I never heard such a powerful speech in favour of Tariff Reform as that of the hon. Gentleman (Mr. Crooks). He only gave us one instance, and that was sugar refining. He told us that when the duty was taken off only 400 men were employed in the East End, but when it was put on, he knows of his own knowledge that at least 1,500 men are employed now.
  Mr. CROOKS: When the duty was on sugar there were 400 men employed in the trade. When the duty was taken off there were 1,800 men, not after the duty, but twenty years ago. They are working now. Tariff Reform did not help them.
  Mr. A. STRAUSS: Eighteen hundred men are employed now, and there is a duty, therefore the duty on sugar helps employment. But the great argument of the hon. Member, and he used it with the emphasis which seems very peculiar to him when he makes a mistake, was, how is it that we export twice as much as we import If the hon. Member would only
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  look at the figures he would find that we import twice as much as we export.
  Mr. CROOKS: Manufactured goods?
  Mr. A. STRAUSS: I did not speak of manufactured goods, neither did the hon. Member. It is quite refreshing to find that the self-imposed silence to which we have been used for the last three or four weeks, has at last ended, although I believe the. Government would rather that it should have continued after the speeches that we have heard from the other side. All the speeches on this side must have been very satisfactory to the Chancellor of the Exchequer. Let me remind him of what the right hon. Gentleman (Mr. Lough) told him. He first of all congratulated him on the accuracy with which he estimated the revenue of the last two years I am quite sure the right hon. Gentleman must have considered that remark as the acme of sarcasm because he was out, as he told us, no less than £5,600,000, and how the right hon. Gentleman can call that accurate except in irony I do not know. The right hon. Gentleman (Mr. Lough) made a further proposal which I did not hear objected to by hon. Members opposite. He suggested that the duties on tea, sugar, and cocoa, and the other articles of food should be fixed once and for all for at least three or four years. We do not like taxes on food, but I do not think any Member on this side ever went so far as to advocate that they should last for at least four years without any chance of their being reduced. That is going further than the greatest food taxer has ever done. Then we had the speech of the hon. Member (Mr. Chiozza Money). He objected to indirect taxation altogether, and wanted all Income Tax. There is a good deal to be said for that proposal, but I should like hon. Members to tell us definitely at what rate of income they want the tax to commence —at £400 a year, or £50 or £80. Then we can go to our Constituents and say that the Labour Members want to put Income Tax on men with 15s. a week. [HON. MEMBERS: "No."] You want to put on nothing at all. Now we know where we are. The hon. Member for East North-amptonshire gave a reason which seemed to me at first blush very good. He said he wanted no indirect taxes whatever, because they came in contact with one another. I am sure the hon. Member for Woolwich (Mr. Crooks) does not agree with that. A week or two ago he advocated interference in contracts between.

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  masters and men. You cannot have it both ways. If you advocate a principle in one direction you cannot object to it in another. I was very much struck with the peroration of the Chancellor of the Exchequer, with which I thoroughly agree. I could not help admiring his advocacy of the principle that before we go in for expenditure we should always consider where we are to get the income from. That is a good, sound business principle, which was advocated by Mr. Gladstone, and I wish that the Chancellor of the Exchequer had acted on that principle a few years ago. When he brought in the Old Age Pensions Bill, with which I thoroughly agree, he did not tell us where he was going to get the money for the scheme. During the discussion of the Bill he was challenged many times to state where he was going to find the money, and he did not favour us with a reply.
  My chief reason for getting up was to give the Chancellor of the Exchequer a warning. He spoke of the great prosperity through which we have been passing. Well, that is a matter of opinion. I and a good many Members on this side of the House have a different notion from the right hon. Gentleman as regards prosperity. We have the same notion as hon. Members opposite have. We have heard more than one Member of the Labour party state that wages have gone down in the last few years. Our idea of the prosperity of the country is not that the figures of the Board of Trade should go up, or that the revenue from Income Tax -should rise to an immense sum. It is that working men should have better incomes in order to be able to live under more comfortable conditions. That is my opinion as to prosperity, and I am glad that hon. Members opposite agree with me for once. Therefore the prosperity of which the Chancellor of the Exchequer has spoken is only fictitious prosperity, which may touch certain classes, but does not touch the multitude in this country. But taking this estimate for the following year, I am afraid that he was a little too sanguine as regards the continuation of that prosperity, which, after all, must be taken into account. I remember that last year, when prophesying a very good year, he gave us different reasons for his prophecy from those which he gave to-night. But I must warn him that the Board of Trade returns show a certain tendency to go down, and that the manufacturers all over the country—and I am in a fairly good position
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  to know what is going on in that respect—although they are to a certain extent still full of orders, have not for the last few months been booking orders to the same extent as they were doing last year. I am speaking now more particularly of the industry which has always been the guide of all other industries—that is the iron and metal industry. Taking the iron industry, there is certainly a falling off in the orders and in the prosperity of that particularly important branch, and taking this in connection with the depression which at present is prevalent in the United States, and with the bad crops in some of the Continental countries, I would suggest that tie Chancellor of the Exchequer should make his Estimates in a very careful manner indeed, and should not be too sanguine, as any Chancellor of the Exchequer is always likely to be. The advisers of a Chancellor of the Exchequer are very apt to make their Estimate first and then find out causes for that Estimate after they have made it. Last year, in October, he gave us a prophecy—no doubt on the information supplied by his advisers, because a Chancellor of the Exchequer could not possibly know all these things—that though the price of cotton was very high yet the price would go down, and we should have plenty of cotton. Well, the price of cotton has gone up since then. I am quite sure that the Chancellor of the Exchequer told us what his advisers informed him of, but I would merely point out that he can hardly get proper advice from the officials of the Treasury, and that he must go further than that in order to find out the exact trend of trade, because appearances for the moment are very deceptive.
  I would like to ask the Chancellor the same question as was put by my hon. Friend the Member for the City of London (Sir F. Banbury) when the Chancellor of the Exchequer did not happen to be present. It is a matter which will crop up during the next few weeks, and which requires explanation, and no doubt there is a satisfactory explanation to which Members are entitled. We have been told that the man has to pay 4d., the employers 3d., and the State 2d. per week for this insurance. There are about fourteen millions of men and women to come into this scheme, which would mean at 2d. a week, roughly about 10s. a year, or a total of £6,000,000 a year which the State has to give to this insurance fund. We have heard from the Chancellor of the Exchequer that in the first year the amount

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  will he trifling, about £50,000; next year a million and a half, and in the following -year two and a half millions. Anyhow, there will be six or seven millions which would represent the 2d. per week. No -doubt it will be explained that the benefits will only accrue later on, and that the heavy sums will only have to be paid at a future time. At the same time, it will not do for the Chancellor of the Exchequer to assert that the State pays 2d. per week, while the other people pay 4d. and 3d., unless he pays that 2d. at the same time that the employer and employed pay their 7d. a week. It would he to a certain extent misleading the people to tell them that the State pays 2d. a week, when, as a matter of fact, it will only commence to pay the 2d. in three or four Tears' time, while the employers and the workers will at once begin to pay their contribution of 7d. a week. It is not an unreasonable question which I ask, and it is one which was asked by such a high financier as the hon. Gentleman the Member for the City of London (Sir F. Banbury). There is some misapprehension about it, I will not say in my mind, but certainly in the minds of those who do not understand the figures so well as we do. Perhaps the Chancellor of the Exchequer will tell us whether we must give this six millions a quarter at once, or, if not, will he not make a plain statement that the 2d. per week is only to commence in four or five years' time? It is a simple question which can be answered. My object in rising was to warn the Chancellor of the Exchequer that his Estimates may be a little too sanguine, and that I trust he will take the proper precautions.
  Mr. HOBHOUSE: The hon. Gentleman who has just sat down suggested that there was distinct evidence of a retrograde rather than a progressive movement in the trade of the country. I recollect that the hon. Member for Bootle (Mr. Bonar Law) made a speech at this time last year of exactly similar tenour to that of the hon. Gentleman who has just sat down. He predicted, amongst other things, that the iron and steel industry, to which the hon. Gentleman referred in his remarks, was in a very parlous condition, and that before the end of the financial year which has just concluded there would be found a very serious set back in that particular trade. I am not an expert in that particular trade; but it is quite clear to anybody who has studied in any way the details of that par-
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  titular trade, as they are ascertainable by the Board of Trade returns, that the fears of the hon. Member for Bootle were entirely unfounded as regards last year, and that there is really no evidence observable for any of the fears which have been suggested in the speech of the hon. Member who has just addressed the House. There is just one remark I should like to make on that subject. It is quite true that in the matter of imports into this country there has been in the month of April a considerable falling off in values as well as products, but more particularly in values. One of the causes of that is due to a very satisfactory reason. There has been a considerable drop in the price of food, and, if my memory serves me right, one of the causes of the falling off in the imports was due to the lessening in values by something like a million-and-a-half of food stuffs. A great quantity of that is due to fall in values, and that is a very satisfactory point for us in this Committee to observe. There is another point which has been mentioned. This time last year Easter came in the month of March, and this year Easter fell in the month of April. In addition to the three days at Easter, during which practically no business is transacted in this country, there was a fifth Sunday falling in the month of April, so that you have to take from the thirty days of April no less than four days upon which ordinarily work is being done, but on which, in this particular year, no business was transacted. That very seriously affected the Returns of the month of imports and exports, and the deficit in the case of imports will, I am perfectly certain, be made up by the increased Returns of the month of May when they are completed.
  There are only one or two other points which I think the Committee would expect me to dwell upon before we come to a conclusion on this particular Resolution. One of the hon. Members for Sheffield asked me whether the Government adhered to their decision to introduce a Bill dealing with some of those minor points connected with old age pensions, on which my right hon. Friend the Prime Minister had given some pledges in the earlier part of the Session. We certainly do mean to deal with those minor points. I understand a Bill comes up for discussion, and is the first Order on Friday, introduced by a private Member—one of the Members for London on the Opposition side—and I may probably take that opportunity of

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  making a more definite statement as to the position of the Government. The hon. Gentleman the Member for Ayr Burghs (Mr. Younger) asked a question earlier in the evening, and made some little play on the fact that no register of valuation had yet been arrived at.
  Mr. YOUNGER: Only partially.
  Mr. HOBHOUSE: Only partially arrived at. That valuation is based on the amount of trade done in particular houses. One of the difficulties in connection with that is that the publicans, perfectly genuinely I have no doubt in many cases, are unable to give details of the trade. They profess to have kept no accounts, and I daresay that is perfectly true. I have no doubt in the matter, but, of course, until they supply the Inland Revenue with those details of accounts of their trade it is impossible to make that progress with the valuation which naturally the hon. Member desires, and which, of course, the Government desire for their system. He admitted that some of the concessions which I was able to make earlier in the year have given satisfaction from his point of view, and he said that our proposed concession with regard to remote stables was satisfactory. My right hon. Friend has promised to deal with that matter, and I will only put in this caveat. We cannot deal with stables attached to hotels. Stables attached to public houses are one thing; stables attached to hotels are quite a different thing. In the case of a hotel, the stables are almost invariably ancillary to the trade of the hotel. In the case of the public house they are in many cases distinct and apart from its business as licensed premises.
  Mr. YOUNGER: Does the right hon. Gentleman's remark apply only to stables within the curtilage of the property, or does it apply to stables removed some streets away?
  Mr. HOBHOUSE: I have told the Committee quite frankly that the wording of the Clause is not yet settled—
  Mr. YOUNGER: I do not press it.
  Mr. HOBHOUSE: The hon. Gentleman does not press it, and until the wording is settled I do not propose to make a more definite statement on the subject. The hon. Baronet opposite (Sir F. Banbury) again said that we were living on our capital. That statement is not justified by any facts of which we have knowledge.
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  You can test the capital of the country in two ways—by the amount of income assessable to Income Tax, by the amount of interest and dividends paid by foreign countries and foreign companies to this country. By neither of those tests is the theory of the hon. Baronet supported. The amount of income assessable to Income Tax has increased steadily for a long series of years. Speaking on the subject last year, I think I pointed out that in the course of the last four or five years the amount of income assessable to Income Tax had gone up by something like £300,000,000. The amount this year, although the final figures are not yet ascertainable, shows no diminution of that rate of progress, but rather an increase. The position with regard to the interest and dividend paid by foreign countries and foreign companies to this country is equally remarkable and equally satisfactory. A very interesting statement was put forward in the autumn of last year by the joint editor of "The Statist," the weight of whose evidence the hon. Baronet will not question. In that statement it was pointed out—I am speaking from memory—that the amount of dividends and interest payable by foreign countries and foreign companies to this country amounted to something like £160,000,000 per annum—an amount which has steadily increased. In the exportation of capital, which the hon. Baronet finds a danger, I find a source of great satisfaction. As long as such exportations of capital are not made rashly and are on sound securities they are a source of strength.
  The hon. Baronet asked what was our difficulty in collecting the Super-tax. It is a very proper question, and the answer is perfectly simple. We have at present dealt—I will not say on all occasions, but practically all—with the voluntary payers of Super-tax. There are two classes—those who voluntarily make a return of their total income, and who therefore are very easily dealt with. There are also those persons who are suspected of not making a complete personal return of their total income. They may be in doubt as to what it is, and they do not want to put themselves on the wrong side of the dividing line; or it may be that they desire skilfully and wilfully to evade payment of the tax. With this class of person we have not yet dealt finally. As time progresses, and we have more knowledge and more leisure to deal with them, I think the return from the Super-tax will be somewhat larger than it is at the present time. This

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  it is that constitutes the difficutly to which my right hon. Friend alluded to this afternoon.
  The right hon. Gentleman the Member for East Worcestershire asked a question about the telephone capital. I will not dwell upon the subject, seeing the right hon. Gentleman is not here, except to say that we are taking over the telephones on 1st January. We shall have to deal with the subject by Bill later. The Bill is now drafted, and it will deal, I hope satisfactorily, certainly fully, with the question of the telephone capital. All I would remark at the present moment is that the price to be paid for the telephones depends upon arbitration. That being the case, the Committee will not expect me to name any sum, even approximately, that we may have to spend. There are only two other points that I need deal with. Questions were asked by the right hon. Gentleman. One was in regard to the £1,200,000 saved on the expenditure of the Budget. He suggested that it might be due either to postponement of work, to error of estimate, or to genuine savings. In nearly every case the difference between the Estimate and actual expenditure is extremely small, having regard to the vast sums dealt with. We do not claim any credit for this Government as having been snore accurate than its predecessors in avoiding error, but I think we are entitled to say that we have shown no greater error in our Estimates.
  The difference in expenditure has been due to two main causes. There were £125,000 to be paid out for old age pensions less than anticipated, and there was a saving upon the Exchequer receipts in respect of the Road Board Improvement Fund. Amongst other matters there was a smaller yield on the Motor-car Licences and the Motor Spirit Duties than anticipated. There was therefore less apparent expenditure. There were a number of small alterations in our expenditure which really I could not class together, and which really are not important.
  There is only one other point to which I think I need refer, and that is the curious point made by the right hon. Gentleman the Member for East Worcestershire that there was a real obligation in connection with the National Debt to pay interest, but not to repay capital. I confess that surprised me very much. It seems to me if that were true there is a greater obligation on a Government which professes to hold that principle not to increase the capital expenditure by actually borrowing for pur-
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  poses which we on this side of the House have met out of annual revenue. Therefore, if I understand the right hon. Gentleman, we have in a very serious way transgressed the principle that he and his followers hold, but which I hope no Chancellor of the Exchequer will ever be found to follow on this side of the House. I think I have now dealt with all the points raised by hon. Gentlemen opposite.
  Mr. EYRES-MONSELL: What about widows, with pensions, living abroad?
  Mr. HOBHOUSE: My right hon. Friend will make a note of that. People who go abroad deliberately do so, if not for other purposes, because they believe they can live more cheaply abroad than at home. They are less ashamed if I may say so, of their poverty abroad than at home. If they go abroad I see no reason why this country should not exact from them some contribution towards the expenses of the country which finds them their pensions or which, if they are in possession of independent incomes, guarantees the security of their capital, and while my right hon. Friend will give attention to the points raised I am afraid I cannot hold out very much hope that the result will be satisfactory to the hon. Gentleman who raised the point. With regard to the Insurance Bill it would be very inconvenient to debate the details of a Bill now before the House on an occasion like this. It is but remotely before us on the Budget. Full provision for this year's expenses on Insurances is provided, but I cannot enter upon a discussion of next year's Budget, and I do not think the Committee will expect me to deal with the details of a very complicated Bill which will come up for consideration and discussion in a very short time, both on Second Reading and in Committee. I trust the Committee will permit us to get this Resolution to-night, and all the more so because we shall have this discussion continued to-morrow.
  11.0 P.M.
  Mr. PETO: I should not have risen to address the Committee were it not for the concluding remarks made by the right hon. Gentleman the Secretary to the Treasury in reply to my hon. Friend. I cannot regard the answer he made in reply to the plea on behalf of the widows of officers as satisfactory in any sense. May I state the question quite simply as it appears to me? The case is as to widows of officers having no means other than the pensions guaranteed to them. She finds it impossible to live on that sum

  1959
  in this country. She puts forward no plea of ill-health, which if she did put forward she would be ganted that remission, and on account of her honest statement that she lives abroad because she cannot afford to live in this country, the sum of 1s. 2d. in the £ is deducted from that pension. I do not think the answer of the right hon. Gentleman is adequate, and I hope that when this matter comes to be considered more maturely by the Chancellor of the Exchequer he will be able to see his way to make this small remission amongst the other trifling remissions he is making this year. The Chancellor of the Exchequer, in giving the Committee his forecast of the sunny year in front of us, based his argument mainly upon the amount of money which is invested by this country in foreign countries, and the large amount of interest which accrues to those who make those investments; and also to the increase in the amount of income assessable to Income Tax. I do not want to belittle this very important index of the prosperity of the country, but personally I find myself infinitely more in sympathy with the hon. Member for Leicester, who preferred to gauge our prosperity by a wholly different measure, namely, that of the wage-earners. The hon. Member pointed out that although the income assessable for Income Tax had increased enormously and our investments in foreign countries grew from year to year, the income of the poorest of the wage-earners had decreased and was going down.
  The hon. Baronet the Member for the City of London referred to the question of unemployment, which was also referred to by the Chancellor of the Exchequer. The Chancellor of the Exchequer pointed out as another index of the prosperity of the country how unemployment has diminished according to the trade union returns from 8.2 to 2.8, which is a very remarkable coincidence. The hon. Baronet asked to what extent this was due to emigration from this country. The reply is that there are no accurate figures to go on, and no figures to compare. The returns of unemployment referred to by the Chancellor of the Exchequer are made by about 700,000 trade unionists of this country, but even if they are an index of the total amount of unemployment in the skilled trades of the country, we have an emigration of 250,000 people every year, and it is obvious that the hon. Baronet's point
  1960
  is established, because if it were not for this gigantic emigration we cannot tell to what extent the unemployment returns would increase. If a quarter of a million people leave our shores every year, there is that number less to be employed. We are more concerned with the numbers who are in employment than with those who are out of employment.
  I should like to refer to one thing which the hon. Member for Northampton said about the Cocoa Duty. There were two very small remissions of taxation forecasted by the Chancellor of the Exchequer: one with respect to the Cocoa Duty, and one to remove a very small part of the grievance under which licence holders still labour. With regard to Cocoa Duty, there are £20,000 of remission and £25,000 of loss of revenue on the rebate for export. According to our view, the Chancellor of the Exchequer has absolutely taken the stick by the wrong end. The hon. Member for East Northampton-shire (Mr. Chiozza Money) referred to the cocoa industry in Holland. He pointed out how much the Dutch people had prospered because they had free trade in cocoa. He said they had been able to do an export trade in cocoa larger than the trade of this great country, and the reason of that obviously from the hon. Member's speech was that they had free imports of the raw material from which they manufacture the cocoa for export. That is our contention. We, as Tariff Reformers, offer no defence for an import duty on raw materials, but we say that this duty, the protective effect of which is graduated upwards, according to the complexity of the components of the various manufactured articles of consumption, such as chocolate creams and all the rest of it, should not be done away with. In order to relieve hon. Members of a very awkward argument at a very trifling expense to the Exchequer we find this remission of the protectionist element, which is so very small a matter for the Treasury and the retention of the one thing for which we have never offered any excuse whatever—the duty on the raw material. I cannot imagine a better argument for us. At the expense of £45,000, they have furnished us with an example of how not to do it under Free Trade.
  Mr. CH IOZZA MONEY: May I ask if the hon. Member is aware that Germany has a duty on cocoa and gives a drawback exactly in the same way as my right hon. Friend proposes?
  Mr. PETO: I do not say that any country has an absolutely perfect tariff system. The hon. Gentleman made no reference whatever in his speech to Germany. He did quote Holland as a great example of a Free Trade country in respect to cocoa, and I have given him his answer. The Chancellor of the Exchequer forecasted future economies in our naval expenditure. I do not know half as much as he does from his intimate relation with the Cabinet as to what their intentions may be in the coming year. But I do congratulate those right hon. Gentlemen who have spoken to-day that at least they reserved to us a large measure of freedom in regard to what might be done by other countries in the course of the coming year. They admitted the principle that we have got to defend our country and our trade, and I thank the right hon. Gentleman for that. It seems to me, however, the Chancellor of the Exchequer drew too strong a contrast between the expenditure on the Navy and the expenditure on social reform. Above all things I hope we shall not have these two great and national expenditures contrasted one with the other, and that we shall not be led to suppose that we can only spend what is necessary upon social reform if we spend less than is necessary on naval defence. I think that would be a most unfortunate conclusion to draw from the right hon. Gentleman's speech. I cannot help feeling that there are hon. Members opposite who feel so strongly on the question of Naval expenditure that they would draw the inference from the right hon. Gentleman's speech that the future expansion of our expenditure on social reform is only possible if the anticipation is realised of a retrenchment of Naval expenditure. We cannot tell if retrenchment will be possible, but so far as we are concerned we are determined on this side of the House that nothing shall stand between this country and the legitimate claims of social reform.
  Question put, and agreed to.
  Resolution to be reported to-morrow (Wednesday); Committee to sit again to-morrow.

  RESTAURANTS BILL.
  Order for Second Reading read and discharged; Bill withdrawn.
  Adjourned at Twenty-five minutes after Eleven o'clock.

  Absentee Landlords (Ireland).
  Absentee Landlords (Ireland).
  Restitution Annuity Fund.
  Restitution Annuity Fund.
  National Insurance Bill.
  National Insurance Bill.
  Teachers' Promotion (Ireland).
  Teachers' Promotion (Ireland).
  Old Age Pensions.
  Old Age Pensions.
  Decrepit Horse Traffic (Dublin).
  Decrepit Horse Traffic (Dublin).
  Land Purchase (Ireland).
  Land Purchase (Ireland).
  Royal Army Medical Corps (Suicides at Parkhurst Barracks).
  Royal Army Medical Corps (Suicides at Parkhurst Barracks).
  Integrity of China.
  Integrity of China.
  Pulmonary Tuberculosis.
  Pulmonary Tuberculosis.
  Poor Law Administration (Cost).
  Poor Law Administration (Cost).
  Imports and Exports (Great Britain and Ireland.)
  Imports and Exports (Great Britain and Ireland.)
  Limerick Harbour Board (Shannon Bridge)
  Limerick Harbour Board (Shannon Bridge)
  Conciliation and Arbitration Boards.
  Conciliation and Arbitration Boards.
  Bath Labour Exchange.
  Bath Labour Exchange.
  Dublin Post Office (Male Learners).
  Dublin Post Office (Male Learners).
  Carlow Post Office.
  Carlow Post Office.
  Dublin Telegraph Staff.
  Dublin Telegraph Staff.
  Postal Hydraulic Lifts.
  Postal Hydraulic Lifts.
  Manchester Postmen (Overtime).
  Manchester Postmen (Overtime).
  General Post Office (Sorters).
  General Post Office (Sorters).
  Mail Delivery, Dunmore (County Galway).
  Mail Delivery, Dunmore (County Galway).
  Publicans' Permit Books (Airdrie).
  Publicans' Permit Books (Airdrie).
  Science Museum, South Kensington.
  Science Museum, South Kensington.

BARONIES OF BURGH, STRABOLGI, AND COBHAM.
Petition of Cuthbert Matthias Ken-worthy, of Leinster Gardens, in the Parish of Paddington, in the County of London (claiming to be one of the co-heirs of the ancient Baronies of Burgh, Strabolgi, and Cobham) to His Majesty, praying His Majesty to admit and allow his claim as one of the right heirs to the said Baronies of Burgh, Strabolgi, and Cobham, and to determine in his favour the abeyance now existing in some one of the said Baronies, and to issue to him a writ of summons to Parliament, and in case it should be held that the Barony of Cobham is affected by the Act of Attainder of 1603, to be graciously pleased to give directions for the introduction of a Bill into Parliament to relieve the Petitioner from the effects of the said Act, in so far as it relates to the said honour and dignity of Cobham; together with His Majesty's reference thereof to this House, and the report of the Attorney-General thereon thereunto annexed: Presented (by command); read, and referred to the Committee for Privileges to consider and report.
Petition of Reginald Gervase Alexander, of Blackwall Lodge, in the Parish of Halifax and County of York (claiming to be one of the co-heirs of the ancient Baronies of Burgh, Strabolgi, and Cobham) to His Majesty, praying His Majesty to admit and allow his claim as one of the right heirs to the said Baronies of Burgh, Strabolgi, and Cobham, and to determine in his favour the abeyance now existing in some one of the said Baronies, and to issue to him a writ of summons to Parliament, and in case it should be held that the Barony of Cobham is affected by the Act of Attainder of 1603, to be graciously pleased to give directions for the introduction of a Bill to relieve the Petitioner from the effects of the said Act, in so far as it relates to the said honour and dignity of Cobham; together with His Majesty's reference thereof to this House, and the report of the Attorney-General thereon thereunto annexed: Presented (by command); read, and referred to the Committee for Privileges to consider and report.
Petition of Alexander Henry Leith, of Freefield and Glenkindie, in the County of Aberdeen (claiming to be one of the co-heirs of the ancient Baronies of Burgh, Strabolgi, and Cobham) to His Majesty, praying His Majesty to admit and allow his claim to be one of the right heirs to the said Baronies of Burgh, Strabolgi, and Cobham, and to determine in his favour the abeyance now existing in all or some one or more of the said Baronies, and to issue to him a writ of summons to Parliament in respect thereof; and, in case it should be held that the Barony of Cobham is affected by the Act of Attainder of 1603, to be graciously pleased to give directions for the introduction of a Bill into Parliament to relieve the Petitioner from the effects of the said Act, in so far as it relates to the honour and dignity of Cobham; together with His Majesty's reference thereof to this House, and the report of the Attorney-General thereon thereunto annexed: Presented (by command); read, and referred to the Committee for Privileges to consider and report.

BARONIES OF DYNAUNT AND FITZWARYN.
Petition of the Right Honourable Sir Henry Charles, Viscount Gage of Castle Island, County Kerry; Baron Gage of Castlebar, County Mayo, both in the Peerage of Ireland; Baron Gage of High Meadow, County Gloucester, in the Peerage of Great Britain, and a Baronet; and of Sir Robert Bourchier Sherard Wrey, of Tawstock Court, in the County of Devon, Baronet, to His Majesty, praying His Majesty to determine the abeyances now existing in the Baronies of Dynaunt and Fitzwaryn in their favour, and that His Majesty will be graciously pleased to determine the abeyance now existing in the said Barony of Dynaunt in favour of the Petitioner, Henry Charles, Viscount Gage, together with the rights, privileges, pre-eminences, immunities, and advantages, and the place and precedence due and belonging thereto, to hold the same to him and the heirs of his body lawfully begotten and to be begotten for ever, and to summon him to Parliament as Lord Dynaunt; also that His Majesty will be graciously pleased to determine the abeyance now existing in the said Barony of Fitzwaryn in favour of the Petitioner, Sir Robert Bourchier Sherard Wrey, Baronet, together with the rights, privileges,

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pre-eminences, immunities, and advantages, and the place and precedence due and belonging thereto, to hold the same to him and the heirs of his body lawfully begotten and to be begotten for ever, and to summon him to Parliament as Lord Fitzwaryn; together with His Majesty's reference thereof to this House, and the Attorney-General's report thereon thereunto annexed: Presented (by command); read, and referred to the Committee for Privileges to consider and report.

BARONY OF MARTIN.
Petition of the Right Honourable Sir Henry Charles, Viscount Gage of Castle Island, County Kerry; Baron Gage of Castlebar, County Mayo, both in the Peerage of Ireland; Baron Gage of High Meadow, County Gloucester, in the Peerage of Great Britain, and a Baronet, and of Sir Robert Bourchier Sherard Wrey, of Tawstock Court, in the County of Devon, to His Majesty, praying His Majesty to determine the abeyance now existing in the said Barony of Martin in favour of the said Petitioner, Henry Charles, Viscount Gage, together with the rights, privileges, pre-eminences, immunities, and advantages, and the place and precedence due and belonging thereto, to hold the same to him and the heirs of his body lawfully begotten and to be begotten for ever, and to summon him to Parliament as Lord Martin; together with His Majesty's reference thereof to this House, and the Attorney-General's report thereon thereunto annexed: Presented (by command); read, and referred to the Committee for Privileges to consider and report.

EARLDOM OF OXFORD.
Petition of Sir John James Hugh Henry Stewart Murray, K.T., Duke of Athol, Marquess and Earl of Atholl, Marquess and Earl of Tullibardine, Earl of Stratntay and Strathardle, Viscount Glenalmiond, Balquhidder, and Glenlyon, Baron Murray of Tullibardine, Lord Balquhidder, Balvenie, and Gask in Scotland, Baron Strange of Knockyn in England; Earl Strange, Baron Percy and Baron Murray of Stanley, County Gloucester in Great Britain; Baron Glenlyon of Glenlyon in the United Kingdom, to His Majesty, praying His Majesty to terminate in his favour the abeyance now existing in the Earldom of Oxford, together with the rights, privileges,
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pre-eminences, immunities, and advantages, and the place and precedence due and belonging thereto, to hold the same to him and to the heirs of his body lawfully begotten and to be begotten for ever; together with His Majesty's reference thereof to this House, and the report of the Attorney-General thereon thereunto annexed: Presented (by command); read, and referred to the Committee for Privileges to consider and report.

BARONY OF LATIMER.
Petition of Francis Burdett Thomas Money Coutts now called Francis Coutts of Stoodleigh, Tiverton, in the County of Devon, nephew and heir of Angela Georgina Baroness Burdett-Coutts, deceased, to His Majesty praying His Majesty to terminate in favour of the said Francis Coutts the abeyance now existing in the Barony of Latimer, together with the rights, privileges, pre-eminences, immunities, and advantages and the place and precedence due and belonging thereto, to hold the same to him and the heirs of his body lawfully begotten and to be begotten for ever; together with His Majesty's reference thereof to this House, and the report of the Attorney-General thereon thereunto annexed: Presented (by command), and referred to the Committee for Privileges to consider and report.
BARONY OF FURNIVALL.
Petition of Etheldreda Mary, Baroness Petre, widow and relict of Bernard Henry Philip, fourteenth Baron Petre of Writtle, in the County of Essex, deceased, as mother and next friend of Mary Frances Katherine Petre, commonly called the Honourable Mary Frances Katherine Petre, an infant, to His Majesty, praying His Majesty to terminate in favour of the said Honourable Mary Frances Katherine Petre, the abeyance now existing in the Barony of Furnivall, together with the rights, privileges, pre-eminences, immunities, and advantages, and the place and precedence due and belonging thereto, to hold the same to her and the heirs of her body lawfully begotten and to be begotten for ever; together with His Majesty's reference thereof to this House and the report of the Attorney-General thereon thereunto annexed: Presented (by command), and referred to the Committee for Privileges to consider and report.

LORD GLENCONNER.
Sir EDWARD PRIAULX TENNANT, Baronet, Lord High Commissioner Designate to the General Assembly of the Church of Scotland, having been created Baron Glenconner of Glen in the County of Peebles—Was (in the usual manner) introduced.
Several Lords—Took the Oath.
The LORD CHANCELLOR acquainted the House, That the Clerk of the Parliaments had laid upon the Table the Certificates from the Examiners that the further Standing Orders applicable to the following Bills have been complied with:
Wirral Water.
West Cheshire Water.
The same were ordered to lie on the Table.

SWANSEA GAS BILL. [H.L.]
Reported from the Select Committee, with Amendments.
DUNDEE HARBOUR AND TAY FERRIES BILL. [H.L.]
The DUKE OF WELLINGTON, Chairman of the Select Committee, reported that the Earl of Londesborough was not present this day, and that the Committee continued sitting in his absence, all parties having consented thereto; read, and ordered to lie on the Table.

MARRIAGES PROVISIONAL ORDER BILL.
Committee (which stands appointed for this day) put off sine die.
BLACKBURN CORPORATION WATER BILL.
HEBBURN URBAN DISTRICT COUNCIL BILL.
UPPER MEDWAY CONSERVANCY BILL.
METROPOLITAN DISTRICT RAILWAY BILL.
PORT OF LONDON AUTHORITY BILL.
Reported, with Amendments.

SEAFORTH AND SEFTON JUNCTION RAILWAY BILL.
Reported, without amendment.
NORTH-EASTERN RAILWAY BILL. [H.L.]
Read 3a, and passed, and sent to the Commons.
LONDON UNITED TRAMWAYS BILL.
Read 3a, and passed.

LONDON AND SOUTH-WESTERN RAILWAY BILL. [H.L.]
Read 3a, and passed, and sent to the Commons.
FURNESS RAILWAY BILL.
WESTON-SUPER-MARE GAS BILL.
CHICHESTER GAS BILL.
MANCHESTER AND MILFORD RAILWAY BILL.
Read 3a, and passed.

PARLIAMENT BILL.
Brought from the Commons.
DERWENT FISHERIES PROVISIONAL ORDER BILL.
Brought from the Commons; read 1a; to be printed, and referred to the Examiners. (No. 85)
SLIGO CORPORATION BILL.
Brought from the Commons; read 1a, and referred to the Examiners.
LONDON CEMETERY COMPANY BILL. [H.L.]
Returned from the Commons, agreed to, with Amendments.
DUNFERMLINE BURGH EXTENSION AND DRAINAGE BILL.
Report from the Committee of Selection, That the Earl of Harewood be proposed to the House as a member of the Select Committee on the said Bill in the place of the Lord Zouche of Haryngworth; read, and agreed to.
THRIFT AND CREDIT SOCIETIES BILL. [H.L.]
A Bill for the regulation of Thrift and Credit Societies—Was presented by the Earl of Shaftesbury; read 1a, and to be printed. (No. 86.)
EDUCATION BOARD PROVISIONAL ORDERS CONFIRMATION (DURHAM, &c.) BILL. [H.L.]
Read 2a (according to order).
LOCAL GOVERNMENT PROVISIONAL ORDER (No. 12) BILL.
  LOCAL GOVERNMENT PROVISIONAL ORDER (No. 13) BILL.
  Amendments reported (according to order), and Bills to be read 3a To-morrow.

HOUSE OF LORDS RECONSTITUTION BILL. [H.L.]
Debate on the Motion for the Second Reading resumed (according to order).
The LORD CHANCELLOR (LORD LOREBURN): My Lords, I do not propose, to trouble your Lordships at any great length on this occasion, because I think that the discussion of this Bill would naturally and necessarily be matter rather for the Committee stage than the Second Reading. I desire to acknowledge most unreservedly the fine temper and spirit which have been shown by the noble Marquess who leads the Opposition and the manner in which he has dealt with this Bill; and, indeed, I think it may truly be said that throughout all the debates we have had on this and kindred subjects relating to Constitutional reform there has not been a single false note from any quarter of the House. I acknowledge that, my Lords, and I know that it must have cost a good deal to those whose ancient and ancestral connection with this House must have been prominent before their minds. It is necessary, however, to look the actual facts in the face. This Bill is not put forward as a solution. It is only the first chapter in a series of amendments of the Constitution, to be continued next year or later by proposals for a Joint Session or for a Referendum, or for both. It seems to be the natural condition of this Bill going any further that the Parliament Bill is to be destroyed or abandoned; and from what the noble Earl, Lord Selborne, said yesterday I gather that he contemplated yet another election in the year 1912, on what point or for what purpose I do not think he made quite clear. It seems there is to be a new House in place of this, with an independent and judicial spirit, the activity of Whips and wirepullers is to be deprecated, and probably disarmed, although I am afraid the noble Marquess can hardly
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hold out any hope that powerful interests will cease to organise themselves and that the natural foundations of Party will disappear.
Let us see what is the mischief that is sought to be remedied. No one questions the great talent and distinction in this House or its illustrious past. It is not the case that individual Peers are looked upon with dislike in the country; on the contrary, I believe they are popular and well liked all over the country. The people of this country are naturally very tolerant of authority, very tractable, and do not care very much whether there are hereditary duties or not provided that they secure what they think is fair play. We have been governed in this country by the Party system for 200 years. We are nearly all of us Party men. When one Party is in power there is, in fact, no Second Chamber. There is not an instance of a Bill pressed by a Conservative Government having been thrown out by this House for, I believe, 100 years. When the other Party is in power this House stands as an invincible obstacle to Liberal legislation, and wrecks our principal measures. No one now present questions the demand that has been made that the Liberal Party shall have fair play. It is admitted in theory, but I am afraid it is still withheld in practice.
What sort of relief would be provided if this Bill became law to-morrow? It would indeed be, as the noble Marquess said, a deathblow to the House of Lords as it has been known hitherto. It reduces the House to a heap of ruins politically. Another House is to be raised in its stead, numbering 350, and there is to be in that House a permanent menace against the Liberal Party in the 100 Peers who are to be selected by the present Peerage, which I believe would be a handicap of 90 against 10. Added to that, the Prerogative of the Crown to create Peers, which has been, and is, the only resort available against the obstinancy or obduracy of this House, will disappear. The House of Commons would thereby be held as in a vice. There would be no escape except by means of the Referendum. I state frankly that I thoroughly distrust that specific remedy. It was discussed in this House for two days at the instance of Lord Balfour of Burleigh, one of the most capable and discriminating members of the House, and it ended in his Bill being withdrawn because it was felt

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that it would not be practicable to obtain the necessary support. I do not believe that the popular vote by Referendum is nearly so valuable as the present system, and I do not think myself that any Referendum ought to be set up unless by special Act of Parliament—and it must be a very rare case—making necessary and proper provision for the treatment of one particular subject.
Supposing the Liberal Government were prepared to accept this Bill and the other Bills which are to follow, we should then be called upon to enter upon a long, difficult, and intricate examination which would last this year and next year before we should have the Bill, not only this Bill, but all the other Bills that are to follow. It would be an examination by the Liberal Government under the old conditions that are now universally condemned—that is to say, we should be at the mercy of the present majority of this House. The last word would certainly be with this House. We should have no means at all of enforcing our wishes in the case of difference of opinion. In fact, what this Bill does, with the other Bills that are to follow, is this—it invites us to surrender at discretion after we have obtained the victory. After the long, weary, tedious and exhausting struggles through which we have passed, what we are asked to do is to lay down our weapons and to accept the solution of our adversaries. Surely, my Lords, you cannot think that there is the smallest chance of our cutting ourselves adrift from our policy, our promises, and our honour in order to enter upon the arduous path of Constitutional reform with our hands tied behind us as they are so long as this House enjoys its present powers.
The principles of the Parliament Bill were announced four and a-half years ago; they have been affirmed at two General Elections. The doctrine that was heretofore upheld in this House was that the House of Lords always yields to the will of the people whenever that will has been declared at a General Election. Was there ever a Bill more definitely approved than the Parliament Bill at the General Election? It was printed in July, 1910. It followed upon Resolutions which had been passed earlier. It was before the country six months before the people were asked to pronounce upon it, and the country returned a majority in support of it. Surely a candid examination
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of the matter will show that the Bill has been fully considered by the country. In these circumstances is it possible for us—even supposing we were so minded—to accept this Bill on the terms of abandoning the Parliament Bill? We should be justly regarded as traitors and poltroons if, with all the omens in our favour, as they are now, and with our conviction that this is the only way of solving the problem, we refrained from pressing forward this measure for our own emancipation. When the Parliament Bill is on the Statute-book, when Liberal Members of the House of Commons are no longer constrained to submit to the humiliation of wearily tramping round and round the Lobbies of the House of Commons night after night for many months only to see, in the end, the result of their labours frustrated, then and not till then shall we be in a position to consider ulterior proposals for Constitutional reform. But when we are in a position to speak with our enemy at the gate, then I heartily hope it will be possible for us, on this and kindred subjects, to come to an agreement which will be satisfactory to all sides, and which will be all the more enduring because it will be founded upon consent.
LORD AMPTHILL: My Lords, I believe that all members of this House unite in respect and, if I may venture to say so, in affection for the noble and learned Lord on the Woolsack. We recognise and appreciate the high qualities of intellect and character which have enabled him to maintain as worthily as any of his predecessors the dignity of his high office and the honour of this House. We know that he is devoted heart and soul to the maintenance of the honour and reputation and the usefulness of your Lordships' House, and I am sure that all noble Lords who sit on this side will agree with me when I say that we are grateful to the noble and learned Lord for the words which fell from his lips in that respect just now. But with all this, even the humblest of us may venture to differ from the opinions expressed by the noble and learned Lord. Reason and conscience are no respecters of persons. This question which is before us is one on which all of us have an opinion—an opinion formed in the constant discharge of duty. We all of us have a conscience in this matter—a conscience begotten of heredity, of training, and of long association; and I think that from that point of view most

445
noble Lords on this side of the House will agree with me that the speech to which we have just listened was singularly unconvincing.
The noble and learned Lord began with a remark which I confess surprised me immensely. He said that this Bill which is before your Lordships for Second Reading was naturally and necessarily a matter for the Committee stage as if, indeed, it were some Bill dealing with details of local administration. Surely, my Lords, if ever great principles were involved, if ever there was occasion for discussing a question from the point of view of abstract principle, it has been this occasion, and yet the noble and learned Lord tells us that it is a matter for the Committee stage. He then went on to say that this Bill was not put forward as a solution of the Constitutional problem. I cannot speak for the leaders on this Front Bench, but, as I understand, the Bill, if not put forward as a solution, is put forward as a better basis for solution and as affording common ground on which we could all meet and discuss this question afresh and come to a national agreement. "What is the mischief which is sought to be remedied?" asked the noble and learned Lord; and in doing so he paid a tribute, for which again we are grateful, to the individual ability and popularity of the more prominent members of your Lordships' House. But whilst anxious to refrain from any recriminations, I am bound to say that that was not the line which was taken by the members of the noble and learned Lord's Party when they stumped the country. This House was shamefully insulted, misrepresented, abused, and so far as my study of the Press went I did not discover a single case of noble Lords opposite raising their voice or holding up a hand of protest against these attacks on the House to which they belong.
The noble and learned Lord stated the mischief which is sought to be remedied in a manner which seems to me absolutely correct. He went to the very root of the matter. He said—
"It is simply this, that the Liberal Party want fair play and must have fair play,"
and he also admitted, for which I was glad, that the Unionist Party have recognised that the Liberal Party must have fair play. But he proceeded to say that although we admit it in theory we deny it in practice.
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He tried to show that this Bill will not give fair play. There is room for difference of opinion, as we have seen, as to what the actual balance of Parties in this House would be supposing for the sake of argument this Bill were to pass into law. But I do not think that it can be the intention of the Unionist leaders to insist that this Bill, every clause and line and comma of it, should pass unaltered through the House if it ever came to that. There is room for amendment, and it occurs to me at once that it would be very easy to make the balance of Parties absolutely even by allowing the Prime Minister of the day discretion to remedy inequalities when he makes his nominations in the second category. I can speak for nobody but myself, but I for one am sincerely anxious that the Liberal Party should have fair play in order that there may be an end once for all of these bitter and unprofitable quarrels, which stop all progress and prevent us from getting on to the settlement of vital questions for the benefit of the Empire. I for one would be perfectly willing to see this Bill so amended that there might be a Liberal majority in this House—certainly that at the outset the Liberal Party should start with a majority in this House seeing that they have a majority in the country.
But what seemed to me most unconvincing of all were the reasons which the noble and learned Lord gave for the desperate hurry with which this question is to be settled. I cannot for the life of me see why there is no room for delay, why it should be impossible to give Parliament and the nation time for calm, deliberate, and careful consideration of a matter which is to affect them for generations to come. The reasons which the noble and learned Lord gave were that if the question were settled now it would leave the last word to your Lordships' House, that the present Government would not be able to enforce their will, and, in effect, that the Party in power would have to give up the fruits of victory. As I conceive this question at the present stage, there is no question of giving up the fruits of a Party victory. Surely the situation has considerably altered. We have gone more than half way to meet our political opponents. Will anybody for one moment maintain that three years ago we should have dreamed of going as far as we have gone now? What can you see in that except a sincere

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desire to give our opponents fair play, and to try and find some common ground on which we can meet them? Surely, then, there is good occasion for them to shift their ground and not to stick to their present attitude of saying that the policy which they developed four-and-a-half years ago, in totally different circumstances when there was no question of House of Lords reform, must prevail. Surely without shame or inconsistency they can modify that attitude and come some little way to meet us.
Your Lordships showed so clearly that you did not agree with the noble and learned Lord when he said that the Parliament Bill had been definitely approved by the country that I need hardly go into that subject; but I think it must have struck your Lordships that it was singularly inconsistent with the remarks which a few minutes before had fallen from the lips of the noble and learned Lord in regard to the Referendum. The objections to the Referendum, if I remember rightly, are that the electorate are not capable of deciding on a Bill, and I know that the noble and learned Lord's friends scoff at the Referendum because they say that every elector must necessarily have a copy of the Bill. Just think, they say, of the expense and trouble, and how ridiculous it would be, if you asked the ordinary elector to read a Parliamentary Bill. If that is their opinion, then surely they must see that since the electorate did not have copies of the Parliament Bill they can hardly be in a position to judge upon it. We are told that unless the elector has a copy he cannot possibly form an opinion. How, then, can the electors have formed an opinion upon the Parliament Bill, seeing that they had no copies? Apart from that, the Bill had not been discussed in Parliament, and that is how the electorate form their opinion. They form their opinion on what they read and hear of the discussions in Parliament, which are boiled down and peptonised for them by minor platform orators throughout the country.
The noble and learned Lord wound up by saying that when his Party were in a position to speak with the enemy at the gate, then the time might come for considering the question of reform. Our contention is that we are at the gate, that we
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are ready to speak, and I do not think that the noble Marquess who leads the Opposition could have given a more sincere and more earnest proof of his willingness to parley and to compromise than he has done in the action which he has so courageously taken. I think that the outstanding feature of this debate is the sense of disappointment which was caused by the speech of the noble Viscount the Leader of the House. We had hoped to get some enlightenment on those great abstract and general principles which are concerned—enlightenment which I think we had the right to expect from one, if I may say so with all respect, whose intellect is stored with the results of deep research into history and philosophy and statesmanship. But even the noble Viscount made no attempt to deal with principles or to give us any guidance. We hoped, of course, that he would at any rate state for our information and guidance what are the principles which His Majesty's Government have in view. His Majesty's Government are committed to reform. Surely they cannot be committed to a policy of which they have not even considered the principles. It would have been the greatest help to us if we had known what kind of reconstitution of this House His Majesty's Government have in mind. But instead of that the noble Viscount gave us a speech which, if I may say so, was a strange mixture of conciliatory suggestions with uncompromising criticism. It was a combination of those conservative instincts which come to all with riper years and the destructive temper of green Radicalism.
The noble Viscount indulged in a few easy jeers at the details of the Bill, such jeers as are no doubt effective in regard to any measure on political platforms. For instance, he spoke of the "ineligible Peer," and I am sure that those criticisms must have seemed to your Lordships a somewhat unfair play with words, a question-begging misapplication of the term. There is no question whatever of ineligible Peers. Under this Bill no single member of your Lordships' House would be ineligible in one way or another for a seat in this House. Indeed, the Bill goes further, for no citizen of this country would be ineligible for a seat in this House. Therefore it is entirely out of place to talk of ineligible Peers, as if, indeed, there were to be a class stigmatised as inferior in character and capacity.

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Then, my Lords, the noble Viscount said that the number of 350 was too large. The words he used were—
"If you want real deliberation you must have fewer members."
But what about the House of Commons? Surely that is an admission that there is no real deliberation in the House of Commons. I wonder whether the noble Viscount associates himself with that member of the Labour Party in the other place who said that the best kind of Second Chamber would be one composed of twenty trades union secretaries. Of course, the noble Viscount referred to the rejection, as he called it, of the Finance Bill of 1909. That question seems to possess the mind of the noble Viscount as a sort of mental obsession. He said that we challenged the House of Commons. If I remember rightly, that is a phrase which I have heard him use on more than one occasion. If to challenge means to express a different opinion, where is the enormity? Up to the present your Lordships' House still enjoys the right, common to all Second Chambers in the world, of expressing a different opinion from the First Chamber; but if, in using the term "challenge," the noble Viscount meant that your Lordships' House provoked, or sought to provoke, the House of Commons, then I venture to disagree with his presentation of the facts. I venture to think that he is distorting history which is not only recent, but which must also be familiar to everybody who takes an intelligent interest.
The Resolutions on which the policy of His Majesty's Government, the policy which underlies the Veto Bill, was framed—the Resolutions proposed by Sir Henry Campbell-Bannerman—saw the light in 1906, four-and-a-half years ago as the noble and learned Lord on the Woolsack reminds us, long before there was any question of the Finance Bill or of the action winch your Lordships' House might take on that Bill; and if it comes to provocation, then I am prepared to maintain stoutly against anybody in this country that the provocation did not come from your Lordships' House. I have very vividly in mind the threat of the present Prime Minister, who said, long before the Budget saw the light of day, that finance was a flexible instrument which might be used for solving the Constitutional
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question. Then there is the retrospective boast of the Chancellor of the Exchequer, who said that a trap had been set for your Lordships' House which had succeeded admirably. It would be possible to multiply quotations of that kind, but there are the plain facts that the policy of the Veto Bill was conceived four-and-a-half years ago, and that the Finance Bill only saw the light two years ago.
I disagree, of course, with the noble Viscount when he says that we made a fatal and irreparable mistake in referring the Finance Bill to the people, for I deny absolutely that this House rejected the Budget. I am among those who believe—and, I shall believe it to my dying day—that this House would have made a far greater mistake if it had not referred that measure, which was admittedly a great revolution, a tremendous social change, a thing that the people had never seen or heard of before, as the Home Secretary boasted—if we had not referred that to the people of the country. Had we failed to refer it to the people I believe we should have forfeited their confidence, and we should have precipitated a far greater calamity than any which can possibly befall us at the present time. But in spite of those criticisms, winch were so disappointing to us and which damped our hopes of an agreement, the noble Viscount said that there was a definite problem, and his view of the definite problem was one which must commend itself to every member of this House. He said the problem was how to get back to that co-operation and accord which used to exist between Lords and Commons. None of your Lordships would, I am sure, dispute that that was a very good definition of what we are all aiming at; but I think there are very few, even on that side of the House, who would maintain with confidence that we can get back to that co-operation and accord by means of the Parliament Bill. I absolutely fail to see how you can get co-operation with those whom you have humiliated, insulted and deprived of powers which they have exercised with all the sanction of custom and authority and law for generations and centuries past. I do not see how you can get accord if you trample on the sentiments and convictions of half the nation. The results of no revolution can possibly be lasting and permanent unless supported by an overwhelming majority of the people.

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I intend to vote for the Second Reading of the Bill because I believe that it marks out common ground for the settlement of a national question on national lines, and because I believe that until that question is settled we shall have neither peace nor progress nor the settlement of other important and pressing questions. I shall vote for this Bill because it seems to me to be a scheme for remedying the actual grievances of which complaint has been made, whereas the Parliament Bill does not touch those grievances. The complaint made by the Radical Party, and frankly admitted by the Unionist Party, is that the composition of this House is at fault, in that it has contained for some time an overwhelming Unionist majority. There has been no complaint against the powers of this House—that is to say, no complaint on grounds of general principle. No speaker on the Government side, so far as I am aware, has gone about the country explaining what ought to be the composition and the functions of a Second Chamber from the general point of view of principle. The complaint, so far as it has related to the exercise of power by this House, has been a complaint against a permanent Conservative majority. The question, therefore, stripped of transient prejudice and superficial misrepresentation, is one of the composition and not of the powers of this House.
Both great Parties in the State are agreed that there must be a Second Chamber, and neither Party can, on sober reflection, desire to have a sham or ineffective Second Chamber. It is not in the spirit of the British people to favour any sort or kind of sham. That is why I say we are on common ground when we attempt to improve the composition of this House instead of destroying its powers. Indeed, it is beyond dispute that both Parties are committed to reform. Why, then, not begin with the task which we all admit to be necessary, instead of with that of which half the nation utterly disapprove? There are some critics, critics of both Parties, who say that it is too late to consider reform—that is, so far as the present controversy is concerned. Radical critics talk of our reform proposals as a death-bed repentance. Well, what if it were so? When has it ever been contended that a death-bed repentance is of no avail? My Lords, there is an old and homely saying that "It is never too late to mend," and if that is our position I am sure that we
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are not ashamed to confess it. Some Unionist critics, on the other hand, say that it is too late from the point of view of Party tactics. To them I reply that Party tactics ought not to be considered for a moment in a matter of such vital national concern as this. It is never too late to do that which is right, and can never be too late to take steps to avert a catastrophe. In this matter I would rather the Unionist Party failed by doing that which is right than that they succeeded by neglecting to adopt a course which I believe to be absolutely necessary for the future welfare of the nation.
There are some who so entirely misunderstand the situation that they fail to see that the course adopted by the noble Marquess the Leader of the Opposition is one of courage and patriotism rather than of surrender and despair. They mistake his natural emotion for weakness, as if, forsooth, it were not open to a General to think with an aching heart of the men he is bound to sacrifice in the engagement to which he is leading them. It is, of course, possible to believe that it is right and necessary to do something and at the same time to regret the change of circumstances which imposes the obligation. It is thus that I regard the proposed reform, or, to use a less question-begging term, the reconstitution of this House. Just as men regret the partial demolition and reconstruction of ancient and splendid landmarks, such as church or castle, monuments of human skill and scenes of high and noble endeavours throughout past generations—just as even the most unimaginative dweller in a rural district regrets the necessary lopping and propping up of some venerable and romantic tree, so, I think, must we all regret the necessity which we have now to face in regard to this national institution with its historic associations of eight centuries. But surely we must endeavour to preserve all that can be preserved, to buttress up that which is useful and sightly, to make our restoration as far as possible in harmony with the ancient design, and to pull down only that which cannot safely be left standing and to lop off those branches only which, though vigorous themselves, have outgrown the strength of the parent stem and may split the trunk to the very roots if carried away in some violent storm. I believe that it is in some such spirit as this that the noble Marquess has approached the task which has been imposed upon him by the highest

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sense of patriotism and public duty. It may well seem to him a thankless and distasteful task at the present time, but I am firmly convinced that, if his counsels prevail against the desire of those who would ruthlessly pull down and sweep away no less than those who prefer to take the risk of accidental and complete destruction rather than face the responsibility of guarding against it, he will in the days to come be amply vindicated and stand high in the roll of fame of the great men of this country who merit the enduring gratitude of succeeding generations. It is on these grounds that I unhesitatingly support this Bill.
There is no possible means of preserving this House as it is at present. There is no possible means of preserving the existing privileges of its members. We may regret this from a sentimental point of view, but we need not regret it—we ought not to regret it otherwise—if we are convinced that this House as at present constituted is no longer effective as a national institution for making the laws and preserving the customs on which the welfare of the British people depends. Both great Parties in the State are committed to reform. It may be said that it does not follow that either of them will carry out reform. There is much to justify that doubt in either case. But there are stronger forces at work than the will of Party leaders—the circumstances which actually exist and must lead in one way or another to consequences which are as inevitable as fate. Let us face the facts. It is no use blinking any of them. Suppose, for the sake of argument, that the Parliament Bill were to become law. Can it be imagined for a moment that this House will be allowed to remain as a mere cause of irritating delay, powerless either to reject or to refer measures to the people? Whatever the Radical Party leaders do, there will be an irresistible demand on the part of their followers for the abolition or reconstruction of so vexatious an institution. The people will not forget that the complaint which has been made has been that the composition of this House is at fault, that the Second Chamber ought not to be on a hereditary basis, that no man ought to sit and assist in making law because he is the son of his father. They will remember that, and will insist that their leaders should abide by the logical consequences of that which they have told them.
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Suppose, on the other hand, the Veto Bill did not pass into law and a Unionist Government returned to power. However much the Unionist leaders might wish to postpone or abate a fulfilment of their pledges, there would be an outcry from the rank and file, who undoubtedly attribute the loss of two General Elections to the prejudice excited against a hereditary House of Lords. Again, so long as this great disproportion between Parties continues there will be a grievance which will not cease to be used as a weapon of prejudice. So long as grievance and consequent prejudice continue there can be no cessation of the class warfare which is fatal to national unity, and without national unity there will be no true progress and no settlement of the great questions, social, Imperial, and international, which are even now being retarded. It is not our fault that there are so few Radicals in this House. If it were our doing, we should not be willing, as we are now showing ourselves, to remedy the grievance. The disproportion of Parties is due to circumstances and causes which it is unprofitable and unnecessary to review at the present moment. We are faced by the fact that the Unionist Party is in an overwhelming majority, and we know that something must be done to alter a state of affairs which is undoubtedly a grievance.
But it is not only because of this disproportion in the composition of this House that reconstitution is necessary and inevitable. A deeper cause—and the noble Viscount the Leader of the House told us that he looked for deeper causes—a deeper cause of the necessity for reform is to be found in the change which has come over the House of Commons. It is because the House of Commons is becoming less and less a faithful reflection of national character and national will that this House must be brought into more intimate association with the electorate. It is not because this House is effete or out of date—we have the testimony of the noble and learned Lord on the Woolsack to the effect that it is not—but because the House of Commons is breaking away from those democratic principles on which the Government of this country is based; it is not because this House is grasping at predominant power in Parliament, but because the House of Commons is seeking to usurp the power which belongs to the people and which has hitherto been exercised

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on their behalf by King, Lords, and Commons, that reform of the Constitution is imperative. It is necessary to bring the Second Chamber into more intimate association with the electorate than in the past in order to counteract the growing tendencies of Cabinet autocracy and House of Commons despotism. These mischievous tendencies make it obligatory to have a Second Chamber which can perform its natural function of referring dubious measures to the people without its action being misunderstood or misrepresented as the self-interested action of a privileged class.
There is no more preposterous claim than that the House of Commons, controlled as it is by an oligarchy with almost absolute powers, invariably represents the popular will. I say invariably, but I mean, of course, only when a Radical Government is in power, for even Radicals do not claim that the House of Commons represents the people when it is under the control of a Conservative majority. It is surely unnecessary to recall the many familiar instances when the decisions of the House of Commons have been contrary to the wishes of the people, for without going back to the Home Rule proposals of 1886 and 1893, we have the cases which are fresh in our minds of the Education and Licensing Bills and of the miscalled "People's Budget." Even when the control of the Cabinet is relaxed we see that the House of Commons can give votes which are absolutely contrary to the will of the people. Will any one dare to say that the people of this country are three to one in favour of Woman Suffrage? Yet only a few days ago the House of Commons voted in that proportion in favour of such a measure. How can that be explained? Surely, it is because politicians, even though they be the wise and high-minded men who are the chosen representatives of the people, are generally mere puppets in the hands of the wire-pullers of the Party system, a system which is often entirely out of touch with the feelings and aspirations of the great mass of men who keep aloof from it.
The domination of the Cabinet oligarchy over the reason and consciences of its supporters has never been more flagrantly exemplified than in the recent discussions on the Parliament Bill, and to that extent I quite agree with the noble Viscount the Leader of the House that you cannot have
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real deliberation in such an Assembly. We feel that change is necessary in order that we may preserve true democracy and avoid the worst of all tyrannies—namely, that of an oligarchy which is now to be supported by paid politicians. We need change in order that the House of Commons may not usurp power which belongs to the people. If our Radical friends are sincere in their professions that they intend to reform this Chamber; if they are not merely paying lip service to the principles that in the end the people must decide and that we must have a Second Chamber in this country—for those are the two great principles on which we are agreed—then we are on common ground in attempting the reconstitution of this House as a solution of present difficulties. I fail to see why any false pride need deter our opponents from meeting us on that ground. When they first proposed their Veto policy they did so because they thought there was no other means of overcoming the rooted objections of this House to any change whatever, but we have pledged ourselves to reform and have gone more than half way to meet them. We have changed our attitude. That surely has changed the whole situation, and is a reason which would appeal to ordinary men for enabling the Government and their supporters to change their attitude in some small degree in order that we may arrive at a permanent and national settlement.
The noble Viscount the Leader of the House said, on the First Reading of this Bill, that it "cannot be a substitute or an alternative for the Parliament Bill." That was the uncompromising conclusion of his speech. That may be his opinion, but I venture to say that it is not a matter which he or his friends can finally decide. It is one which only the people of this country can decide, and the people have not yet settled this question. All that they have settled on the arguments which have been put before them is that there must be fair play between Parties, and that the Second Chamber ought no longer to be constituted on a hereditary basis. They have still to settle which of the other two alternatives—for there are only three courses—they will adopt. That is to say, whether the Second Chamber is to be purely elective or formed on some composite basis. This Bill proposes a compromise between the hereditary system, which is discarded, and the elective system, and since it is only by compromise that differing parties can arrive

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at agreement, surely that is a prima facie reason for regarding it as a fair offer to meet on common ground. I for one do not hesitate to believe that sooner or later a system similar to that proposed by this Bill will be approved by the nation and become the law of the land, for it seems to me very certain that the people will not care to set up a Second Chamber which is wholly elective, and therefore necessarily a formidable rival and competitor to the popular and more representative Chamber. It is on those grounds that, without misgiving and with no more regret than is in accordance with natural sentiments, I unhesitatingly support the proposal of the noble Marquess.
LORD SHEFFIELD: My Lords, there are two points in common between both sides of the House, though there are a great many more important points on which there is diametrical opposition. The points on which the House is now agreed are that this Bill by itself—and I am quoting the words of the noble Marquess who introduced it—is not a solution of the difficulties which embarrass both Parties and that the relations of both Houses still have to be dealt with by legislation. The noble Marquess went on to say that the Bill is a complement or supplement to a Parliament Bill dealing with the relations between the two Houses. In the course of the discussion of this question many reproaches have been addressed to the Liberal Government because they have only produced one-half of the scheme which they consider ultimately necessary for the settlement of this question—that is to say, they have approached the question of the limitation of the powers of this House before attempting to touch the question of its composition. We have had bitter complaints of that, but if those complaints were justified we might very fairly say, "Why does not the noble Marquess act up to his precepts, and not according to our example?" Why has he not embodied in one Bill, not only the composition of the House but also the relations between the two Houses? We had a discussion on the Referendum the other day, but it was thrust aside. We have had the Referendum talked of; it was paraded before the electors, but when in this House, where if anywhere sympathetic treatment ought to have been extended to it, the Referendum was presented as a positive and definite settlement of the question, the noble Lord who brought it in did not go to a Division.
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The noble Marquess has presented sincerely what he considers a necessary step forward. There are other steps to be taken; but I have not understood from any of his speeches that he thought the proposals he now made were not, as far as they went, satisfactory proposals with a view to the constitution of a Second Chamber. I do not say the noble Marquess put all the details of his scheme as being final, for they are to be open to criticism in Committee, but the broad features of the scheme were supposed to be a settlement. Last night Lord Willoughby de Broke expressed much sympathy with the House as now composed, although he was willing to follow his leader into the creation of an entirely different House. The noble Lord mitigated the language of the hunting field into the language of this House and said he was sorry that the noble Marquess had not told his opponents to go to perdition. In substance he took up the attitude of the solicitor who says that the offer of the Bill is made "without prejudice," and that if the Veto Bill is to be forced through, this offer now before us will be withdrawn and he and his friends will be free to do whatever his Party please to find some entirely different solution. The noble Earl, LordSelborne, took up that line, and absolutely declared that this Bill would be withdrawn, abandoned, utterly discarded, if any attempt were made to tack on to it the Government Bill dealing with the powers of the House of Lords. The Opposition should make up their minds whether they agree with the noble Marquess, their leader, that the proposal now before us is introduced as a reasonable step towards a settlement, or whether they regard it merely as a provisional offer, made without prejudice, to be withdrawn unless it is coupled with some other proposal of theirs that they know will not be accepted. The noble Marquess repeated what he said in this House before this matter became so urgent and what has been said by other responsible Statesmen, that there is no claim made for absolute Veto, and that there is a recognition of the ultimate supremacy of the other House. But the impassioned declaration to which we have just listened paid very little regard to the other House of Parliament. On the contrary, the noble Lord asserted that, in spite of the large extensions of the suffrage, in spite of large redistributions to bring representation more in accordance with the population of the electorate, the House of Commons had deteriorated, had got further and further away from expressing the will

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of the people, and therefore this House ought to be strengthened in order to secure more truly that the will of the people should prevail. The suggestion is made that the Government Bill should contain a provision as to the constitution of this House. I might return the compliment and ask noble Lords opposite for their scheme as to limitation of powers. But we have had indications. The noble Marquess indicated a leaning to the Referendum, though afterwards that leaning became so slight that he seemed to stand in an almost perpendicular attitude towards it. We have also had talk of Joint Sittings.
My Lords, the Bill of the noble Marquess is presented, among other objects, for the purpose of establishing a fair equilibrium between the two great Parties in the State, of securing, as the noble Lord who spoke last put it, fair play to the Liberal Party. I should like to analyse for a moment the proposed composition of the House and see what element of fair play it shows to the Liberal Party. I will not put it as high as did the noble and learned Lord on the Woolsack when he said that in the initial stage there would be only 10 Liberals out of 100. Perhaps I am a little sanguine, but when I look at Dod and other books and see the members of this House to whom the word "Liberal" is attached—although the word Liberal perhaps does not quite express the ingredients within—I am willing to assume that we cannot claim more than one-eighth of the persons who would be entitled to vote as Peers in the selection of the 100 Peers. We are not going merely to have those Peers who sit in this House by hereditary right, but we are going to have—and it is perfectly right and fair—all the Irish and Scottish Peers. I take it that the aggregate will rim up to fully 700 persons entitled to vote, and I do not think even a sanguine estimate could rely upon more than one-eighth of those being Liberals. We would start with 87 Unionists, Conservatives, and non-Liberals, and perhaps 13 who might fairly be classed as Liberals, though I should be very sorry to have to go into action with all of them. My noble friends opposite are fond of commenting on the rapid change that comes over the temperament and disposition even of a Peer who has been appointed by or on the recommendation of a Liberal Prime Minister after he takes his seat in this House, and as to answering for the sons of the fathers I am sure he would be a very
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rash man who attempted to do so; it is hard enough to answer for the father during his lifetime. I could not help thinking, when the noble Lord who spoke last was talking of the way his conscience was made up of pedigree and hereditary material, what the hereditary conscience of the house of Russell has been from the time it was first enriched by the spoils of the Abbeys, and when the members of that house were such a powerful factor in English history in the eighteenth century in the great Whig Oligarchy. It seems to show to me that the noble Lord must have sought for his conscience in the recesses of his own personality and not in the inherited dispositions of his forefathers.
To proceed with the composition of the new House. I suppose you would certainly agree that if electorate after electorate were steadily over a long series of years to return a House of Commons in which there was a 10 per cent. majority hostile to the views which this House has hitherto entertained, it would be taken as some evidence of the settled opinion of the nation? But what would that 10 per cent. majority give? Assuming that majority to be constant, because if it is not constant then the Liberal Lords elected would diminish in number, the best case I can put for the Liberals as to the proportions in this House would be that you would get from the two factors of nomination by the Crown and election by the House of Commons a majority of twenty-two Lords of Parliament who would be Liberal, and against them you have to set the majority of seventy-four, the outcome of the choice by the hereditary Peers. Although the noble Viscount, Lord Morley, could not bring his mind to grapple with the problem of what a variation of opinion might mean among theologians, judging from the history of the action of the Bench of Bishops. I should be very sanguine if I expected to see one Liberal Bishop elected. This would give the Unionists a standing majority of from fifty-eight to sixty in the House of Lords even when the House of Commons over a long series of years was steadily Liberal. Is that what noble Lords opposite call fair play to the Liberal Party? On the introduction of his Bill the noble Marquess took as a basis an exceptional election—the election of 1906—when the catastrophe fell on the Conservative Party. In that Parliament the Party opposite only returned 23 per cent. of the other House. If the Liberals had brought in a

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Bill to reform the House of Lords on the lines suggested by the other side, and the Conservative Party had accepted that Bill, no doubt on that occasion the Liberals having a fresh start would have elected a majority in your Lordships' House. But you are going to dilute and average the composition of the House by spreading the re-election over twelve years. The upshot of it would be that assuming on the whole there is a tendency towards Liberalism against Conservatism on the part of the electorate, it could not outweigh the overwhelming loading of the dice provided by the representation of hereditary Peers.
The fact is the Bill presented for the purpose of bringing about this object is perfectly idle and illusory. The noble Earl who spoke after dinner last night correctly commented on the disproportion which very commonly occurs between the representation of a Party in the House of Commons and its poll of the popular vote. But the noble Earl did not comment on how gross that disproportion was during the twelve years or so when his Party was in power, and when they took advantage of a Khaki Election to pass measures which were very unpopular in the country. But let that pass. With the present mode of election the popular vote is not properly represented in the constitution of the Rouse of Commons. There have even been cases where actually a minority of the electors have returned a majority in the House of Commons. Any one who has seen the working of proportional representation in Belgium and other countries will agree that if that system were introduced in this country the fluctuation of minorities and majorities would be brought within much narrower limits than at present. If that change were made, a majority of 10 per cent. in the House of Commons would be a very unusual and rare occurrence; but the closer you run the majority in the House of Commons the more absolutely necessary it is that you should not load the dice, as I said before, in the House of Lords. You ought to secure that the House of Lords is as absolutely fair a reflection of the general opinion of the people of this country as the House of Commons would be. But there is no suggestion of such a thing as that in this Bill. Noble Lords opposite give a very grudging welcome, if I can call it a welcome, to the Bill. I would rather use the expression of the noble Viscount who leads the
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House when speaking of a great man in the French Revolution, and say this Bill is receiving "sombre acquiescence." But if the Bill were amended by securing that the Upper House were to be as true a representation of the prevalent feeling of the country as the House of Commons is, I am quite sure it would be entirely distasteful to your Lordships.
The noble Marquess who brought in this Bill said it would not be unfair, seeing that he wanted the House to contain rather a steadying influence, that there should be usually a preponderance, although, perhaps, not a very large one, of persons of moderate opinions. I do not know what the noble Marquess's idea is of a not very large preponderance of persons of moderate opinions in this House, but by his own calculation, which I think is absolutely incorrect, he worked it out on the supposition that when the House of Commons is nearly three to two it would give a Conservative majority of 22 to 24 in a House of 300 odd. I do not look forward to the House of Commons usually being composed in the proportions of three to two. We have had ever since the great disturbance of Parties which followed Mr. Gladstone's introduction of Home Rule, in 1885 and 1886, much greater swings of the pendulum, much more abrupt changes and larger shiftings of majorities than we were accustomed to before; but those of us who look back to the days of Lord Palmerston, and the fifties and sixties, remember how happy Governments were when they had a majority of 40 to 50 in the House of Commons, and there is no reason why we should not go back to that again. But this Bill does not attempt to approach, not by an immense distance, anything like securing fair play or equal treatment between the two Parties in the State.
I see no object whatever in the creation of electoral colleges up and down the country instead of at once giving the election to the House of Commons as a whole. Mind you, this Bill, while it has a suggestion which is quite unnecessary, because every Act of Parliament can be altered by Parliament at any time, provides that unless Parliament otherwise elects these colleges shall go on. I am in favour of bringing about a fair representation of the various shades of opinion in the country. I took the trouble to map out, on the lines indicated by the noble Marquess, what sort of colleges you might

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make, taking the limit of twelve. I suppose he had in his mind such great units as London and Lancashire and Scotland and Ireland. I made what I thought was a fair distribution of constituencies. I did not make out that there was any material difference in what the Parliamentary result would be between the great Parties whether the Lords of Parliament were elected by these colleges or by the House of Commons as a whole. But there would be this important difference in the representation of some shades of opinion. If you map out this country into electoral colleges the Labour Party would in no case be able to get a single representative, whereas if the House of Commons voted as a whole with proportional representation the Labour Party would get a very fair proportion. Again, take Wales, for instance, as a unit. Wales would return on the noble Marquess's plan about six members. In Wales, as a unit, not a single Conservative would have a look in; the whole of the representation of Wales would pass to the Welsh Party. In Ireland you would get about 2 Conservatives and 10 Home Rulers, and in Scotland about 2 Conservatives and 10 Liberals. Of course, if you were to break up Scotland into still further units the Conservatives would disappear more absolutely than ever. I do not think there is any difficulty in letting the House of Commons as a whole choose its representatives for the Upper House of Parliament, and I think it would be better in the sense that more shades of opinion would be represented than if you were to break the country up even into substantial units.
To touch on another small point dealt with by the noble Marquess, I agree with his conclusion that it is quite impossible to represent in this House various shades of ecclesiastical organisation and opinion. I am quite sure we do not want to make this House, however constituted, any more like a Convocation or a Round Table of different ecclesiastical denominations than we can help, and I am well aware that the keenest of the Free Churches would repudiate any extension of the principle of the union of Church and State by allotting to them official representation in this House. It is quite true, as the noble Marquess said, that in the case of an eminent man of character and knowledge and public spirit, it would be quite within the power of the Prime Minister to offer him a seat in this House. That would be a different thing altogether, but to invite
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any external organisation, whether Roman Catholic, or Jewish, or Nonconformist, or anything else, to nominate their representative and send him here would be a great mistake, and not, I think, popular with the great mass of those whom it was intended to please.
I have touched on the most important points to which I wished to call your Lordships' attention. But I desire to press again that, if you put forward as part of your principles the recognition of the ultimate supremacy of the House of Commons, you must neither make such speeches as the noble Lord who preceded me made, full of contumely and contempt for the House of Commons, nor must you indicate your hope to call in some external force, such as a popular plébiscite, to control and regulate and limit the powers of the House of Commons. Make the House of Commons, if you please, as fully representative of the nation as possible. I am not afraid of a complete and equal electoral system by districts. I should welcome One man one vote, and One vote one value. Your Lordships did not show any great desire to make the House of Commons more representative of the people when you rejected the Bill to prevent people voting two or three times. You cannot expect these professions of good faith and liberality not to come home to you at last. You cannot go about the country proclaiming your anxiety for democracy without its coming home to you, and whether they are sincere or not these professions will some day be embarrassing to you at the hustings. If you had a House of Commons elected with single voting, no plurality, no property qualification, and with equal electoral representation, we shall have no fear of the result. You may be quite sure that we as Liberals are not afraid of the effect on the composition of the House of Commons of bringing its members more in contact with the electors, nor are we afraid of shorter Parliaments.
May I say one word before I sit down with regard to the mandate of members of the House of Commons? A Member of Parliament has a duty to his constituents, to fulfil the pledges and act on the professions he has made to them and not to depart from the fair and honourable understanding that exists between them as to the policy he should pursue in Parliament. I think it is democracy gone mad, and reckless folly on the part of a Con-

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servative body like your Lordships' House, to talk as if the Member was to go down and consult his constituents with regard to every clause and every little detail of every Bill with which he has to deal. In a country like this a member of the House of Commons must be a thoughtful and capable man ready and willing to use his own judgment with regard to the details of legislation, and if you undermine that sense of duty and responsibility you undermine the whole value of the House of Commons.
THE DUKE OF NORTHUMBERLAND: My Lords, there is one circumstance connected with this debate which seems to me to be somewhat remarkable—namely, that from beginning to end, with but one exception, we have not heard a single remark as to the causes which have produced the situation—the emergency the noble Viscount the Leader of the House called it—in which we stand. I think it very important that somebody should call attention to the causes which have led to the present state of things, because it seems to me that only in that way can an answer be given to such a speech as was made last night by Lord Bathurst when he asked why this House should be modified in any degree in its constitution. The one exception to which I refer was the striking remark of a noble Lord who said that the present situation in which the two Houses of Parliament stand was rendered inevitable by the Reform Act of 1832. It was not any musty or rusty old Tory who gave vent to that sentiment, although it is a sentiment that reminds me very much of the utterances that we read of in the mouths of Tories of those days. The statement came from the lips of the noble Viscount, Lord Morley. As my noble friend below me said, there is no Peer in this House who by training, by study, by mental ability, is better able to take a philosophic view of political causes.
And the noble Viscount told us further that, starting with the Reform Act of 1832, the Reform Act of 1867 and the Reform Act of 1884 had rendered the present situation not only inevitable but cogent. In other words, my Lords, with one very great and signal exception what has brought us to this pass is the domination of the Liberal Party from the year 1832 to the year 1884; and I could not help thinking, when I heard those remarks fall from the noble Viscount, what a proof it
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was of what I have always held to be true, that the Radical Party had far greater foresight than the great Liberal Party that they knew where they were going, which the Liberal Party never did; and they have arrived at the goal to which they were tending. Although it is now the fashion to call ourselves democrats—and I understand the leader of our Party in the House of Commons has dubbed himself by that title—nothing was more abhorrent than democracy in the eyes of the old Liberal Party which dominated the country in the thirties and the forties and the fifties. Nothing was more abhorrent to such men as Lord Melbourne or Lord Palmerston. None of the powers of vituperation of that great writer and imaginative historian, Lord Macaulay, were called more into exercise than when throwing contempt upon democracy. But we have been landed in that condition, and when I said it was due to the Liberal Party I said there was one great exception, and there was. It was when Mr. Disraeli thought that he would try and dish the Whigs by passing a Reform Bill of his own and set the example to his Party of trying, if I may use a vulgar phrase, to go one better than his opponents, which I am sorry to say has been too often copied by the Party since. Well, my Lords, that has landed us in the present emergency, and I was rather surprised to hear the noble Earl, Lord Selborne, last night throw in the teeth of the noble Viscount, as if it were a very effective argument, the fact that since the passing of the Reform Bill the Unionist Government had been in power for many years.
THE EARL OF SELBORNE: I do not think I mentioned that subject.
THE DUKE OF NORTHUMBERLAND: I certainly understood the noble Earl to say so.
THE EARL OF SELBORNE: It must have been somebody else.
THE DUKE OF NORTHUMBERLAND: Then I beg the noble Earl's pardon. It was certainly said by some one. The argument was this, that it was not true that the Reform Bill had brought about the domination of the present Government and their Party because the Unionist Government had for many years been in power. In the first place, if you confer

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upon a class of persons who have no political education the right of the franchise, it takes them naturally some time to appreciate and to know how to exercise their power. Then it must always be remembered that Mr. Gladstone's adoption of Home Rule made a split in the great Liberal Party which carried with it an enormous majority of the country in the Liberal interest over to the Conservative, or the Unionist side, and so protracted the advent of the situation in which we now find ourselves. But I do most cordially agree with the noble Viscount opposite that the present situation is owing to three successive Reform Bills that we passed. I think it shows the prescience of the Radical Party. I wish I could think that they showed as much prescience now with regard to what is before them in the course they are pursuing.
This succession of Reform Bills has brought about what we call a democracy. What is a democracy? A democracy is simply that kind of Government which invariably prevails in one form or another in the decay of a State. I see some noble Lords smile, others raise their eyebrows. I quite expected that. It is a very unpopular sentiment in these days. But I would like to quote from authority which perhaps will appeal to the two noble Viscounts opposite, because I know they both take a philosophic view of politics. I will not quote a politician at all. I will quote a man of science, a man well known to have given great attention to the subject of ancient civilisations—I refer to Dr. Flinders Petrie, who has just published a little book, one of a series of "Harper's Library of Modern Thought." There is not anything very antiquated or musty about a library of modern thought, and in that book Dr. Flinders Petrie has treated the various periods of civilisation, showing how civilisations at different times have risen and then fallen; and I may say, in passing, that it is a curious argument by which he shows that these rises and falls have been universal all over the earth at different ages. But that is beside the mark. He treats civilisation from the point of view of art and literature and divers standpoints, and then he comes to stages of Government. The conclusion he draws at the end of his book is this, that in the early period of civilisation of a State strong personal rule exists and, is necessary to maintain unity, and that lasts from
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400 to 600 years; that is followed by an oligarchy when the unity of the country can be maintained by law instead of by an autocracy—he gives another period of 400 to 600 years for that. He goes on—
"Then gradually the transformation to a democracy takes place; beginning about the great phase of literature in Greece, Rome, and Modern Europe-During this time, wealth—that is the accumulated capital of facilities—continues to increase. When democracy has attained full power, the majority without capital necessarily eat up the capital of the minority, and the civilisation steadily decays, until the inferior population is swept away to make room for a fitter people. The consumption of all the resources of the Roman Empire, from the second century when democracy was dominant until the Gothic kingdom arose on its ruins, is the best known example in detail. Such is the regular connection of the forms of Government, or the relation of classes, which is inherent in the conditions of the revolutions of civilisation."
I apologise for having read so long a quotation, but I think it is a somewhat remarkable one, coming as it does from the pen of one who is not interested in our political struggles and has no particular bias or animus for taking one view or the other. I confess that I adopt that idea of democracy. I do not think the noble. Viscount the Leader of the House will deny that we had at one time a Constitution which was the admiration of all the nations of the earth. Does he think so now? Does he hear from other nations, the educated opinion of Europe, the admiration of the Constitution of this country which we heard continually in old days and which no one has more studied than the noble Viscount himself?
What is one of the principal signs of this degradation—the one which necessitates our dealing with the questions which are now before us? Something has been said to-night about the deterioration of the House of Commons. Last year I ventured to trouble your Lordships with an expression of my feeling with regard to that. It is a disagreeable subject to deal with, and I am strongly of opinion that the more the two Houses of Parliament respect each other, and the less they use hard words in regard to each other, the easier it will be to come to a settlement, of their differences. Therefore I shall not dwell upon this subject further than to point out that when I first had the honour of a seat in the other House there was no closure; private Members had absolute power, as fully as we have in this House, of bringing forward any questions in which

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they were interested, and some of the most useful measures of legislation were introduced and carried through by them. There was no repression of discussion, no guillotine, no censorship of Questions put down, and it was not necessary to invest the officers of the House with a control, not only of the conduct of debate, but of the choice of the subjects to be debated. As you have extended the franchise and given more and more power to that part of the nation which has the least political education, has it improved the calibre of the House of Commons? I will say no more tan that.
I cannot, however, help pointing out that, whether the House of Commons is improved or whether it is not, it has become absolutely powerless as a deliberative Assembly and absolutely powerless to modify or to control the conduct of a powerful Ministry. As I have said, I do not want to say anything hard or disagreeable of the House of Commons, but I can hardly be blamed for quoting what a Member himself says of that House. I have here a paper sent to me this morning from the House of Commons. It is signed "Henry Kimber," and is headed "Misrepresentation of the people." After pointing out the absolute inequality of the distribution of seats, and the number of electors in various constituencies, it says—
"Should the constitution and powers of the other House be dictated by us who are ourselves misrepresentative and unreformed?"
That is the opinion of a Member, and I must point out that this helpless character of the House of Commons has been purposely fostered by the Ministry of the day. Mr. Asquith last year, on March 29, concluded a remarkable speech by these words—
"The absolute Veto of the Lords must go before the road can be made clear for the advent of full grown and unfettered democracy."
That, my Lords, is what the Party opposite desire. Is it a statesmanlike desire? I have always supposed that the great object of all governments was that no part of any civilised State should be utterly unfettered; that the whole wisdom of Statesmen was the judicious contriving of checks on the various parts of the Constitution. And when a Statesman tells his countrymen that he desires any portion of the Realm—Lords, Commons, or King—to be unfettered, he is, I think, unfaithful to his trust.
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But it is not difficult to see why Ministers use this sort of language. In the first place, it is, of course, very convenient to flatter those who are in power. Flattery is the vice of all Statesmen, and whether it be a King we flatter, or whether it be a democracy, the same vice is seen; and probably there was no age in which the flattery of the democracy, now supposed to be the dominant element in the State, was carried on more freely or to greater depths of degradation than now. That is not the only reason. The real reason why the Prime Minister and his colleagues wish for an unfettered democracy is that it involves an unfettered Cabinet. That is really what we are face to face with, and, from a Constitutional point of view, that is the danger which the country runs. It has often been said that democracy always ends in despotism. In most States that despotism has arisen by some émeute, by some great and violent change. But in this country we have always done our revolutions by law; we have always, hitherto at any rate, carried out our revolutions by quiet and gentle means; and it is curious to observe that the despotism in which all democracies end is coming on this country in a different though equally effectual form—in the form of the domination of the Cabinet.
Now, my Lords, I come to the reform of this House. I want a reform of this House because I, for one, want a check on the democracy. I am not afraid to say that although I know it is an extremely unpopular sentiment. The proper thing at the present day is to say that all wisdom lies with the people, and that a form of Government which you would never adopt in your own household or in any business company must be the best for the State. But I do not believe it, and I am not going to say it. I want a check on the democracy just as I should, if I had lived in the seventeenth century, have wished for a check on the power of the Crown; or, if I had lived in the eighteenth century, I would gladly have joined in breaking up the old Whig Oligarchy. I want a check on the democracy, and this House is, it seems to me, the only power in the country which, for the present at any rate, can successfully check the democracy. But in order to check the democracy your constitution must be such that it is understood of the people. I am not going to say one word against the present constitution of this House. I am quite willing to take the

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line assumed by Lord Bathurst last night, that on the whole you have an Assembly which is superior to any other which you could put in its place. But it is not understood by the people, and you cannot get it into their heads.
There is one thing, for instance, that the people cannot understand—that is the old story of the "backwoodsmen." Last year I gave a challenge to the House which has never been taken up. I asked any member of this House to point to two Divisions which were decided by the vote of the "backwoodsmen." I do not quite know what a "backwoodsman" is. He may be anybody who does not sit on that Bench. It may be that I am included. My noble friend here tells me that I am one, but I would rather be allowed to cry off and perhaps consider myself an "undesirable." I have challenged any member of this House to point out any occasion on which any measure was ever passed, any Resolution ever come to, any Division decided, by the votes of the "undesirables." Of course we have seen many Divisions swelled by the "undesirables." I remember many years ago when the Second Reading of the Deceased Wife's Sister Bill was carried by ten votes, that that Division was carried by some members who do not usually attend this House—I will not go further than that; but that Bill was thrown out on Third Reading. Even that was not a definite decision of this House carried by the "undesirables," if I may still use the term, and that is the only instance in my experience where the "undesirables" have ever affected the decisions of this House. But, my Lords, you cannot get the people to believe that; they do not believe it, and they will not believe it, and therefore it is very necessary to show them what the facts with regard to the "undesirables" really are. Another misunderstanding which requires to be cleared up is this. The British public believe that your humble servant and all my noble friends round me upset the decisions of the Judges. Nothing will get that out of their heads, and the consequence is that if you have voters of this sort of calibre of intelligence you must make them understand and show them that it is impossible for any one of your Lordships who has not had a legal training to take part in the judicial business of this House, or else you naturally have a House in which the people have no confidence.
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I come lastly to the hereditary principle. I am told sometimes that we have abandoned the hereditary principle. I do not quite know what that means. If it means that the hereditary principle as an abstract principle is abandoned, I do not think that those who say so know quite what they are talking about, because the whole of religion, both Christian and Jewish, is based upon the hereditary principle, and no man in the abstract can abandon the hereditary principle as a principle and remain either a good Jew or a good Christian. Therefore I do not suppose that those who use these terms mean that. What they do mean is that we have abandoned the hereditary principle as a means of giving a seat to noble Lords in this House. I, for one, have never done so. All I have ever assented to is this, that hereditary right alone without any qualification of any sort or kind should not give a seat to a member of this House. That is a very different thing from abandoning the hereditary principle. And in addition to that I am perfectly willing to consider any well-thought-out proposition for placing other members on these Benches who have not the hereditary character; but the hereditary principle, as a principle, as part of the considerations which should govern us in deciding upon the constitution of this House, I have never abandoned, and, as at present advised, have not the slightest intention of abandoning. I protest most strongly against the accusation which is sometimes made against some of us who supported my noble friend Lord Rosebery when he brought forward his Resolutions, that we thereby abandoned the hereditary principle. I agree with Lord Lamington, who said he did not believe the hereditary principle to be unpopular in this country. It is curious to observe how very differently noble Lords look upon this subject according to the part of the country they come from. I heard my noble friend Lord Faber say last night that he believed the hereditary principle was very unpopular. I heard Lord Lamington say that he did not believe it. I do not believe it. I only know this, that whenever an occupant of one of my cottages dies the first thing his relations are anxious to show is that the family have occupied the cottage for generations, that they have been tenants of my family for generations, and that that is an argument why they should not be moved. I do not believe while that is ingrained as it is ingrained in the hearts of the people of this

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country that they are against the hereditary principle. But, my Lords, the people who have not got political education cannot understand that the hereditary principle does not give what I call the "undesirables" the power of legislating for this country. Therefore you must, modify the constitution of this House so as to give the people confidence that those who are in this House are fairly qualified for their duties, and I agree that there should be a certain representation of those who cannot sustain the burden of a hereditary Peerage but who are chosen to sit here upon some other tenure.
For these reasons I welcome in general terms the Bill which the noble Marquess has laid upon the Table of this House. I welcome it as an effort to solve a problem. I think myself that it will require much modification in committee, and I am not at all sure that it is not going in some respects in advance of public opinion. What I am now going to say I say with some hesitation, but I think I am known to your Lordships sufficiently well after all the years I have sat in this House to be allowed without offence to say something unpalatable. If this House has a fault it is that it is prone to act in a panic; it is prone to think that the country is more against it than it is; it is prone to think, if might humbly suggest, that the passing waves of feeling are to be taken as indications of the permanent feeling of the country. I will add one caution more. When I say passing waves, I often think that politicians do not sufficiently remember how long life is. Waves of feeling now are counted by months. Waves of feeling really should be counted by years; and, as I showed at the beginning of my speech, it is not at once that we see the evils which ensue from a particular line of policy. It has taken more than half a century to produce the consequences which the noble Viscount now sees ensued from the Reform Bill of 1832. It took seventy years to bring about those changes. So, my Lords, we should remember that we have to act in the way we think best for the country taking into review a long period of its history. Add while, on the one hand, we should be perfectly willing to sacrifice ourselves if it is merely a question of our seats or the right to express pour opinions in this House, we should nor act in a panic or be frightened by the big words which proceed from the government Benches.
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In the present situation we should consider, as this House throughout its history has always done, independently and with the intelligence and training which it has, what really is best for the country. For that we ought to vote, for that we ought to endeavour to bring measures forward, and then, whether we succeed or whether we fail, we shall at any rate have the feeling that we have striven to do our duty, that we have not bent to a popular cry leading us to do things which we do not honestly think to be the best for the country in the long run, and if this House is to be abolished it will fall with the respect of the nation.
THE EARL OF DUNRAVEN: My Lords, we have heard from the noble and learned Lord on the Woolsack what in his opinion is the course that this House should take. I gathered that in his opinion the House ought to drop this Bill, accept the Parliament Bill, and leave it to His Majesty's Government to fill up the Preamble of their Bill as they think best and introduce what provisions they like for arranging difficulties that might arise between the two Houses. I have no doubt that, even on this side of the House, noble Lords have every confidence in His Majesty's Ministers, but I would point out to the noble and learned Lord that we are not dealing with a matter in any way personal to ourselves. This House, like the other House of Parliament, is merely a trustee of the rights and the liberties of the people. I think the noble and learned Lord will admit that the position of His Majesty's Government at present is in some respects a rather peculiar one. They are not, supported in the other House of Parliament by a homogeneous Party; their majority is composed of very divergent elements, and it can scarcely be said of them that they are really masters in their own house. In those circumstances, I can hardly think that the Lord Chancellor really sincerely meant that it would be advisable for the House of Lords practically to sign a blank cheque and give it to His Majesty's Government to fill in any way they pleased.
This Bill has been, in one respect, received by noble Lords opposite in a spirit which I did not at all anticipate. The noble Viscount, Lord Morley, on the First Reading described it as destructive of the House of Lords, and the whole tone of his remarks was regretting the destruction of the House as at present constituted.

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Then the noble Lord opposite, Lord St. Davids, literally showered praises upon the House of Lords as at present constituted, and I have noticed the same strange phenomena occurring outside. Speech after speech by noble Lords and their friends have been of the same tone—that the House of Lords as at present constituted is about the most admirable Second Chamber that could be devised. If this House should ever be in want of a situation it has received from Lord St. Davids a character that will at once get it a situation with any community in search of a perfect Second Chamber. But he language used to the electorate at the last two General Elections was very different. Then the whole ground of attack was that the House as then constituted was not a fitting instrument to fulfil the functions of a Second Chamber. That view was forced upon the people in very strenuous language, in many cases with not the most strict regard for accuracy. What is the meaning of this strange change of tone? A few months ago nothing bad enough could be said for the constitution of the House of Lords; now no language is too good. I confess that I misdoubt me as to the meaning of the adulations now cast upon us. I do not understand why so much love is now showered upon the House and why noble Lords dissembled their love so very successfully when addressing the electorate. I have a suspicion that the object may be either that, if the House is, as it is, a very perfect instrument, there can be no particular object in filling up the Preamble of the Parliament Bill, or that, having found the constitution of the House of Lords such a very convenient ground of attack when desiring to stir up the prejudices and passions of the people, they may desire to preserve it in the same condition in order to use it at some future date in the same way.
I am not going at any length into a description of the problem before the House, or into the main principle of this Bill. I think the House is discussing this matter under some difficulty. The noble Viscount opposite said that they were discussing the Bill under much difficulty because they did not know how the noble Marquess the Leader of the Opposition was going to fill in the difficult question of the relations between the two Houses. That I have no doubt is the case. We
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also are discussing the Bill under the same sort of difficulty, because we have not the faintest idea how His Majesty's Government intend to fill in their Preamble. The position is undoubtedly difficult for the reason that this Bill deals with only part of the great Constitutional question. Your Lordships will not forget, though there is nothing said about it in the Bill, that propositions of a definite character have by Resolutions been made in this House suggesting means by Joint Sittings and otherwise of adjusting differences when they arise between the two branches of the Legislature, and also suggesting that in rare and well-defined cases, when all other means had failed, the matter in dispute might be referred to the ultimate source of all power—the people. Your Lordships also will not forget that the Parliament Bill is in this House. As a matter of fact, there are three more or less distinct Bills in the House—the Parliament Bill, dealing with the powers of the House; the Bill we are now discussing, dealing with the constitution of the House; and the Reference to the People Bill.
I hope your Lordships, in discussing this Bill, will not be unmindful of the fact that it is really impossible to consider it without some reference to the Resolutions that have been passed with regard to Joint Sittings and the Referendum, and also the provisions of the Parliament Bill. The Bill of the noble Marquess was described by the noble Viscount opposite as destructive of the House of Lords. It seems to me that the Bill is of a distinctly constructive character. This House, the most ancient legislative body in the world, has gone through many vicissitudes, many changes both of constitution and political complexion; it has adapted itself to the changing circumstances of different times; and surely a Bill which aims at adapting the House to the conditions under which we now live, which aims at rendering it more responsive to popular feeling, and so on, is most distinctly a measure of a constructive character. The noble Viscount attributes the present Constitutional question to the gradual cumulative effects of the Reform Acts of 1832, 1867, and 1884. In his opinion the admission of great bodies of new electors caused a cleavage between the House of Lords and the other House of Parliament. I feel rather diffident in differing from the noble Viscount on a matter of that kind, but at

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the same time I cannot quite agree with him in that.
The actual crisis, if I may so call it, that we are now in is due to some extent to the necessity that the present Government are under of endeavouring to legislate to satisfy all the peculiar fads of the various groups constituting their majority, to some extent to the exuberant character of their own legislative faculties, and to a very large extent to the congestion of business which is suffocating the House of Commons. This has led to the undoubted fact, which was pointed out by the noble Duke behind me, that the Cabinet not only absorb all the time of the House, not only exercise all the administrative functions, but really all the legislative functions also, and have become virtually masters of the House of Commons to the exclusion of the private Member, so that the House of Commons has almost ceased to be a deliberative Assembly. Even if it be true that the admission of large bodies of men to the franchise is the cause, surely the course adopted by the noble Marquess, Lord Lansdowne, is a more statesmanlike course than that which noble Lords opposite would wish us to adopt. They would settle the difficulty by reducing this House to an absolute nullity—to all intents and purposes doing away with it altogether as an effective check or balance. The noble Marquess, on the other hand, aims by his Bill at making the House more responsive to popular feeling, at making it vibrate more readily to changes in popular sentiment, and so bringing it more into touch with these great bodies of men who have been admitted to the franchise, and enabling it to fulfil its duty as a check and balance better than it can at present. Of the two I think the constructive scheme of the noble Marquess is wiser, more statesmanlike, and more effectual than the purely destructive principles of noble Lords opposite. Even were the Bill destructive, I confess I should prefer it to the alternative offered to us of accepting the Parliament Bill with a blank Preamble.
I would sooner see this House absolutely absolutely than, as it seems to me, degraded. I honestly believe that if the great Statesmen who from this House governed the affairs of the Empire in the past could be here now, they would say, "Reform the House, reconstitute it, adapt it to the circumstances with which it has to deal,
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or abolish it altogether; but do not inflict upon an ancient and honourable institution the indignity of being turned into nothing better than a sham." And that, after all, is what noble Lords opposite propose to do—they would leave this House merely a sort of wax image of what it once was, a mere effigy with a wooden lance and a pasteboard sword and with no power worth considering if your. Lordships consider the way in which business is forced through the House of Commons—I am not cavilling at it and I would not go so far as to say even that it is not necessary—if you consider the application of the closure, surely it is absurd to suppose that the mere suspensory powers to be left to this House under the Parliament Bill would be worth anything at all as a check or a balance. Bills would be sent up here and if they were rejected or amended they would be brought in again in the House of Commons and passed through in the most perfunctory manner. Ministers would, say, "This Bill was amply debated and thoroughly threshed out a few months ago, and it would be mere waste of time to debate it again." The closure would be applied and the Bill sent up here again in quite a short space of time. The short suspensory powers proposed would have no real effect, and the House in those circumstances would be reduced to nothing better than an empty shell.
I do not propose to go into the main principles of this Bill. They have been so amply and fully explained by the noble Marquess, both on First Reading and on Second Reading that that would be totally unnecessary. It is also unnecessary for the further reason that the Bill merely puts into concrete and definite shape within the four corners of a Bill the Resolutions which were accepted by the House some time ago by enormous majorities. The House admitted that the hereditary principle must be modified, that the mere accident of birth should no longer of necessity convey a right to sit and vote. The Bill provides for that, and provides for it, it seems to me, in the only absolute and adequate way. A Peer would not be eligible for election unless he had some qualification. The noble Viscount contended that that qualification would have a detrimental effect upon members of the Peerage who might wish to sit in the other House of Parliament, that the fact that a Peer was not qualified

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to sit in this House would be looked upon as a reflection upon his capability, would militate against his success in getting into the House of Commons. I cannot conceive that such a thing as that would occur. I cannot see why the fact that he had not been a Governor-General, Lieutenant-Governor, a Major-General, or whatever the qualification may be should in any way militate against him as a candidate for the other House.
There are one or two details of the Bill upon which I would like to comment. The noble Viscount opposite commented upon the election of Spiritual Peers, and I entirely agree with him in what he said. I fail to see how they are to elect a number from among themselves by proportional representation, how it refers to them in any way. I should much prefer the provision in a Bill that I had the honour of presenting for Second Reading in this House in 1888. By that Bill the Spiritual Peerage would have been reduced to five: the two Archbishops and the Bishops of London, Durham and Winchester, who have rather a different tenure from the other Bishops. I sincerely hope that means will be found for ensuring that representatives of the other great denominations should find a place in this House. I should like to see it. I do not agree with the noble Viscount opposite in the small number which he mentioned as sufficient for a reconstituted House of Lords. I think he put it at 100.
VISCOUNT MORLEY OF BLACKBURN: Or 200.
THE EARL OF DUNRAVEN: There are rumours—absolutely unfounded, no doubt, but still very persistent—that under some circumstances the noble Viscount and his colleagues would not be absolutely horrified if the numbers of the House were increased to about 1,000 or 1,100. There is a great gap between that and the modest number of 100 which the noble Viscount thinks would be quite sufficient. I look with great satisfaction upon the fact that Peers are to be eligible for the section to be elected outside, and I think it ought to give great consolation to all those Peers who are about legislatively to die. They may all become resurrected under it. I think the Bill, considering what it had to do, has been very considerate of the Peerage. If this Bill becomes law Peers who desire a more energetic field for the exercise of their abilities than this House affords will no
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longer be precluded from seeking admission to the House of Commons, and I venture to say if they do seek admission they will in a great number of cases he successful. If a Peer's ambition is to sit in this House as a Lord of Parliament there are three doors open to him: he can be elected by his brother Peers if qualified; if he is not qualified, or fails to be elected by his Peers, he can be recommended and nominated; or he can be elected by the suffrages of the electoral colleges. To that I attach great importance.
The noble Marquess laid stress, in his speech on the First Reading, upon what he called the value of the Cross-Bench mind—the value of independence in this House. I quite agree with him. I believe that the most solid ground of objection held by sober-minded men in the country to this House is that they think the House is actuated too much by Party considerations, that it is not as independent as a Second Chamber ought to be. That, of course, is a great exaggeration; it is, however, an honest opinion and ought to be dealt with, and this Bill will help to deal with it. It is obvious that any one possessed of what is called a Cross-Bench mind may find himself, and in some cases must almost of necessity find himself, placed in a position of considerable difficulty as regards Party platforms and Party politics, and I am sure it would be an immense relief to men of that independent frame of mind to have the opportunity of explaining their actions to a constituency or to the electoral colleges of their fellow countrymen and submitting themselves to their judgment. I think that is one of the most important provisions in the Bill.
On one point only do I wish to make a little criticism. The method of election by electoral colleges, consisting, as I understand, in the first place at any rate, of members of the House of Commons, is I consider a very admirable way of getting over a very great difficulty. It is very admirable and, what is not always synonymous, very practicable. But what I do not altogether like are the instructions to be issued to Commissioners who are to delimit the electoral areas. According to the Bill they are to have regard to population and area, to boundaries of counties and boroughs, to existing Parliamentary constituencies, and to community of interests. I should like to have seen less stress laid on population and more stress laid on community

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of interests; and in the reference to areas I should have liked some indication that the larger areas, the main divisions, of the United Kingdom should be taken into consideration. In fact, in both categories—in the section elected by the Peers and in the section elected by the electoral colleges—I should have liked, with due regard, of course, to population, boundaries, and other things, some prominence given to the great main divisions, so that Lords of Parliament would, to some extent at any rate, sit as representatives of England, Scotland, Ireland, and Wales. I should like that because, in the first place, community of interests is obviously more developed and defined in those great territorial divisions than in smaller ones, and I think it important that that community of interests should be considered. But I frankly admit that my real reason for saying this is that I should have liked the House so framed that it might fit in with a development which I feel confident must sooner or later come—that is, some delegation of power to subordinate bodies in order to relieve the House of Commons from the congestion which suffocates and paralyses it. I admit, also, that I should have liked the constitution of the new House of Lords to be of such a character that it might act as a germ, as it were, of some great scheme of federation that may some day arise whereby the great Dominions oversea might find representation, not perhaps in the Imperial Parliament, but in some Council or body emanating from that Parliament.
I approve of this Bill for the reason that it aims at a stable and a well-balanced double-Chamber system. I approve of that because, in my opinion, it is only under such a system that the democracy can really rule and protect itself from the fate which has befallen so many democracies. In spite of what the noble Duke (the Duke of Northumberland) said and of his quotation from Dr. Flinders Petrie, I have the utmost confidence and belief in our democracy provided only our democracy has fair play, and to have fair play I believe a stable and well-balanced Second-Chamber system is absolutely essential. I approve of the Bill because of the opinions I hold as to the relations which ought to exist between Great Britain and Ireland. I approve of it because I am what is commonly called a Home Ruler. I am not, of course, going to say what I understand by Home Rule,
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except that my conception of it is very different from that on which the two Bills of Mr. Gladstone were founded. My conception is rather in the direction of a federal arrangement. I am not going to trouble the House with my reasons for believing in Home Rule. I believe that it would be enormously beneficial both to Ireland and to the United Kingdom, but I believe it can be beneficial only under certain conditions. One of those conditions has to do with finance, and that, of course, I cannot discuss. But I do not believe that any statutory Parliament set up, for instance, in Dublin, which of course would be subject to the supremacy of the Imperial Parliament from which it derived its powers, could have the remotest chance of working successfully and of having fair play if it was under the supervision of a Single Chamber, an omnipotent House of Commons, swayed, as the House of Commons must always be, by great and sudden changes of opinion, and gusts of prejudice or passion. I do not believe such a statutory Parliament could have a chance of working well except subject to the supremacy of a stable and well-balanced Parliament acting under a stable and well-balanced Constitution. I cannot conceive that Home Rule would have a chance of being successfully worked either unless it was conceded—I do not say absolutely approved of but acquiesced in—by a majority of the people of Great Britain. It may be, and I have no doubt it is, too much to hope that a statutory Parliament in Dublin could be set up, or a statutory body of any kind, by the advocacy of both the great Parties in the State, or by the advocacy of the great majority of the predominant partner. But I do not think it is too much to hope that it might be generally acquiesced in with an honest desire that, if established, it should work well. I do not believe for a moment that it would have a chance of working well if Home Rule were snatched by a chance majority of such a coalition as His Majesty's Government are now supported by. Take as an example the Act of Union itself. That Act was passed without any reference to the Irish people, the only authority that had any right to decide upon it. It was passed without reference to them more than 100 years ago, and the people of Ireland have never forgotten or forgiven the outrage that was then done to the principles of democracy; and the Union never had a chance. To smuggle on to the Statute-book an Act so vastly important as an Act

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remodelling the Act of Union without referring it to the people of Great Britain would, I am sure, be resented by them, and would not have a fair chance. I believe a balanced and stable Second Chamber system would be absolutely essential for the well-working and the success of any statutory Parliament that might be set up in Dublin, or of Home Rule of any sort or kind, and for that reason, if for no other, I should support this Bill, which aims at stability, and vote against any Bill which seeks to undermine stability and destroy Parliamentary equipoise.
THE PRESIDENT OF THE BOARD OF AGRICULTURE AND FISHERIES (EARL CARRINGTON): My Lords, we on this side of the House have been racking our brains, and I should not be surprised if some members on the other side of the House have been doing the same, to know what unfortunate circumstance induced the noble Marquess the Leader of the Opposition to introduce this Bill into your Lordships' House. There must be some reason, but the reason is not easy to find. Last night Lord Selborne, in his exhaustive and eloquent speech, gave us one reason. After saying that without the Crown the Empire would not exist twelve months, he went on to say—
"Therefore, it is the duty of Constitutionalists, by an honourable surrender of their dignity, to come to the rescue of the Crown."
I fancy I saw the eyebrows of some noble Lords opposite go up when he made that statement. I make no comment whatever on those words, the purport of which seems to have escaped the noble Earl. I leave them to his riper consideration. But if we allow ourselves to entertain what I venture to think is a preposterous proposal, what does the noble Earl propose? He proposes to effect his object by attacking, if not altogether abolishing, one of the most important privileges of the Crown by stopping the creation of Peers and Members of your Lordships' House. There may be some other reason. We were told that one reason why a Bill would have to be brought in was on account of revolution. We have not heard a word about that in this debate, and therefore I let that go by the board. We were also told that there were two great lions in the path. One, of course, was Home Rule, and the other was a Single Chamber. Neither Home Rule nor a Single Chamber has been mentioned in the whole of this debate until my noble friend mentioned
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them in the last speech your Lordships have listened to. I therefore do not say one word about them.
I should like to call the attention of the House to the extraordinary proceedings which have gone on for the last eighteen months and which have now landed us in what Lord Selborne calls the amazing position in which we find ourselves. Things were in a very disquieting state up to the end of last year, and on February 10 The Times, in its wisdom, announced the abandonment of reform from within. Mr. Garvin, the pacemaker of noble Lords opposite, immediately jumped in and told the public that the policy was to be changed again. He made a great discovery—that the duty of an Opposition was to oppose and not to construct, and in his beautiful language he said that the Lords were not to charge but to form squares. That, I fancy, is one of those parade movements which were alluded to by the noble Marquess opposite and to which he seems to have so serious an objection. The word went round that the Liberal Party were to be tackled in earnest, and it was whispered—of course, I do not know how true it was—that this back-stiffening and more resolute policy was the direct result of beneficent and outspoken feminine influence. A paragraph went round the Press to this effect—and it made an immense sensation—that "a Party which cannot get up a fight and justify its position can only expect and deserve extinction." That spirited paragraph was, rightly or wrongly, attributed to a female pen, and some of us on this side of the House rather expected a move in that direction.
But I often wondered in the long March afternoons when we listened to Lord Rosebery, and in the long November nights when we listened to the noble Marquess opposite, what the Peeresses of the United Kingdom must have thought of the suicidal suggestions and the filicidal propositions of those two Whig leaders of the great Conservative Party. I hope the House will do me the justice to believe that I am not such a consummate ass as to pretend that in any way I understand women. In the course of a somewhat long life I never knew but one man who said he did. He told me he did, and he came to the most hopeless grief it is possible to conceive. Still I think I am justified in saying that, now that the crisis has come, the maternal instinct—or "gorge," to use the pet phrase of Lord

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Rosebery—must rise at the sight of their lords and masters in earnest making preparations, not only for self-slaughter, but for the slaughter of their sons and of their sons' sons. I can well imagine the feelings of the mother as she follows the agonised looks of her beloved son. "the honourable Isaac," as he is bound and helpless on the sacrificial altar, with one eye fixed on the sacrificial knife which has been sharpened by "the noble Abraham," and the other eye wandering about searching for a friendly old billygoat or a handy old ram caught in a thicket by its horns.
In these circumstances the mothers would cry out, "A truce to this—." I will not use Lord Milner's expression, but you know what I mean. And they would go on to say, "Is there no alternative to this massacre of the innocents, young and old; is there no golden bridge by the crossing of which we will be able to save not only our privileges, our coronets, our robes, but our faces as well?" Of course, my Lords, there is such a golden bridge. It is our Parliament Bill, to which we shall ask the House of Lords to give a Second Reading next week, and that bridge has been declared by a majority of your fellow country-men to be a safe and a sound bridge; and though you were not aware of it, by the acceptance of the first clause with regard to finance and the third clause with regard to five-year Parliaments instead of septennial Parliaments, you are safe over two-thirds of that bridge already. The Parliament Bill, at any rate, does not insinuate that four-fifths of your Lordships are, I will not say unworthy or unfit, but unable or unequal to the task of carrying on those great hereditary' duties to which most of you were born and the rest created.
The country, my Lords, has spoken, and it has spoken with no uncertain voice. It has declared that the despotic, absolute, uncontrolled, and irresponsible power of your Lordships' House must go. It seems to me that a great deal of this debate has been beating the air. The real fight is about the powers of this House. That is what will have to be settled. You are fighting for despotic powers; we are fighting for your powers to be somewhat limited. I very respectfully ask the House—What is the wisest thing for, you to do in this crisis?" Is it to sit down and cut not only your own throat, but the throats pf your sons and your sons' sons as well,
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or boldly to face the inevitable—to fight to the last and go down with your flag flying? If you want an Imperial example you will find it in General Botha and his gallant Boers at the end of the South African War and a national one in Wellington's desperate struggle against the reforms of 1832.
I think it was Lord Morley who said that the proposals of this Bill were farcical. It is absolutely true. I hear from Liberal agents in all parts of the country that the country is laughing at your suggested concessions. If the country wants an elective Chamber of course it will have it, and you and I will have to go. But if you must perish why should you perish before your time? I believe there is a great deal more searching of hearts and wringing of hands and grinding of teeth among the supporters of the noble Marquess opposite than he apparently Lad any idea of. It seems to me that not only the noble Marquess but his followers are not altogether displeased with the result of the last election. In spite of the Rosebery Resolutions, in spite of the Lansdowne Resolutions, our sons are still on the steps of the Throne, our wives still in the Peeresses' Gallery; and in spite of his magnificent voluntary act of self-renunciation, in spite of the effort to bring about a hereditary holocaust, still we see with the greatest pleasure the noble Marquess restored to health, sitting in his old, old place, surrounded by his supporters and his friends—himself the most perfect, up-to-date, ideal, British impersonification of "the marquis malgré lui."
Debate again adjourned till To-morrow.

PARLIAMENT BILL.
Read 1a; to be printed; and to be read 2a on Monday next. (No. 84.)

MARITIME CONVENTIONS BILL. [H.L.]
A Bill to amend the law relating to Merchant Shipping with a view to enabling certain Conventions to be carried into effect—Was presented by the Lord Granard (E. Granard); read 1a, and to be printed. (No, 87.)
House adjourned at twenty-live minutes before Eight o'clock, till To-morrow, a quarter past Four o' clock.