asked the Prime Minister whether he is aware that the three first Orders to be discussed after the return from the Whitsuntide Recess, namely, the Address to the Crown on the appointment of a High Court Judge, the Appellate Jurisdiction Bill, and the Mental Deficiency Bill, are opposed by Members on the Government side of the House; and whether some other arrangement could be entered upon that would be fairer to all parties?

The arrangement referred to is, I think, generally satisfactory to Members in all quarters of the House, and I am not prepared to make any alteration with regard to it.

May I ask the Prime Minister what Supply he proposes to take on the Thursday after the Adjournment, and would it also be possible for him, for the convenience of the House, to state now before the Adjournment what steps the Government propose to take in connection with the Home Rule Bill?

I understand, though it is only a provisional arrangement, that we propose to take the Foreign Office Vote on the Thursday after we reassemble. Of course, circumstances may occur which may not make it expedient. With regard to the other question put by the right hon. Gentleman, I should point out what we propose to do is to take the Second Readings of the three Bills which are going to be presented to-day, the Government of Ireland Bill, the Established Church (Wales) Bill, and the Temperance (Scotland) Bill, in the ordinary course. We do not propose to submit any Resolution to the House on procedure until those Bills have been read a second time. Although what I say now must be taken merely as an indication of what the Government at present have in their minds, and may be liable to further consideration—subject to that reservation it may be convenient to the House that I should state in a general way how we propose, after the Second Readings have been passed, to proceed. Our idea is this: With regard both to the Irish Bill and the Welsh Bill it would be necessary to obtain a Financial Resolution in order that those Clauses in the Bills which deal with finance may be authorised by Resolution in Committee; and provision will have to be made for discussion in Committee and Report of those Resolutions. As regards the Committee stages of the Bills, it is quite obvious, having regard to the provisions of the Parliament Act—which requires a Bill, to take advantage of that Act, to be identical with that passed in the successive Sessions—that the Committee stage ought to be of a formal character, but we propose that some provision should be made for dealing with that stage. We propose, in pursuance of the provisions of the Parliament Act, that the House should have the opportunity before the Third Reading of any of those Bills, to avail itself of the powers which the Parliament Act gives to make suggestions of Amendments which can, if they are approved by this House, be considered by the House of Lords, although they will not form part of the Bill which passes from this House. I say nothing more as to the length of that stage, or whether we will have it at all, until we know where we are after the Second Readings. As I have said our present intention is to afford the House the opportunity, if the House desires to take the opportunity, of making suggestions before the Third Reading.

Does that mean there will be no Committee stage at all?

It does not necessarily mean that, but only a formal stage.

But it does mean that our discussion will be a complete farce.

I do not think so. I think it would be a great waste of time to have a Committee stage in the ordinary sense of the term, because any Amendment, of course, would destroy the identity of the Bill. On the other hand we propose to afford the House the opportunity which the Parliament Act expressly reserves to make suggestions to the House of Lords.

Without continuing that discussion, will the right hon Gentleman tell us on what day the Second Reading of the Home Rule Bill will be taken?

Our present proposal is—again subject to further consideration—to take it on the Monday after the House reassembles.

Can the right hon. Gentleman state approximately the number of days that will be occupied by the Second Reading of the Home Rule Bill?

The Debate will be conducted under the normal conditions, with the ordinary power of Closure. We do not propose to submit any procedure Resolution with regard to the Second Reading.

With regard to the Resolutions to be taken to-day, will you, Sir, for the convenience of Members, state whether you will follow the same course as was taken in Committee by the Chairman, namely, that of allowing a general discussion, or will the Debate be limited to the subject of each Resolution? I understand that the rule laid down in Committee was that a general discussion should be taken on the first Resolution, and that the two remaining Resolutions should be put at the end practically without any Debate at all. Therefore, I wish to ask whether it will be in order to have a general discussion on the first Resolution on the same understanding as in the Committee stage?

I think that would be contrary to the practice generally followed. On the Report stage the discussion must be confined to each separate Resolution. Therefore, on the Income Tax Resolution, Members must confine themselves to Income Tax; on the Tea Resolution, to tea; on the general Resolution, I dare say that some general discussion might take place.

In the event of the day being occupied with the first Resolution, will the two remaining Resolutions be put without Amendment or Debate?

I must wait and see what is the character of the discussion on the first Resolutions. I can hardly conceive that the discussion on the Income Tax Resolution will last the whole day.

Can the Prime Minister state when the Second Reading of the Welsh Church Bill will be taken?

I cannot say, as I do not know how long the Second Reading debate on the Home Rule Bill will take.

It will follow immediately after?

Yes.

Will the debate on the Foreign Office Vote include the debate on the Congo recognition, which was promised for an early day?

I imagine that it will be in order.

Will it be taken as implying or carrying with it the acceptance by the House of the principle of recognition?

On the Foreign Office Vote any subject connected with foreign policy can be raised.

I do not think the Prime Minister realises that we have been promised that the Congo should not be recognised until the House has had an opportunity of deciding whether it approves of that recognition. What I and many other Members want to know is whether that opportunity which has been promised to the House will be afforded on the Foreign Office Vote?

My impression is that the only promise given was that the House should have an opportunity of discussing the subject; but I will look into the matter.

Although this Resolution stood first on the Committee Stage and we have been nominally discussing it on several days, I believe that beyond a few passing remarks of the Chancellor of the Exchequer when he introduced the Budget the question of tea has not really been discussed at all. There have been one or two questions addressed to the Chancellor of the Exchequer with regard to his statement when introducing the Budget, but beyond those questions and the replies thereto, there has been no discussion whatever upon the subject. On the Committee stage I had on the Paper an Amendment, which has often been before the House, proposing to reduce the duty upon tea grown in the Dependencies of the Empire. I withdrew that Amendment because of an intimation from the Chairman that in his opinion it would come better when the Finance Bill was before the House, and that in any case he could not allow the matter to be discussed twice. Therefore, on his advice, the Amendment was withdrawn, and I do not propose to move any reduction on the present occasion. Whatever we may think on this question of the Tea Duty, it is impossible for us to vote against it; we should be immediately met with the statement that it would upset the whole Budget, and we should be asked how we proposed to raise the money that would be lost to the Exchequer. Next to tobacco, tea is the heaviest item in the way of taxation collected by the Customs officials. The taxation on tea amounts to over £6,000,000 a year; it is an item without which the Chancellor of the Exchequer could not balance his Budget. There is no article of which the consumption is more widespread than tea. The consumption of tea amounts to over 300,000,000 lbs. per annum, which represents about six and a half pounds per head of the whole population of the United Kingdom. The Chancellor of the Exchequer estimates that this consumption will materially increase during the present year. He has budgeted for an increase of about £300,000 to be brought about by the Tea Tax. That is a very large increase. I must do the right hon. Gentleman the justice to say that he does not say exactly that the people of this country are going to drink 14,000,000 lbs. weight more tea this year than last year, but that there will be that quantity of tea more withdrawn from the bonded warehouses than in the previous year. That is somewhat of a distinction, because we have tea withdrawn before it is wanted if there is an anticipation that an extra duty will be put on, and I believe also that tea is not withdrawn if, on the other hand, the merchants think there is to be a reduction in the duty. The Chancellor considers that last year probably as much tea was not withdrawn from the Customs as would have been because there was some anticipation that there might be a reduction in the Tea Duty. That anticipation could not have been at all well founded. I do not, indeed, think it was really anticipated by the tea trade. Anyhow, there was not quite the amount of tea withdrawn from bond this year. The anticipation of the Chancellor this year may or may not be realised. However all this may be, it is perfectly clear now that the Tea Duty, I will not say is going to stay only, but it is going to stay at the high rate at which it is now. No Chancellor of the Exchequer can do without the £6,000,000 which the Tea Duty at present brings in. Although there are manifest disadvantages in this tax—they have often been mentioned in this House—the fact that low-priced teas bear the same duty as high-priced teas must be taken into account; for there is no ad valorem duty, as there is in many countries where taxes on imported articles are the rule and not the exception, as in this country.

In this country we have this fixed duty upon tea whatever the quality may be, whether it, is worth 6d. or 7d. per lb., or whether it is worth 1s. 6d. or 2s. or 3s. per lb. That makes the Tea Duty a more oppressive tax upon low-priced teas. Although some people think that that necessarily falls upon the very poor, I do not believe that that is quite the fact. I am not sure that it is the very poor who drink the cheapest tea. I am not at all sure that it is not the lower middle classes who look out for and try to obtain the cheaper sorts of tea, and they are the people who are as much affected by this tax as are often the very poor themselves. Because of the position they have to keep up, taxes of this kind fall just as heavily upon them as upon people of smaller income who have not to keep up such a pretentious position; so that I do not think on the whole that you would find that the very poorest classes do buy the cheapest tea. But, whoever the class that buys these teas, there is no doubt about it that a tax of 5d. in the pound falling as a level tax is an extremely hard one upon the cheaper kinds of tea. I will not enlarge upon that fact, nor upon the fact that tea in many of the poorer parts of the country is an absolute necessity of life. On many occasions below the Gangway I have heard it mentioned as to what an absolute necessity tea is amongst certain Irish classes, and how desirable it was that tea should be plentiful and, as they would say, cheap. I am sorry to say that those who desire to cheapen it have not yet achieved that desire. Some of these hon. Members have on numerous occasions supported me and other hon. Members when we have discussed this Tea Tax, and have moved a reduction; but while they have supported us in debate, they somehow or other have not the courage to vote with us in the Lobby. There have been exceptions, but the bulk of those to whom I refer have not felt it possible to follow us into the Lobby when we voted upon this question. Some years ago, when parties were not so evenly balanced as at the present time, I believe that on several occasions we had the benefit of the Irish Members with us in the Lobby when we moved the reduction of the Tea Duty.

The Tea Duty is the principal ingredient of the taxes on what we call "a free breakfast table"—that free breakfast table which, I believe, has been the Liberal ideal ever since I was a boy. The tax upon sugar is so very much smaller: it only brings in about a half of the Tea Tax; therefore it is very much less oppressive than the Tea Tax on the free breakfast table. It appears to me that when we saw this Budget brought in it removed any expectation of getting a free breakfast table—[HON. MEMBERS: "No."]—unless a total change takes place in the fiscal system of this country. With the present financial position and the present theory of taxation which is embodied in what is termed the People's Budget, which theory of taxation comprises a tax on tea to a certainty and very possibly taxation on sugar for all time, I cannot believe that any Chancellor of the Exchequer, with the increasing liabilities which the present one has thrown upon the country will feel himself in a position to substantially reduce the taxation either of tea or sugar. We had tea taxed an additional penny as a war tax, and it was taken down again at the end of the Boer war; but the tax has remained for the last nine or ten years following the end of the war at 5d. in the pound, and I am perfectly confident on the present theory of taxation that prevails that the tax will never be reduced. That is a thing we have to face, a thing which the people of the country will have to face. They will have to realise that they cannot have the benefit of the old age pensions, the benefits of the Insurance Act, and so on, unless they retain this heavy tax which is universally felt, because it is a heavy tax upon one of the prime necessities of life. [An HON. MEMBER: "Question."] It is something we have to pay for our appreciation of our duties towards old age, and of the duties which we owe the poorer classes. The Chancellor of the Exchequer has often asked us on this side when we have moved reductions to suggest some other tax. I do not wish to do so on the present occasion. I am only making these remarks for the purpose of showing that we will have this hung round our necks as a tax in the future and shall not be able to throw it off.

The Chancellor of the Exchequer anticipates an increase, a withdrawal from bond—I will not say consumption—of 14,000,000 pounds, but whether that will be realised is a totally different question. Tea merchants can arrange to withdraw the tea exactly as it is wanted. Some of the tea experts that I see before me may be able to tell us what expectation there is of the Chancellor's anticipations being realised. The right hon. Gentleman has budgeted for a large increase in the consumption of alcoholic drinks. He expects a sunny year. Another prophet I noticed the other day, prophesied that we were going to have an extremely wet year. I hope the Chancellor may be right and that the other prophet may be wrong, but, if a sunny year, will that promote, or otherwise, a consumption of alcoholic drink? Has the matter been discussed? I should say that a very sunny year would get people out of doors, and would be more likely to have the effect of inducing a less consumption of tea, so that instead of getting a large increase in the consumption of tea, possibly we may see a larger consumption in alcohol and a decrease in the drinking of tea. How is it considered that these two go together? I do not think you can budget for an increase of both. While I am not suggesting that we are going to vote against this, I do say that the Chancellor of the Exchequer may be rash in basing his figures upon the fact that there will be such a large withdrawal of tea as he suggests. It is a matter of only 300,000 pounds, but the Budget is made up of these items of 300,000 or 400,000 pound increases! We must only hope that the right hon. Gentleman's anticipations will be realised, but with regard to tea I have very great doubt; I think the Chancellor of the Exchequer, when he budgets for this great increase, is running a great risk. He is incurring a responsibility which the future may show to be justified, but which I am afraid we have no ground for expecting, and therefore, although I raise my protest as to these figures, I will not vote against this Resolution now.

On a former occasion I deplored the enormous expenditure for which the Chancellor of the Exchequer has to provide, thoroughly unjustifiable, as I think, and which he has forced upon the country without counting the cost, or counting it on such calculations as had no relation whatever to the actual cost. Nevertheless, I cannot honestly say that I think the reduction of the Tea Duty was expected this year. I do not really think the trade expected it. I believe the trade was prepared for the continuation of the Tea Tax of fivepence. Now if a high tax upon tea is necessary, and under the existing system it probably is, then, as I think, the avoidance of change which has been accomplished this year is an important consideration for the tea trade. A change is considered as almost as disastrous as an increase, and a very small reduction is of such a character that it brings very small relief to the poor who are chiefly concerned. I ventured already to ask the right hon. Gentleman the Secretary to the Treasury how he justified the Chancellor of the Exchequer's Estimate of an increase from the Tea Duty of £298,000, and he very kindly replied, but I was unfortunately absent on duty, not unconnected with tea. The right hon. Gentleman was kind enough to explain that at some length, but I still feel some little doubt. I do not understand what his ground is for thinking that there will be 14,000,000 lbs. more tea withdrawn this year. I confess upon that point the explanation of the Secretary to the Treasury did not seem to me to be convincing. I do not know whether the Chancellor of the Exchequer is going to refer to this matter, but I should be glad if he would explain or reaffirm what his right hon. Friend has stated. The Secretary to the Treasury knows there has been no such increase for many years, and that an increase of 14,000,000 lbs. is almost unprecedented. It seems to me, speaking from recollection that there has not been an increase of anything like 14,000,000 lbs. in the last five years. In the last five years I think 11,000,000 lbs. in one year was the largest increase we had, and I should like to know what special reason there is for anticipating that 14,000,000 lbs. extra will be taken out of bond this year. There must be some reason for believing that this extra amount will be withdrawn. If the duty remains the same, primâ facie I believe there must be some ground for believing that the consumption would remain the same.

I cannot follow my hon. Friend in his calculation that this is likely to be a sunny year. I do not know what special information he has on the point that a sunny year is likely to lead to a decrease in the consumption of tea. If my hon. Friend was in the habit of hunting big game in tropical climates he would know that weak tea was one of the most thirst-quenching and palatable drinks in the sun which any human being ever invented. Even if we have a good summer I confess I do not see what is the ground for anticipating so large an increase in the consumption. Since the right hon. Gentleman's Budget was introduced I have tried to find out from such quarters as I think are most likely to possess the information where this large increase is to be obtained from. I think it is hardly justifiable to enter into a discussion now as to reducing the rates of the duty, because that duty has been in force for some time and it is now continued. I think everybody will agree it is most unfortunate that tea which comes to us from British Possessions, which is grown by British capital, produced by British labour, and is in every respect a British Empire product, should be subject to a higher duty than any other product except tobacco. Tobacco is on a very different footing, because, with all due respect to hon. Members from Ireland, the United Kingdom can hardly be regarded as a tobacco-producing country, and therefore I think tea should have a preference over tobacco from the point of view of taxation. To most people tea is a far more important necessity of life than tobacco. I endorse the remarks made by my hon. Friend that the Tea Tax hits the poor people more than any other tax, and the fact that there is a flat rate of fivepence per pound ruthlessly levied upon all tea, on the poorest class of tea as well as on the highest class, is certainly, to my mind, a most regrettable circumstance.

I do hope that the fact will in time get beaten into the minds of the people of this country that in the Tea Tax and other taxes of this character they are paying for old age pensions and National Insurance and every one of those so-called benefits which the Chancellor of the Exchequer hands over to them, and for which they, even more than other people, are taxed. If the people would only realise that, it would be an enormous step towards the real understanding of some of the economic conditions which seem to me are only mentioned to be obscured and misrepresented on every possible occasion. I do not understand the cant about a free breakfast table. I do not see why the breakfast table is to be free any more than the dinner table or the tea table, but I do know tea is drunk at the table of the poor at breakfast, dinner, and supper more than anything else. The poor drink it, and they ought to know that every time they take it they are paying through the nose for all those measures which are lumped together under the question-begging and comprehensive title of "Social Reform," that glorious-sounding expression used to cloak any amount of excessive taxation, any amount of grinding tyranny, such as is exercised by the imposition of Insurance taxes. I do not intend to trouble the House any further, but I should be glad if the Chancellor of the Exchequer or the Secretary to the Treasury would kindly do something to further resolve the doubts on these matters which still remain in my mind.

I should like to say one word upon the question of procedure in the situation in which we find ourselves. The Chairman of Committees, on the submission of the Chancellor of the Exchequer on the first night of the Budget, when the right hon. Gentleman moved the Adjournment of the Debate, suggested that we should have an opportunity of raising every subject touched upon in the speech of the Chancellor of the Exchequer upon the Budget, but I gather from your ruling, Sir, that a different rule would prevail upon the Report stage of the Resolution. If that be the true view, and I am sure it is, on your high authority, I think it may be necessary for us in another year to maintain that the same rule should prevail in Committee as would be enforced by the Chairman upon the Report stage. The position is this: We made our statement which we had to submit to the House in Committee as to the effect of the Budget upon our country, and we put our views before the Committee, but the right hon. Gentleman the Chancellor of the Exchequer, for reasons best known to himself, did not consider it necessary to reply to our arguments, and these arguments, therefore, of ours remain unanswered. We were very desirous of raising this question again in some manner in which it could be effectively brought before the House. We did not desire to do it in a piecemeal form. Of course, the special Resolution dealing with tea is not one which would enable us to raise the whole of our case on, neither would the Income Tax Resolution afford a favourable opportunity for raising the entire case which we have to make as regards the thoroughly false system of budgeting which was presented to the House three years ago in the famous Budget of the right hon. Gentleman. We are prepared to show that every figure presented by the Treasury three years ago, on which the votes of Irish Members were obtained, was not only false but hideously false, and that every Estimate presented was an Estimate not merely doubling but in some cases almost trebling the real figures, and we want to arraign the Government on the head of presenting a flagitious case, and almost I might say a fraudulent case, as regards Ireland, and getting Irish votes for the Budget, practically by a Treasury fund, because every figure relied upon by successive officials, as presented to the House, is a false one, and has proved to be a false one.

That is a serious allegation for a humble Member to make against a great Department like the British Treasury. Its effect is far-reaching, because it shows that the Estimate upon which the right hon. Gentleman is able to make up a deficit of £7,000,000 as regards the future is based upon figures supplied to him by the same officials as the officials who befooled Ireland and the Irish Members in the matter of Budget some three or four years ago. We do not desire in any way to conflict with the ruling of the Chair, but when we raised this matter on the occasion which the Chairman of Committees said was a proper occasion, we got no reply from the Government, and we desire to have some opportunity, whether upon this Bill or upon the Adjournment to-morrow, to show the falsity of the Treasury figures as regards our country. Therefore, while bowing respectfully to the ruling of the Chair which was given at an earlier stage of the proceedings to-day, I shall make "an Act of Presence." I shall show that I am present in the Debate and what the position is which we occupy, and that we have only refrained from raising the question afresh in deference to the authority of the Chair.

The hon. and learned Gentleman who has just spoken realises of course that I am guided by the same rules of debate as he is. I can only make a very limited reply to what he said. I very much regret that in the previous debate I did not reply to some of the statements which have been made by him and his colleague. As I have stated already, I had looked up one or two of those questions and I had got the material for the reply on my notes, and I proposed to deal with them, but as I did not see the hon. and learned Gentleman in his place, I passed on to some other subject. I understand that he proposes to raise some of these questions on another opportunity, and therefore it would be of no avail to go into them now, even if we had not in view the decision of the Chair. I will therefore pass on to questions which are more strictly relevant to the Motion before the House, which have been raised by hon. Gentlemen sitting on the other side. Both of them were disposed, I will not say to cavil at, but to challenge the accuracy of the Customs Estimate with regard to the quantity of tea which is likely to pass through the Customs this year. They say it is a quite abnormal quantity, and that it is quite abnormal to anticipate an increase of 14,000,000 lbs. It is an abnormal Estimate. I have explained that the circumstances are abnormal. You have, first of all, the coal strike last year, which was actually proceeding in the very weeks that the Budget was submitted. That had, of course, a depressing effect upon the quantity of tea withdrawn from the Customs. It was not so much that consumption had diminished, but no one knew what was going to happen, and every trader realised that if the strike lasted very long, although consumption had not diminished at that moment, it would have the effect of reducing the consumption of many commodities in the course of a few weeks. Therefore, traders were not withdrawing goods from bond at anything like the rate which would be normal during a period of prosperity and active trade. Now I hope we shall not have that to contend with this year. The withdrawals at the present moment by comparison with last year are considerably more than is usual. Then there was the second condition that there was an anticipation of a probable reduction in the Tea Duties, which checked the withdrawals from bond. Why anyone should think that any Chancellor of the Exchequer would be in a position to reduce any tax this year I do not know, but there was that anticipation of a probable reduction in the Tea Duty, and stocks were held in bond. These two things taken together—there were one or two other matters which also affected it, but these were the two main considerations—make an enormous difference between the quantity last year and the quantity which is anticipated to pass this year. So far as the normal increase is concerned we are only budgeting for an increase of 1 per cent., that is under 3,000,000 lbs. of tea. That is really a small increase in good times, but it is all that I am anticipating so far as the normal increase is concerned. The rest is purely due to the abnormal conditions I have described.

Does the fact not count that there were two Easters in the last financial year, and that there are no Easters in this year?

I shall have to go into that a little. I did not mean to go into it just now. I went into it before my Budget Statement, but I may as well say now that I am not at all sure that it affects withdrawals from Customs as much as people imagine. I shall make a few comments upon it, but I shall not dwell upon it. The chief reasons are these: First, consumption is no less. People drink tea on Good Friday, Easter Monday, and Bank Holidays, and traders will draw in anticipation of the holidays There are certain taxes which are undoubtedly affected by the two Easters and Good Friday. For instance, Income Tax is affected, but I doubt very much whether the Customs and Excise are affected so much as people imagine. I went very carefully into the matter before I made my Budget Statement, and I came to the conclusion that I could not rely much upon it as to the effect this year, when I had not two Easters as I had in the preceding year. Therefore I am not allowing very much. I am really allowing nothing except in Income Tax, where it does really make a difference. My right hon. Friend behind me (Mr. Thomas Lough) reminds me that it also makes a difference because people do not send in their accounts. Going back to the speeches of the two hon. Gentlemen opposite, the Member for Nottingham (Sir John Rees), who has a special acquaintance with this subject, will realise, I think, that there is a good, sound basis for my Estimate, as I am only budgeting for a normal increase of under 3,000,000 lbs., and that that is a moderate estimate. The whole point turns upon the question whether I am right in anticipating an abnormal increase in consequence of the strike last year, and the postponement of clearances in anticipation of a change in the duty. Let us see what has actually happened this year. In this year, although we have only had one month since the 31st of March, there has been an increase already of the quantity of tea withdrawn from Customs of 3,250,000 lbs., so that there goes 3,250,000 lbs. out of the 14,300,000 lbs. which I anticipate. That would go to show that the estimate of the increase of the whole year formed by the Customs and Excise officials will prove to be a reasonable anticipation. The total increase I expect is £298,000, and I have every reason to believe that sum will be reached. It is quite impossible to say, but I may advise the hon. Gentlemen not to stake their reputation upon predictions that this sum will not be realised. I think the hon. Gentlemen will see that there is some ground for our having made this Estimate, although I agree that on the face of it that it appears to be a sanguine one. In an answer which I have already given, I reminded the hon. Gentleman that in 1907–8 the clearances rose thirteen and a half million lbs.; in 1908–9 they rose eleven and a half millions; in 1910–11 they rose twelve millions; and in 1911–12 they rose eleven millions. This year I think they will be much more. The clearances of 1912–13, we have good reason to believe, were postponed to the extent of 4,800,000 lbs. in consequence of the impression among those who are engaged in the trade that there was going to be an alteration in the duty. In the ordinary course that amount of tea would have been withdrawn from bond in 1912–13. In the ordinary course in this year we will get not merely that 4,800,000 lbs. odd, but we will get the corresponding 4,800,000 lbs. which will be withdrawn at the end of the year. I cannot imagine that anyone will expect this year that any Chancellor of the Exchequer will be in a position to reduce the Tea Duties.

They may anticipate an increase?

In that case they will withdraw, and I shall get more than my 4,800,000 lbs.

That is my point.

The hon. Gentleman complains that I have underestimated it. I did not realise that. If we take the criticisms upon my Estimate both ways I think it will be found that I have struck a middle course. It seems now that there are conflicting criticisms of hon. Gentlemen on the other side of the House. I think I have dealt with the criticisms which the hon. Gentlemen have passed upon the soundness of the Estimate. I do not know if I should be quite in order if I went beyond that to make some reply to the animadversions passed by the hon. Member for Nottingham (Sir John Bees) upon the social reform programme which has necessitated all this expenditure. This is not an occasion upon which I could defend it. He was very scornful about what he called the grinding tyranny of social reform.

I referred to certain taxation, and said that it threw a flood of light on the effect on the people.

I understood that he was specially severe in regard to old age pensions, the Insurance Act, and what he contemptuously called the grinding tyranny of social reform. I believe the people of this country could do with a great deal more of this grinding tyranny of provision for sickness, for infirmity, and for old age, but if I go into that I shall be travelling outside the limits which are permitted by the ruling of the Chair. I agree with the Member for Yarmouth (Mr. Fell). I am afraid that no Chancellor of the Exchequer can reasonably hope to look forward to a time when expenditure will be reduced. To-day some of his Friends who sit near him got into an argument with the Prime Minister at Question Time about the expenditure upon another branch of social reform, and the only difference between them was as to the method by which that expenditure ought to be incurred. The hon. and learned Gentleman the Member for Dudley (Sir A. Griffith-Boscawen) wanted to have expenditure on housing reform and the Prime Minister in reply never challenged the need for housing reform, he never challenged the proposition that we ought to find money for it. The only disagreement was as to the method by which the money should be raised and the way in which it should be expended. Therefore, whatever Government is in power, I do not think the Chancellor of the Exchequer, for the time being, can hope to look forward to a time when the strain upon the Exchequer will be eased by reduction of expenditure. Certainly not, I hope, on social reform. I regret all this heavy expenditure which makes it necessary to keep up taxes of this kind. I agree with what was said, and I have always said at this table that it would be very much more desirable if you could raise taxation as you do upon the working classes, as you do upon the middle classes by direct means, but it is a practical difficulty. It has been attempted in Germany, and I do not think it has been a great success. They have levied Income Tax upon people with £45 a year, and I do not know that it has been a great success. It is a very expensive process, and I am told that it does not give satisfaction to the workmen themselves and does not give very much satisfaction to the State. If we had a cheap and effective way of raising taxation by direct means as a substitute for these indirect taxes, I agree it would be much more desirable, very much more desirable, than the present system. I cannot see my way to the imposition of any direct tax as a substitute for these indirect taxes. I have always maintained, though I have not always carried my hon. Friends with me, that you cannot confine the taxation of the country to one class of the country whilst political power is distributed over all classes. My hon. Friend threw out the suggestion that somehow or other a direct tax might be imposed. He did not give any figures, and he did not embark on any details, but when you consider a question of that kind, you must consider it in some practical form.

He spoke for himself.

That illustrates the difficulty. The moment you get a suggestion coming from a direct representative of labour that there should be direct taxation it is instantly repudiated by another hon. Member sitting in the same quarter. Therefore, until there is some sort of acceptance of a direct method of taxation, I am afraid we shall have to adhere to the indirect method which now finds a place in the Budgets of this country. At any rate, for the present year no Chancellor of the Exchequer could see his way certainly to abolish and probably not even to reduce the Tea Duty. It does undoubtedly press hardly upon some people, and I wish it were possible to find some substitute, but at the present time I am afraid it is necessary to continue to impose it.

The hon. Member for Yarmouth (Mr. Fell) takes the pessimistic view that these breakfast-table duties, in view of the large expenditure disclosed in the Budget, are going to continue for all time. I do not think the Chancellor of the Exchequer has very much modified that view, although we heard from him that he would be glad to substitute a direct tax for these indirect taxes. It is impossible, I think, for a Liberal Chancellor of the Exchequer to go on for all time levying these breakfast-table duties. We heard last night a great deal about mandates, but, if there is one mandate which the Government have in the matter of finance, it is to get rid of these breakfast-table duties. If these taxes are not going to be got rid of, it is mere hypocrisy for the Liberal party to permit the kind of propaganda that is going on in the constituencies. We are told by hon. Gentlemen opposite that we should tax foreign imports and thus get rid of these breakfast-table duties, but Liberals are saying, "We will get rid of them without taxing other commodities to make good the loss." The speeches of the Chancellor of the Exchequer have for the first time opened up to us a real hope of getting rid of these taxes, because through the valuation of the land of the United Kingdom, which we are to get in 1915, he is opening up a fruitful source of taxation and a method of direct taxation that will meet his requirement that all sections of the community should be called upon to pay any tax which is to be levied in substitution of these duties.

May I ask the hon. Member what there is about Land Taxes in this Resolution?

I, of course, bow to your ruling, but perhaps I may be permitted to point out, as the hon. Member far Yarmouth said, the Budget showed no hope whatever of the abolition of these taxes because there was no possibility of raising the revenue by any other means, that, if the growing revenue from Land Tax valuation were further permitted, we should be able to get the revenue required.

I said "under the present system of taxation." I was very careful not to refer to any other system.

I accept the statement of the hon. Member, and I do not wish to pursue the matter any further, except to say that an obligation rests upon a Liberal Chancellor of the Exchequer to get rid of these duties, more particularly having regard to the fact that other commodities are rising in price. When we are on all hands hearing of the increased cost of living, it becomes all the more necessary that these taxes which raise the cost of living should be abolished.

The hon. Gentleman has told us that in his opinion it is impossible that a Liberal Chancellor of the Exchequer should continue this particular tax. It is now seven years since the Liberal party were returned to power, and during the whole of those seven years they have done that which the hon. Gentleman says it is impossible for them to do.

They have reduced it.

Yes, one penny, but that was not what the hon. Gentleman said. It was open to him to move to reduce the tax another penny, but he has not done that. He has stated that the tax ought not to be kept on at all. I venture to prophesy that, if, unfortunately for the country, the Liberal party remain in power for another seven years, there will still be a tax upon tea. When Amendments have been moved to reduce this tax, I have always voted for the Government in favour of continuing it, and I have done so for two reasons. When my party were in power, and demands were made by hon. Gentlemen opposite to reduce the duty, I always voted in support of my Government. Therefore, when, unfortunately, I was transferred to this side of the House, I continued to support the Radical Government as long as they carried out the policy of the Conservative party. I think that is the proper line to take. It is not the line that hon. Gentlemen opposite have taken. When we were in power they were always telling us that this duty should be abolished altogether, but when any proposal is made either to reduce the duty or to abolish it altogether, the vast majority of those hon. Gentlemen, who were returned to power on the understanding that they would vote for the abolition of this duty, cheerfuly go into the Lobby with me and vote for its continuance. Therefore, the hon. Member for Hanley (Mr. Outhwaite) is justified in saying that, if this policy is continued, it is nothing but hypocrisy on the part of the Liberal party. That does not make the imposition of the Tea Duty wrong. It only shows that the Liberal party, when they are in Opposition, will stick at no methods in order to gain votes and will make any number of pledges, knowing perfectly well when they are returned that they will be able to break those pledges, as in fact they have done.

I was very glad to hear the Chancellor of the Exchequer enunciating very strict Tory principles and very right principles. I understood the right hon. Gentleman to say that as long as a large number of people in this country had the franchise so long must they continue to contribute something towards the expenses of the country, a truly wise and statesmanlike doctrine, one with which I am in perfect accord, and one which I hope the Chancellor of the Exchequer will always carry out. It is undoubtedly true that at the present time this Tea Duty, and one or two other indirect taxes of the same sort, are practically the only form of taxation which is paid by the working classes. The working classes claim to have a due share in the power of returning Members to this House, and it is surely not right at this time of day for them to come down and say, "We are going to send Members to Parliament, but we ourselves will contribute nothing, or practically nothing, towards the expenditure of the nation. I therefore regret very much that this Tea Duty is tending to diminish. The Chancellor of the Exchequer stated that indirect taxation now only amounts to 41 or 42 per cent. of the total revenue of the country. Under these circumstances, if there is any Division upon this duty, I shall certainly support the Government, and I shall be curious to see how many hon. Gentlemen opposite, who undertook to vote for a free breakfast table, are going to take steps to carry out that pledge.

I am not going to associate myself with the hon. Gentleman opposite who has spoken of the "grinding tyranny of social reform," whatever that may be. He seemed to associate the "grinding tyranny of social reform" with this 5d. Tea Tax. I think we have had scarcely enough "grinding tyranny of social reform" of the sort that was mentioned by the hon. Gentleman, namely, old age pensions, Insurance Act, and so on; and for my part, apart altogether from the question of where the cost is to come from, I rejoice in the fact that the nation has at last begun to deal with some of these social evils amongst us. The twin social evils are unemployment and sickness, and both of them have been more or less dealt with in the Insurance Act. We want not less, but more social reform. It comes with rather a bad grace from the hon. Baronet to twit the Government with retaining this Tea Tax or any other tax, having regard to the reason assigned by the Government, and I believe the right reason, for retaining them. The reason is largely, if not entirely, expenditure on armaments, and the Government, at all events, have never been restrained in that particular form of expenditure by hon. Gentlemen opposite. On the contrary, the more money they have spent on armaments the more they have been applauded by the hon. Baronet and his colleagues. I remember a year or two ago, when there was a disposition on the part of the Government to reduce armaments, or at all events to arrest the growth of armaments, hon. Gentlemen and right hon. Gentlemen on the opposite side of the House went about the country protesting, and one of them, like Silas Wegg, dropped into poetry, and said:—

"We want eight, and we won't wait."

That is the reason why we have still this retention of the 5d. Tea Tax.

The hon. Gentleman would not be entitled to discuss those topics. We are here for the purpose of imposing taxation, and not for the purpose of discussing the manner in which the money is expended.

I thought, Sir, you would rule that out, and I shall content myself with entering my protest against a continuance of the tax. I am not disposed to assent to any of the reasons assigned for its continuance. Like my hon. Friend behind me, I look back on the last few years during which we have been promised the abolition of these indirect taxes, and I think the time has come to put some of these professions into practice. There is no reason to cast around for new methods of taxation whereby that can be done, because the Chancellor of the Exchequer told us only the other day that £184,000,000 had during the last year been left by 4,000 persons, and it seems to me that, when we have a vast sum of money like this available, we might very well draw upon it a little more than we have hitherto done, so as to relieve the people from these obnoxious taxes. This is one of the most iniquitous and unjust forms of indirect taxation, because this particular tax bears particularly hard on the poorest of the poor. I believe that at the present time £6,500,000 is raised by this tax, and the right hon. Gentleman has predicted that he will be enabled to get £298,000 more from it this year. I hope he may be right in his Estimate. It seems to be based mainly on the supposition that industrial peace will obtain. I certainly trust it will prevail, and, if it does, the Estimate may not be very far wrong. I object to this tax not only because it is an indirect tax but for another reason, and that is that it presses more than any other tax upon the very poorest of the people. Large numbers buy tea in very small quantities, and the smaller the quantity purchased the heavier is the tax they have to pay. For that, and for other reasons, I submit it is time that the Government made much more energetic attempts to redeem some of those promises and professions which they have so often indulged in for many years. I said last year that I would never again vote for the Tea Tax and I am going to stand by that statement. I know at different periods there have been Amend- ments proposed to this House either for a reduction of the tax directly or for a preferential reduction on tea coming front other places than inside the Empire.

The proposal was the other way.

Yes, it was. But for me the scheme of preferential reduction has no attraction at all. It would only tend to confuse people, and, instead of putting anything into the pockets of the consumer, would benefit the tea merchant. I am not disposed to support proposals of that nature. If anyone proposed to-day a straight reduction from 5d., I should have not the slightest hesitation in supporting him and following him into the Lobby.

One observation which fell from the, hon. Baronet the Member for the City of London is calculated to mislead the outside public, and, to my mind, there is no doubt that it has been made with such an intention. I saw last week in some of the newspapers particulars of a Return presented by the Chancellor of the Exchequer, in which reference was made to "Liberal taxes upon food," and the inference it was evidently wished to be drawn was that these taxes are really Liberal taxes.

No.

At any rate, I understood the hon. Baronet to infer that. But the Tea Duty is a very old tax; it dates back to 1660, when it was levied at the rate of 8d. per gallon by the then House of Commons. In 1698 it was converted into a 5s. duty upon every pound of tea consumed. That was in the good old Tory days. The duty came down from time to time until, in 1851, Mr. Gladstone found it at 2s. 1d. per pound. It was really Mr. Gladstone who, between 1851 and 1887, reduced it from that figure down to 6d. In 1890 it was reduced to 4d. by the then Conservative Government, but it was again raised to 6d. by the late Government in consequence of the South African war—it was, in fact, a war tax. It is really a very old tax. But it is more or less a very unfair tax, and it is unfair in this sense, that the cheaper the tea is the heavier proportionately is the tax, because exactly the same duty is charged on the higher classes of tea, and consequently, the consumers of the poorer classes of tea pay more than those who buy tea at rates varying from 2s. to 5s. per pound. I would like to point out that the Chancellor of the Exchequer, with all the increased burdens which have been placed on the revenue during the last few years, in order to meet additional expenditure on the Navy and for social reform, could have abolished the Tea Duty, and I will give my reasons for that. During last year, if it had not been for the Supplementary Estimate of no less than £4,621,000 we raised in surpluses above what was required no less than £26,414,000. The hon. Baronet knows quite well that the surplus each year has gone to the repayment of the National Debt. He has, in fact, been very keen in looking after that. If the Chancellor of the Exchequer has budgeted according to what was required to meet the expenditure, a reduction in the Tea Duty, although we have spent this large sum on the Navy and on social reforms, such as old age pensions, etc., could have been made, and still the expenditure of the last five years provided for. I contend that had it not been for the extraordinary expenditure this year, there is a probability that owing to the productiveness of the revenue, especially from direct taxes, a reduction of the Tea Duty could have been made. I protest against the allegations which are made from time to time on the other side of the House, and in the Press, and the inferences which have been drawn, that the Tea and Sugar Duties, and other duties on food, are Liberal taxes when, in fact, they date back for centuries. At least 250 years have elapsed since both were first imposed. It is only right for hon. Members to say distinctly that these are ancient duties, and that they have been continued by each Government in turn. We, on this side, however, take credit in regard to tea, and especially in regard to sugar—because the Sugar Duty was practically abolished by Mr. Gladstone in 1874—

I would rather have tea without sugar to-day.

I am sorry I am out of order. I should have liked to have given hon. Gentlemen opposite a little history of both the Tea and Sugar Duties, but as you have ruled that I cannot to-day apply the sugar to the tea, I must drop that idea. I do, however, hope that next time the hon. Baronet and his Friends speak, they will not infer that these are Liberal taxes. We all ought to state what are the actual facts, and should not ignore the fact that Liberal Governments have been the Governments which in the past have reduced these duties.

We all listened to the Chancellor of the Exchequer with very great regret when he told us he could hold out no prospect of reducing the taxes on tea and sugar. Speaking for many hon. Members on this side, I can assure him that there is no tax which we vote for with greater reluctance than that on tea, because it specially affects poor people. The average price of tea runs from 6d. to 7d. per pound. If you put a tax of 5d. upon it, it represents a duty of 80 per cent., and it is simply infamous that such a burden should be placed upon an article of food so largely consumed by the poor. We were told when discussing another proposal that the State could not take a penny a week from persons who were earning but 9s. weekly. Surely that applies with much stronger force to this Tea Duty, because people who earn that small sum are called upon to contribute much more than a penny weekly in the form of the tax upon tea. The party sitting on these benches is pledged to the hilt to take the duty off tea and sugar—particularly off tea. In my own country, at any rate, we have for thirty years been preaching the doctrine of a free breakfast table, and it has been constantly held out by speakers on this side, particularly when the Free Trade controversy was at its height, that any tax upon food is a danger to the country. Therefore, in my opinion, the maintenance of this tax is extremely unfair. I could quote a great many speeches delivered by the Chancellor of the Exchequer and other Members against the tax. It was the present Secretary of State for War who, when in Opposition, said he would not again vote for this tax, while the late Sir Henry Fowler described the tax as falling with extreme severity on the poor. I have other quotations from men on our side holding the highest positions, which show that we, as a party, are absolutely pledged to abolish these taxes. If we make a reduction in the Tea Tax it will have the effect of increasing the consumption of sugar. Mr. Gladstone pointed that out in a speech he made forty or fifty years ago, when the question was whether a reduction should be made in regard to tea or sugar. He said:—

"If we reduce the duty upon sugar we bring about an increased consumption in tea, and if we reduce the duty upon tea we shall excite a larger demand for sugar."

I hope the Chancellor of the Exchequer will keep that in mind. We quite recog- nise it is impossible to make any reduction in tea or sugar this year, but I hope he will bear the fact in mind because it is a subject upon which we feel very strongly indeed. I vote for this tax with the greatest reluctance, and if something can be done next year to reduce it the right hon. Gentleman will give the greatest satisfaction to many hon. Members sitting on this side of the House. Another point referred to by the last speaker was that there has been a surplus under the Budgets for the last three or four years. Each of those surpluses was big enough to enable him to take off the whole tax upon sugar. These surpluses have gone to reduce the National Debt. Whereas it would have given infinitely more satisfaction to the country if they had been used for reducing the duties upon food.

The hon. Member who has just sat down complained that we on this side of the House called attention to the fact that the Liberals taxed tea. Whatever be the origin of the Tea Tax there is no doubt it is a Liberal tax now, because the Liberals are the people who put on the tax. I believe it was the hon. Member for the Blackfriars Division (Mr. Barnes) who said that for a great number of years Liberals had always been talking of a free breakfast table, and had said that they were going to take the tax off tea. I remember thirty-five years ago seeing in Leicestershire a great placard saying:—

"Vote for the Liberals and a free breakfast table."

We have certainly not got it. Our people at the present moment are more heavily taxed per head upon their necessities or small luxuries than any other people in the world. Hon. Gentlemen opposite admit that the tax on tea is exceptionally heavy. The very poor have to pay at least from £75 to £100 on every £100 worth of tea imported into this country. That is Liberal taxation, and we are perfectly justified in pointing it out to the country. It is one of the things I very seldom forget to tell the people, and I certainly intend to go on doing so. How hon. Gentlemen opposite can complain about it when they belong to the party which puts on this taxation, is more than I can understand. The hon. Member for the Blackfriars Division told us that the very poor were more heavily taxed than the rich. In proportion to value the very poor are taxed about three times as much; they pay about three times as much on their tea as do the rich. With regard to tobacco, the cost is multiplied about ten times. That is another thing I am very partial to telling the people when I go down to the country. For a party that is always running the dear food bogey, it is a very strange thing that after all these years they should continue to put such heavy taxation upon what is admitted to be one of the greatest necessities of the poor, while there are millions of things which are the luxuries of the rich upon which there is no import taxation at all. That is a part of the Liberal policy I have never been able to understand. They go shouting about the country that they are the free food party, who do not put taxation on the very poor. It is a very extraordinary thing in itself, and it is extraordinary that the people should believe it. How much longer they will believe it, it is impossible to say. I freely confess that I was mistaken in the Chancellor of the Exchequer this time. I thought that after the pressure put upon him from both sides of the House he would have taken off some of the taxation upon tea, or at all events something off sugar. As it is, we shall feel compelled, when we visit our constituents, to point out to them that with all the cleverness of the Chancellor of the Exchequer, and all his wonderful land taxation, he still has to keep up this tremendous taxation upon what is admittedly one of the great necessities of the poor. I only hope that when the Unionist party are fortunate enough to get into power that a Unionist Chancellor of the Exchequer will be able, if not entirely to remove it, at any rate to considerably reduce the taxation on tea. I might remind the right hon. Gentleman that in highly protected America there is no tax at all upon tea, nor is there any such tax in our great Dominions, except, perhaps, in Australia. Even there they do not tax it in the bulk, but they put a tax upon the packets, because the Labour people there think that if tea is to be put up in packets, they might as well make the packets as allow other people to do it for them. In America there is no tax upon raw tea or cocoa. If they can do without a tax on tea in tariff-ridden America, surely we in this country ought to be able to do without a heavy tax on tea!

The hon. Member who has just sat down has a remarkable power of exposition, especially when he goes on his crusades in the country and denounces this party for their system of taxation. May I suggest to him that the next time he goes upon one of his expeditions he should carry his illustration and exposition a little further. On both sides of the House we agree that the Tea Duty is one we would gladly get rid of, but will he explain to his hearers the fact that so long as we are obliged to raise revenue we have to raise it in the way most convenient to the people, and in such a way that the whole proceeds of the tax shall go into the public exchequer? That is the fact with regard to the Tea Duty. It has no protective operation whatever. We do not produce it in this country; therefore, when the Tea Duty is imposed on the tea coming in, substantially the whole of the tax, less the cost of collection, goes into the Exchequer and helps to pay the expenses of government. What do the hon. Member and his party suggest in place of that? A duty on corn, which is a protective tax, which would raise the cost of the article coming from abroad as well as of the home-grown article to the consumer, and not one penny of the latter would go to the public Exchequer. That is the difference between the two parties as to methods of taxation.

It is very undesirable to raise the question of Free Trade and Protection in this Debate; it is quite a side issue.

I bow to your ruling, Sir. I only wish to point out with regard to the Tea Tax that it is a proper and fair tax so long as it is necessary to impose it, and we have not heard any suggestion made to put a tax in its place which would have the effect I have mentioned.

It is a question whether this tax is rightly called a food tax. For my part, I do not consider it is a food tax. There must be some compensation to the State in regard to the large amount which is expended by the people upon this commodity. I believe it is something like £6,000,000 or £7,000,000 that is spent, even by the very poorest people, upon this common article, tea. It would be a very great waste of money to the country if there were no benefit derived from that purchase. I have often been struck by the fact that no one has ever asked whether the State derives any benefit from that expenditure. Whether I am right or wrong, I have a suggestion to make, that tea is of very great value to the State as an article of luxury, because it is not a food. It is commonly used merely to keep us awake; that is the only use tea has. Whether or not that is an advantage to the State can be proved when we come to think of the number of women who have to do their work in confined rooms, heated atmospheres, and how they would be unable to keep themselves from nodding if it were not for their cup of tea. Therefore it is of some benefit to the State. When a man is called in the morning he has a cup of tea. Very often he would turn over and go to sleep again if he did not have it. I have done it myself. When some people desire to make themselves very much awake they take coffee. If you take coffee every day it loses its effect, but tea never does. It always keeps you awake. Therefore it is an advantage to the State. Now I know why the Chancellor of the Exchequer does not remove the tax. If he did there would be a larger consumption of tea among the poorer people and they would be more awake than ever.

I approach the subject from rather a different point of view because I think an extra amount of somnolence might not be a bad thing for the country in general. I will not particularise whom I mean, for, if I did, offence might be given. I look upon tea as a very active source of dyspepsia and neurosis, and I do not, therefore, specially welcome it. I wish to ask the Chancellor of the Exchequer whether he has further considered the question of graduation and differentiation and putting the duties on ad valorem. He voted for it some years ago, and certainly he must have had the advantages of it in his mind, because it is unfair that the cheaper kinds of tea should pay duty at a fixed rate. Some of us raised the question last year, and I do not think the right hon. Gentleman spoke. The Chancellor of the Duchy said a few words, but the whole of his argument was that it had been refused by the right hon. Gentleman (Mr. Austen Chamberlain). I suppose there are some administrative difficulties, but the justice and merits of it are surely plain, and, considering the complicated scale of Sugar Duties that it is possible to adopt and the other complicated provisions with regard to spirits and beer and the rest, I cannot see why the difficulty in the case of tea should be greater, and undoubtedly, if he were prepared to have same graduation, which might, of course, be an upward graduation, in the very ex- pensive teas, he would be able to let off the common beverage of the poor at a very much lower rate than it now pays. The hon. and gallant Gentleman (Colonel Greig) would maintain that, so long as a tax cannot benefit any producer in England, that is the only thing you have to look at, and, however much it may directly increase the burdens of the people, that may be cast aside so long as no producer is benefited thereby.

The hon. Member can hardly be aware of the fact that the most expensive classes of tea are those which are in most common use in Ireland. The best teas in the whole world go to Russia and Ireland, and tea is not classed as a luxury but as a food. There has been

I beg to move, after the words "value of property during that year," at end of paragraph (b) to add the words "except that the separate income of a married women shall not be deemed to be income of her husband, but shall be treated as her separate income."

The object of this Amendment is to remove one of the striking anomalies in our Income Tax law. It has been brought before the House on previous occasions, but there are two special reasons why I think it is appropriate to call attention to it again at the earliest stage possible. The first reason arises out of the case of Mr. Wilkes which occurred last autumn—a case which if it be not quite the same as that of his famous namesake at an earlier time, appears to me to be more ridiculous than any connected with that time. Another reason for bringing it forward is that the House yesterday by a decisive majority negatived a proposal for giving the franchise to women. I think this will be an appropriate day on which to remedy an injustice which is strongly resented by women who are subject to the Income Tax. At present the position of the law is this. A husband is the only unit, subject to certain exceptions, so far as Income Tax is concerned. He has to make a return; he is liable for the tax, and he is liable even to the extent that, like Mr. Wilkes last year, he may be sent to prison if he does not pay the tax on his wife's income. Moreover, he alone can claim the exemptions and abatements, though it may be that the wife is entitled to these exemptions and abatements. The origin of this anomaly is explained by the fact that the Income Tax was imposed long before the passing of the Married Women's Property Act, and the Income Tax law has never been brought into harmony with the present conditions. At the time the Income Tax was passed the husband had really control over the wife's income. The wife's income was really part of the husband's income, and he had the management and control of it. That is not so now, but although you make the husband responsible, you do not compel the wife to make any statement as to what her income is, nor has he any right to take the tax out of her income at all. I do not think the position can be better explained than by quoting the words used by the Lord Chancellor on 14th October, 1912. He said:—

"In the case of Income Tax the law dates from a period when the position of married women was very different from what it is to-day, and legislation has become commonplace which would have been looked upon with the utmost disfavour half a century ago. To-day we treat the income of a married woman as nearly as possible as though it were the income of an unmarried person, and yet the machinery for enforcing the income Tax laws remains in a large measure what it was half a century ago. The result of that, of course, is hardship."

So far as I understand, the effect of the proposal of the hon. Gentleman is, for the first time, to treat the incomes of married women in respect of Income Tax in the same way as the incomes of unmarried women. That is to impose an Income Tax for the first time on married women having separate incomes.

The tax would be enforced direct against them instead of being enforced through the husband.

That would be what we call a charging Resolution. There are two objections to take to it now. First of all, we cannot do that on the Report stage, and we cannot do it at all without the consent of the Crown.

May I call attention to the fact that exactly a similar Amendment has been moved on previous occasions. There was one in 1910, which was moved by the hon. Member for Bury St. Edmunds, and it was stated then that on two or three previous occasions similar Resolutions had been moved.

I would like, if the hon. Member would refer me to the volume of the Debates.

I have not the volume here, but it was moved in November, 1910.

Does the hon. Member say that was done on the Report stage?

I think it was on the Bill in 1910, but in some previous cases the Resolutions were moved on the Report stage. With reference to the argument as to the consent of the Crown being necessary, I submit that it will be equally as necessary on the Bill as on the Report stage.

On the point of Order. I think the hon. Gentleman will find that any Amendment that was proposed was in respect of something that was proposed in Committee. I would suggest that any question which the hon. Member desires to raise would be appropriate—if it is ruled to be appropriate at all—on the Revenue Bill, and not on the Income Tax Resolution.

If this Amendment cannot be moved, may I ask whether the subject-matter of it could not be debated as part of the general consideration of the Income Tax Resolution?

I will deal first of all with the case which the hon. Member cited. It was in Committee on the Bill. It was not even on the Resolution, and, therefore, that is not a parallel case. It seems to me quite clear that on the Report stage the House cannot impose a charge of this kind. If it is a charge, as presumably on the face of the Amendment it appears to be, it could not be imposed by the House on the Report stage of the Resolution passed in Committee. These things, if done at all, must be done in Committee. There is no objection to the hon. Member discussing the question, but certainly he could not raise a distinct issue of imposing a charge.

In accordance with your ruling I shall not move the Amendment or discuss it, but may I mention in case the matter arises again on the Bill, I would submit that it is a case where no recommendation from the Crown would be necessary.

This is not, of course, the time to discuss that matter. Those questions should be discussed in Committee on the Bill, and not on the Report stage of the Resolution. The object of the Resolution is to enable the Bill to be brought in. When the Bill is before the Committee then will be the proper time to raise these objections and to move these Amendments. I protest against these matters being discussed on the Resolution, and I warn the House that they are endangering the old system of bringing in these Bills on Resolutions if they insist on discussing the Resolutions apart from the Bill.

I do not propose to proceed with my Amendment.

I would like to say a few words on the Income Tax, for I think we ought to register our protest on this side of the House on the continued fact that the Income Tax is 1s. 2d. in the £. We have repeatedly urged that that condition of things ought to be one only in time of war so far as possible. Instead of that, we now find ourselves face to face with an Income Tax of 1s. 2d. in the £ for several years in time of peace. I believe it starts from the date of the so-called "People's Budget." The Chancellor the other day seemed very much annoyed that we should refer to the Finance Act of 1909–10 as the "People's Budget," as if it were the only joke the Opposition could produce. He seems to forget that particular title originated with himself, and I would suggest to him that if he issues another edition of his book on the "People's Budget," he ought to amplify the statement, or make it more descriptive, as to what is within. He might call it the "People's Budget; or, the Conjuring Demagogue, by the author of Ninepence for Fourpence." I think that "People's Budget" is a farcical name, and that people have found out in a great degree the mischievous finance it contains, and what harm it is doing to the country. I noticed the sigh of relief when the Chancellor of the Exchequer announced that no further taxes, and no increase of the Income Tax, would be proposed this year. I trust his forecast is not too optimistic. I think he may be right in believing, according to the signs of the times, that we may have another year of booming trade, which will justify him in placing no increase on the Income Tax; but if we do have that trade boom, it will not be due to the Free Trade Government or the skill of the Chancellor of the Exchequer. It will be due to the universal conditions of the world and the general trade boom that exists throughout all countries.

6.0 P.M.

I hope we shall not go on persistently with this high rate of Income Tax in time of peace. The fact remains that we are living up to the limit of our income in time of peace, and if any emergency arose—for example, the emergency of war, or another emergency of some drastic and expensive social reform—it seems to me that we should very possibly have to draw upon the Income Tax, which is deleterious to the trade of the country. Therefore, if we agree to maintain the Income Tax at this high level, I think it ought to be with the distinct comment on the Report of this Resolution that we trust expenditure will be reduced, if no fresh war breaks out. Looking back on the history of the party now in office, we find that they have consistently urged that the Income Tax is too high. Sir Henry Fowler, afterwards Lord Wolverhampton, in 1901, moved a Resolution to the effect that £125,000,000 was an excessive peace expenditure. I am very much disposed to agree with him, yet in the interval that expenditure has risen to £198,815,000. When Sir Henry Fowler moved his Resolution the Prime Minister voted for it. I think we have a right to complain that the expenditure is going up far too much by leaps and bounds, and that that is one of the main causes of the necessity of this high level of Income Tax. The Prime Minister has said, and it has often been quoted in this House, that Income Tax ought not to be above 1s. in the £ in time of peace. I know that he subsequently explained that this meant the average Income Tax, but under the methods of the present Chancellor of the Exchequer we are going perilously near to paying no attention to the Prime Minister's advice. And even if we take it as an average matter that the Income Tax ought not to be above 1s. in the £ in time of peace, we shall find ourselves exceeding the limit if we are not very careful. I would like to warn the Government that on the Prime Minister's own showing that limit ought not to be increased, and we must be very careful, if we choose to maintain sound national finance, not to incur expenditure which is likely to bring the Income Tax above that figure.

Another point to which I may allude is the ratio of direct to indirect taxation. The original maxim accepted by Chancellors of the Exchequer, Liberal as well as Conservative, was that the total amount of taxation ought to be made up by about 50 per cent. of both one and the other. Sir William Harcourt, in 1903, laid down this as a maxim which he considered was always to be followed. He said:—

"Since the Finance Act of 1894 came into operation it has been the consistent policy of the Finance Minister of this country to reach to and maintain equality between direct and indirect taxation."

I asked the Chancellor of the Exchequer a year ago what was the present ratio, and he informed me that the ratio then was, direct taxation 57.76, and indirect taxation 42.24. I do not suppose that the figures this year will be very different, as no alteration in taxation is being made. This is straying very far from the maxim of Sir William Harcourt and previous Chancellors of the Exchequer. I would urge that we ought, from that point of view, also to reduce the amount of Income Tax as a whole and increase the indirect taxation. That was the firm opinion of eminent finance Ministers in the past, and I would like to know why it has been overthrown by the present Chancellor of the Exchequer.

All this consistent disregard of the policy of former Chancellors of the Exchequer is a bad sign. It is not maintaining the high traditions of finance; it is not following up the experience that former Chancellors of the Exchequer have had in finance; it is revolutionising our financial system, and in so doing it is creating a general feeling of insecurity which is reflected in the general disturbance in many details which it occasions in trade. I cannot help saying that if this policy in finance is continued in a time when there is no trade boom, there is every prospect that public confidence will be shaken, and that the prudence which has been abandoned by the Chancellor of the Exchequer ought to be reverted to, otherwise a national calamity will ensue. I know that such matters as these are questions which people are not specially disposed to attend to in the middle of universal prosperity, but I think that the more cautious financiers cannot but regret, that what has been called Lloyd-Georgian finance is so much to the front at the present time; and as a necessary consequence, quite apart from any party view one way or the other, we should return to the more fixed, more experienced, and more successful financial methods of Mr. Gladstone, and even of Sir William Harcourt, and of Unionist Chancellors of the Exchequer.

If the hon. Member who has just spoken were consistently to follow out his reasoning, he would have moved, or at least suggested, that we should increase our indirect taxation, but it is rather strange, I venture to say, that on the last occasion he voted against the Tea Duty, and voted against the Government, when they moved that the duty should be 5d. a pound.

I did not vote.

There again he is inconsistent, because he has been arguing practically in favour of an increase in indirect taxes as compared with the direct taxes. I think that he is entirely wrong in his argument about Chancellors of the Exchequer and the ratio of direct to indirect taxation. I remember in the 1895 Parliament listening to a very eloquent speech by the then Chancellor of the Exchequer, the present Lord St. Aldwyn, in which he stated, and gloried in the fact, that there had been a general decrease in the proportion of indirect taxation, and I believe, if my memory serves me rightly, that he mentioned that before the repeal of the Corn Laws and before Mr. Gladstone began his great work of transferring the cost of taxes from indirect or direct taxes the proportion was seventy-three indirect to twenty-seven direct; and I remember that, speaking from that box, he indicated very strongly the policy of a radical reduction from one to the other. I believe that at that time they were about equal. I think for myself that direct taxes should bear a larger proportion of the taxation of this country than indirect, because the more indirect taxes you have the greater burden you put upon the poorer classes. The hon. Member talked about Lloyd-Georgian finance. It is unfair to say that the Income Tax is at present 1s. 2d. in the pound. It is well known that the Income Tax is 1s. 2d. only upon unearned incomes, and I should very much like myself to see that Income Tax reduced to at least 1s. for people who are receiving small incomes up to, say, £500. But, so far as the earned income is concerned, there is a large decrease in the proportion which the Income Tax payer is paying.

The fact is that under the finance of the present Chancellor of the Exchequer and his predecessor, the present Prime Minister, every man with an income, of £2,000 and under is paying less in taxes now upon earned income than he did in the year 1906. Take, for instance, the case of a man with £1,500 a year. In 1906 he paid 1s. in the £ upon his income, which came to £75. That has been reduced to 9d. in the £, and he is now paying £56 5s., which represents a reduction of £18 15s. per annum. That is the case of a man with £1,500 a year. But the man with under £500 a year has other exemptions as well. Take, for instance, the exemption of £10 allowed off the income of a man with a family for each child under sixteen years of age. That is equal to £700,000 per annum. That is a very serious and very welcome relief to the man with a large family. I contend that every man with £2,000 a year and under is now paying less in taxation than formerly. He is paying less in Income Tax, and he is paying less in indirect taxes, that is to say, upon his tea and his sugar, and it is wrong to give the impression to the public that the finance of the present Chancellor of the Exchequer is a burden upon the taxpayer, when in fact it has been a great relief to those who are earning their incomes as I have indicated, and to the poorer classes, and has placed the burden upon the shoulders that are best able to hear them. That is really the trouble, and the very contention of the hon. Member when he strongly advocated that we should revert to the system when indirect taxes bore a proportion equal to direct taxes, or even greater than direct taxes, would mean going back to the time when the poor paid the bulk of the taxes and the rich escaped.

There was one other contention of the hon. Member which I think was very inconsistent. He referred to the growing expenditure. I am quite with him in that respect, and there is one thing that the Members of this House must learn, and it is this, that when we are in Committee of Supply, if we demand that the Government should increase the expenditure, then we ought to be men enough to place the taxes upon the people to meet that expenditure. But the fact is anyone listening to the Debates when we are in Supply must see that if the Chancellor of the Exchequer were to concede all that is clamoured for by Members of this House, the expenditure of the country would go up by leaps and bounds. I ask the hon. Member opposite which part of the expenditure he would reduce? That is a practical question. Would he reduce the expenditure upon the Navy? That is a question which I also put to the hon. Baronet, the Member for the City of London (Sir F. Banbury). In 1905, in their last Budget the late Government reduced the Navy Estimates by £3,500,000. When the present Government came into power they followed the example of their predecessors by reducing the Navy Estimates by about a million or so. There was a great outcry, and a meeting was held in the City, at which they demanded increased expenditure. And to-day, again, what do we find in the City? We find that the City is clamouring for larger expenditure on aircraft and on naval appliances of war.

I have frequently urged in this House that we ought to cut our coat according to our cloth, and that, before so large an expenditure is incurred, we ought to be sure that we can meet it.

This is not the proper time to discuss expenditure. Committee of Supply is the occasion for discussing expenditure. This is the time for discussing how you are going to meet the expenditure.

I was endeavouring to point out that in time of peace we are expending large sums, and that if we vote in Committee of Supply in favour of this large expenditure, it is our duty to place on the taxpayer, however unpopular the process may be, the requisite taxes to meet that expenditure. What I complained of was that the hon. Member did not cite a single item of expenditure which he would reduce.

It would not be in order.

If it is not in order I will not pursue it, but I understood the hon. Member to condemn the present expenditure of the country. I agree with him in that, and no one would be more gratified than I to see our expenditure greatly reduced, but the difficulty is in which direction to reduce. While the expenditure is being increased, it is the fact that men with under £2,000 a year are paying less Income Tax than they did in 1906, and it is a wise policy on the part of the Chancellor of the Exchequer to demand more from the men who earn large sums of money and that they should contribute to the State in proportion to their earnings.

A great writer with a deep insight into human nature has laid it down that rien n'est plus désagréable que d'être pendu obscurément. I do not wish it to be supposed for a moment that at my age I am in any immediate danger of incurring the supreme sanction of the law. The phrase I have quoted expresses a broad truth which extends beyond the death penalty, and in its wider and more general significance is peculiarly applicable to me and to all other Income Tax payers. Income Tax payers have now for a long time occupied the unenviable position of being the handiest victims of a necessitous Exchequer—ready and waiting to be done to death, financially speaking, in a corner, with the least possible fuss, whenever the Treasury executioner is out of practice or athirst for blood. They get no sympathy, for the public takes their sacrifices for granted. They are denied even the doubtful recompense of notoriety. They are neither praised nor greatly blamed, yet once a year they suffer agonies. Theirs is a martyrdom without a halo. The British Empire has been well said to be one on which the sun never sets, and in which the taxgatherer never goes to bed. The activities of the collector of Income Tax are the more continuous and relentless in that they are supposed to affect only the wealthiest section of the community. It is this belief that the tax falls upon the persons most able to bear it—that it is a just tax—that supplies the reason for its popularity among those who have not got to pay it, and is responsible for the small amount of consideration accorded to the occasional complaints of those who have. The general view is that a man is lucky to be in a position to pay Income Tax, and any person who is reasonably well off is placed in an invidious position the moment he mentions the words "Income Tax." I do not expect to escape criticism of this kind any more than I can hope that, under existing circumstances, the noose will be slackened from the necks of unfortunate Income Tax payers as a result of my efforts; but I count such criticism a small thing if I can draw attention to the fact that they are being, strangled, and suggest that they are really more serviceable to the State alive than dead.

When the then Chancellor of the Exchequer (Sir Michael Hicks-Beach) was introducing the Budget of 1900 he declared that the Income Tax had always been considered a tax that might properly be augmented on the occasion of a war, for the obvious reason that it could be dealt with either by way of raising it when required for a war or by way of lowering it when the war was over without any practical disturbance either of trade or commerce In those words he enunciated a principle which, till to-day, was common both to practical statesmen and students of political economics—a principle which, till the period of office of the present Administration, has always been given effect to by the Governments of this country. At the beginning of the Crimean war, to go no further back, the rate of income Tax was 7d. in the £, and during the course of the war it rose to 1s. 4d. in the £. When Mr. Gladstone returned to office in 1880 he found the Income Tax at 5d. It is not perhaps surprising that thenceforward the rate of Income Tax showed a tendency to rise, especially under Liberal Governments, but prior to the South African war it had not exceeded 8d. In the height of that war the rate was not increased beyond 1s. 3d. in the £, and when the Conservative Government went out of power in 1906 it had been reduced to 1s. It would have been reasonable to expect that, as the effects of the war diminished, so the rate of Income Tax would have been reduced. Instead we find that, in spite of limited concessions in favour of earned incomes, the normal rate has been so increased that the average represents an advance upon that paid during the early part of the Boer war. The tax has changed in character. It is now a tax which is always increased in time of war and never decreased in time of peace.

How do the proposals of the present Budget square with the statement of the Prime Minister, when Chancellor of the Exchequer—a statement oft quoted, but not yet explained away, that in regard to Income Tax he did not hesitate to associate himself with the declarations of more than one of his predecessors that an Income Tax of a uniform rate of 1s. in the £ at a time of peace was impossible to justify. I maintain that whatever may be the case with the practice, the principle of the tax has not changed. The principle and justification of the tax is that it should be maintained during peace at a figure which gives room for expansion in time of war or unexpected crisis. Again, in the words of the Prime Minister, the maintenance of Income Tax at an excessive rate in time of peace is open to the same objection as the continuance at an abnormal figure of the floating debt, namely, that it tends to destroy, or, at any rate, to contract, a most readily available reserve on which the State can draw in any sudden and unforeseen emergency. The reasons against a high rate of Income Tax are many. By indirect taxation it is possible to ensure that a man's surplusage alone is hit. You may increase the tax to its economic limit, being certain that if a man pays it, he does so because he wants a luxury and thinks he can afford it. By indirect taxation you can to some extent tax expenditure instead of revenue, and so achieve a method of taxation which is economically sound. Income Tax, on the other hand, is in many cases either a tax on savings or a tax on the necessaries of life. It is a direct deterrent to thrift and an encouragement of evasion and extravagance. The higher you place the rate, and the more you discriminate between earned and unearned incomes, the greater that encouragement becomes.

The man who must save, to whom thrift is all important as a provision for his family or his old age, is the man who is hit hardest. So long ago as 1859, Mr. Bright declared the Income Tax to be odious and hateful because it was unjust. It is still unjust, and the higher the rate is fixed the more unjust and the more immoral it becomes. It is obvious that the higher the rate is fixed the greater the inducement to take the risks of evasion. But I do not wish to state the case unfairly, or to overlook arguments on the other side. As the rate of Income Tax has grown, so the inquisitional nature of the tax has increased, so that many people now have to make a complete return of their incomes, and I have recently seen it suggested that it is time that such a condition of affairs became universal. Of course, it would be an excellent thing if we all knew each other's incomes. I do not say this on my own authority, I quote from an authority which will be well known and readily accepted by hon. Members opposite, John Stuart Mill:—

"One of the social evils of this country is the practice, amounting to a custom, of maintaining, or attempting to maintain, the appearance to the world of a larger income than it possessed; and it would be far better for the interests of those who yield to this weakness, if the extent of their means were universally and exactly known and the temptation removed, to expend more than they can afford."

But the same authority has other remarks upon the Income Tax which I venture to think outweigh this prime advantage. He points out that on whatever principle of equality it may be imposed, it is in practice unequal in one of the worst ways, falling heaviest on the most conscientious, and that this tax, while apparently the most just of all modes of raising a revenue, is in effect more unjust than many others which are primâ facie more objectionable. The Income Tax is, of course, a permanent institution in this country. It is only fit and proper that it should be graduated so that the heaviest burden should fall upon the broadest shoulders. I think that there are few people that pay Super-tax to-day who have any complaint to make so far as they personally are concerned; but the influence of an excessive average rate of Income Tax in time of peace, as I submit the present average rate is excessive, is not personal or peculiar to them. "It is," and again I quote the Prime Minister, "a burden on the trade of the country which in the long run affects not only profits but wages." The question involved is not the luxuries of the wealthy few, but the general welfare of the many. Because a man does not pay Income Tax directly, it does not follow that he does not feel its burden. An excessive Income Tax is a tax on profits, and a tax on profits, to refer once more to the economic apostle of Free Trade, "is, in a state of capital and accumulation like that in England, extremely detrimental to the national wealth." And this effect is not confined to the case of a peculiar and therefore intrinsically unjust tax on profits. The mere fact that profits have to bear their share of a heavy general taxation, tends, in the same manner as a peculiar tax, to drive capital abroad, to stimulate imprudent speculations by diminishing safe gains, to discourage further accumulation, and to accelerate the attainment of the stationary state; all of which things are bad for the community as a whole, and must lead eventually to a state of things in which "a part of the burden will be thrown off the capitalist upon the labourer or the landlord." I, of course, appreciate that money has to be found somewhere and by some means. To one who has not had time to become accustomed by insidious degrees to the growing liabilities of the State, the addition of nearly £50,000,000 to the National Expenditure in the course of a dozen years, is a fact of almost overwhelming significance. There seems no immediate probability of material reduction in this stupendous rate of increase. Where is the money to be found? If it cannot be found except by maintaining the Income Tax at a rate in time of peace which is injurious to every class in the community, and a danger to our financial ability to withstand the shock of war, we have a right to claim that the present economic system is a failure. There are those on this side of the House who could find a way to get the money; but hon. Gentlemen opposite are like a former Member of the House, of whom Sir Robert Peel once said, that—

"The right hon. Gentleman never felt half the indignation at the financial difficulties of the country that he exhibited at the imposition of a differential duty upon Colonial asses as compared to foreign asses."

There are means, if the Government would but adopt them, by which money could be found for the needs of our country without piling up Income Tax, and without infringing that "soundest principle of Liberalism," the free breakfast-table. But if the fetish of Free Trade still holds them, I conclude in the words of Mr. Bright,

"I hold that, whatever be our taxes, let us have £50,000,000, or £70,000,000, or £100,000,000 a year, and I know not but we may live to see taxation grow up to £100,000,000 a year as heedlessly as we have seen it grow up to £70,000,000—whatever the amount of our taxes, let us endeavour to do honestly by our countrymen, not pressing the poor, whether our taxes be heavy or light in the main, laying them with ft stronger and noire resolute hand upon property, hut in dealing with Property dealing just as honestly with its owners, as we should deal with the poorest subjects of the realm."

In this part of the Debate we have had two very interesting speeches from hon. Members opposite, and, comparing them with the speech by the hon. Member on this side, one sees now fairly well at least one point on which there is a real difference between parties in this House. Occasionally one outside imagines that there is a great deal of sham fighting here between the two sides, but that cannot be applied to the question of the raising of the revenue to carry on the business of the country I venture to say, so far as the poor men are concerned, that there is no possible chance of them hesitating as to which of the two sides they ought to support. The speeches of the two hon. Members opposite, and especially that we have just listened to, are declarations, as far as I understand them, in favour of a system of raising taxation which I understood was antiquated and had been discarded, not only by this side of the House but also by the leading men of the Opposition, and that is a glorification of indirect taxation. Why should a system of indirect taxation be so much more advantageous in the opinion of hon. Gentlemen opposite? It seems to me that of all the taxes there are which can be justified by experience and by common sense and by economic law, it is the tax which we are now discussing. It is the fairest and most just system of taxation that one could possibly imagine. It seems to me that the idea suggested by the hon. Member for Aston (Mr. E. Cecil) and the hon. Member for Hythe (Sir P. Sassoon), that a man should pay for the service of the State without knowing what he was paying or the exact amount as compared with what other citizens were paying, is a principle which is unjust and unfair, and which could only possibly have been asserted and supported in a Parliament controlled almost entirely by aristocratic influences. The hon. Member for Aston surely will agree with me that it is more honest for the State to say to a man, "The expenses of the country are so much, and according to your resources this is the amount you have to pay." I am bound to say that one of the great advantages of the great discussion that took place some years ago on what the hon. Member for Aston referred to as the "People's Budget," was not so much that it secured the money, but that the people of the country did at last discuss closely the principles upon which taxation rests.

I feel certain that the majority of the people are in favour of a direct system of taxation, as illustrated by the tax we are now discussing, rather than any indirect system, and that if a plebiscite were taken they would express that view, especially in view of the speeches that we occasionally hear even on this side of the House. There are, for instance, advocates of a simple system of taxation known as the Single Tax, who say that it would be much fairer to pay one tax and one alone from which you should derive all the revenue required for the purpose of government. If we were to decide finally upon the necessity of simplifying our taxation by the adoption of a single tax, I should imagine that it would not be a tax upon land or upon any other kind of property, but that the most sensible and most scientific and fairest and most honest way would be to tax the incomes of the citizens. I am delighted at last to be an Income Tax payer, but I am only paying it, as is well known, even yet on a very small scale. I should like to pay it on a higher scale—I should indeed! It is one of the ambitions of my life first of all to pay 1s. 2d. in the £, and then eventually to pay the Super-tax on £5,000, instead of coming down here to grumble and suggesting a system of indirect taxation, so that the people who paid would not know what they were paying, and instead of pretending that that is the fairest system by which you could get the revenue of the country. That is a policy that might have been accepted years ago, but it is antiquated and out of date, and I believe that no Chancellor of the Exchequer, Liberal or Tory, is ever likely to adopt it again. There is the definite answer of honesty and fairness to those who claim that taxes should be imposed in this indirect fashion. I understand that in the case of incomes of over £2,000 the Income Tax on unearned income is 1s. 2d. in the £. [An HON. MEMBER: "It is that on all unearned income."] Then what are you grumbling at?

I know the hon. Baronet the Member for the City of London (Sir F. Banbury) thinks in money and represents money, and thinks that there is not any other interest in the world worth considering, only money. The Income Tax of 1s. 2d. is a terrible thing to him, but it is a glorious thing to me and to those I represent, because it shows quite clearly that we are getting the money from the people who can afford to pay, and that we are gradually reducing the burden on those who can ill afford to pay. Is there any hope that this form of taxation is likely to be superseded, or that States generally are going to adopt the indirect system in preference to the direct system of taxing incomes? We had an illustration in the recent election in the United States, and there is not much doubt among other things that the success of the democratic candidate was largely due to the fact that he advocated a more direct system of taxation for that country in the future than it had previously had. Taxation upon incomes, such as the tax we are now discussing, is in future to be part of the revenue producing organisation of the United States. I do not dispute that there may be grievances as to the method of collection and the inquisition involved in the present system. I dare say there are many personal grievances and wrongs that ought to be ventilated; but that the direct system of taxation is wrong in principle I for one do not think it is possible to maintain. The speech of the hon. Member for Aston was to the effect that the present Chancellor of the Exchequer had departed from the well-establshed rule that the revenue should be derived as nearly as possible equally from direct and indirect taxation. If there is any glory attaching to the present Chancellor of the Exchequer's financial policy, it is that he has gradually reduced the proportion of indirect taxation and increased the proportion of direct taxation. Instead of going hack to an equilibrium between the two, I think the tendency of all Chancellors of the Exchequer ought to be to obliterate indirect taxation from the financial arrangements of the country. Income Tax is the fairest tax if it is imposed upon a man in proportion to his ability to pay and is on his clear income. The whole object of my observations is to show that a direct system, as represented by the Income Tax, proceeds upon the fairest principle, although, as I say, there may be room for discussion whether it is properly applied. I do not see why it should not be graduated down to lower scales of income. I would prefer that the head of a working-class family should pay his taxation in a direct form, and know exactly for what he was paying.

One of the finest things about the Income Tax paper at the present time is that for the first time in the history of the Exchequer it sets out some of the items upon which the money is to be expended. In the case of municipal councils, it is stated on the rate papers that so much in the pound is for different items, so that the ratepayer knows exactly the kind of institution he is supporting and the business for which he is paying. The Chancellor of the Exchequer has begun that practice in connection with the Income Tax. Why should he not carry it a little further and give the whole of the items? If the head of a family has to pay £1 of indirect taxation—I am not saying that it is £1; the amount is immaterial to my argument—I say that that is an unfair way of raising the money. It would be infinitely better that he should know that he was paying £1, and that the attention of the family should be drawn to the fact. That would constitute as good a curb on extravagant expen- diture as could possibly be secured. If it were known every year, when the demand for the tax was made, that so much was for the Navy, so much for the Army, so much for old age pensions, and so forth, the citizen would look very closely at the paper and would want to know from the Government the why and the wherefor if there was an increase in any of the items. You would have a natural check upon the possible extravagance of any Government. For these and other reasons I certainly would not support the suggestion that we should glorify a system of indirect taxation at the expense of direct taxation.

I wish to say a word or two upon the excellent and clear speech by the hon. Member for Stoke in regard to the relation of direct taxation to the general taxation of the country. I think he hardly did justice to my hon. Friends when he suggested that they had objected on principle to direct taxation, represented by Income Tax, as against indirect taxation. That was not the intention of their remarks at all. They were dealing with the existing situation. I agree absolutely with the hon. Member for Stoke, that of all taxes that can ever be imposed, theoretically and ideally, an Income Tax is the fairest. I go further, and say that every other tax, as far as I know, whether indirect or direct, is really intended as a substitute for an Income Tax. Exactly the same remark applies to rates. On what principle are rates levied? On what any property may reasonably be expected to let at from year to year. What is that but the income which that property may be expected to produce? If the principle could be absolutely fairly applied to the raising of local rates, it would be an Income Tax. I take it that the hon. Member would agree that, if it were possible to have an indirect tax which fell upon people in proportion to income, there would be no injustice in it. I agree that it would not meet his suggestion, to which much weight should be attached, that in connection with indirect taxation people do not know what they are paying, and that there is no tendency to curb extravagance. An indirect tax is less galling; it is not felt so much directly by those who pay it; it is more convenient to impose; it does not arouse so much opposition; and, if it produces the same revenue in as fair a way, it is a very desirable tax. I admit that in so far as it departs from the principle of being a fair tax upon income in the widest sense of the word, it is unjust. Ideally, what we desire is that the whole of the taxation of the country should be levied according to ability to pay. But there is no given measure of ability to pay in fact, there is no other measure of ability to pay than the income, in the widest sense of the word, which every man possesses. But income has many forms and is derived from many kinds of property. I believe it to be an unattainable ideal that you should be able to impose by a mere rate of tax upon income a tax which will really fall evenly upon the true income, either real or potential, of every individual in the State. I do not think that the hon. Member would carry his objection to indirect taxation so far as to object to the taxes on beer and spirits.

I was merely supporting the principle of direct taxation.

But the hon. Member would not desire to levy more direct taxation than was necessary. There may be methods by which the State could obtain considerable revenue by indirect taxation without doing any harm to the community. You do not come to the necessity for Income Tax until those indirect means have been exhausted. When you have passed that point, I agree that the fairest way of levying taxation is by means of an Income Tax. Up till now it has not been practicable to levy Income Tax over the whole community directly. We there come to a point which the hon. Member did not directly mention. He will doubtless agree that it would never be possible for any Government to levy the entire taxation upon a minority of the population, allowing a majority of the population, while paying nothing, to decide what the expenditure should be. The whole trend of the hon. Member's speech was that Income Tax ought to be levied, not only according to ability to pay, but on every class of the community. He then went on to reinforce the suggestion recently made by the hon. Member for Halifax that the working classes whom he represents would be willing to pay an Income Tax. That suggestion could only properly come from that quarter of the House. I do not think that it could be proposed by anyone except the working classes themselves. If, as education advances, as the working classes become more capable of understanding the nature of the necessity for particular expenditure, and of forming opinions upon the relative merits of different taxes, they arrive at the point of desiring to realise their own responsibilities and are willing to pay a direct Income Tax if it is levied upon them, I do not think that this House would resist that suggestion for one moment, provided it came from the working classes themselves, and was not forced upon them by another class. I do not know whether the hon. Member was present in the House an hour or two ago when another of his colleagues on the Labour Benches, the hon. Member for Bradford, expressed a contrary opinion. He said that the hon. Member for Halifax must not be taken to be expressing the opinion of his colleagues on the matter.

I must not be taken as expressing the opinion of anyone except myself; from my own knowledge of discussions that take place amongst the people among whom I move.

I quite understand that. I do not put it a bit further than that. The thing is at present in a somewhat embryonic state. It is nothing more than a suggestion made by hon. Members who have taken a great interest in the question of taxation here, and who have discussed that matter amongst their colleagues at home, and they have begun to think it conceivable and possible that the time may come when the working classes will desire to show that they are responsible, and that according to the ability they are willing to pay in the form of direct taxation. They do not put it further than that. There is no general statement from the Labour Benches in that direction. But I do think we are entitled to comment upon that fact that the subject has been mentioned from those benches twice in the course of the present Budget Debate. I think it is a very important suggestion, and I hope it may bear fruit in the future. I have one further remark to make, and that is that I do think it is unfortunate that on a subject like this, where I am sure every party in the House is absolutely agreed that taxes must be levied, and that this is on the whole the fairest tax—although there are many what I may call local injustices in the tax, as the hon. Member admitted, and which both sides desire to put right—I do very strongly deprecate a spirit of antagonism on either side of the House. I think nothing could be more unfortunate or do more to prevent the House arriving at a wise conclusion in this matter than that it should be thrown from that side of the House to this that all taxation ought to be thrown upon the rich, and that it should be suggested that if they had their way the poor would pay no taxes at all; that in the case of those, for instance, who died leaving large sums behind them it proved that the whole burden could easily be borne upon their shoulders.

That is not what the hon. Member who has just sat down says. He takes an exactly opposite view. Still, that kind of suggestion is made. On the other hand, on this side of the House, too often perhaps, we have heard the suggestion that the working classes demand constant expenditure, very little of which will fall upon themselves. I deprecate all that when we are discussing general questions of this character, for I think that both sides of the House do really desire to levy this fairest of all taxes according to ability to pay. There is another unfortunate fact I would comment upon: that is that this kind of spirit, and this kind of attack really defeats its own object. May I add this, too, that if you approach a man of large means and say, "There is national expenditure to be met; we do not desire to impose undue burdens upon you; we only desire to tax you according to your ability to pay, the representatives in this House of the very poorest classes only ask for that, and are willing to bear their own share according to their ability to pay, although it may be very small," I say that if you approach men of means in that spirit and ask them to contribute their fair share of the burden of taxation, I do not think there is one of them who would refuse the appeal. I think that any man to whom that appeal is made and who attempts to evade that taxation is a disgrace to his country. But when statements are made of a threatening character, when it is said that people who are well off are the enemies of the State; that attempts are to be made to tax them out of existence—statements of that character have a directly contrary effect to the first, and the people concerned then feel justified—and it is the worst of them that take the step first—in placing their money beyond the reach of any taxes imposed by the Chancellor of the Exchequer. If we approach this question of the Income Tax in the spirit of the speech that has been delivered by the hon. Member below the Gangway I think it would yield more than it does, there would be a chance of it being extended to other classes of the community, and that direct taxation might be still further diminished, and next year the revenue prospects would be very considerably improved.

I hope the House will come to a decision upon this particular Resolution, especially as the Debate has been largely, I readily acknowledge, uncontroversial, or not bitterly controversial, and also because I think the House will desire to obtain the Resolution dealing with the general amendment of the law. I may say in respect of that Resolution that it is put in, not in the interests of the Government merely, but in the general interest following, as I understand, the precedent set by Lord St. Aldwyn when he was Chancellor of the Exchequer, in order to enable the Opposition on the general financial position, or any private Member of the House, to propose any reduction in the taxation which cannot be covered by the Income Tax and the Tea Duty Resolution as embodied in the Budget.

I do not want to interrupt the right hon. Gentleman, but can he say whether the amended Resolution is necessary for the Finance Bill, or only necessary for the future revenue.

It is not at all necessary for the Finance Bill, but is in order to enable the widest possible discussion not only in the suggestion of new laws, but in the suggestion of a desire for a reduction of the present permanent taxation. Therefore, I think, every one in the House would wish to see the Resolution passed. So far as the Government is concerned we could introduce the Revenue Bill without the Resolution at all. As to the statement made by the hon. and gallant Gentleman opposite (Mr. Pretyman) let me readily reciprocate the opinion he has stated of the desirability of discussing such a subject as this without introducing any party heat or acrimony into the matter. There are one or two statements that I wish to refer to mainly in connection with the speech of the hon. Member for Aston Manor (Mr. Evelyn Cecil). Apart from those statements, I have no wish to raise anything in the nature of party controversy. I agree with the hon. and gallant Gentleman that the main principle which must govern taxation—I think it is common to all parties in this House—is ability to pay. I do not think that is probably the only principle, for you must also introduce some considerations as to the advantages attained in the taxation. I think you must also introduce into the general scheme some consideration of questions as to how far special monopolies created by the State or by nature should contribute to the State or to national taxation. Apart from those reservations, I agree with the general statement. With that I turn to the speech of the hon. Member for Aston Manor. I find there some statements to which I am compelled to take exception. We have the habitual sneer in connection with the "People's Budget" which now must be the accompaniment of any debate on the Finance Bill. Someone made the jest on the opposite side, and it has been like the sacred torch that was passed from hand to hand, it has gone from mouth to mouth.

I must protest against that. The origin of the phrase is a book published by the Chancellor of the Exchequer, with his portrait largely emblazoned on the front, and the "People's Budget" written over the top.

If the hon. and gallant Member had done me the honour to wait for one more sentence he would see that I was going to refer to that particularly.

Where is the joke, then?

The difference is this. You are referring to the expression, the "People's Budget," with a sneer of contempt. People outside this House refer to the "People's Budget" with a smile of gratitude. [Laughter.] Certainly there are some millions who are doing that at the present moment. If I went into any of those cottage homes where the People's Budget is understood, after hearing the gratitude expressed there, I do not think it would be very difficult for me to endure the sneer of the hon. Member. The second point the hon. Member made was the statement, which is again and again affirmed, that we are groaning under the Income Tax of 1s. 2d. in the £. The hon. Member knows that nothing less resembles the actual truth. It does not in the least degree resemble the truth. Income Tax payers are not paying 1s. 2d. in the pound or anything like it. But for the fact that a certain amount of income in the usual way is collected from investments at the source of the income, there would be no question of what is stated. If the taxes were collected by affirmations instead of deductions, you would have an aggregated Income Tax of a totally different nature altogether. What are the actual facts of the case?

I was careful to refer to the statement of the Prime Minister that 1s. 2d. in the pound was not the average rate.

I know what the hon. Member says, but he makes comparisons with former years and with what former Chancellors of the Exchequer have said, and it goes out on his high financial authority that we are groaning under an Income Tax of 1s. 2d. in the pound, and his newspapers comment upon that absurd assertion! What are the actual facts? There are 1,100,000 Income Tax payers. Of these 820,000, to begin with, receive abatement under the ordinary system—that is they have incomes of under £700 a year—and they pay 1s 0½s., some of them, and the rest something like 6d., 7d., or 9d. Then there are 130,000 in addition who receive deductions on their earned income—deductions which have been given by this present Government. That leaves out of the 1,100,000 Income Tax paying persons probably less than 150,000 persons, or 13½ per cent. who are paying Income Tax of 1s. 2d. in the pound. That means that 86½ per cent. of Income Tax payers are paying much less than 1s. 2d. in the pound—the overwhelming majority infinitely less than 1s. 2d. in the pound. Under those conditions it is—I do not want to say anything distasteful to the hon. Member—but he will understand that I do say that it is an utterly misleading statement to repeat the statement that we are now suffering from an Income Tax of 1s. 2d. in the pound. What was the next point made by the hon. Member? He said that it had always been a financial tradition that half of the taxes should be got from indirect taxation, and the other half from direct taxation. I have tried to trace that financial dogma to any reasonable source, but after the investigation of financial statements of past years, I must honestly confess to the House that I have not been able to find it.

I quoted Sir William Harcourt.

Certainly. The hon. Member goes on to quote statements, but I never heard from him or other hon. Members in this House a reasoned argument on the point. I think every tax ought to be treated on its merits, and ought to be justified on its merits. I have not heard a reasonable argument why it is erroneous for any Government to increase the proportion of direct taxation and to reduce the proportion of indirect taxation, as has been done by this Government; and I remain unconvinced by any statement of financial dogma on the subject. I will point out to the hon. Gentleman—he stands here in a much less satisfactory position than the hon Baronet the Member for the City of London.

How is that?

I was going to pay a high tribute to the hon. Baronet. Quite apart from the question whether taxes should be imposed or not, or whether we are paying too much, the hon. Gentleman made the very definite point that we ought to have kept to the system of half direct and half indirect taxes, and, therefore, that if we are spending more money it ought to be by raising indirect taxation and not direct taxation. What happened this afternoon? There was a proposal, as I understand, to abolish the Tea Tax, amounting to something like £6,000,000. That would mean a very substantial reduction in indirect taxation, and we could have met it by direct taxes; we might have a fair balance between the two. What did the hon. Baronet do? We had the honour of having him as a comrade with us in our Lobby. He contends that to reduce Income Tax or to reduce the Supertax or the Death Duties would be all right, but he would not reduce the Sugar Tax or the Tea Tax. What did the hon. Member for Aston (Mr. Evelyn Cecil) do when the Division came on? He ran away.

No, but I thought you could very well take care of yourselves.

May I suggest that there are two classes of persons who are concerned. One the class that pays the Tea and other indirect duties, and the other the class that pays Income Tax, and the hon. Member was extremely reluctant to tell the people who paid the Tea Duties that he would vote for the retention of that tax, while at the same time he tries to make a case why the Income Tax should be reduced. I have more political respect for Gentlemen who try to carry their principles to their logical conclusion than those who try to get an advantage from one side, and get an advantage from the other also. The next point he made was the question of relaxation. As everyone knows we are not merely concerning ourselves with giving relaxation to the non-Income Tax payer. We have swept away some taxes on sugar and some taxes on tea, and we have already given as the Chancellor of the Exchequer has stated very substantial reductions to the Income Tax payer. There is the reduction to the comparatively rich man on Schedule A, and there is the reduction to the man of moderate means on earned income and the reduction to men of families and of comparatively small means, a reduction which I know from personal investigation has been very greatly appreciated. I find that a very large number of those people are putting into insurance for the children the money they have gained from that saving. Take a man earning £1,200 or £1,500 or £1,800 a year, which in the view of a poor man like myself is a very substantial income. That man is having a very substantial reduction in Income Tax as the result of the action of the Government compared with what he paid when hon. Gentlemen opposite were in office.

The next point is one which has been again and again put forward and is rather a stock argument in these Debates, namely, that by continuing a high Income Tax we leave ourselves no reserve in time of war. What are the actual facts, and what have the Government done? The Government might have reduced the Income Tax by something like 6d. in the £, if it had not paid off so much of the debt of the country, but instead of that they preferred as an advantage in time of peace and as a reserve in the miserable calamity of war to pay off £113,000,000 of debt. There is no better method of building up a reserve in time of war than by reducing the indebtedness of the country in times of peace. Then the hon. Gentleman said that on the question of Income Tax is was not so much the question of the particular tax as the question of the total expenditure. You have ruled, Mr. Speaker, that the question of total expenditure is not appropriate to a debate upon Income Tax, and certainly I have no reason to contest your ruling. I only make this one statement upon that subject: If the hon. Gentleman really thinks that we could reduce the Income Tax, and that we ought to reduce the Income Tax by refusing to indulge in any further expenditure, will he be consistent, and will he and his Friends, when schemes of expenditure are proposed all over the country at by-elections and elsewhere, and when the Government are accused of resisting these great schemes—will he do us the justice to say, "No, you are all wrong in attacking the Government; that money ought not to be voted, because the chief interest is economy, and economy will enable us to reduce the Income Tax."

I have said so.

The hon. Gentleman's party has not said so. His party is trying to make capital now because we do not increase the expenditure by £1,000,000, and his party are trying, on the other hand, to make a reduction of £6,000,000 on the Tea Duty. Surely that is not consistent. The last statement I have to make is this: Many suggestions have been made, and by no one more cogently than my hon. Friend the Member for Northampton, for dealing with Income Tax, and some have even suggested Income Tax for local purposes. I do not deny that the arguments of my hon. Friend are arguments which should be considered by any Government, but the only consideration I advance is we ought to act very carefully before we tamper in any way with this great and just instrument of taxation. The hon. and gallant Gentleman (Mr. Pretyman) said that the Income Tax was the least impeachable form of taxation that existed. I agree. Look at what it means this year! We propose to bring in by Income Tax from those who have the ability to pay £42,750,000 in ordinary Income Tax and £3,250,000 in Super-tax, making a total of £46,000,000 coming in on the basis of ability to pay. At the same time we are presenting Estimates which coincide almost to a pound for naval expenditure, and Income Tax payers may have the consolation that they are paying what they always professed they would pay for, and that they alone are maintaining the naval forces of this country. I say, under these circumstances and with the knowledge that almost every one of the great States in the world are turning to the Income Tax as a source of raising national revenue, and are turning to it as the result of the experience they see obtaining in this country of the enormous utility of the Income Tax as a source of national revenue, and as they see the way in which this country, with its increasing wealth and natural expansion, provides more and more money from the Income Tax, it would be folly, whichever party was in power, to attempt to tamper with this instrument of taxation.

The right hon. Gentleman has given us figures which show the number of people Who pay less than 1s. 2d. in the £ Income Tax and the number who pay 1s. 2d. in the £, but may I point out that in all Governments, at any rate during the last thirty years, there have been grades of Income Tax? In the time of my right hon. Friend the Member for East Worcester (Mr. Austen Chamberlain) there were a large number of people in the days of the Boer war, when the Income Tax was at 1s. 3d. in the £, who did not pay the 1s. 3d. rate; people whose incomes were under £500 did not pay as much as the Income Tax payers rated at the higher figure. The only difference the right hon. Gentleman has shown is in the case of earned incomes under £2,000. That is a proposal which was initiated and carried out by the Liberal party, but, with that exception, no other difference was made in the Income Tax since the Liberal party came into power.

There is the Schedule A abatement and the exemption of families.

That is really whether a man is paying on what is his income. That, I admit, is a concession. With regard to the families, it is a question of assessment and not of taxes. It is true I omitted what in those days was called the Dog Tax of 7s. 6d.

It means the remission of £700,000.

I think the remission must be very small.

I beg pardon, it is £600,000, not £700,000.

I presume the hon. Member means that the £10 reduction per child is £10 assessment, and not £10 taxes, and what he probably means is that the assessment is reduced by £600,000.

No, there was a loss to the revenue by this remission of £600,000.

The right hon. Gentleman the Secretary to the Treasury can give us the correct figures. I was going to point out to the right hon. Gentleman what seems to me a very good argument in favour of a moderate amount of indirect taxation. I think the right hon. Gentleman said that out of 1,100,000 people who pay Income Tax only 150,000 pay at the rate of 1s. 2d. in the £. My point is this: Is it not very dangerous to allow such a large amount of taxation to be put upon such a small number of people as 150,000? We have here some 7,000,000 electors out of a population of 45,000,000, and here is a very large sum of money placed in the form of taxation upon 150,000 people. Is that not a direct temptation, in these days, or in any days, when the power is in the hands of the people who do not pay so much taxation, and a temptation to hon. Members who are dependent for their presence in this House upon the votes of the democracy who do not pay, to vote for expenditure? I admit that what the right hon. Gentleman said in that respect is true. Is it not a temptation for them to vote for it in the hope that it will fall upon this comparatively small number of 150,000 people who can exercise no influence at election time, and who have, or will have, the ability for the time being to pay this heavy share of taxation? That is a very strong argument in favour of having, at any rate, some considerable proportion of the taxes raised by indirect taxation? I do not go so far as the hon. Member for Stockton (Mr. Jonathan Samuel) said some people are ready to go. I do not say that you ought to go back to the old system where indirect taxation provided some 75 per cent. of the-taxes, and direct taxation only 25 per cent. Although that may not be right, it is a very different thing to say that 75 per cent. should be provided by direct taxation and only 25 per cent. by indirect taxation. A moderate average is really the proper course in this as in many other things. There should be a certain proportion raised by indirect taxation, and a certain proportion by direct taxation, and I rather agree with my hon. Friend that that percentage should be about 50 per cent. of each.

I am not quite certain that the reduction in the case of unearned incomes from 1s. 2d. to 9d. is altogether a wise thing. Of course it is a popular thing. Every one who happens to earn an income of £2,000 is naturally very glad to know that he has only to pay 9d. instead of 1s. 2d., but look at the hardship upon the man who has worked hard for a large number of years and has saved money, and has consequently been able to invest a certain sum of money which will return £600 or £700 a year, and in his old age have to pay upon that at the rate of 1s. 2d. in the £, whereas a young man who is making £2,000 a year, who is providing nothing whatever for his old age, who is spending everything he is getting, only pays at the rate of 9d. I really do not quite see where the great advantage of that comes in. It is a direct incentive to extravagance and a discouragement of thrift. I think that a person who has saved money, and who has an income from what he has saved, should be encouraged instead of being penalised as he is under the present system. One of the great disadvantages of our present system of taxation is that it encourages extravagance and penalises thrift, and this is a particular example of it. I want to say a word about the question of Income Tax in time of war. The right hon. Gentleman rather put that by by saying that it was a stock argument of my hon. Friend. Stock arguments are very often very good, and certainly it was the first principle I learned, when I took an interest in finance, that the great reserve of this country in time of war was the Income Tax. It was pointed to me that countries like Russia, and, I believe, to a great extent Germany, kept a large reserve in gold, bearing, consequently, no interest as a war reserve. They had what was called in those days, and is probably still called, a war chest. We have no war chest in England. We are a great Empire, subject, though not perhaps so much, to a great many of the risks which Russia, Germany, and other great European countries are subjected to, but we have no provision in the shape of a war chest, as these countries have. The answer to that always was that we have a provision in the Income Tax, that the Income Tax in this country is fixed at such a rate that, in the event of there being a war, it could be raised and the richer classes would be able to contribute largely by Income Tax towards the funds necessary for carrying on a war. It was pointed out to me that that was a very much better way of keeping a war chest, because it allowed people to keep that money in their business and encouraged enterprise. It enabled them to go on with manufacturing business or other kinds of business, whereas if we kept a sum in gold it would be locked up in the Bank of England or in some other secure place. But if we are going to keep the Income Tax at 1s. 2d. in time of peace, I think the war reserve disappears.

I suppose it would not be in order to allude to the Death Duties, but they are really the same question. If I may for one moment point out the connection, the real Income Tax at the present moment is not 1s. 2d.; it is very much more, because the Death Duties are practically Income Tax. You have got to make a calculation which I cannot make at the present moment, of how much has to be added to that 1s. 2d. to represent the Death Duties. If that is added, you will find that the Income Tax at the present moment is, not only as high as it has ever been in time of war, but considerably higher. I merely submit that this is a question which does deserve the serious consideration of the right hon. Gentleman and the Chancellor of the Exchequer. I could not raise this question on the Committee stage because, although the Eleven o'clock Rule was suspended, it was arranged, I understood, that the Committee stage should terminate at about the usual hour. I do think that such an important question should have proper consideration given to it by the right hon. Gentleman. I quite sympathise with him, if he will allow me to say so, in his complaint that there is a very large number of Members on both sides of the House who are always anxious for expenditure. I have never been one of those, and I think that on the Bill to which he alluded I voted with his party, and did not vote with my Friends on this side. I quite recognise it is no use getting up and saying we object to expenditure, and at the same time going to the Government and saying we want a million for this and a half-million for that. I am not tarred with that brush. I have always consistently voted against all these schemes of expenditure. Sometimes I think my action has been misconstrued. It has been thought that. I did not vote for them because I had an unkindly spirit, but I do not vote for them because I do not believe We can afford them at the present moment. I believe that is a sound principle to go upon. There are a great number of Members in this House who do not go upon that principle.

There is a method of levying Income Tax which I think is a very unjust one. Supposing a person has a house and a garden, Income Tax is levied upon the occupation of the garden. I have a garden. I do not make any profit out of it. The reverse is the case. I make a loss upon it. I pay a certain number of men, and I get a few vegetables and a little fruit, and I get my lawn mowed. They cost me as much as if I were to put the cost of the vegetables and the flowers at the highest price in Covent Garden, and yet I have got to pay Income Tax upon a problematical profit which the right hon. Gentleman's subordinates say I have made upon that garden because I occupy it. It is a small matter; it is only a few pounds, but it is the principle that I contend for whether or not it is a great injustice to charge Income Tax in that way. What does Income Tax mean? It means a tax upon income. How can you come down and say you have got to pay something when there is no income2 It is surely not right to say, "We believe it to be an income which you might make under certain circumstances." I do not believe anybody could make a profit out of a garden—no private individual at any rate. But even if one were fortunate enough to make a profit, then put a charge upon that profit, but the person who cannot make a profit should not have a tax to pay upon it. May I hope to receive for these points the favourable consideration of his Majesty's Government? If the right hon. Gentleman will nod his head that will be enough. I did not see him do so. I think he might be ready to consider how to remedy this injustice, especially as the return is so small. It is not a good argument to say that the return is small, but after all, because it does not mean very much money it may be an argument which will appeal to the right hon. Gentleman. I should like to ask whether it would not be possible to do away with what I consider a great injustice—that is the making of a husband liable for Income Tax upon his wife's income. Why should the income of husband and wife be lumped together in these days when in a great many cases he has no control whatever over his wife's income? Why they should be lumped together, and why he should be made liable, perhaps for Super-tax in consequence, I cannot conceive. If a brother and sister live together their incomes are not lumped together. If you are not married to your wife your incomes will not be lumped together; it is a direct incentive to immorality. If you are married, your wife's income is joined to yours, and you may be brought under Super-tax. If you are not married, that is not so. I really do think in these days—I am not quite certain how the right hon. Gentleman voted last night; I think he voted for the women. I am told he ran away like my, right hon. Friend here.

The right hon. Gentleman's first surmise was correct, and did more credit to my character. I voted for it.

He voted for it. Then I think, with his view of the rights of womanhood, surely he would not want to lump the wife's income with her husband's, and would agree that they should occupy at any rate an equal position, and that the husband should not be supposed to be in any kind of way a superior person. It is most inconsistent on the part of the right hon. Gentleman. Perhaps, to make himself consistent, he will accept the Amendment on that point of my hon. and learned Friend behind me. May I appeal to the right hon. Gentleman to give these matters a little consideration in view of the fact that I have been a consistent supporter of his party against any increase of expenditure?

Income Tax has now become a permanent part of our system of taxation, and it is surely beside the point to refer to that somewhat obsolete argument about it being a war-reserve. The hon. Member for Aston Manor (Mr. E. Cecil) makes that speech every year, and I find myself in danger of making the same reply every year. The real reserve of the nation in time of war is the entire wealth of the country and the national dividend of the country. It is that and nothing else, and if in time of peace that wealth or that national dividend is attacked by any taxes whatsoever, you perform precisely the same operation whether you call the tax a Tea Tax or an Income Tax. Whatever name you care to give it, you take something from the nation's dividend, and all you have to have regard to surely is the principle of equity and justice, asking yourself from what persons you are taking it. The hon. Baronet seems alarmed at the prospect of a 1s. 2d. Income Tax in time of peace. He should reflect upon those very striking facts which were given to the House by the Financial Secretary (Mr. Masterman) as to the small number of persons who actually pay 1s. 2d., and also as to the amount of money which after all is raised, not only by the Income Tax, which has become the chief instrument of our taxation, but by all our taxes put together.

I do not suppose anybody will quarrel with my estimate of the national dividend if I put it at well over £2,000,000,000. It could not have been less last year than £2,100,000,000. I think our national expenditure is commonly exaggerated by the inclusion of the Post Office figures. If you subtract the Post Office figures, which are not really national expenditure, our national expenditure is £175,000,000. That being the case, what proportion of the national dividend are we taking? If we took a tithe, we should be taking £210,000,000. I remember a very striking essay by the late Sir Robert Giffen in which he pleaded with the nation to consider whether a nation like this ought not to be taking for national purposes at least a tithe of the national dividend. If we were taking a tithe at the present time, we should be taking £210,000,000, whereas we are taking very much less. I am not pleading for taxation for taxation sake. I am only trying to reassure the hon. Baronet (Sir F. Banbury) with regard to his fears as to the rate of taxation we are levying. I take it that the hon. Baronet does not desire that the working man's family should pay an Income Tax larger than is paid by a Super-tax payer.

No.

If he investigates the facts, I think he will find that if you take an average penny of the working classes they are paying an Income Tax expressed as a percentage which is rather higher than that paid by the middle-classes, and is almost as high as that paid by the Super-tax payers. I do not want to quote the figures because I have not got them with me, and I know how dangerous it is to quote figures from memory, but this general statement is at least true, that the average working man's family pays taxation, expressed as an Income Tax, higher than the middle-class man, and rather lower than the Super-tax payer. It cannot be said, in spite of the adjustments and the amendments that have been made, that the working classes are not taxed greater in comparison with other classes. I want to pass to some interesting remarks made by the Financial Secretary. He claimed, on behalf of the Government, and it is a just claim, that they have given more attention to the principle of ability to pay than was given in former times, and the figures he quoted shows that is true; but, while that claim is true, the hon. Member opposite might have replied by pointing out that it wants a great deal of explain- ing to the public what our system of Income Tax really means, and I say that is a criticism of our system of Income Tax. A man has to sit down and examine the Income Tax very carefully indeed—not only the provisions of the Act, but a list of concrete examples—and make a table for himself before he can understand what it means. That is a criticism of the Income Tax which ought not to obtain at this time. My right hon. Friend pointed out, with perfect justice, the small number of people who pay the 1s. 2d. rate, and he might have added the 1s. or the 9d. rate, but that is never made clear to the taxpayer. Supposing the taxpayer received a demand note which showed him a plain, graduated scale of taxation—let us say he has £500 a year—he would see that a man with £500 has to pay at a certain rate, that those with a less income pay at a less rate, and that those with a greater income pay at a greater rate. The justice and common sense of the system would immediately appeal to him.

Under the existing system there is nothing to reveal to him exactly what is his rate of Income Tax. He does not work it out for himself. He does not work it out with regard to his neighbours, those of his neighbours who have smaller incomes and those who have larger incomes. He, therefore, does not understand exactly how he is treated by the Income Tax system. Really, even if he did, and supposing he took the trouble to take the man with £100, the man with £200, and so on, working his way up to the man with thousands, which he does not himself possess, what would he find? Would he find it very equitable? He would find that some attention has been given to the principle of ability to pay, but he would find that it has been done in a very rough way indeed. Take merely the case of a man with £700 a year. It is extraordinary that a man with £700 a year should pay equivalent to 8d. in the £, whereas, if he got £10 a year more income, his rate would be 9d. in the £. Our Income Tax is full of these extraordinary anomalies. There is, with regard to unearned incomes, a certain amount of graduation, but how poor it is. At £700 a year graduation ceases until we reach the region of the Super-tax payer. You get graduations from £160 up to £700. At that point you reach is. 2d. I do not hesitate to say that 1s. 2d. is too much to levy upon an unearned income of that size, but there graduation ceases. The man who has £2,000 a year also pays 1s. 2d., and the man who has £3,000 a year also pays 1s. 2d. You do not get any fresh graduation until you arrive at the Super-tax line. There, of course, the man with an earned income over £5,000 begins to pay at a higher rate, but you get an extraordinary gap in the graduated scale between £700 and £5,000, which surely ought not to obtain. It is high time we graduated those incomes.

I do urge that very strongly, because graduation is the real differentiation. Really, if you graduate your scale properly, you need not worry very much whether it is earned or unearned. The graduation itself effects justice in the matter, because, as a general rule—I am using the word "unearned" in the sense that it was used in the Finance Act, that is to say, incomes derived from dividends and interest and so on, and not dependent entirely upon the exertions of the individual—as incomes rise in the scale, they are found more and more on examination to be unearned. Therefore, if you graduate the Income Tax you also differentiate the income. You perform the two operations at the same time, and you need not worry very much about the differentiation. I regard that point as of very great importance. What stands in the way of this? There is only one thing, and that is to complete the system of personal declarations, which is now almost complete. Let us think what we do. If a man has an income of under £700 a year, he has to declare his income or he does not get abatements. Again—I am speaking now of earned incomes—he has to declare his income in order to get the 9d. up to £700 a year, or 1s. up to £3,000 a year. Then, when you get into the higher scale of incomes you get the Super-tax-payers also declaring their incomes. It comes to this, that out of every eleven Income Tax payers about nine now for some reason or other make a personal declaration of their incomes.

Why should we not complete the system? I suggest to those in charge of our national finances that, if we did complete it, we should get a better result from the Income Tax. Why should we merely fish in regard to the Super-tax, for example? Why should the Commissioners merely send a form of declaration to persons whom they suspect to be very rich? I do not know, and I have often wondered upon what principle they conduct this fishing process. The curious figures that were given the other day by the Chancellor of the Exchequer in reply to a question were quite a revelation to me, and I think to many others. We find that in the present year the number of fishing inquiries is only about 17,000 in a great nation like this. Is that enough? I very much question whether it is. It is very difficult in these times to detect whether a man has £2,000 or £5,000 a year merely by the way in which he lives. You cannot tell that. It is especially difficult in the provinces. I should very much like to know upon what principle the Commissioners fish for the Super-tax payers. If we had declarations all round, I am quite sure that we should not only get better returns from the Super-tax, but better returns from the Income-tax also. The people with middle incomes, if I may use the term, would not be in the position that they leave the Government to tax them where they can at the source. I am not, of course, suggesting the abrogation of taxation at the source. If you had a system very much like the Super-tax system, of levying a certain amount at the source and collecting the balance on personal declaration, you would combine all the advantages of taxation at the source with all the advantages, and they are great, of taxation on personal declaration of income.

8.0 P.M.

I suggest that my right hon. Friend might well consider whether that admirable conception of making allowances to the family man cannot be carried a little further. We have now got a family man's allowance. But what about the man who has no family? I once suggested seriously to this House, and I venture to suggest it again, that we might very well indeed, in view of the needs of the national exchequer, penalise the bachelor. Supposing we made the bachelor pay 25 per cent. more on his income for one thing, it would be no more than he deserves. Even if he paid 25 per cent. more, he would obviously be left in a better position than the family man with the same income and with his family responsibilities. Surely, in view especially of the fall in the marriage-rate and the birth-rate, we might give very serious consideration to that suggestion. It has been seriously considered in other countries, and I see no reason why we should not adopt it. Apart from that, there are other allowances which might be made to small Income Tax payers which somewhat resemble the family man's allowance. I think in cases where a man suffers special misfortune, or where a man has suddenly the support of poorer relatives cast upon him, there ought to be power given to the Commissioners to make certain allowances within certain limits. The Prussian Bureaucracy has a name for hard dealing, but the Prussian Bureaucrats do this thing. Why should not we have such regard to ability to pay as to make such common-sense provisions as that? Then we might make payment easy to the small middle-class man. The payment of Income Tax is very often a burden to him because he has to pay it in one sum. Why should we not make it payable half yearly, or even quarterly? I am suggesting all these things to my right hon. Friend with a view of improving this instrument of taxation, which has become our chief instrument of taxation. Why, therefore, should we not do everything we can to improve it. Reference has been made to local Income Tax. We have to face the fact that our local government demands more revenue. That being the case, do not let us run away with the idea that by any special tax of any kind we shall ever get enough for this purpose. If we want sufficient money for local purposes we must have regard to the wealth of the community, and there is no other proper way of having regard to that wealth than the levying in some form or other of local Income Tax. Our present rate is a form of local Income Tax. I make the suggestion to the Treasury Bench that they should give this matter most earnest attention. Since it appears that they are contemplating a reform of local taxation, they should have regard to this question, and not put it away from them as being impossible. You will find in the great towns of Germany the local Income Tax is the chief instrument of taxation, just as we make it for our national purposes. If the Government refuse to consider the possibility of the scheme they will retard the development of local government in this country. Local government demands increased revenues. These increased revenues, in my opinion, cannot be secured unless we have regard to this form of taxation, and I hope my right hon. Friend will not relax his efforts to readjust taxation in view of what I have said with regard to the high proportion of taxation still falling on the working classes. It would be churlish to deny what the present Government have done in this direction, but I would urge them to take their courage in both hands and go a little further. A working man's family, with an income of 30s. a week, ought not to be expected to bear a higher rate of taxation than 5 per cent. As a matter of fact, it bears much more like 10 per cent., and I am sure my right hon. Friend will see that there is a great deal still to be done before we can lay the flattering unction to our souls that we have put the taxation of this country on a fair basis.

I do not propose to raise the general Question, as we have only ten minutes in which we can discuss this Motion, but I think it necessary to call attention to an extraordinary statement made by the Secretary to the Treasury on the Committee stage of this Resolution. I was not present in the House—having been engaged in the country—when the right hon. Gentleman made the speech to which I have to call attention, but he is reported to have used these words:—

"The land valuers in the various districts throughout the country are meeting property owners in a manner totally different from that prophesied in the pamphlet of the Land Union, and the result of it is exhibited in the rapidly declining subscription list of this unfortunate body."

That is a rather remarkable statement to come from the Treasury Bench. I really do think that, occasionally, the right hon. Gentleman does not quite know what he is saying when he addresses the House. He makes very strong statements. He has interrupted me once or twice in a manner not too courteous, although I am quite certain he desires to be courteous. But, having made a statement which is absolutely without foundation, I thought it very desirable the right hon. Gentleman should have an opportunity of contradicting it. A letter was consequently written to him immediately after the statement, on 1st May, by the secretary of the Land Union. I have a copy of it in my hand, but I will only read the concluding sentence:—

"Your statement is absolutely contrary to the facts, which are that the subscription list and membership of the Land Union have steadily and continuously increased since its inception and are still increasing. … I hope you will be good enough to withdraw the statement at the earliest opportunity, now you are aware they are wholly untrue."

Of that letter no acknowledgment even has been received, and the statement has not been withdrawn. It is very unusual, and I should perhaps apologise for bringing up such a matter. It is the last thing I would desire to do, but I have no alternative. The right hon. Gentleman in his place, as a Minister of the Crown, makes a statement attacking a body which is opposed to him in a political matter. He makes the definite statement it is an unfortunate institution whose subscription list is declining. It is pointed out to him that that statement is absolutely without foundation—that it is exactly contrary to the facts. He is given an opportunity of withdrawing it, but he does not even acknowledge the letter which he receives or attempt to withdraw the statement which he has made. I think I have a right, on behalf of the Land Union, and of everybody in this House, to complain that such action should be taken by the right hon. Gentleman. I would make every excuse for any statement of that kind being made in the heat of debate, but I can find no excuse whatever when a correction is given him in the right manner for his not taking the opportunity to withdraw it. Perhaps the right hon. Gentleman will be good enough to give some explanation.

I should very much regret if it were the general opinion of the House that I was customarily guilty of discourtesy, or of making strong statements, or of interrupting. I rather think that if one Member has a right to complain of interruption and of strong statements being made against him it would be myself, in view of certain recent events that have happened in the House. I am not aware of any organised attempt to shout down any other Member represent- ing this Front Bench. But, after all, these are personal and trivial matters. As to the letter which was addressed to me, I certainly have no intention, nor should I ever have an intention of answering a letter couched in language which I regard as insolent. If the hon. and gallant Gentleman himself had brought the question to my notice, as he does now, and if he had said of his personal knowledge that I had made a wrong statement and that the subscription list of the Land Union was increasing—

I do say so.

As I understand the hon. and gallant Gentleman tells me that the subscription list of the Land Union is increasing, instead of decreasing, then I frankly accept his statement and withdraw my statement that it is decreasing.

Why did you make it?

If time permitted I could give the reasons why I made that statement, but I cannot do it now. I think the hon. and gallant Gentleman should be content with the withdrawal.

I want to ask the Secretary to the Treasury if he really wishes to take this Resolution to-night. The Chancellor of the Exchequer at Question Time led us to believe he was going to explain various matters in connection with the Revenue Bill. In answer to my hon. Friend, the Member for Ayr (Sir G. Younger), he said that if this Resolution was reached he would indicate the Amendments of the law which it was proposed to introduce. These are very complicated matters and we certainly expected, when the Resolution was reached, to hear from the Chancellor of the Exchequer some detailed statement on the point. The right hon. Gentleman has not found it possible to be here, and even if he were present it would not be possible for him in the short time which still remains to make such a statement. I would therefore appeal to the right hon. Gentleman whether he really desires to take this now, or whether he will not defer it till such time as the Chancellor of the Exchequer can make a statement upon it.

I heard the statement of the Chancellor of the Exchequer, that it might be desirable to authorise various trivial Amendments.

Not trivial.

The right hon. Gentleman indicated all the substantial points of the Revenue Bill on a previous occasion. This Resolution is being introduced for the benefit of the Opposition, or rather of the critics of the Government. I think I might repeat what Lord St. Aldwyn said in introducing a similar Resolution:—

"The Resolution is not necessary from the Government point of view at all, and if hon. Gentlemen do not want it we will drop it."

This is necessary if hon. Gentlemen wish to criticise the Revenue and Excise Taxes other than the Income Tax and Tea Duty. It is because we think it fair to give hon. Members the opportunity for criticism that they desire that we have brought this Resolution forward, and I do not believe, even if my right hon. Friend were here, he would have any substantial revelations to make to the House.

I can only quote what the Chancellor of the Exchequer said in the course of his financial statement on 22nd April. The words he used were:—

"I will not now indicate the Amendments which we propose. I shall have to do so when I move the Resolution."—[OFFICIAL REPORT, 22nd April, 1913, col. 280, Vol. LII.]

It will be seen that the right hon. Gentleman put it, not as a matter which he could do, or not, as he liked, but he used the words, "I shall have to do it when I move the Resolution." When the Resolution was moved in Committee the Chancellor of the Exchequer really did not indicate all the changes he proposed to make in a manner which every Member of this House could understand. I was present throughout, and listened to what he said with great care. I am unable to say which Amendment he expressed his willingness to accept. He certainly told us he was going to accept Amendments from this side which would do away with what we suggested was the effect of the Lumsden case, but we do not really know what Amendment he is willing to accept, and he never really indicated what he intended to propose. I do not wish, however, to stand in the way of the Resolutions being taken to-night, but I must say I do not think the right hon. Gentleman has carried out what he said on 22nd April—not only what he said, but what he admitted he was bound to do.

I beg to move, "That this House again places on record its conviction that the Indo-Chinese opium trade is morally indefensible; and, in view of the position of the Chinese Government, which, while engaged in suppressing the profitable production of opium by its own citizens, is obliged to admit opium from India, this House calls upon His Majesty's Government to release China from her treaty obligation to admit the Indian drug, and urges that she should be set free to prohibit the importation of the stocks of Opium now accumulated at the treaty ports and Hong Kong."

I crave the indulgence of the House upon rising for the first time to address it. Cardinal Manning once confessed that he had never felt more embarrassed in his life than when he had to address the College of Cardinals in Rome in a speech not in his own mother tongue. I am profoundly conscious that to me it is one thing to speak at a gathering of my own countrymen in the venacular, but quite another thing to address the British House of Commons in a langauge not my own, and which I have but seldom used save in private. As a Welsh Nationalist I feel that Providence, through circumstances over which I have no control, has given me the opportunity of speaking here for the first time, not upon a question exclusively Welsh, but on a great and grave moral question—a question that transcends the boundaries of all the nationalities, and all the political parties that are assembled in this House, but which is at the same time in perfect accord with the most cherished traditions, the deepest convictions and the best ideals of Welsh nationalism. The burning words of Dr. Griffith John, Principal Hopkyn Rees, the Rev. Timothy Richard, of China, Dr. Roberts, of Cassia, and Mr. Henry Richard and other great spiritual and social leaders, have set the hearts of my countrymen ablaze with the desire to see the end of this Indo-Chinese Opium Traffic—the greatest curse of China, and the greatest disgrace of Britain.

For seventy years China, under treaties imposed by Britain, was obliged to allow her teeming millions of people to be exposed to the dangers of a trade in a drug that makes the strongest of men bankrupt in body, mind, and soul. In 1893, by a majority, this House for the first time declared the traffic to be "morally indefensible." In 1906 and 1908 it repeated that declaration by a unanimous vote. At the end of 1907, under the rule of Lord Morley at the India Office, a new agreement was made with China, under which we undertook that India should diminish by one-tenth every year, beginning in 1908, the quantity of opium sold for export to China, thus bringing the traffic to a close by the end of 1916. China had to diminish her production of opium according to the same ratio. In 1907, Sir John Jordan, the British Minister at Pekin, estimated that six-sevenths of the opium consumed in China was her own production, the remaining one-seventh coming from India. At the same time the Indian Government computed that, on the average of ten years, 51,000 chests out of a total Indian annual production of 67,000 chests went to China. This new arrangement sent a thrill of joy throughout China, and the Chinese Government, supported by all classes of the Chinese people, entered upon a noble crusade against the great enemy of the land. Their Herculean efforts in putting down this traffic, against tremendous odds, commanded the admiration of the world. By the middle of 1910, China had reduced by 70 per cent. to 80 per cent. her former production of opium, whereas India by that time had only diminished her former quantity of opium exported to China by 30 per cent. So great was the success that attended the strenuous exertions of China to stop this traffic that the price of the drug increased fourfold. One result was that the Indian revenue, computed to produce £11,250,000 in three years, has really produced over £20,000,000 in five years and a quarter. Another result was the unwillingness of the Chinese farmers to give up the cultivation of the poppy after it had become so enormously profitable. They naturally argued, and argue still, that their Government should not punish them for growing what the foreigners were allowed to send in.

China now became intensely conscious of the fact that she would have a much better chance of ridding her people of opium if the period for terminating the trade were shortened. Consequently the Chinese Government, supported by the anti-opium societies in this country, made an earnest appeal to the British Government to release China from her treaty obligations. Responding to this request His Majesty's Government, in the summer of 1911, made a fresh agreement with the Chinese Government, which not only recognised the large measure of success already attained by China in putting an end to the production and consumption of opium, but also definitely promised our assistance to China in completing the task. China's action in the suppression of opium was now greatly hampered by a clause contained in that agreement, which compels China to allow the wholesale trade in opium to continue unhindered till her complete success in eradicating the poppy cultivation, as well as by the revolution, which was taken advantage of by the farmers in some districts for the planting of the profitable opium poppy. It is often said that China has violated the Opium Agreement of 1911. By Article 7 of that agreement, China undertook to

"cause to be withdrawn all restrictions placed by the provincial authorities on the wholesale trade in Indian opium,"

and agreed that—

"no such restriction shall be again imposed so long as the additional Article of the Chifu Agreement remains in force."

The same Article further provided that:

"The foregoing stipulation shall not derogate in any manner from the force of the laws already published or hereafter to be published by the Chinese Government to suppress the smoking of opium, and to regulate the retail trade in the drug in general."

The Chinese Government protests that it has scrupulously refrained from any direct interference with the wholesale trade in Indian opium, and it is doubtful whether there is any reliable evidence to the contrary. But it has availed itself of its right, recognised by the agreement "to regulate the retail trade in the drug" to such good effect that the wholesale trade has practically been brought to an end, for it is obvious that if the retail trade can be confined to that for the supply of registered opium smokers, the wholesale trade must thereupon cease. The opium merchants of Shanghai and Hong Kong thinking that China could not carry out her opium policy, have accumulated large stocks of opium valued at some ten or twelve millions sterling, and on which British and other banks have advanced between four and five millions sterling. Finding that the stocks were practically unsaleable the bankers and merchants have put a strong pressure upon the Governments connected with this nefarious traffic, either to compel China to take over these stocks, or bear their loss. The Revolution in China has transformed the world's oldest Empire into its newest Republic, and considerations connected with the Chinese Republic in its infancy, such as those of recognition and loan, may account for the fresh stream of opium traffic that has been flowing during the last few weeks into China from Shanghai and Hong Kong.

That, I understand, is the position of things to-day regarding the Indo-Chinese opium trade; and as a solution of the problem I submit this Resolution to the House by which the Government are called upon to promise that the Chinese be at once formally and finally released from all further obligation to admit Indian opium — and that, first and foremost, on account of the iniquity of the trade. It is an absolutely wicked traffic. What is morally indefensible must be politically wrong. However much it was necessary in former Debates in this House to call high officials and missionaries and medical men as witnesses against the degrading and brutalising effects of the opium drug, such is not the case to-day. The reports of the Shanghai Conference and the International Congress at The Hague have convinced the whole civilised world that the sooner the trade in opium is stopped the better, save for medicinal purposes. Japan, Canada, Australia, New Zealand, the Philippine Islands, and latterly France, have had to make strict laws against the consumption of opium. It has destroyed a greater number of the Chinese people than war, famine, and pestilence together, and when China is alive to the fact that the opium trade is her greatest curse, surely it is a disgrace to Britain to enforce upon China a traffic that is condemned by the intelligence and the conscience of the world! In Britain we label opium as poison, and what is poison in Britain cannot be food in China. As far as its effects are concerned, they are disease, debauchery, destruction, and death everywhere, irrespective of colour and creed, country and clime. Again, the Chinese people should be released from the treaty obligations, because they are compulsory. If China had been so debased as to want our opium, that would not justify Britain to carry on a trade which has ruined millions of the Chinese people in health, intellect, and soul. But the fact that the British Government are enforcing this immoral trade against the will and conscience of China by unrighteous treaties, consequent upon most unjust wars, adds unmeasurably to our guilt and shame. Moreover, it impedes the progress of China's reform, which Britain has promised to help forward. China has awakened as a giant after centuries of slumber, and her efforts toward reformation is to-day the wonder of the world, and doubtless the strongest of Western Governments would fail in the moral courage that she has displayed in attacking the enemy within the gate with such determination and success. The Chinese Republic has tabulated the opium smoker in her electoral laws with the bankrupt, the lunatic, and the felon, and has promulgated the strictest measures, which she has also drastically enforced, for the extermination of the national vice by means of fines, imprisonment, canque, and capital punishment.

Further, it is our duty to release China from her treaty obligations in order to free our Christian civilisation from the reproach that rests upon it in that country. There is the reproach of revenue versus morality. Heathen China has ever waged her battles against the opium trade on moral grounds. Christian Britain has invariably emphasised revenue as its reason for keeping up the traffic, irrespective of its iniquity. Then there is the reproach of offering salvation with the one hand and destruction with the other. There is no affinity between light and darkness, between life and death, between the works of God and the works of the devil. I cannot read of the legalisation by these treaties of opium and Christianity in China, without remembering a story that Mr. Spurgeon used to relate of a tramp that insisted upon a certain minister that he should help him, were it only for the blessings he had received under his ministry, for, added he, "When I came first to hear you I cared neither for God nor the devil, but I am glad to be able to tell you that by means of your good ministrations I have come to love them both." The Opium Traffic is the greatest hindrance to the spread of Christianity in that great country. Archdeacon Moule said years ago at Lambeth Palace, that he was told hundreds of times while preaching to the Chinese to keep his Christ as long as Britain cursed China with her opium. Before sitting down, I should like to say that the Indo-Chinese Opium Traffic has been a tremendous loss to Britain from the beginning. Retribution follows in the track of an illicit trade. The opium trade in China has cost us, even in money, immensely more than we have gained by it. But what about the loss in intellect and soul? The opium trade is a stupendous sin, and Britain with its good name and fame, strength and glory, cannot violate the laws of righteousness with impunity. Mr. Gladstone wrote in his diary that he was afraid of the judgment of God upon Britain for its injustice to China. There is a God who sits on the throne of the world and causes victory to settle on the banners of right and justice. The Opium Traffic has failed to destroy the Chinese nation. God is working mightily in China. The other day the Chinese Republic appealed to the Christian communities of the world to pray for the Government and the nation in the present great crisis. The Christian churches of Britain responded to the call. Is the Government going to be the only obstacle? God forbid that this should be so. I thank the House for extending its indulgence to me. I beg to move.

I am sure the House will join with me in expressing unanimous congratulation to my hon. Friend on his admirable maiden speech. We can all feel, having heard his eloquence in English, that those who are fortunate enough to understand his native tongue will regard it as a privilege to hear him in that. I think my hon. Friend traced with great power and fervour the moral objection to the present Opium Trade. I would ask the House to examine in detail the Resolution he has moved, and to see whether we cannot accept it unanimously. In the first place, we are asked to put on record again an expression of opinion that this House has already solemnly made three times, namely, that the Indo-Chinese Opium Traffic is morally indefensible. It is no pleasant task for any citizen of this country to look into the past records and history on which our present traffic is based. They are pages which we must read with shame and indignation, and it may well be that to-day not a few will say, "That is all ancient history. We all agree in the shame of it. Let us leave it on one side." But although it may be ancient history for us, it is not ancient history for China, which still suffers from the wrong. Although it may be convenient for us to forget that dishonourable past, we have to remember that we have no right to forget until we are prepared to redress. In 1891, 1906, and 1908 the House has affirmed its conviction upon this point. Unfortunately, history has shown that what is morally indefensible may be, and has been, defended by diplomacy. What is morally indefensible may seem to be politically profitable. I understand that the Government do not in any case oppose this part of the Resolution. It is only the practical consequences that are to be drawn from the Resolution which may cause difference, but I hope when the House faces those consequences in the strength of their conviction, they and the Government will be prepared to take the necessary step.

We only ask that China in future should be treated on the basis on which we would treat any other country. We remember that in the case of our ally, Japan, the first treaty that was framed was framed at a moment when we were engaged in negotiating a treaty with China after a terrible war. When Lord Elgin was negotiating that treaty, in which we legalised the Opium Trade, he at the same time successfuly negotiated a treaty with Japan in which the importation of opium was entirely prohibited. As we look back, we surely must feel that that differentiation cannot be defended. Our ally, living under very similar conditions to those of the Chinese, prohibits the smoking of opium even in private under most grave penalties. A man who is convicted of smoking opium in his own home is liable in Japan to a penalty of three years' imprisonment with hard labour. A man who sells cooked opium in Japan is liable to a penalty of seven years' imprisonment with hard labour. That shows the point of view which a civilised Eastern people take in dealing with this great evil. We must surely be prepared to leave China to deal as firmly and as strenuously with that evil herself. The second point in the Resolution deals with the Convention of 1911, and what it means to China. My hon. Friend has explained that Convention. It marked a real step forward in the relations of this country as to the Opium Traffic, for which all of us in this House are profoundly grateful; but, although it did mark a step forward, we feel that it was not enough. We cannot stop there. In that Convention liberty was given to China to restrict the retail sale of opium, and to take steps for suppressing opium smoking, while at the same time the wholesale import from India was guaranteed. So long as that contradiction exists, we must feel that there is always a danger of indirect pressure, diplomatic and otherwise, upon China not to be too severe in dealing with the retail trade or with the individual smoker; China cannot be really, whatever she may be in name, free to deal with that evil while these provisions remain. I think that cannot be better shown than by reference to the painful incident of sending a British gunboat to Nganking. That was sent in consequence of the burning of opium, which was the property of a native Chinese. Imagine what we should feel in England if a French gunboat was sent up the Thames, say to Oxford, to deal with some severe local measures that had been taken in regard to absinthe. The mere mention of such a possibility shows how grievously this must have offended against the self-respect of the Chinese.

The third part of the Resolution asks us to release China. It may be said, why should we take the step? If China really wishes this, why does not China make the move? I think we should be ashamed to use an argument of that kind after the discreditable years in our history when we used every artifice and every form of force to compel China to do what she did not wash to do. It may be said that we have not any evidence that China wishes this. A little while ago we listened to the appeal which Dr. Sun Yat Sen addressed to the British people to free his country from this curse. To-day the secretary of the Chinese President, General Yung, is on his way to Great Britain, sent officially for the purpose of doing his utmost to persuade the British people to take a further step in stopping this traffic. We have, therefore, every evidence that the best opinion in China is keenly desirous of this change, and while the Chinese Republic has not yet been recognised, can we wonder that it has not officially approached the Government on this question, while our Government is still making difficulties about the official recognition of the new Government? Then we must remember that a new situation has arisen. That is provided for in the Convention of 1911 itself. In Article 9, which we cannot examine too carefully, it says:—

"Should it appear from subsequent experience desirable at any time during the unexpired period of seven years to modify this agreement or any part of it, it may be revised by mutual consent of the two high contracting parties."

It was obviously foreseen when making the Agreement that it might be desirable to revise it. We ask the Government now to take advantage of that provision and to take a fresh step with a generosity which would redound to the credit of this country; not to wait for China to come on her knees begging for this present, but to say, "We wish to do it for your good." I shall not go into details of other evidence, though I could do so if there were time. I have here the files of the "Central China Post," which gives most important evidence from an inquiry conducted in the different provinces of China into the actual state of affairs in China to-day with regard to the suppression of the trade. I will only quote one report, if I may. It is from the province of Szechuan, which, it has been stated, would serve as a test of the earnestness of China in dealing with this trade. The report is dated 1st December. It says:—

"Before the Revolution the poppy was completely suppressed in my district. This year a few plots might be found in out-of-the-way country districts and away from the main roads. Even during this revolutionary year the officials were most active in suppressing the growth of the poppy. Growers have been executed and their lands confiscated. Regarding opium dens, a large number were opened when the revolutionary troubles were at their height. The officials have now been busy for several months in closing these dens and punishing the keepers. The officials appear to be perfectly sincere in this."

That is only one out of a very large number of reports. I might further instance the report of Mr. Broomhall, who has just returned after an eleven months' journey of over 7,000 miles. It goes into great details of the different districts, and, while it does allow that there are cases here and there of a breach of the law, it makes it quite clear that throughout those great districts there is an earnest, systematic attempt to get rid of this curse. Now I come to the last point of the Resolution, the difficulty of the stocks in the ports. That, I think, will probably be felt by the House to be the most difficult point we have to deal with. We have to remember that the value of these stocks has been artificially raised, and raised to an enormous extent, partly on account of our action and partly on account of the action of the Chinese Government. The one-seventh of the opium of China which came from India has been reduced by half. The remaining six-sevenths has been reduced, it is calculated, by something like three-fourths. In consequence of that the value of these stocks has appreciated enormously. Moreover, for more than a year, the Chinese Government has entirely suppressed the importation of opium from Persia and from Turkey. That, again, has increased the value of the stocks held at Shanghai and the treaty ports.

It is surely very hard that the Chinese Government, having put up the price of this opium which is in bond by their own action, should now be compelled to pay double for their own work! Two suggestions have been made as to how this can be dealt with with perfect justice. No one wishes to inflict unnecessary loss on any merchant, whatsoever his nationality may be. One suggestion has been made by a great friend of the anti-opium cause, that part, at least, of the indemnity which is due to this country for the suppression of the Boxer troubles should be allocated to compensation. This debt has been forgiven freely by the American Government in return for certain educational advantages which the Chinese Government are offering instead. The other suggestion is simply to allow this stock to be used in those markets of the world which are at present open to opium without any restrictions of this kind. Unfortunately, for some time yet there will probably be a large market for opium in Siam and in the Dutch East Indies, and so long as those countries do not take effective measures to prevent the habit of opium smoking or eating there cannot be the same objection to this stock being used there as otherwise would exist. It has been calculated that it might all be used in those markets, if the merchants were prepared to wait, not without loss of the profit that those merchants have hoped to get, but without material or serious loss, and if there is to be a loss, is it better that it should be a loss to the purses of a few or of the lives of a great number? That is really the choice.

Has the hon. Member any figures showing the estimated value of those stocks?

The figures put forward have been very contradictory. I believe that the merchants claimed the stock at one time as worth over £10,000,000. Others put it at £4,000,000. Others put it lower. I should not like myself to say what the actual value is, but I should imagine that it is less than £4,000,000. I have no right to give an authoritative opinion on that point. I see that the hon. Member for East Nottingham is prepared to move an Amendment to this Resolution. He will no doubt do it with his customary ability, which is worthy of a better cause, but I see that in his Amendment he says that we "must decline to vary such agreement." That agreement itself makes provision for variation, and therefore on that point he will feel that the Amendment which he is proposing would be unsuitable; and he also points out that no variation should be made without safeguarding the Indian taxpayer. My hon. Friend has shown most powerfully that the Indian revenue is already provided for. I believe that the Budget now balances without making any allowance for the Indo-Chinese Opium Trade. They have made more profit in these few years than they hoped to make in the whole period, and, as we know, the Indian cultivators would in many cases prefer to cultivate other crops. Now the question of the British and Indian merchants remains. While I do not wish any one of them to suffer loss we must remember that their trade was in its essence a speculative trade. The Under-Secretary for Foreign Affairs has said himself in this House that it is a highly speculative business, and people who engage in a highly speculative business must be prepared to run a risk. Finally, I would beg the House to remember that this is indeed a unique opportunity. We have now the opportunity, all too rare, to do an act of national generosity in which all parties can unite. There are occasions that come to this House when, without distinction of parties, we can feel that this House is the organ and the instrument of the best will of the whole community when it is expressing the general will of all good citizens, all good men and women, without distinction of creed or party. I believe that such an occasion has come to-night. We may really to-night, in agreeing to this Resolution, do something which will express the very best sense of the whole community, and we may do an act of tardy justice which will bring its own reward in the future. I beg to second.

I have listened with great care to the remarks that have fallen from the Mover of this Resolution, and also from the other hon. Member who has spoken on the opposite side of the House, and I have been astounded at the attitude which they took up towards this question of opium. I have not, as in the case of the hon. Members to whom I have referred, carefully prepared any speech, and I have not notes before me to which I can refer, and which might possibly give figures to prove either their case or mine, because figures with regard to this question of opium can be manipulated in either direction. I can only address the House with a knowledge of nineteen years' residence in China, where I have seen opium growing, opium smoking, and the various results of the smoking of opium. If you believe all that has been said in this House to-night, you would imagine that the smoking of opium was necessarily a most horrible evil. It is no more an evil than the taking of a glass of beer or a glass of wine. I have seen people smoking opium, and I have seen the results. I have seen people drinking beer, I have seen people drinking whisky, and I have seen the results of that—in the Far East, be it remembered! I can assure all Members of this House that the abuse of alcohol is far greater than the abuse of opium. Another thing which I should like to bring before you is that the cost of smoking opium is a hundredfold greater than the cost of the alcoholic poison, if you wish to call it so. The hon. Member who spoke last referred to the increased cost of opium. He said that the price was going up all the time. From his point of view that should affect opium growing in China. On the other side, it should merely show him that the ordinary man in the street in China cannot smoke opium, he can only get the very smallest modicum, which will bring him some small relief in the course of his work. You have heard of opium dens. Why they should be called "dens," I cannot imagine, because they are not worse, as I know from personal experience and from looking at them, than the ordinary house in which the Chinaman lives. But they are called dens, and in this House a den is supposed to be an evil place, a belief which is due to the fact that hon. Members have not had an opportunity of seeing the actual conditions. But this question of opium is an ethical question, and in dealing with it you find persons just as cranky as those who deal with the teetotal question. The whole discussion goes round and round and round among just a few enthusiasts, and there is no direct way out of the diffi- culty. I am not to-night prepared to discuss the ethics of opium or the ethics of alcohol, but I wish to bring to the notice of the House that we are asked to adopt a Resolution which shall relieve the Government of China, whatever that may be.

Some people think it is a Republic; they are entirely wrong. Some people may think that it is an Empire; that is equally wrong. What the Government of China to-day is I do not say definitely, but I do venture to express the hope that Yuan-Shih-Kai will prove the strong man who will bring the people of China out of the morass in which they find themselves. The methods by which he will do so are methods which will not commend themselves to this House. They are methods which obtain in Oriental countries. And when you deal with an Oriental country you must put yourselves on that plane. You cannot endeavour to come to the right conclusion as to what an Oriental will de if you start from the plane which is parallel to the plane of this House. That is quite impossible. If you deal with an Oriental country you have to start from the Oriental point of view. As I have already said, I have had nineteen years in China, and it was only when I had gone half way through that time, that I began to see that I was not able to judge from what actual point the Oriental started to think. Therefore I would urge all hon. Members before they endeavour to make up their minds with regard to this question to realise that in dealing with Oriental countries they cannot start from the ordinary home basis. The question of opium, the ethics of it, I wish to set aside; but what I wish to point out to the House most particularly, is that we have made a bargain with the Government of China, whatever it may be, and a bargain whereby we forego many advantages in order to assist China to regenerate herself, if I may adopt the phraseology of those who are in favour of the abolition of opium smoking. But in any case it is a contract and it is a bargain. The Chinese Government has to do its part, and we have to do our part. We are perfectly prepared to do ours, and we are doing it, and the Chinese Government, such as it is, is not doing its part. So long as that exists, I deprecate any Resolution urging a loosening of the bond on China. This is a time, especially when the Government of China is undergoing transformation, when we should take great care that the interests of His Majesty's subjects and the traders out there should not suffer. Those who know the Chinese know perfectly well that if you give them half an inch they will take two ells. It is for those considerations I have ventured to address the House this evening.

I beg to move, as an Amendment, to leave out from the words "That this House," and to add instead thereof the words,

"in view of the arrangement entered into between the British and Chinese Governments for the extinction of the Opium Traffic between China and India, declines to vary such agreement or to precipitate the immediate cessation of such traffic without due provision made for safeguarding the interests of the Indian taxpayer and of British and British-Indian merchants who have entered into engagements, in the faith that the British Government will redeem its pledges or pay due compensation at the expense of the British taxpayer."

It is really like a refreshing breeze in an arid desert to hear the speech which the hon. Gentleman has just addressed to the House, not that I wish to speak otherwise than with great respect of the hon. Member who preceded him (Mr. Towyn Jones), whose speech was a mixture of humour and eloquence, which I am sure was equally acceptable to the House, and on which I respectfully congratulate him. He and the hon. Gentleman the Member for Leeds (Mr. T. E. Harvey) spoke as if the only opium in Chinese traffic is Indian opium. I wonder whether they know that Indian opium has only been one-sixth of the opium smoked in China, and that China can, and does, and is, now growing opium on all sides.

No; it is not true.

There is a great deal of assertion on both sides, and Members opposite are asking the House to believe that China has abandoned what it has been doing for a thousand years, but I ask hon. Members to believe me that they are still doing it, and it is perfectly well known that they are doing so. I am as anxious to put a stop to the abuse of opium as any hon. Gentleman, and in my small way as an official I have always used my small influence to that end. I was a party to the Resolution which was passed in this House, and which was the basis probably of the arrangement which was made. That was the Resolution moved by the hon. Member for the Radcliffe Division (Mr. T. Taylor). The Secretary of State for India himself on that occasion pointed out that what the House is asked to do is to put a stop to the control and supply of opium which can be, and is, limited, in favour of the uncontrolled supply of opium which can be, and will be, unlimited. The difference between us and the Gentlemen who are moving this Resolution is that we want to get the thing done, whereas they want to put forward some ethical Resolution. We are anxious to get it done, but we do not believe that this will do it. The hon. Member for Carmarthen (Mr. Towyn Jones) spoke very fairly and very moderately, and in a most reasonable manner to-day, but I think I can see the hon. Member addressing an excited audience in Wales, and saying that on the occasion of his maiden speech in this House he was privileged to wield the sword of the Lord, and that he smote hip and thigh the men of Belial who dared to excuse or extenuate the manufacture of opium, that drowsy syrup of the East and thrice damnable drug of the vegetable kingdom.

Is that the way you used to talk to them when you were in Wales?

Never; but I know the way they do talk to them, and I know a Whip has been sent round with a stock sample Resolution. I submit, though I regard their motives with the utmost respect, that it is better to deal with the actual facts in treating with this matter, as the hon. Member behind me did. There is nothing inherently wicked in the poppy; it is no worse than the vine; Solomon sung its praises; and remember St. Paul said, "Drink no longer water, but use a little wine for thy stomach's sake." Wheat can be made into whisky as well as into bread. Rice can be made into puddings for the young and innocent, and it is also made into ardent spirits for the old, and not guilty, but gouty. Hemp may be used for packing boxes and for hanging criminals. There is a good and a bad use for everything. All the gifts of the good God have their useful and beneficial purposes, and certainly opium is no exception. It is one of the most beautiful crops to see growing, and in some of its legitimate, moderate uses it is one of the most beneficial of vegetable products. I notice that on this occasion there is in the anti-opium resolutions which have reached me a saving clause as to the medicinal use of opium. One would really think, to hear hon. Members speak, that there had never been an Opium Commission which made one of the very best reports ever made by a Royal Commission. It was absolutely unanimous, with one exception, whom my hon. Friend would call crank, an expression I will not dare to apply to any hon. Member of this House. What did that Commission report; since it is very material to the Resolution before the House? It said that total prohibition was not necessary or demanded by the people, or desired by any but a few, and that it was impossible to carry it out without unfair interference with the native States.

Is not that in reference to India and opium eating and not to China and opium smoking?

It is very much the same thing in both countries. It is quite true that opium is eaten in India and smoked in China. But the report was on the character of this drug, and I am now taking the ethical side which is so prominent in this Resolution. That Commission also said that the finances of India were not in a condition to stand the change. The hon. Member for Leeds, in his speech this evening, said that the finances of India were now in such a condition that they could easily drop this revenue. The hon. Member speaks without consideration of the fact that the finances of India are good after two or three good years, and that they become bad after two or three bad years. Thus at any moment you may see the Finance Minister in urgent need of money. The Commission also reported that there was no evidence of extensive moral physical degradation by its use, and that it was extensively used for non-medical and quasi-medical purposes, and that its abuse was condemned by public opinion in India as it is in China too. They also say that smoking is very little practised in India. I heard hon. Members say that the people of India would gladly sacrifice the revenue. It is impossible for them or for anybody to tell what the people of India think in the matter, but if they were able to vote on it you may be certain they would not vote for losing any revenue. Why should they? When we talk upon the ethical side, we say it is so wrong that we must not in any way be concerned with it. Do hon. Members reflect that in a report made by Mr. Knox, the Secretary of State in America, the other day, he said that probably tons of hypnotic drugs were being consumed in America, and that the people were "rapidly becoming hopelessly addicted to the habitual use of narcotics." I asked the President of the Board of Trade the other day a question, and he informed me that the annual importation of opium into this country was 555,000 lbs., and that the average of imports for the last five years was 272,000 lbs. This, like other countries, is not exempt from the use of drugs. This country is by no means exempt from the use of opium and its derivatives.

Then take the evidence, which surely is material upon this ethical point, of Sir William Roberts, a member of the Opium Commission, a most eminent medical man, who said that laudanum is a household remedy, not only in India, but in England. India is malarious from end to end, and the consumption of opium bears a close relation to the ravages of malaria or freedom from them. In Bombay, Bengal, the Punjab, and the North-West Provinces, 70 per cent. of the whole of the deaths are due to malaria, and in the other provinces the figure is only slightly less. I remember that when hon. Members here were always girding at the plague in India, and saying that the Government ought to stop it, the mortality from the plague was absolutely trifling compared with the mortality from fevers in India. I believe that India knows that opium is a specific for malaria, and I dare say my hon. Friend would say that that is the case with regard to China. Sir Wm. Roberts also said opium is regarded as "a general panacea for health troubles—fever, malaria, and so on." There is a consensus of opinion that it is a valuable mitigator of and prophylactic against Indian diseases, and cannot be replaced by any known remedy. I submit that it is perfectly clear that this subject must not be approached from the ethical platform from which hon. Members opposite approach it. They must really mitigate their transports in this respect if they are going to deal effectually and fairly with the problem. China in 1885, when the arrangements made under the treaty of 1858 were under consideration, was practically master of the situation. As soon as China made representations that she wished to be exempt from the importation of Indian opium the Governments of Great Britain and of India immediately met her half way, and an arrangement was made very much to the financial detriment of British India, which arrangement is now proceeding, and in a very short time will produce the extinction of this traffic. There is no case under existing circumstances, when everything that hon. Gentlemen wish is being done, for accelerating the process to the great detriment of those who are at present engaged in a lawful trade.

I do not think that it would be right to take up time in giving the House any more of the results of the most careful and informing inquiries of the Opium Commission. It is enough to say that they blow into the air the whole case of the hon. Member for the Radcliffe Division (Mr. Theodore Taylor), at any rate. This perhaps will be a matter of some little surprise to hon. Members who take for granted, as if they came down from Heaven, those Resolutions which are kindly prepared and posted to them. The insurance societies in India ask for no extra premium from opium eaters. Nor I believe do they in China. Mr. Monro, an Indian Civil servant, who retired in order to take up the work of a missionary, said that he had never found the use of opium an obstacle to missionary work. Surely the case as to the utter and universal degradation of everybody who uses this drug is grossly overdrawn. A great deal of the case must be allowed, but it is intensely weakened instead of strengthened by the appalling exaggeration of which it is habitually the subject. Let me come to Lord Morley, of whose statesmanlike gifts I am a great admirer. He it was who dealt with the question on that night in 1906 when, in an absoluetly empty House, not one-tenth of the number now here being then present, the Resolution was passed which had rather momentous results. Lord Morley said, as I said just now in another connection, that India controlled and limited the production of the drug, and that in that sense the connection in respect of opium between India and China was all in favour of the case which hon. Gentlemen opposite want to destroy, because the Indian traffic was subject to the most rigorous limitation; whereas if it was abandoned, and if the cheaper deleterious class of opium grown in China was used, the floodgates would be opened, and any amount subject to no control would be available for the people of China. He said that the arrangements which existed between India and China even before the Resolution was passed, were the next best to absolute restriction. Would anybody have thought that that was the case from what has been said by hon. Members opposite?

Lord Morley also said that the financial argument was very potent. I should think it is. The Indian people are people whom it is almost impossible to tax more than they are taxed at present. They are not taxed much, but they are very poor and cannot afford to pay more. Lord Morley, although he really allowed all the salient facts of the case, was not prepared to act upon the conclusions to which he ought to have come from the premisses which he allowed. But he threw over the doctors handsomely, they having stated that there was a most beneficial medicinal use of opium. He said that he would lay no great stress on the opinion of the doctors; he would take the evidence of nations. I do not know how that is done. It would take a longer time than the Marconi Committee. He asked what was the good of comparing opium and alcohol. On the contrary, it is an exceedingly apt comparison, except that probably the abuse of alcohol in this country is far greater than the abuse of opium in China. He said that he would not stop this traffic at once; the financial effects would be too serious. Let me remind hon. Gentlemen who are backing this Resolution, who, if they do not belong to Free Churches, are being supported by them, that Lord Ripon, who would be the Viceroy of their choice, was strongly opposed to this proposed course. He said that it would be most unjust to put a sudden end to the Opium Traffic in India. Another eminent Nonconformist, Lord Wolverhampton, who dealt with the matter in this House, said that what the prohibitionists wished to impose on India was impossible, even if desirable, and that the evidence was overwhelming that it was no more desirable than possible. He pointed out that opium was grown in the native States, and that their right to grow what they pleased could not be interfered with, except under a threat, and possibly by the actual levying of war. He said that to do what was desired would lead not only to a great loss of revenue, but to the addition of 10,000 men to the Indian Army.

What is the date of that quotation?

I was quoting from the Life of Lord Wolverhampton by his daughter, in which she quotes her father, I have no doubt, with filial piety and correctness.

I wished to know the date when the statement was made by Lord Wolverhampton.

I am sorry I have not got that. If the traffic is so wicked that it has to be put an end to now, that it cannot wait until 1917, when it will die a natural death, why is not England going to pay? The hon. Member for the Radcliffe Division has written a pamphlet on the subject, but he will not consider anything about payment. He says, "Abolish the Opium Traffic at once; cease the export to China, and supply cotton instead." When the question of Indian Import Duties and Countervailing Excise was to the front, did the hon. Member take a different line from the other Lancashire Members? I expect not. When you come to touch the pocket it has a wonderful effect upon one's attitude in regard to these matters. I must confess that I am amazed that, out of the fullness of their ethical abundance, hon. Gentlemen can propose to take the substance out of the mouth of the poor Indian coolie, instead of proposing to pay for what is so great a luxury, namely, the indulgence of one's finer feelings. Lord Morley went on to say that in this kind of action lurks a very great danger. He said that it made him wonder whether a Parliamentary democracy could govern wisely and beneficially, unless it was most careful, so vast and complex a dependency, "that they must be careful not to allow their righteous sentiment—if righteous it were"—I rather agree with Lord Morley in this—"to do wrong to Indians. We had no right to place burdens which, if they had representation, their interests, habits, and customs would predispose them not to accept. If China wanted freedom the thing was done." China and her people did say that they wanted freedom, and the thing was done; and an arrangement was made, which is proceeding, and which will lead to the extinction of this traffic. That Resolution was passed in an empty House, to the satisfaction of hon. Gentlemen opposite, which led to the present position of affairs. We have had various authorities quoted to-night upon China. One was the present President of China, Yuan-Shih-Kai. I suppose hon. Members opposite will allow that Dr. Arthur Smith is one of the greatest living authorities on China. I suppose it was with his consent, or, no doubt it would speedily have been repudiated, that what I will give is representative of the sense of his opinion:—

"The present movement in China"—

that is for total abolition—

"can hardly be moral, because if so there would be endeavours made to mitigate the other equally crying evils in China. Many sober Chinese are ashamed of this vice and wish to see their country free from it."

I agree. The writer goes on:—

"But one is constrained to point out that jealousy of the foreign right to import and sell the foreign product does more than anything else to maintain the opium agitation and to stimulate perseverance with the suppressive measures. Few seriously acquainted with the subject are confident that the denunciation of the Agreement of 1911 and the immediate stoppage of the foreign trade would accelerate the eradication of the evil. Rather they fear that the elimination of the foreign product would result in a decline of interest in the general policy of suppression and only lead to a prolonged use of the native article."

From such sources of information as I have, and from the actual course of events, I dare say the abolitionists are earnest in the matter, but there are provinces in the South which are practically independent of Pekin, and even if Pekin is anxious to suppress the traffic, I think the Southern provinces are not, and that at any rate the results are not such as we have a right to expect under this agreement. Dr. Arthur Smith sent a signed article to a leading journal in China in which he asked the pertinent question, "Is China able to suppress opium?" and expressing a doubt as to whether she could do so. I will give some reports by missionaries taken from a local newspaper which devotes much space to the discussion of the question. Fifty or sixty replies were received by this newspaper as to the cultivation, trade, and smoking of opium in their neighbourhood.

"In Yingchaufu this year a tremendous sowing is going on."

[HON. MEMBERS: "Date."] This must be either in December, 1912, or January, 1913.

"In Ninghai: Quite five times more opium was planted than in earlier years, and this year the gentry reaped a fine harvest. … The head of the City Anti-opium Bureau smokes, so does his wife and daughter; the picture cannot be painted black enough.

In Haaikingfu: Opium was sown, grown and harvested, and shops everywhere opened for its sale, and it flourishes unhindered.

In Liangchaufu: Opium growing has largely increased from about 40 to 70 per cent.

In Anshunfu: Everywhere the people are sowing opium and are laughing at the proclamation prohibiting the planting of the poppy.

There are other provinces similarly which I will not refer to."

What paper is that from?

I am quoting from an article in the "Times" of 28th January, 1913. I shall be very happy to hand it over to the hon. Member. The hon. Member for Radcliffe in his little pamphlet refers, with the utmost complacency, to the whipping, imprisoning, and slicing to death of persons not more guilty of any offence than Driver Knox was. I wish to speak with the utmost respect of Driver Knox, before whom Parliaments tremble and magistrates bow their heads.

Driver Knox was guilty of nothing.

These people were not either; so we are agreed. And they are treating them in this barbarous manner! It is said that the Southern provinces are in earnest, and that opium is being suppressed all round, but that is absolutely impossible of belief by anybody who cares to look into the matter and into the records—such as there are—upon the subject. Just a word or two on the very important question of the stocks in Shanghai. Replying to a question, the Under-Secretary of State felt extremely comfortable about the losses to the merchants, who, in pursuance of a legitimate trade, had exported to treaty ports £10,000,000 worth of opium. I do not know that there is any need to doubt the total value, for the price per chest at the auction in Calcutta could be verified. The injustice of depriving these merchants of their sale would be equally great, whether it was £4,000,000 or £10,000,000. In this connection it must be remembered that British merchants bought this opium at an enormous price and sent it to China on the faith of a pledge by the British Government that during the years the Agreement was expiring, or the trade was expiring, there should be free, unhampered sale for a certain limited amount of opium. There is really no case whatever for denying them justice—out of the pockets of hon. Members for Lancashire and others who will not wait. The Under-Secretary said, in his answer to me:

"Oh they must take their loss because they indulged in a speculative trade."

I should be very sorry to say who are the best judges as to whether it is a speculative trade or an investment; but I will say this: it will be a bad day when it is to be regarded as a speculation to trust the good faith of the British Government.

Is the hon. Member quoting an answer I gave?

No, I am quoting the Under-Secretary of State for Foreign Affairs.

Is that a quotation?

Yes. The Under-Secretary said that the merchants must have known that the trade was a highly speculative one. I say that that indicates that the Government are in an unpleasant position in respect to this. These men have exported their opium on the faith of an existing Agreement between the two countries, and are to be defrauded. I have in my hands a letter signed by a great many opium merchants in India, who say—and I thoroughly agree with them—

"The suggestions that the difficulties of the opium merchants are of their own creation, and were not the result of any violation of treaty obligations on the part of China cannot be allowed to pass unchallenged."

I should think not. Referring to the efforts of the reformers, these gentlemen say:—

"They are defeated by the widespread desire to smoke by the numberless merchants who wish to trade in opium, legitimately or illegitimately, by the agriculturists who make profit out of the growing of it, by innumerable smugglers who go between the growers and the consumers. The truth is that the reformers are trying to oust the foreign product which can easily be controlled, while they cannot extinguish the native trade because of the demand for the drug."

The merchants regard the reply of the Under-Secretary to me in October with well founded dissatisfaction. Take the case of Chekiang. They say that in the early part of last year the Chinese authorities did not even pretend that opium cultivation was stopped in that province, and they say solemn treaties can be violated with impunity provided only that you show that your house is not in order. That refers to the plea made that the Chinese Government should be excused on the ground that there was a state of anarchy and confusion in China on account of the establishment of the Republic, if it is a republic. They say:—

"We have to point out that we were prepared to accept the risks incidental to the business, including that of the closing of the provinces in which it could be proved that indigenous cultivation had been totally stopped. What we did not bargain for was the attitude of the British Government. Trade flourishes only when those engaged in it have some assurance that equality of rights and opportunities will be secured to them. It was the positive conviction that the British Government was capable of enforcing the terms of the agreement with China that led opium merchants to continue to trade."

I will not trouble the House with any more quotations. The Motion urges that the British Government will redeem its pledges, and prohibit the importation of stocks of opium. I say if the British Government do not compensate the merchants they will be behaving worse than the proprietors of any bucket shop in the country, and will have reason to be ashamed of themselves, and I hope we shall hear something more satisfactory than the answers I got when I put a question on this subject. I have said as much as I wish to say upon the ethics of the case, but I submit that the statement that the Chinese Government is engaged in suppressing the trade of its own citizens is open to the utmost suspicion, and that it is not proved, though I allow it is alleged, to the advantage of the Chinese Government. I say that it is not becoming in any Government or in any person, to say to one of the parties to an agreement, "We will believe you, and therefore we will carry out our engagements to the detriment of our own nationals and subjects." Such a course will bring the British Government into the utmost disgrace in India, and for these reasons. Great as is my sympathy, and anxious as I am to prevent the use of opium, willing as I am to see the traffic brought to an end, I say it would be a self-righteous and not a righteous proceeding, and it would be a fraudulent thing to lightly accept the assurances of China and, acting upon it, to hurriedly accelerate the termination of an agreement which has yet one or two years to run, during which time proper arrangements can be made, and the British Government, which has taken special power to inquire from time to time what is going on in China, will be able to find out whether the suppression in China goes on pari passu with the reduction rigorously exacted of the annual exports from India to China.

I rise to support the Amendment, or most of the Amendment, that has been moved. There is one sentence in it which I should like to see modified. In discussing this question I approach it from the point of view of the man who deprecates the practice of opium smoking, who believes that great evil is involved in the practice; but I also approach it from the point of view of a man who does not wish, while eradicating one evil, to commit a gross and serious injustice. The real question before the House, as it seems to me, as raised in the issue between the Resolution and the Amendment, is this: Both the Mover of the Resolution and the Mover of the Amendment are at one in this proposition, that they want to bring to an end the traffic in opium, out of which the Government of India is to-day making enormous profits. We all agree in that. We do not like to see any portion of the British Empire living upon a trade which in itself may do great harm. But the difference between us is this: Under the treaty which is now in existence there is necessarily and automatically a reduction year by year of 5,100 cases, until in the year 1917 the export from India of opium to China comes to an end. That is four years from now.

The Motion proposes, as I understand it—and unless it means that it means nothing—that the exports from India should be stopped here, and now either by direct instruction from the British Government to the Indian Government, or by releasing China from her obligations under the Treaty to take that quantity—a diminishing quantity of opium—down to 1917. Let us consider that position. During the last three years, as we all know, the Indian Government has made very great profits. Every Member of this House must be familiar with the fact that the Indian Government is the grower, producer, and seller of opium. It is a monopoly carried on by the Government. Out of the Bengal opium, on the prices realised last year, the Indian Government were making a net clear profit of 3,500, rupees per case, and in addition to that, taking the prices which had ruled previously at 1,500 rupees, the profit they were making before out of the 1,500 rupees that is, 3,500 rupees plus this considerable sum. With regard to the opium sold in Bombay, they made in the same way about 3,500 rupees profit. They charged a pass duty of 1,200 rupees and a permit price of 2,300. The permit price was this. In order to export opium the Indian Government demanded that the exporters should pay through them for a permit, and not only have the Indian Government sold their leave to export, but leave to export was put up to auction and sold, and the average price realised was 2,300 rupees, with the result, as we know, that the Indian Government estimated in the last two years for four million odd of revenue from opium, and they got one and a half to two and a half millions in addition to their estimate. At the present day there are in all the ports of China very large stocks of certificated opium from India, and I will ask the Under-Secretary of State for Foreign Affairs to put the House in possession of such information as our Government possesses as to the exact quantities of these stocks at the present time.

I believe that in January the figures were 27,500 cases. There is no question that on these figures the value was about £8,000,000. I observe that the right hon. Gentleman assents. I do not want to trouble with detail. The Government can give the most recent information. The whole of the money that is represented by that opium is in the pockets of the Government of India. The risk of anything that might happen to that opium is not on the shoulders of the Government of India. It is on the shoulders of the traders who, at the invitation of the Government of India, and in view of the treaty upon the basis of which all the sales have been expressly made, bought the opium, and upon the shoulders of the banks who financed the purchases. In making these remarks, I know I am authorised to say that the sympathy of the banks who are engaged in these large financial transactions—the banks are well known to Members, and I need not refer to them; the Eastern Banks—is with the traders in this matter. If what is proposed by the Resolution is done, what will be the result? Let us assume that this House passes this Resolution, and that to-morrow the Government acts upon it and says it will have nothing more to do with this treaty with China; then the £8,000,000 worth of stock lying in the treaty ports will be sacrificed for the greater part of its value, the loss will fall upon the individual trader or upon the banks concerned in order that this House may express its view upon a moral question. We have a familiar definition of philanthropy which says that A pities B, and thinks that C might do something for him. That is what the House is invited to ask the Government to do. I submit that if we take the view that the trade is to be brought to an end, we must only put our views into practice if we can, at the same time, avoid robbing individuals in that process. This trade may be meritorious, or it may not, but the fact is that it has been carried on upon the invitation of the Government of India, and with the sanction of the Government of England. It is by reason of the way the Government have failed to force upon China the performance of its obligations under the Treaty of 1911 that these immense stocks have accumulated, and that a grave financial crisis is looming in the immediate future. I suggest that the only thing the Government can do is to arrange with the Government of India, which has made these enormous profits, to negotiate with the Government of China, which the Movers of the Resolution say is anxious to bring to an end the trade in opium, for the purpose of taking off the market these vast stocks and relieving the financial and commercial strain which exists at the present time, and which, at any moment, may cause a very grave financial crisis in the East. I put that forward as a practical suggestion to the Government, and I invite the Under-Secretary for Foreign Affairs to express to the House the views of the Government as to the, practical steps which they propose to take with the view to meeting the present contingency, and to carry out the general lines of the treaty obligations of 1911, so that we may see that treaty work itself off and bring to an end by degrees, without injustice, that traffic which most of us, I believe, in this House are anxious to see brought to an end.

I am sure it will interest the House to know what are the sentiments of the constituents of the hon. Gentleman who has just sat down. I congratulate him very much upon the tone of his speech, which has been such a remarkable contrast with the tone of previous speakers who spoke in favour of the Amendment. I think it is very much to the credit of the great city of Liverpool that it prepared a petition which I presented to the House of Commons on this subject a few months ago. It would be out of order to read it, but I will give the purport of it. It says that there are numbers of dealers in opium in Liverpool and elsewhere. There are Chinese opium shops even in Liverpool. Speaking of the effect of opium, they refer to the degradation, distress, and suffering which are caused not only in the city of Liverpool, but throughout the United Kingdom, by persons who make improper use of opium, and they ask this House to follow the example of China, Australia, and the United States, and to pass legislation restricting the use of opium. So much for opium at home. I am sure the House will not expect me to spend much time in replying to the hon. Member for Nottingham (Sir J. D. Rees). His speech was entirely out of date. In order to convince the House of Commons and the British public and the whole world that the whole world was wrong in its judgment against opium he quoted the out-of-date Commission Report of 1895, which should have been an inquiry into opium smoking in China, but became an inquiry into opium eating in India. I am ready to confess that the hon. Gentleman knows all about India.

I have been there.

I have been in China.

So have I.

I will give him credit for special information about every place except China. He wishes the House to believe that opium smoking is quite a mild thing.

I did not say so.

I think I have heard him use the term, "A mild sedative." Am I correct in saying that the hon. Gentleman has endeavoured to persuade the House that it is not an important evil? Very well; has the hon. Gentleman ever heard of the finding of the International political and scientific Conference which met in Shanghai in 1909, and met again at The Hague in 1912, in which we have the testimony of the medical and scientific knowledge of the world upon this traffic as being what the legislation of Japan and other countries assumes it to be. They take it to be a very great evil justifying the most extreme measures necessary for stamping it out. I should like to give the House a specimen of the quotations which the hon. Member has given us about China. He has read a passage from the "Times" correspondent, written at the end of December and published in January. I know he would not intentionally mislead the House. Let me tell him that that is a garbled quotation published originally by the China Central Press, and sent by the "Times" correspondent, and now I make use of it to show how public opinion has been misled, and the hon. Gentleman himself is being misled upon this question of the evidence of what China is doing to suppress the opium traffic. I will read what it said:—

"Many of the gentry have several years' opium stored up for future gain, and several have converted money into opium to make more money. Many (most) of the Tze Chi Chi Chou (Self-Government Society) leaders smoke and sell opium. The head of the City Anti-Opium Bureau does so. So does his wife and daughter! The picture can not be painted black enough."

Now I will read the part that followed which he omitted.

"At present we have an energetic magistrate, and the city is in a turmoil. Dens are closed, gentry imprisoned, head of Anti-Opium Bureau has fled, his daughter and wife in prison, and the officials are scouring the country to hinder the planting of opium. All this is to do away with opium. Good success to him. Secret trading in opium is heavily fined and severely punished."

I could make many quotations from the same letter that appeared in the "Times" in January last, professing to represent the state of things in China. I am sorry it has been quoted, because it obliges me to say that is one of the many extracts unfavourable to China that were taken and garbled by the correspondent of the "Times," and that misled the "Times" leader writer to write an article based on that letter. The hon. Member has quoted Dr. Arthur Smith. He was also quoted in the "Times" about that time as being hostile and unfavourable to opium suppression. He has written a letter which was published, not entirely, but partly, in the "Times" in March, showing that he is certainly not to be quoted in the sense that he was quoted. What is the real difference between the Motion and the Amendment? It is to be found in the first clause of the Motion of which the hon. Member does not dispute the correctness, because he does not put in a contra to it, namely, the declaration for the fourth time (because this House will not hesitate to make it again), that this traffic is morally indefensible. He proposes to omit that. The question at issue is this: Is this traffic right or wrong? If right, there is no need to end it, but, if wrong, the sooner it is ended the better. If right, it is curious that this House should have been so misled as to have made this declaration three times before. The hon. Member said that the Resolution of seven years ago, passed not in a crowded House but in a House much smaller than it is now or has ever been to-night, but as many of us here know it was much larger—

I was here.

And so was I. We had Lord Morley and the Prime Minister on the Front Bench. Since 1906 and 1908 when this House passed this declaration unanimously that this traffic is morally indefensible and called upon the Government to put an end to it as speedily as possible, nothing has occurred to make forcing opium on China more defensible but much has happened to make it less so. If it be such an innocuous practice, why have so many countries in the world legislated against it? Why have the central Government and nearly all the provincial Governments of China made such prolonged efforts and employed such drastic means to stamp out opium smoking? If opium smoking be a harmless indulgence, how is it that all the best foreign friends of China of all classes and creeds desire to see her free from it, and, above all, how is it that among the Chinese themselves there is not a single native paper, not a single party, and not a single public man that is not bitterly opposed to it? Why should the first elected National Assembly which met before the Revolution, on the 4th October, 1910, have taken up as its first business the pressing upon its own Government still more drastic action against its own people to put down this practice? Why does the Chinese electoral law class the opium smoker along with the bankrupt, the lunatic, and the felon, as disqualified from voting, and why is it that to-day in China no man may hold any public office of any kind who is known to be an opium smoker? Surely the hon. Member might at last fall into line with the rest of the world and admit that opium smoking is a very bad thing.