We on this side suffer under two disappointments in regard to the Budget Statement of the right hon. Gentleman the Chancellor of the Exchequer. One is that he has done nothing to carry out the pledge of the Government with regard to assisted education; and the other is that he has neglected to do anything to reform the Death Duties by equalising the burdens on personalty and realty. We are glad to believe, from what the Chancellor of the Exchequer has since said, that he is absolutely pledged to providing for free schools next Session; and it is probable, from the under estimate he has made of the revenue for the year and the way he has provided for certain items of expenditure which will not recur, that he will have a surplus which will enable him to carry out his pledge. The right hon. Gentleman is also understood to have practically pledged himself to turn his attention to the reform of the Death Duties, combined with a reform of the Income Tax. If he does this without fear and favour, as a strong Chancellor of the Exchequer ought to do, he will have warm supporters on the Opposition side of the House. I am by no means sure, however, that that proposal, combined, as we hope it will be combined, with assisted education, will endear itself to the hearts of country Gentlemen opposite, if they have to pay for the reform with an increased duty on realty. Then some of us—though we did not expect much— thought that the right hon. Gentleman would have done something in a small way in the form of restitution to the Sinking Fund, which he had so shamelessly plundered. The right hon. Gentleman has boasted of the reductions of Debt he has made, hut I should like to point out that the power to reduce the Debt has arisen to a very large extent from casual and unexpected surpluses and windfalls; and while paying off Debt the right hon. Gentleman has been borrowing money for coaling stations, for Imperial defence, for naval extension and other matters; and it really makes no practical difference whether the money is taken out of the balances or is raised by loan. The Budget has been praised as a great Budget, a popular Budget, and one that vies with the famous Budget of old. I admit that the Budget is intended to be a popular one, but I deny that it is a great Budget. From a fiscal point of view it aims at too much, and it does not attempt to do anything thoroughly. It does not show any financial reform or fiscal improvements, such as has marked the Budgets to which it has been compared. It is not the kind of Budget the right hon. Gentleman the Member for Mid Lothian would have proposed if he had had the opportunity. The Chancellor of the Exchequer, to my mind, has frittered away a great opportunity for the sake of a passing popularity. He has attempted to do too many things, and the result is that he has done them all badly. By the surplus of Revenue over Expenditure and the imposition of taxation the right hon. Gentleman had a surplus of £4,750,000—a surplus which has been only twice approached and only once exceeded during the last 30 or 40 years. I do not object in principle to the increase in the Beer and Spirit Duties. The Spirit Duty has not been raised for the past 30 years; and it is a financial axiom of this country that while as to harmless articles of general consumption you ought to get as large a revenue as you can spread over the largest area of consumption, while as far as the Spirit Duties are concerned, the principle has always been acted on to get the largest Revenue you can from the smallest area of consumption; and that you are only to by stayed by the fear of causing a reduction in consumption, so as to prejudicially affect the Revenue, by a fear of causing smuggling or greatly encouraging adulteration. It is doubtful, however, whether it is wise in a year of peace and surplus to increase the taxes on beer and spirits; because those taxes and the Income Tax are the great sources from which we can obtain an increase of Revenue when war or other serious emergency arises. It is curious to note that the policy of the Government is the exact reverse of their attitude in 1885. They now propose to increase the Beer and Spirit Duties and to decrease the Tea Duty; but, in 1885, when the Liberal Government, under stress of war expenditure, proposed to increase the Beer and Spirit Duties, they opposed the scheme, and as a counter proposal suggested that the duty upon tea should be increased. Well, the Chancellor of the Exchequer has a surplus of £4,750,000. I will not detain the House by discussing what I may call the minor proposals of the Budget as to barracks, volunteers, postage, and so on, which may practically reduce the surplus to a little over £4,000,000. I do not desire in my remarks to attempt an alternative Budget. But I think the Money at his disposal might have been better dealt with fiscally if he had included a smaller number of articles and had given them thorough relief. Everyone in this House, I think, is in favour of a reduction of the duties on tea and on currants and of the House Duty; and we hail with satisfaction the further step the Chancellor of the Exchequer has taken to introduce, in reference to the last duty, the principle of graduated taxation. But I think it would have been better to have entirely abolished the Currant Duty, so as to have saved the cost of collection and prevented the great disturbance to trade which is always involved in the collection of the Customs Duty, both of which will now be out of all proportion to the revenue received. It would have been better also to have reduced the Tea Duty by one-half instead of by the 2d. now proposed. It is a fiscal axiom that the larger the reduction the greater is the proportionate recovery of the revenue. The Chancellor of the Exchequer has adopted a half-hearted measure in regard to the Tea Duty, and it is to be feared that the reduction he has made will go, not to the consumer, but to the middleman. The right hon. Gentleman the other night congratulated himself on the fact that while he had too largely relieved direct taxation during his former term of office he had on this occasion purged his sin by giving a large relief to indirect taxation. But has he made the accounts at all equal? It is admitted that as regards the Income Tax and direct taxation generally there has been a reduction of some £3,000,000 on balance. The reduction made in indirect taxation this year, together with the former reduction of the Tobacco Duty, which he said would not affect the consumer, amounts to about £2,250,000.

I never said anything of the kind.

The right hon. Gentleman in reducing the tax on tobacco said it was purely a fiscal measure and would not affect the price, but was merely a question of water.

The water affects the consumer as much as the price.

In his Supplementary Budget this year the right hon. Gentleman added £1,300,000 to indirect taxation; and thus we find that while he has reduced direct taxation by £3,000,000 a year, he has reduced indirect taxation by less than £1,000,000 a year. The Chancellor of the Exchequer, when he was '? talking shop "among his friends in the City the other day, intimated that there would be a further reduction of the Income Tax later on. I do, in advance, enter a protest against any further reduction of direct taxation unaccompanied by reductions in indirect taxation. One last point. I think the principle which has been adopted, and greatly extended this year, of allocating certain portions of certain Imperial taxes to local purposes is very objectionable, and I do not think the ratepayers are justified in calling on us to pay the very large sum which the Chancellor of the Exchequer proposes to hand over to them. The deficiency still existing' amounted practically to the Horse Duty which was proposed and abandoned. Why the Chancellor of the Exchequer did not proceed with his Horse Duty when he came a cropper over his Van and Wheel Tax I never could understand, because I do not think there was any objection to that tax such as was legitimately taken to the other. That tax was dropped, however, and £540,000 was needed to make up the deficiency. The Chancellor of the Exchequer now pro-poses to hand over to the Local Authorities not £540,000, but no less than £860,000, besides a further sum of £169,000 for compensation for the slaughter of animals suffering from pleuro-punumonia. I object to this payment on the ground that until we have a thorough reform of our local and Imperial finances in respect of the incidence of taxation on realty and personalty, we ought not as taxpayers to be called on to vote larger sums for what is practically the relief of realty, which already, during the last two or three years has received enormous relief from its local burdens. I object also to this principle of mixing up Imperial and local finance by voting certain proportions of our Imperial taxes for local purposes. The object of the Chancellor of the Exchequer in 1887–8–9 was entirely to cut adrift local from Imperial finances. And for that purpose he handed over nearly all the Licence Duties, he caused personalty to pay something to the local rate, by giving half the Probate Duty. Now, he is carrying this principle still further, and in an objectionable way, by allocating the 6d. Spirit Duty and the 3d. Beer Duty for a special local purpose; and the result will be that instead of the local revenues being fixed they will fluctuate, and it is probable also that instead of leading to thrift the proposal will lead to extravagance. As far as we are concerned as taxpayers, it will make it very difficult for the Chancellor of the Exchequer to deal with these Spirit Duties or with these Probate Duties with a free hand. If he reforms the Probate Duty, as we hope he will, it will probably be by combining the Legacy and Probate Duty in one; and under these circumstances the Local Authorities will probably obtain very much more than they are entitled to. If we are to carry on the system of giving further aids to local funds, I think, for Imperial purposes, it would be much better to hand over the whole proceeds of a particular tax instead of only a very small proportion of each. The House Tax might very well be handed over in lieu of these small proportions, and it would enable the Imperial and local accounts to be kept separately and simply. It seems to me that the Chancellor of the Exchequer has neglected a very great opportunity of carrying out real financial reforms, and that he has endeavoured to carry out a popular Budget instead of carrying out a great Budget. He looked to the elections, and not to fiscal and financial considerations.

Though no one has more admiration than myself for the Chancellor of the Exchequer's abilities, I must this night raise my voice in opposition to the chorus of praise with which this year's Budget has been received by hon. Member on this side of the House. I can assure the right hon. Gentleman that I do so with very great timidity; and before I decided to take this step the idea often occurred to me that it was my own intelligence that was in fault, and not the skill of the giant of finance, with whom I am audacious enough to cross swords on this occasion. Certainly, my first impression was one of admiration. I was carried away at the outset by the glamour, the ingenuity, and the mastery of detail shown in the speech of the right hon. Gentleman, whose eloquence for the moment cast a spell over my intellectual faculties; but when I began to reflect quietly and dispassionately, it seemed to me that, after all, the Chancellor of the Exchequer has frittered away a magnificent surplus upon a number of small reforms from which no one can get any sensible relief. I have fought against the feeling as a warm supporter of the right hon. Gentleman and of the Government as long as I can, and it is only with the utmost reluctance that I venture at length to offer any criticism on the proposal of the Chancellor of the Exchequer. Indeed. I would be heartily glad to be convinced that I am in error and in ignorance. My objections to the Budget fall under three heads. It aims at too much; it does too little, and it is grossly inconsiderate, if not unjust, to the claims of two important sections of the community—the payers of Income Tax and the licensed victuallers. The Budget is one of small things—of two-pences and twopence half-pennies—and at the end of the year no one will be a bit the richer for it, while many people will be distinctly the poorer. What are its leading features? What first strikes the eye with regard to it? There are the revision of the Tea Duty, the imposition of a fresh duty on spirits in face of an enormous surplus, and a multitude of peddling tips to taxpayers. My right hon. Friend reminds me of a man who, having inherited a fair estate, wake,3 up some morning to find it gone, though he cannot lay his hand on any one great extravagance, all having disappeared in a multitude of petty excesses. At the outset I am met by this difficulty, that I must either suggest some alternative scheme, and thus run the risk of exposing myself to the cheap ridicule of posing as an embryo Chancellor of the Exchequer, or else I must offer such criticism as I have to make without indicating any course which might, with advantage, have been pursued. As the latter step would deprive my criticism of half its force I prefer to risk the cheap ridicule. In the first place, I will touch on that portion of the Budget scheme which deals with local finance and the imposition of 6d. per gallon on spirits. I will not, however, discuss the wisdom or policy of Imperial Grants in aid of local finance, since that is a large question on which financial experts hold varying opinions. Personally, I view those grants in aid, if not with actual hostility, at all events with jealoussuspicion. Myattitude, indeed, may be described as one of malevolent neutrality; but I would like to ask my right hon. Friend why, even supposing that a grant is desirable, so large a grant should be given, why it should come out of the pockets of one particular class—the publicans—and why it is desirable to raise at the present time the whole thorny licensing question? I think the right hon. Gentleman will find it difficult to justify the imposition of a new tax at the present time. He has the largest surplus any Chancellor of the Exchequer has had for many years, and he has consequently plenty of material for what he proposes to do without making another inroad upon the pocket of the already menaced and harassed publicans. I am well aware that many hon. Gentlemen opposite regard the word "publican" as synonymous with "sinner," and consider that his pocket is to be bled as much as possible; but the methods of Dr. Sangrado are no longer approved by the medical faculty, and I would rather have been a Jew in the days of King John than I would be a publican at the present time. The calculations as to the Budget surplus are largely based upon a belief in the continuance of the recent abnormal increase in drinking. The right hon. Gentleman the Chancellor of the Exchequer has better means than I can have of forming an opinion on that point; but I would suggest that even the Treasury officials are not always infallible. The tendency of Budgets in recent years has been to show that the revenue from drinking has been, if not waning, at least stationary. The population has grown, but the revenue from the Excise has not increased with it, and I would like to ask whether the Chancellor of the Exchequer is fully convinced that there is no risk of the country returning to its previous more sober habits? What will become of the right hon. Gentleman's surplus if the rush to the wine bottle and the spirit decanter and the beer barrel, of which he has spoken almost with triumph, should cease? All that, however, I only wish to sound as a note of warning; and I pass to the consideration of the uncalled-for tax of 6d. on spirits. The distillers and brewers can protect themselves, but the retail dealer has no protection. It is true that if unscrupulous he can water or deteriorate his spirits, but if he be honest the tax must come out of the publican's own pocket. I am told that there are 64 glasses in a gallon of spirits; and although I have no special knowledge on the subject, I would ask my right hon. Friend the Chancellor of the Exchequer whether he is equal to the financial feat of dividing 6d. by 64? Rum, which is the sheet anchor of the right hon. Gentleman's finance, is sold at most of the public houses at 2½d. a glass, and as in the case of other spirits I am informed that there are of these 64 glasses in a gallon, which would make the receipt of one gallon 13s. 4d., while the cost of the ram being 3s., and the duty 7s. 6d., the profit left on the serving of 64 customers is just 2s. 10d., from which small sum the right hon. Gentleman proposes to take 6d. I put it to my right hon. Friend, does he think that this is fair? I do not see any method in which the landlord can distribute the burden among his customers unless he resorts to the base and unscrupulous method of adulteration. I am told that the trade would greatly have preferred to have had even 2s. put on spirits to this arrangement.

I will do that if they wish it.

I cannot promise my right hon. Friend that they will petition in favour of that suggestion; but I have been told they would have preferred it. No doubt my right hon. Friend comforts himself by the thought that, after all, he is benefiting the trade, and that in him they are entertaining an angel unawares; but, on the other hand, that does not appear to me to be a reason why spirits should be made to compensate beer, for, whereas 95 per cent. of the public houses are owned by the brewers, and one-half of the goods sold is beer, the result will be that, under the right hon. Gentleman's proposal, three-fourths of the compensation will come out of spirits; so that the bulk of the compensation will go into the pockets of the rich brewers, and the poor dispossessed publican will go out of his holding without a shilling in his pocket, unless care be taken by the right hon. Gentleman the President of the Local Government Board that he shall receive some compensation for disturbance. On this subject I would refer my right hon. Friend to a vigorous article which appeared in the Economist of last Saturday. I have no doubt the right hon. Gentleman will think I am wry ungrateful, and that he bases his chief claim to our affectionate regard on the reduction he proposes in the Tea Duty. I would remind the right hon. Gentleman that "Blessed is he that expects nothing." He has reduced the Tea Duty by 2d. per lb., but I am afraid that although the right hon. Gentleman expressed great concern for the the poor consumer, and virtuously repudiated the middleman, the same original sin lurks in this proposal as in the case of the Spirit Duty. The purchaser of half or a quarter of a pound of tea may derive some good from the reduction; but it is a fleeting and microscopic reduction, inasmuch as the purchaser of a whole chest would only receive 3s. 4d., whereas those in whose interest the reduction is supposed to be made -the poorer classes—who buy their tea by the ounce or half ounce, cannot receive anything unless my right hon. Friend can show some way in which 2d. can be divided by 16. I must here say that I view the proposed remission of the Tea Duty with great concern, because, in the first place, I think that no Chancellor of the Exchequer will ever have the courage to re-impose that duty; and when revenue is sought for in vain from that source the Income Tax collector will once more be called in to make up the amount that may be needed. In the second place, I regard the remission with concern because of the effect it is likely to have on tea planting in India. On this subject I can speak with some knowledge, owing to my connection with that country, and I say that the remission will do no good to the tea planters of India, who are prosecuting an industry in which millions of British capital are invested. It will be no compensation to them if that industry is jeopardised to be told that India will profit by the removal of the duty on silver plate, which I admit is called for by public opinion in India; but I warn my right hon. Friend that it is more than probable that the remission of the Tea Duty will seriously cripple one of the greatest industries of India by enabling the cheap and worthless teas of China to compete with Indian tea in this market in a manner it has hitherto been unable to do. I now come to the proposed reduction of the Inhabited House Duty, of which I most heartily approve. It is said that my right hon. Friend has introduced the principle of graduated taxation, and, for my part, I am not in the least afraid of that principle. On the contrary, I should like to see it extended on behalf of the class who wear the "rusty black coat;" and that brings me to a suggestion which I make with great deference to the authority of my right hon. Friend. It is based on a regard for those whose interests he has specially at heart. I mean those earning incomes of from £150 to £400 a year. What, I ask, do they gain under the scheme of the Chancellor of the Exchequer? Let us assume that a man with an income of £400 a year is a married man with a family, and consumes a chest of tea in the course of a year; that he also consumes 1½ cwts. of currants, which probably would be in excess of his requirements. Let us also assume that his rent is £50 a year, and that he takes one glass of whisky a night, with an extra allowance of 19 glasses for festive occasions. The result would be that he would find he had saved 13s. 4d. on his tea and 7s. 6d. on his currants, £1 0s. 10d. on his House Duty, making a total of £2 1s. 8d. If from that we deduct 3s. for the whisky he has consumed to the extent of six gallons his total gain would have been £1 18s. 8d. My right hon. Friend started with a surplus of £3,500,000. He has proposed to allocate £300,000 of this for barracks, £100,000 for the Volunteers, £210,000 on currants, £80,000 on postage, and £300,000 on the police, making together a total of £990,000, leaving him with a balance of £2,510,000. Even after the most careful consideration of the right hon. Gentleman's apologetic utterances at the Mansion House as indicative of an unquiet conscience which induced him to think that some relief should be given to the Income Tax payer, especially to the class whose incomes are between £150 and £400, it will be seen that people of that class pay something like £4,700,000 a year, or more than one-third of the whole £12,200,000. [The CHANCELLOR of the EXCHEQUER dissented.] I am afraid I have misunderstood the right hon. Gentleman, and my argument is, therefore, somewhat thrown out. My proposal would be that he should reduce the tax on such incomes by 2d. or 3d., which would still have made possible the reduction on the Inhabited House Duty and left over the sum of £320,000 to be applied either in repealing the Plate Duty or in subsidising the County Councils. I have to apologise to the House for the length at which I have spoken; but I have felt so deeply the immense claims of the classes for whom I have pleaded for consideration, and against the injustice that is being done to one of them by my right hon. Friend's proposals, that I have ventured to trespass somewhat longer than I ought to have done on the indulgence of the House.

I think that the hon. Member, has accurately described the Budget as one which aims at too much and does too little. The Chancellor of the Exchequer frequently took credit for the large sums which had been liquidated during his period; but, like one of the characters in Moliere, the right hon. Gentleman paid off debt malgré lui. He has deliberately reduced the annual fund for the payment of debt by £3,000,000, and if there have been surpluses they are surpluses which he has not expected or provided for, but which have depended upon windfalls, upon the profits from silver, or the large increase in the consumption of rum and other intoxicants, and were no part of the provision for the payment of debt. But that is not all. The Chancellor of the Exchequer has left out of sight, and kept out of the sight of the country, the fact that he has been making debt at the same time. The Chancellor of the Exchequer has practically created a debt of £5,000,000, which remains to be liquidated in the future, and instead of having made immense reductions of the National Debt, the fact is that he has destroyed the permanence and regularity of the liquidation of the Debt—a very different state of things to that which he has presented before us. With reference to the relief of taxation, I protest against the notion of treating the increase of the Spirit Duty as anything else than Imperial taxation, for there never was a more audacious fallacy than to say that the tax upon spirits is a tax levied upon the publican, and is to be disposed of for the benefit of the publican. A more unfounded suggestion was never made. We might just as well say that the Tea Duty is a tax levied upon the grocer, and that the produce should be disposed of for the benefit of the grocer, and similarly with the Tobacco Duty and the tobacconist. The suggestion is fundamentally false in finance. The duty upon spirits is a duty under which the publican has, no more right to expect special advantage than under any other tax; it is, absolutely indistinguishable from any other tax. In some form or other it will be ultimately paid by the consumer, and therefore it should be regarded, like any other tax, as a consumer's tax. If the tax is agreed to by this House it must be regarded like every other tax, as belonging to the general public; it must be devoted to the general convenience of the country, and not to any particular class of the community or of property. My hon. Friend behind me, speaking of the reduction of the Tea Duty, Said this proposal of the Budget was a half-hearted measure. That, I think, was a rather too complimentary term to apply to it, for it is, in my opinion, a third-hearted measure, and a very inferior one at that. I confess that I am glad that the Chancellor of the Exchequer has dealt with the Tea Duty, but I wish the right hon. Gentleman had taken off half the duty instead of one-third. I refuse to distinguish between the Spirit Duty, which he has appropriated to local purposes, and duties which are levied for other purposes under this Bill. They are all Imperial Duties, and must be regarded as such. Therefore, I hold that the right hon. Gentleman had, in point of fact, a sum of £4,000,000 to deal with, and I say that he would have produced a much much more simple Budget, as well as one of sounder finance, and one giving much greater relief, if he had taken off half of the Tea Duty and the whole of the Inhabited House Duty. I know that these are not the views of the Chancellor of the Exchequer; he likes to keep the skeleton of a tax even when he is obliged to take the flesh off. I prefer the corpse of the tax, and to see it well buried, as we have buried many a tax in former days. In the time of Sir Robert Peel and of my right hon. Friend the Member for Mid Lothian there have been taxes on hundreds of commodities taken off, and I confess that I prefer the financial doctrines and financial practice of Sir Robert Peel and of my right hon. Friend —those great masters of former Budgets— to the doctrines laid down by the Chancellor of the Exchequer to-day. I have a few figures which I should like to lay before the House dealing with the subject of the Inhabited House Duty. I quite approve of the proposal to deal with that duty; and I agree with the hon. Member who last spoke that it would have been better if a clean sweep had been made of it, because it falls unequally and with undue severity on the lower part of the scale, while its exemptions in favour of the higher classes are extremely unjust. The man who just comes within the ranks of those who wear black coats pays a much larger proportion than the more wealthy man, and the reason is this, that he pays a larger share of his annual income for rent. I am happy to think that in later times men have been more willing to do this for the benefit of their families than they were in former days. A man with an income of £600 a year will pay as much as £100 a year for his house. If you take a sixpence off his Income Tax you relieve him to the extent of six hundred pence; but if you altogether abolish the House Duty yon relieve him of a charge of nine hundred pence: and he belongs to the class who most want relief. But take the case of a man with an income of £10,000 a year, or from £10,000 to £20,000. I venture to say that the houses occupied by such men are seldom assessed at more than £500 a year, and I know many men of great fortune whose houses are assessed at from £300 to £500, and who therefore contribute infinitely less to the Inhabited House Duty than they do to the Income Tax.

But suppose such a man has two or three houses?

The gallant Admiral may have three; indeed, I do not know how many flags he flies. I am taking the case of men of more moderate means, of men who have only one house. The figures on this subject are interesting. The Inhabited House Duty yields £2,000,000, and of that sum £1,250,000 a year is paid by houses of £100 a year and under. Now, if the Chancellor of the Exchequer had done nothing else, he might have struck off that portion of the tax at least. When we get to higher rates the yield is much smaller. Houses and shops of £100 to £150 a year yield only £200,000; houses of £300 to £500 yield £95,000: those from £500 to £1,000 a year yield £58,000; and when we reach houses of £1,000 a year and upwards the duty yields only £60,000 a year. It is quite clear that this is a tax of which the whole weight falls practically upon men of moderate means, and by sweeping it away, therefore, the Chancellor of the Exchequer would have removed a burden which it is plain does not press equally on rich and poor. I shall not oppose the Second Beading of this Bill; but I confess that these seem to me to be very fair criticisms of general principles. I do not complain of the right hon. Gentleman for having dealt with the Tea Duty and the Inhabited House Tax; on the contrary, I approve of his having done so; all I wish is that he had reduced the Tea Duty by one-half, and taken away the whole of the Inhabited House Duty, as he might have done with the funds at his disposal. An hon. Gentleman opposite has compared the publican to the Jew of the Middle Ages, and said that he was in a still worse position. I never heard, however, that the Government of King John introduced a Bill to give compensation to the Jew for the extraction of his teeth. Therefore, I think the hon. Gentleman was a little hasty in taking a view of the publican that used not to be taken of the Jew, and he is a little ungrateful to the Government for what they are doing. Now, Sir, I come to the question of the hypothecation of particular duties to local purposes. If you are going to carry out the principle of hypothecating the duties for local purposes it is obvious that you will place upon yourselves great restraint and difficulty with regard to the increase or the reduction of those duties. If the localities are entitled to a certain proportion of the duties they may say it will be very unfair to them if the duties are reduced. On the other hand, it may be extremely unfair to the State if a large portion of the taxes are carried off for local purposes. By their proposed appropriation of the Spirit' Duties the Government are placing themselves in a position of want of freedom and of restraint in dealing with the great pillars, of Imperial finance. I do consider that this is a most important principle, and one which we ought to consider most carefully before we allow ourselves to be committed to it. My hon. Friend remarked that the Chancellor of the Exchequer was frequently taking credit to himself for giving relief to indirect taxation as compared with his dealings with direct taxation, I am bound to say that when he went to the City of London the right hon. Gentleman principally enlarged upon the remissions he had made in direct taxation, and gloried in what he had done for the Income Tax. To other audiences, however, the right hon. Gentleman played on the other string of his fiddle, and enlarged upon what he had done in the way of remissions of indirect taxation. For my own part, I do not object to the right hon. Gentleman's running the horse which he thinks is most likely to win. But the comparison made by my hon. Friend behind mo is, in my opinion, a fair one; and, if so, it cannot be denied that even taking the Budget of this year, which is supposed to redress the balance, that balance stands in favour of the remission of direct taxation. At all events, the relief, taking all things into consideration, that the right hon. Gentleman has given to direct taxation is more than double the relief which has been given to indirect taxation. I confess that I am not myself a convert to the new doctrine of appropriating the taxes in respect of the people who pay them. I have said already that I do not regard the Spirit Duty as being the special property of the publicans; and when the Chancellor of the Exchequer says that because his increase of income is due to the greater consumption of spirits, therefore relief should be given to those who contribute to this source of income, I reply that that is a new financial doctrine, and one which may lead to great difficulties hereafter. My opinion is that the Chancellor of the Exchequer should regard his surplus as an Imperial fund, and that he should distribute it for the benefit of the community to the best of his judgment. The new standard which he sets up is perfectly unsound. It is a novel doctrine of finance. I claim to be a Conservative on financial doctrines, and I say it is a new doctrine to deal with the origin of surpluses on speculations of this kind. I have ventured to make these remarks upon the general framework of the Budget. I am extremely glad that the Chancellor of the Exchequer has had so large a surplus, and that it has been mainly derived from the increased prosperity of the country; for, after all, although it comes directly from the increased consumption of intoxicating liquors, that increased consumption arises from in- creased wages, which, of course, results from increased employment. I hope the right hon. Gentleman will not think I have behaved at all unfairly in the spirit in which I have addressed myself to the consideration of his Budget. There are some things in it which I should have desired to see otherwise, and in the disposal of this large surplus I wish the right hon. Gentleman had dealt with it upon one large topic, rather than upon several smaller heads. That is no reason, however, why we should oppose the Second Reading of the Bill, although some of the clauses will require careful consideration when we come to consider, in Committee, the duties upon particular articles.

I take a view somewhat different from that adopted by my hon. Friend the Member for Central Hull. It seems to me that this Budget affords immense relief to the smaller paying part of the community, which I have always held pays too large a proportion of the Imperial taxation. I regard the Budget, therefore, as a step in the right direction. My hon. Friend has described it as a Budget of petty items. That may be quite true from the view of opulent Members opposite who have derived great fortunes from breweries, and to whom these reductions are unimportant; but to the great mass of the people the reductions are of the utmost importance, for they will greatly benefit the hard-working classes. The right hon. Gentleman the Member for Derby spoke of a man with £500 or £600 a year as just coming within the ranks of those who wear a black coat. That shows that he knows very little of the habits of the less well-to-do classes of the community. Men who have £G00 a year do not pay £100 a year as rent.

I was only arguing to show that a reduction of the Inhabited House Duty would give greater relief than a redaction of the Income tax.

And my point is, that by reducing the Tea Duty, the Currant Duty, and the Inhabited House Duty, the less well-to-do classes are mostly benefited. No man can eat more than a certain number of currants, and it is the poor who will reap the advantage of the reduced duty on currants, which form an attractive article of food. The man with a small income spends a larger proportion of that income on currants than the man with a large income. Therefore, I say the Budget is a step in the direction of reducing the inequalities of the incidence of taxation. I do not agree with the right hon. Member when he said the reduction of the Tea Duty should have been 3d. instead of 2d and for this reason, that 2d. is divisible by four, and we want to get the poorer classes to buy their tea by the quarter of a pound. They are not likely to buy it by the half pound, and 3d is not divisible into four. I think the Chancellor of the Exchequer has shown his wisdom in this matter. It is true many of the poorer people buy tea in small quantities, but we want to induce them to buy it in larger quantities, in which case they will get much better tea. Reference has been made to the Income Tax. All of us would be glad to see the tax reduced, and I hope when the Chancellor of the Exchequer considers the matter, as he may do in another year, he will consider whether there should not be a different rate of Income Tax for accumulated savings as compared with the savings of the current labour of the day. Personally, I think the Budget will give general satisfaction to most of the poorer classes. It is said it is an electioneering Budget. I do not know whether it is or not, but I am sure of this, that if our Friends opposite were in office they would certainly introduce electioneering Budgets. I notice that hon. Members opposite always criticise what is done by their opponents, but when in office never take the steps they have advocated. This Budget tends to equalise taxation, and I hail it, therefore, with great satisfaction. I trust that another year the Chancellor of the Exchequer will be able to go further in this direction.

Before dealing with the second part of the Bill, to which I wish particularly to address myself, I should like to refer to the surplus which the Chancellor of the Exchequer finds at his disposal. As I understand him, he attributes the great increase in the consumption of spirits to increased prosperity. As far as the consumption of rum is concerned, the information which reaches me is that the increased consumption is to be attributed chiefly if not entirely to the influenza epidemic. Of course the Chancellor of the Exchequer has better means than I have of knowing in what part of the year the chief rise was, but it is curious that while in 1848 duty was paid on 2,430,583 gallons of brandy, in 1849— the cholera year—duty was paid on 4,479,549 gallons of brandy. It may not be uninteresting to the Chancellor of the Exchequer to consider whether the recent influenza epidemic had any relation to his surplus. It is not, however, in the sense of criticism that I have risen. The hon. Member for Hull (Mr. King) sneered somewhat at the remission of the Plate Duty, and at the reduction of the Tea Duty. I quite agree with the wish expressed by the right hon. Gentleman the Member for Derby, that the reduction of the Tea Duty had been larger, but I fail to comprehend the argument of the hon. Member for Hull, that the reduction of the Tea Duty can be a mischief to the Indian tea trade. I suppose there is some reason in his mind which he did not communicate to the House, but unless there is some reserve on the part of the Chancellor of the Exchequer, of which I am ignorant, I understand that the reduction affects equally the tea coming from India and the tea coming from China. I do not quite understand, therefore, how it can be to the injury of the tea merchants or tea cultivators and those they employ, that the duty should be reduced. It is, however, specially with regard to the remission of the Plate Duty, that I rise to say a word, and, apart from the communication made to me, it would have been impossible for me to remain silent when the hon. Member for Hull stated that the public opinion expressed in India for the remission of this Plate Duty had been chiefly bi-metallic opinion. I was present at one meeting, attended by delegates from all parts of India, which did not express the slightest opinion in favour of bimetallism, which did not discuss it, which I don't think cared much about it, but which certainly made a very strong appeal to the English Government to remove the duty on silver plate, and I put a Motion upon the Paper not merely at the request of those very persons, but also on behalf of a large English Association which is in no sense whatever connected with bi-metallism, but which has for years been agitating for the repeal of the Silver Plate Duty. I do not know that I ought to say anything upon the subject of hall-marking. The Chancellor of the Exchequer will, I suppose, say that another Bill will be introduced to deal specially with the matter of hallmarking. Unless that is so, my thanks-to him for repealing the Plate Duty will have to be expressed with some caution. The whole of the silver plate made in India is made of rupee silver, which is of a less standard than the ordinary English silver. I understand from the-Chancellor of the Exchequer that that is a point he has considered, and that he-intends to make a legislative proposition to the House enabling the Indian silver to be hall-marked with a standard of its-own. If so, that standard would have to be the standard of rupee silver, less the necessary reduction in the standard which arises from reducing it in the working-up into the very fine native work which we too seldom see in England. I do not know whether I have any right to infuse my own feeling into the matter, brought home as it was when the Chancellor of the Exchequer laid violent hands on some silver with which I had been temporarily entrusted. There is another point in connection with the hall-marking, which, unless the-Chancellor of the Exchequer considers, he will not earn the gratitude of the Indian native population to the extent he otherwise might. The Indian silver work is very fine work, and very easily damaged unless the hall-marking is very carefully applied. I am sure the trade represented by the hon. and gallant Member opposite (Mr. Howard Vincent) will not do anything to injure their Indian competitors. Still, I should like it to be impossible that anything of the kind can happen. Considering the very great and influential pressure which has been put on the Chancellor of the Exchequer, I wonder the right hon. Gentleman really did repeal the duty. His action only shows that some of the old views of the Chancellor of the Exchequer still exist in his mind and make him do justice in a matter of this kind. The Budget has been attacked as a twopenny halfpenny Budget. I do not know whether that is a proper conclusion, but I am bound to say that a few twopenny halfpennies are sometimes of serious importance to those who get the benefit of remissions. The remission of the Plate Duty, even if it be a twopenny halfpenny duty, the hon. Member for Hull urges, is a remission which enables a possible development of an artisan trade which is not practised in this country, and which is of such a character that it cannot in any way compete with the trade of this country. While one is not astonished to hear from those Benches some of the old Protectionist doctrines occasionally trotted out, as they are likely to be presently by the hon. and gallant Gentleman the Member for Sheffield, I avow I was rather shocked to hear the hon. Member for Hull urge that injury will be done to the Indian tea trade by the reduction of the Tea Duty by 2d.

While expressing general approval of the Budget, I must express some surprise at the treatment both the barley growers and the brewers have received at the hands of my right hon. Friend. He did them justice at first, by withdrawing the extra 3d. a barrel, which, last year, he placed on beer, but 20 minutes afterwards he re-imposed it. Last year I placed on the Paper an Amendment to the Customs and Inland Revenue Bill, limiting the duty to one year, and I only withdrew it on the understanding that my right hon. Friend would take the 3d. a barrel off this year if there was a surplus and if there was a general remission of taxation. Last year the right hon. Gentleman said the duty was to make up a deficiency of £300,000, and this year he asks for £386,000. To my mind the effect of this increased Beer Duty will certainly be in the direction of brewers watering their beer, less barley being-used. What the tenant farmers, certainly in the corn growing counties, wished for originally was a total repeal of the malt tax. They never bargained for, and never asked for, a transfer of the tax from malt to beer. The repeal of the Malt Tax was considered a very important question in the prosperous days of agriculture, but surely it is still more important in these days of agricultural depression. In 1880, when the question of an increased Beer Tax was brought forward by the Government of the right hon. Gentleman the Member for Mid Lothian, the present President of the Board of Trade (Sir M. Hicks Beach), in speaking from the opposite Bench, said—

"In my opinion the price of barley will continue to fall and this will be the last nail in the coffin of the representatives of the most depressed industry in the country, namely, the corn growing industry."

And on that occasion no less than 25 Members of the present Government voted against the proposal. I must confess I am astonished that the present Government should not have thought of the barley growers in this matter, and have relieved them of this tax. I renew my protest. and express the hope that the Chancellor of the Exchequer will consider this matter whenever he has another surplus.

I rise to protest against the Bill on a question of principle. Whether I should move the rejection of the Bill is a, matter which has somewhat puzzled me. I had thought of moving—

"That this House regards as unjust a proposal to impose fresh unequal taxation on alcohol in the form in which it is chiefly consumed in England, Ireland, and Scotland respectively, with the object of raising a fund to he equally divided amongst the three kingdoms."

That embodies my objection to the Bill. The right hon. Gentleman has refused to give us any information as to the taxation which is at present levied per gallon of proof spirit of alcohol in the form of beer and in the form of spirits. In Scotland the duty on alcohol is levied at the rate of 10s. per gallon proof spirit, while in England the duty on the proof spirit in beer only amounts to 1s. 6d. or is. 8d. per gallon. I do not ask the right hon. Gentleman to remedy what has passed, but here the Chancellor of the Exchequer is taking an entirely new departure on very questionable lines when he gives aids to Local Taxation, not directly from the Exchequer, but in the form of a share in a general tax. Last year the right hon. Gentleman told us that he was obliged to divide the Probate Duty to suit the exigencies of the case. I do not approve of any system which involves unfairness, but having started the system with regard to the Probate Duty he now proposes to amend it in regard to this duty on alcohol. As a matter of fact, there is a larger annual consumption of alcohol in England per head of the population than in Scotland or Ireland. In England the annual consumption per head of the population is 6¾ gallons of proof spirit; in Scotland it is 4½, and in Ireland only-3, and yet in England the amount of duty paid per head on this alcohol is l1s. 8d., in Ireland 13s. 10d., and in Scotland 18s. 10d. The right hon. Gentleman now proposes to increase the duty on whisky by 6d. per gallon of proof spirit, and on beer by 3d. per barrel of 36 gallons. There cannot be less on an average in beer than 10 per cent. of proof Spirit, and that will give you 1d. per gallon of proof spirit on the beer as against the 6d. on the whisky. The right hon. Gentleman proposed to bring the proceeds altogether and divide the aggregate equally amongst the three countries. Was there ever a more monstrous suggestion? I have no sympathy with the publican, and do not mind how much you increase the duty as long as you do not produce smuggling, but I say this is a grossly unfair proposal, and if I do not divide against it, it is only because it is mixed up with other proposals. I think that, under the circumstances, perhaps, the best course to pursue would be to single out this tax and to move an instruction on going into Committee stating that the new duty on alcoholic drink should be equalised on per gallon of proof spirit, whether the proof spirit be in the shape of spirits or beer. I hope hon. Gentlemen who take an interest in the question will come down to the House early to-morrow so as to make as good a fight on the subject as it is in our power to make.

I do not think there is much in the chief objection to the Budget. That objection is that the Chancellor of the Exchequer has tried to remove too many grievances and to conciliate too many interests. It is much better sometimes for a Chancellor of the Exchequer to do a little for a great many interests than to use his surplus in relieving one particular interest. This discussion has wandered over a very wide range of subjects. I should like to say a word about the removal of the duty on silver plate, referred to by the hon. Member for Northampton (Mr. Bradlaugh). I am entirely in sympathy with the hon. Member in his remarks on the desirability of doing away with that duty. No doubt the imposition of the duty was looked upon in India as a real grievance. I am somewhat sceptical myself as to the results that will follow its repeal. The principal silver manufactures of India are very delicate works of art, and not useful objects likely to meet any large or general consumption. The great proportion of them are casksts for enclosing addresses for presentation to hon. Members who go out there to court the favour of the natives, and then there are card cases and so forth. It is extremely improbable that work of this kind will ever be largely consumed in this country, so that I do not think the clients of my hon. Friend the Member for Sheffield (Mr. Howard Vincent) need be much alarmed about the repeal of the duty. Something was said about the reduction of the Tea Duty being likely to prejudice Indian planters, and to benefit rather the tea of China. It must be obvious to the hon. Member for Northampton (Mr. Bradlaugh), who said he could not understand the complaint, that the reduction of the duty will be much larger proportionately on the coarser teas of China than on the finer teas of India. On the other hand, of course, the cheaper teas are still placed at a disadvantage by a duty which is not levied ad valorem, but is a fixed sum for each pound of whatever quality, so-that this argument cuts both ways. I wish to take an objection to the way in which the Chancellor of the Exchequer has dealt with the surplus he has obtained from the beer and spirit drinkers in this country. The principle laid down by the right hon. Gentleman was that those who produced the surplus were entitled to the remission of taxation.

I am afraid I must have used some incautious words. I said it should not be given back to them, but that alcohol should pay for tea. I did not intend to lay down a principle.

I think I am correct in saying that the right hon. Gentleman said that what had been given to him by indirect taxation should go to the relief of indirect taxation. Well, I object to a particular application of this doctrine. He owes a great deal of his surplus to the increased consumption of alcoholic liquors, and he says he will make the tippler pay for the tea-drinker. I look on that as a very immoral doctrine for the Chancellor of the Exchequer to use in effecting a transfer of taxation. What right has the right hon. Gentleman, in his position as Chancellor of the Exchequer, to brand a large body of his fellow countrymen as tipplers? He had previously told us that all classes of society had consumed large quantities of strong drink, and so ho had a surplus to offer us. But, why then did he go on to outrage the sensibilities of these consumers by denouncing them as tipplers? I know he may be said to have used the phrase humourously, and that he did not mean seriously to denounce everybody who takes a glass of beer or wine as a "tippler," but is there not at the same time some practical unfairness, some injury to these men, that you take their money and use it for the benefit of the tea drinkers? What satisfaction has the right hon. Gentleman obtained by this? The hon. Member for Leicester (Mr. Picton) is not pleased. The hon. Member has one ruling idea, of his Parliamentary life, and that is to compel other people to pay his taxes for him. He is not satisfied at all with the concession of the Chancellor of the Exchequer. He never will be satisfied until the whole of the Tea Duty is abolished. Now, speaking seriously, I think it is a matter for the House to consider whether it is a just doctrine that the Chancellor of the Exchequer should annually raise money whenever he needs it by increasing the duty on beer and spirits. It seems to me that beer is quite as wholesome an article for anybody to drink as tea, and no doubt it always will be drunk. The present Chancellor of the Exchequer poses, as Chancellors of the Exchequer are apt to pose, as the champion of morality, while all the time they are jingling the money of the publican in their pocket. If the Chancellor of the Exchequer thinks that a heavy tax ought to be imposed on beer and spirits to check alcoholic consumption, then he is bound to show that the increased consumption during the last year has had a distinctly demoralising effect. 1s he able to do that? Can he show us there has been any increase in pauperism or in crime commensurate with the great increase in the consumption of alcoholic liquors during the last 12 months? If he cannot do this then, what moral ground is there for the doctrine he adopts, and the distinction he makes between beer drinkers and tea drinkers? I certainly agree with the right hon. Gentleman the Member for Derby (Sir W. Harcourt) that the hon. Member for Hull made a mistake in speaking against this new duty on beer and spirits as an impost upon publicans. No doubt, ultimately, the money will be paid by the consumer in one form or other—either he will have to pay a higher price or he will get an inferior article. It is a change which affects not the publican class alone—it affects the great body of the people of England, and the working classes particularly. We have seen the result of an increased duty on one class of alcoholic liquor imposed by the Chancellor of the Exchequer. Everybody knows that since the new duty was put upon champagne we have had to pay a price much higher than the proportionate increase in the duty, and this is the inevitable tendency of taxation of this kind. Therefore, we ought to remember, when we think how cheap and easy a thing it is to increase the duty on beer and spirits, that we are actually levying a considerable tax in the country. I have heard it said that this is an electioneering Budget. Well, if the Chancellor of the Exchequer framed it with that intention, I think he has made a great mistake. A Budget of this kind will not increase the number of friends of the Conservative Government in the country, and I am strongly convinced myself that the line the right hon. Gentleman has taken of levying increased duty on beer and spirits will alienate a great many of the best friends of the Government. It certainly will not propitiate our fanatical friends opposite, who are invariably Radicals first and teetotallers afterwards.

I do not propose to enter into the general question, but I desire to say a few words upon a point with which the Chancellor of the Exchequer dealt in one of the most eloquent passages In his Budget speech. I mean the growing expenditure of the Army and Navy. The right hon. Gentleman said that no apology was needed for this expenditure, considering the purposes to which it was applied, and most hon. Members, from this passage in the speech, would have thought that the right hon. Gentleman was intending to meet this expenditure by taxation within the year. But I will show that a very great proportion of the extra expenditure on these Services is paid out of borrowed money. Roughly speaking, it may be said that during the last three years the Chancellor of the Exchequer has increased the Army and Navy expenditure by the sum of £2,000.000 a year; and further, during the same period he has entered into obligations for extraordinary expenditure to the amount of £18,000,000, the whole of which will he raised by borrowing or by postponing payment to future years. I have found it extremely difficult to ascertain exactly the amount of the expenditure upon the Army and Navy which is to be met within the current year. There are no means of obtaining this information from the accounts put before the House, without an immense amount of trouble, and I very much doubt if the Chancellor of the Exchequer, or the -Secretary to the Treasury, could say exactly the amount to be expended in the current year on the two Services. But by dint of questions to the heads of the two Departments, upon different items, and at different times, I am in a position now to say what the expenditure in the present financial year will be, and I think the House will be surprised to hear the total to be expended on these two Services. The amount is £38,163,000, or £7,000,000 more than was ever spent before in any year in time of peace. Of this amount, £31,497,000 appear on the Estimates, and may be called the ordinary or normal expenditure on the Services, and the remainder is for the following purposes:—£5,236,000 for new ships and their armaments, under the Naval Defence Act of last year; £180,000 is devoted to the building of ships for the Australian Squadron; £400,000 for fortifications under the Imperial Defence Act; £450,000 for the armament of these fortifications; £300,000 for new barracks, out of the Budget and surplus; and £100,000 for the equipment of Volunteers from the same source. Thus we have £6,666,000 for extraordinary expenditure upon the two Services, and the House will be surprised to hear the various shifts and devices by which this money is provided. £1,400,000 falls upon the Consolidated Fund for the year, under the Naval Defence Act of last year; then there is an item of £128,000, which, under a new and dangerous process, is paid out of unexpended balances of last year on Army account; then comes £64,000 under the Imperial Defence Act, charged by way of annuities in the Estimates in regard to the Australian Squadron; then £400,000 is provided out of the surplus, and deducting these amounts from the £5,666,000 there remains a sum of £4,774,000 unprovided for in the Budget of the year, and which is borrowed or the payment of which is postponed over future years. The payment of £3,800,000 is spread over seven years, the payment not beginning until 1892, £116,000 is spread over 12 years, and £712,000 will be paid out of the dividends from the Suez Canal shares after 1894. These are the various operations, methods, shifts, and devices by which provision for expenditure within the year is avoided. Roughly speaking, it may be said that of the extraordinary expenditure upon the Services of, say, £6,500,000, we pay £2,000,000 within the current year, and spread £4,700,000 over future years. I need hardly remind the House that, under the Sinking Fund established by the late Lord Iddesleigh and my right hon. Friend the Member for South Edinburgh, the amount which ought to be paid for repayment of debt within the year would be £5,000,000, and I presume we shall repay debt by that amount; but then, on the other hand, we borrow to the extent of £4,674,000, so that practically the operation of what the Chancellor of the Exchequer is doing' this year in respect to extra expenditure is really to suspend the Sinking Fund for the year for the amount which ought to go in reduction of debt, and which I suppose will, in a certain sense, be paid, will, on the other hand, be withdrawn by borrowing or suspending payment. That does not seem to me to be wise finance, and seems to me to present a dangerous precedent for the future. I need hardly point out that the only real check within the Government itself is the Chancellor of the Exchequer and the Treasury. The two great spending Departments are always desirous of increasing expenditure, and this tendency is kept in check by the wish of the Chancellor of the Exchequer to avoid increase of taxation, and to obtain credit for the reduction of taxation, but if it is laid down as a precedent for the future that by spreading payments of money expended over future years the Chancellor of the Exchequer can obtain credit for his finance, while still borrowing or incurring debt, then it seems to me a dangerous liberty is given to Admiralty and War Office Expenditure. For this I must hold the present Chancellor of the Exchequer largely responsible. It was my fortune to serve under the Chancellor of the Exchequer when he was at the Admiralty in the years 1871–73. and I should like to call attention to a comparison between the expenditure of the two great spending Departments, the Admiralty and War Office, then, and the expenditure of the present year. In 1871 the Army and Navy expenditure was £22,735,000, of which the Navy absorbed £9,770,000. For the present year the normal expenditure is £31,500,000, and, including extraordinary expenditure, £38,360,000, so that the increase in normal expenditure has been 44 percent. in the interval, or, including the extraordinary expenditure, the in crease has been 70 per cent. Looking back at the year I have mentioned, the present Chancellor of the Exchequer, then First Lord of the Admiralty, was controlled by two great economists at the Treasury, Mr. Lowe, the present Lord Sherbrooke, and my right hon. Friend the Member for Mid Lothian. But for that control, I have no doubt, those responsible for the Navy, as well as those responsible for the Army, would have launched out into all kinds of expenditure, and the Chancellor of the Exechequer was then quite ready to be responsible for the Naval Service and the security of the country at an extremely modest expenditure as compared with the present. For my part. I see no justification for this enormous increase of naval and military expenditure. I believe it is not required, and that if the Treasury had kept a firm hand of recent years over these Departments the expenditure would not have been found necessary. But if the Chancellor of the Exchequer joins the ranks of the professional alarmists, and if, at the same time, he can claim credit for reducing taxation by postponing payment. all checks will be got rid of, and there will be no limit to the demands that may be made in the future. For one part of the Budget I have nothing but praise: I refer to the reduction on Indian and Colonial postage. The high rate of postage has been in the past a perfect scandal, and it was quite time a portion of the surplus should be devoted to its reduction. I must congratulate the hon. Member for Canterbury (Mr. Henniker Heaton) on the success of his efforts in this direction, and I must say I was somewhat surprised at the tone of the Postmaster General's remarks at Bradford in reference to the hon. Member in which he spoke of the hon. Member as the "Fly on the Wheel," whose buzzing had become offensive. I should hardly have expected such language towards a supporter of the Government, and I think the right hon. Gentleman would have been wiser to have acknowledged the assistance of the hon Member for Canterbury in his efforts to induce the Treasury to give way on this point. Many other Post Office reforms are urgently needed. For my part, I think that for the past four or five years the present Treasury has starved the post Office, and many important reforms have been postponed in order that the Chancellor of the Exchequer might realise the surplus Post Office Revenue. The Secretary to the Treasury seems to dissent to that, but he will not deny that there has been a growing surplus derived from this source in the past three years.

Gross Revenue.

In the net surplus in the last three years. Within four years it has increased £760,000, or at the rate of £190,000 a year. In 1860, after deducting the cost of the Packet Service, there was a surplus Revenue of £440,000; in 1870 of £1,173,000; in 1880 of £2,225,000; in 1890 of £3,500,000. Of course there have been some ups and downs in the intervals, but, looking broadly over the period, that is the rate of progress, and at the present time there is a larger surplus than before. On the Post Office Vote I shall attempt to show the effect of the Treasury screw on necessary and urgent Post Office reforms, but I should hardly be justified in doing that now, for the moment I congratulate the Government on giving up £80,000 for Indian and Colonial postage, and I think they might well have devoted more of their surplus to Post Office reforms. I hope the hon. Member for Canterbury will not be discouraged by the somewhat contemptuous terms in which he was referred to by the Postmaster General from urging still further those reforms in the Post Office which are urgently required. There is no Department of the Public Service where expenditure is more valuable than in the Post Office; it gives immediate facilities to the public, and in the long run is almost certain to result in an increased revenue. All the money expended in this direction yields a good return, and the Post Office stands in quite a different category to all other Services. In reference to the Indian and Colonial postage, I should like to ask the Chancellor of the Exchequer whether he has any information to give us as to the disposition of the Indian and Colonial Governments—are they prepared to assist in the new arrangements; will they contribute towards bringing the reduction into effect very shortly?

I will not follow the right hon. Gentleman into his calculations and details; but I may say I cannot attach any material importance to the charges he makes against the Chancellor of the Exchequer, because we all know that the expenditure upon our defensive forces was, after full discussion, adopted by this House and universally approved by the country, which was not content to go on in an unhappy state of unpreparedness, subject to constant panics and fits of hurried expenditure, but has approved the policy that is placing our Army and Navy on a footing the magnitude of our interests requires. Passing from this, I wish to express my gratitude to the Chancellor of the Exchequer for the fulfilment of his promise in a certain direction I desire to indicate. I am one of those who considered that there was still an account remaining unsettled between the Chancellor of the Exchequer and the Local Authorities when the Horse and Wheel Tax was withdrawn; but the Chancellor of the Exchequer, by his proposals in regard to the surtax on spirits and the Beer Duty, has, in a bold and novel manner, largely reinforced the local finance and done what he could to make up for the deficiency caused by the abandonment of the Van and Wheel Tax. There is one other point to which I wish to draw attention. For the first time in the history of finance a contribution in aid of local finance has been raised from indirect taxation. Hitherto all the sums that have been devoted to the purpose of aiding the burdens of the local taxpayers have been by way of subvention or contribution arising out of direct taxation. Now, for the first time, indirect taxation is applied to the purpose. That is a new departure, which gives us hope that further aid will be granted from Imperial sources to local rates. Exception has been taken to the allocation of the Beer Duty to local purposes. Now, there is no class which received more benefit from local taxation, while paying small contributions, than brewers. The abolition of the turnpikes was a great gain to the brewers, who, while the turnpikes existed, paid their fair share to the maintenance of the roads. With the disappearance of turnpikes their contributions ceased. Taking the Budget as a, whole, it appears to me to deserve to be popular in the country. Taking it as a whole, it is a Budget that gives relief to those classes who are most entitled to ask it. I believe that the reduction of the House Duty will be widely appreciated, and that the more the provisions of the Budget generally are studied the more they will be approved by the country. I therefore give it my most hearty support.

I rise to enter my protest against the unfair way in which the Chancellor of the Exchequer has levied further duties on wine, beer, and spirits. Spirits already pay six times the duty on beer, reckoned by alcoholic strength, and spirits pay half as much again as wine, reckoned in the same way. No doubt, the Chancellor of the Exche- quer will reply that the duty is levied on the various articles in a different way, and that in the case of beer it is levied not on alcoholic strength, but on specific gravity; but my contention is that there ought to he a uniform way of levying the duty on intoxicants, so that there may he a fair incidence of duty on the drink consumed in different parts of the country. Taking it per head of the population of England, Scotland, and Ireland, the duties on intoxicants are now paid by the peoples of the three countries in almost the following proportions per head:—England, 12s.; Ireland, 14s.; and Scotland, 19s. This is in consequence of the want of uniformity in the mode of assessing the duty on alcoholic drink. But the unfairness of the incidence of the duties is no greater than the unfairness with which the Chancellor of the Exchequer intends to allocate these duties for local purposes. He told us in his Budget speech that he intended to give them to the three countries in the same proportion as the Probate Duties are now given, which is 80 per cent. to England, 11 per cent. to Scotland, and 9 per cent. to Ireland. As the new duties are something like £700,000, this division will tax Ireland and Scotland for the benefit of England. The precise figures it is not easy to ascertain at present; but it is clear that Scotland and Ireland will not have returned to them for local purposes so much as they will be called upon to pay, by a sum exceeding £10,000 per annum, and such a state of things will be condemned generally by hon. Members from both of those countries. With respect to the duties on dried fruits, I think the Chancellor of the Exchequer might have swept away the whole of them. As it is, he only proposes to deal with currants. From the duties still to be imposed he will only receive £:S00,000 or £400,000, and, therefore, I think he might have abolished the lot. I hold it is self-evident that no Minister in these days would ever venture, no matter what the necessity might be to put a tax on food, and a sufficient portion of the magnificent surplus might have been applied, with benefit to the poorer classes of this country, in the complete abolition of the Dried Fruit Duties.

Perhaps I may be allowed to endeavour to answer some of the questions which have been raised in this discussion. I think that, so far as the criticism of the Budget has gone, we have no reason to complain of any of the speeches made. There seems to have been a general expression of opinion that, upon the whole, it- is a satisfactory Budget, especially so far as the constituencies are concerned. The hon. Member for the Poplar Division, however, thought that my right hon. Friend has rather missed a great opportunity, and that he would have done better to make some great alteration than various small remissions. Yet, in the course of his speech, the hon. Member avowed himself in favour of those remissions which my right hon. Friend has made. Taking the general feeling of the House with regard to the four or five small remissions, it seems to be that they are wise in themselves and beneficial to the country. A complaint has been made that since my right hon. Friend has been at the Treasury he has given greater relief to direct than to indirect taxation. That is not so. When my right hon. Friend remitted 2d. from the Income Tax it was because he felt it his duty to take it off. It was put on for a special purpose, and that purpose having been served he felt himself bound to take it off. Excluding that 2d., in regard to which I maintain my right hon. Friend had no discretion,? submit that he has granted more relief to indirect than to direct taxation. The hon. Member for the Poplar Division appears to think that the amount of money being handed over to the Local Authorities is too large. There are probably not very many Members who will agree with him in that view. The hon. Member must himself recollect the Resolutions which in the past were carried against the Government, compelling them to give additional financial relief to the Local Authorities.

The Local Authorities are being given more than was promised them in 1888.

The hon. Member says it is more than was promised by the Chancellor of the Exchequer in 1888; but that is because, upon the basis then laid down, the sums turned out to be larger than had been estimated. The hon. Member has also alleged that this pro- vision is in relief of realty. But does the hon. Member consider that all the local rates are paid by realty? If so, realty must contribute £20,000,000 a year in the form of local rates, and the reduction by £1,000,000 would not be much relief viewed from that standpoint. The hon. Member for Hull and the hon. Member for Oldham both referred to the Tea Duties, the former expressing a doubt as to whether the pocket of the consumer would be in the least benefited, and the latter doubting whether the Chancellor of the Exchequer would get many thanks for what he has done. As a matter of fact, however, I can assure the hon. Member for Oldham that evidence is accumulating every day at the Treasury that the Chancellor of the Exchequer has secured a great deal of thanks for what he has done in this direction. With regard to the point of the hon. Member for Hull as to the effect on China tea, I can assure the hon. Gentleman that there is no reason to doubt that Indian teas will be able to hold their own, notwithstanding this reduction of duty. As to the Beer Tax it has been asserted that both the public and the farmers will suffer—the former because brewers will water their beer, and the farmers because they will get less for their barley. These arguments, however, were urged last year, when the tax was originally imposed, and experience has not shown that it has led to any depreciation in the quality of the beer or to any fall in the price of barley. I am not sure that the Central Chamber of Agriculture, of which my hon. Friend is a member, has not refused to consider this question, or to endorse the opinion that the interests of barley growers will be seriously interfered with. Two hon. Gentlemen who represent different divisions of Glasgow have referred to a question of great importance, namely, as to the proportions in which these sums have been allocated to the Local Authorities of the three Kingdoms. I think I shall be able to show that this apportionment has been based on fair and just principles, and in accordance with the sources from which the total Revenue is raised, and that this apportionment is in fact slightly against England, and slightly in favour of Ireland and Scotland. Taking the Tax Revenue at £75,764,000, it is found by means of the most accurate calculation it is possible to make that £61,224,802: is paid by England, or 80·8 per cent.; £8,027,158, on10·6 per cent., by Scotland; and £6,512,040, or 8·6 per cent., by Ireland.

Will the hon. Gentleman state on what authority he gives these figures? I am not aware that they are to be found in any public document.

The figures have been obtained by the Department. and I believe that they are as accurate as it is possible for figures to be made.

Will the hon. Gentleman state the proportion which the taxation bears to the production of Excisable articles such as spirits?

Yes, presently. I may repeat that the figures have been made up with the greatest care. They may be accepted as being as accurate as it is possible for such figures to be made. In these figures the Post Office revenue is not included. Taking the surplus from the Post Office at £3,500,000, and distributing it between the three countries in the proportion of the number of letters calculated to be delivered in each country, the percentages will be found to be slightly different, namely, 81 per cent. contributed by England, I0·5 per cent. by Scotland, and 8·5 per cent. by Ireland.

Has the hon. Gentleman made allowance for articles cleared in England but consumed in Ireland?

Yes; there has been some allowance made. It is quite true that there are cross items between the two countries, and also between England and Scotland. It is true, for instance, that beer comes from Ireland to England, and also from England to Ireland, and that tobacco is sent from Ireland to England, and I am not aware of tobacco being sent from England to Ireland. Allowance is made for these facts, and the figures work out as I have said, 81 per cent for England, 10·5 per cent. for Scotland, and 8·5 per cent. for Ireland. The Chancellor of the Exchequer in making the apportionment of the Probate Duty allocated 80 per cent. to England, 11 per cent. to Scotland, and 9 per cent. to Ireland, so that England receives I per cent. less than its due, and Scotland and Ireland a half per cent. more than their due.

May I ask if allowance is made for Income Tax collected in London, but in respect of Scotch and Irish incomes, from sources such as shares in public companies?

I have already said that we have made all the allowances which we consider ought to be made in arriving at these figures, and upon being checked they will be found to be accurate. I will state to the House a few figures which will show the House how the taxation is apportioned and how it is allocated among the three Kingdoms. Out of a total of £3.704,000, £3,059,218 is paid by England, £388,594 by Scotland, and £256,188 by Ireland. The percentage of contributions, therefore, are 82·6 per cent. paid by England, 10·5 paid by Scotland, and 6·9 paid by Ireland. The distribution gives to England £2,963,200, to Scotland £407,440, and to Ireland £330,000. Therefore England receives £96,018 less than she pays, Scotland receives £18,846 more than she pays, and Ireland receives £57,000 more than she pays. I think that it will be seen that my right hon. Friend has given a distinct advantage to Scotland and Ireland as compared with England. The comparative figures showing the proportion of the Probate Duty paid by each country are these— England, 88 per cent., Scotland, 8 per cent., and Ireland 4 per cent. But according to the more recent figures there would come to hand for the last nine months an actual contribution of 90 per cent. from England, 6 5 from Scotland, and 3·5 from Ireland. The right hon. Gentleman, I believe, intends when he has got the figures into something like shape to lay them before the House in a clear form, in the event of hon. Members deeming them to be of sufficient interest for that course to be adopted. I think, therefore, that I have shown that the charge of unfairness which has been made with reference to the allocation of this local taxation is without foundation. The only injustice that has been done in the matter is that too much has been taken from England and too little returned to her.

I do not allege unfairness as regards Scotland in the dis- tribution of the Probate Duty, but in the distribution of the new Spirit and Beer Duty.

It would not be fair to single out the Spirit Duty without taking into consideration the whole case, which shows that Scotland and Ireland have been unduly favoured at the expense of England. The right hon. Member for Bradford has made some rather good-natured remarks with regard to the action of the Treasury in dealing with the Post Office; but I can say most conscientiously that since I have been at the Treasury not only have the Post Office and other Departments not been stinted in any justifiable expenditure, but every application for extension of buildings and acquisition of sites has been met by the Treasury in a most reasonable spirit. I do not mean to say that they have yielded to every application, because I am sure that the Treasury have made the Post Office and every other Department show that the money they asked for was really needed in justice to the Service. The hon. Member for Northampton has rather warned my right hon. Friend that he had almost come to the conclusion that the surplus of last year was due to the epidemic of influenza; but I am glad to be able to inform the hon. Member that although the influenza has left us the buoyancy of the revenue continues. I hope that hon. Members will now allow the Bill to be read a second time.

The hon. Member has declared that the Budget is a most popular one in the country. I ask what country he refers to? That is certainly not the case as regards Ireland, because it throws a most unfair burden upon an article of large consumption in that country. I object to the hon. Member laying mere results of calculations before the House instead of the figures upon which those calculations were based. Three years ago Mr. Giffen showed that Ireland contributes more than double what she ought to do to the Imperial Revenue. We are kept in the dark; we have no materials to go upon. A bland Minister rises at the Table whenever a financial debate occurs, and gives us some meagre fare in the shape of what he calls the results of calculations. I say with regard to the estimates of the relative proportions paid by the three countries, we have every reason to doubt them. In our view the proportion paid by Ireland is nearly double what it ought to be. The hon. Gentleman has said that. this new Spirit Tax will be in proportion to the yield from it, as in the ease of the Probate Duty. What has the Probate Duty to do with it?

You have got your share of it.

The basis of the relative contribution from the three countries is no argument for the distribution of what is derived from the tax on alcohol. There is no possible relation between the two subjects.

I think the hon. Member perhaps misunderstood what I said. I did not say that the allocation is made on the proportions of Probate Duty contributed. If the distribution were on the basis of the Probate Duty contributed, Ireland would get one-half what she is to get.

Why did the hon. Gentleman refer to the contribution of Probate Duty at all?