I have not intervened in the Debates of the House for some considerable time past, and I venture to ask the indulgence of the House while I offer some criticism and suggestions with regard to the financial proposals embodied in this Bill. I suppose that never within recent times has a Chancellor of the Exchequer been called upon to produce his Budget under sorrier circumstances than those which now prevail. He has produced his Budget in a time of deep depression, with an actual deficit, a sudden and serious aggravation of the naval situation, a steadily diminishing yield from the chief source of revenue, due to what he would call an alarming increase in the sobriety of the people. Last, but not least, he has to provide for old age pensions. These circumstances, taken together, might well try the ingenuity of the most experienced financier. With regard to old age pensions, I have always felt that the Chancellor of the Exchequer was entitled to our sympathy. The institution of this boon will always be associated with the names of a great political triumvirate. First of all, there is the right hon. Gentleman the Member for West Birmingham, who promised old age pensions; then came the Prime Minister who gave old age pensions; and then there devolves upon the Chancellor of the Exchequer the more prosaic duty of providing the money to pay for them. That is not all. The Chancellor of the Exchequer is above all things a social reformer—he is more a social reformer than a financier. His Budget speech consisted to a large extent of a series of essays on social problems, and his eloquence and deep humanity stirred to the inmost the souls of those who heard him. There has been a sudden discovery that after ten centuries of war, after ten centuries of spilling of blood and spending of our treasure, statesmanship begins at home. Those and other considerations have been in the minds of the Chancellor of the Exchequer and the Prime Minister, and I may say without any disrespect that the Budget of the Chancellor of the Exchequer shows that he has been confronted with a situation which might tax the ingenuity of the most experienced financier.

The question to which I propose to devote my consideration, with the indulgence of the House, to-day is whether, within the limits of the present fiscal policy of this country the Chancellor of the Exchequer has shown that it is possible to grapple with the ever-growing requirements of the nation. By the words chosen for the official Amendment we are not called upon this year to discuss the ethics of what is called Tariff Reform; therefore the question before the House is whether or not our present Free Trade, or so-called Free Trade, system is competent to deal with the admitted requirements of the nation. My first complaint against the Budget will be that whilst in one respect, and perhaps in two, the Chancellor of the Exchequer has made bold departures deserving of the earnest consideration of every thoughtful person, he has failed to avail himself of many available sources of revenue well within the limits of our present system, which would relieve him of much difficulty. I am afraid that like most Chancellors of the Exchequer and most Ministers of the Crown he has placed himself too unreservedly in the hands of his official advisers, and with the rod of convention in his hands has been striking at the old old rocks in the belief that they will never be exhausted. But so far as there has been a departure—I refer of course to the land proposals—they and they alone represent the only effort of the Chancellor of the Exchequer to show a new source of revenue available within the present limit of our fiscal policy. My other complaint against the Budget—and it is a strong one—is that in regard to one of its most important provisions, it is not only characterised by political spite, but that it is the carrying out of deliberate threats on the part of responsible Members of the Government to the effect that if they did not succeed by legislation in accomplishing certain objects they would endeavour to effect the same aims—I may be forgiven for saying so perhaps—in a most unconstitutional method, through the medium of the Finance Bill. I will later on endeavour to justify this proposition.

So far as the important land proposals are concerned, I am more than delighted to find myself in agreement with the principle, at any rate, of the proposals of the Government. I am glad to see the hon. Member for Preston (Mr. Cox) in his place. I listened to the criticisms of the hon. Member at whose feet I am proud to sit on most questions of political economy, and I am bound to say that when dealing with the land proposals, if the speech he then made was the strongest case that could be made against the taxation of unearned increment, then the Government stand on a stronger basis to-day than it has done in regard to many of its proposals. When one has enunciated certain copybook texts about land one has sufficiently differentiated it from everything else in the world, except air and sea, as to take it out of the category of all other sources of taxation. Although there is much in this land portion of the Bill to which, as I will indicate in a moment, I strongly object, so far as the main proposal goes, to appropriate to the use of the State a portion of that ever-accruing increment that is the result of the growth of the community, I do not think there is any real argument against it, and the chief argument in favour of it, which I venture to think the hon. Member for Preston has overlooked, is that at present it is not taxed in any sense at all. I may be told there is no reason why it should be taxed, but I cannot agree with that, inasmuch as it frequently becomes a means of bringing enormous profit into the possession of the owner, and inasmuch, as I understand the law of Income Tax, the effect is that a man may buy a piece of ground which may enormously increase in value—even to the extent of twenty, or even one hundred, fold the original cost—and he is under no legal obligation to return that as a basis of increased income, and it is looked upon, even by the Commissioners of Income Tax themselves, as an accidental accretion of capital, and not a legitimate subject of assessable income.

The point which chiefly presses on my mind is this. If the growth of the community entitles the State to say it is therefore justified in taking a portion of the increment of the land which that growth has brought about, I am a little doubtful whether one is not bound also to say that if the necessities of the community result in a decrement of the property, we are equally justified in recognising an obligation in respect of that. If the community says we require to build a fever hospital or to construct sewerage works or electric lighting works, or to lay down tram rails, and in that way depreciate the value of the property, it is a little difficult to say you should not make some allowance for that decrement when you claim to be entitled to a share of any increment. May I suggest to the Chancellor of the Exchequer, as a practical statesman, that he might sweeten his pill by giving the Commissioners some power to take decrement into consideration. There is another portion of these land proposals to which I entirely object. If we confine ourselves to unearned increment we are on safe and sound ground, to which no reasonable person would object, but when you come to undeveloped land and to ungotten minerals you are getting into such a maze of intricacies as will render the working of your proposals utterly impossible within the four corners of a Finance Bill. In re-regard to leases and leasehold enfranchisement, I used to be told as, a young Radical student that the question of the adjustment of equities between freeholder and leaseholder was a matter for State intervention in the interests of the leaseholder. If you are going to take a portion of the accrued value on the expiration of the lease you wipe out the leaseholder's position altogether, and you kill the movement of leasehold enfranchisement. What the Government really says to the freeholder is this: "You may swindle the leaseholder as much as you like, provided we stand in." As regards undeveloped land, is not the whole solution a simple one? If it can be proved that any land-owner is, against the public interest, withholding land from cultivation or occupation cannot you give power to the municipal authority to call upon him to place a value upon that land, and give it also the right to acquire it at that value, if it thinks it necessary to do so in the public interest. I will go further and suggest the Government might consider the desirability of introducing a short measure compelling the owner of unused land to declare its value, even for rating purposes, and bring it into the rating area, and also give the municipality the right to purchase it at that price. I hasten from the general land proposals, because I am under a compact not to occupy too much time as a condition of having this very advantageous opportunity of addressing the House, and I am anxious to say a word about other matters, in regard to which I venture to hope I may be able to be of some little assistance to the Government. There is one word I would wish to say on the Finance Bill, and I may just interpolate this echo of an observation by the hon. Member for Ayr as to why these land proposals have been put in the forefront of the Bill. They are not effective taxation. Nothing for all practical purposes is expected of them this year, and therefore I do appeal to the Prime Minister to see that when the time comes for allocating time for the Committee stages of this Bill he does not forget that, however much time he may allow for the land clauses, they are not effective taxation, and he will not cut down the period to be allocated to effective taxation proposals on the ground that much time has been expended on the consideration of non-effective proposals.

I come now to what I conceive to be a grave impeachment and indictment of this Budget Bill. I refer to the liquor taxes. No reasonable human being can object to a fair and equitable revision of the Licence Duty. Everybody knows that there have been anomalies, and nobody would object to their being adjusted, but what I say and say deliberately is this, that this portion of the Finance Bill is the carrying out of a deliberate intention on the part of His Majesty's Government to punish the licensed trade for the rejection of the Licensing Bill. I say a deliberate intention, and when I say it I use a definite phrase. I listened to the extraordinary speech of the Lord Advocate yesterday. I knew that he was a great authority upon land values, and I was prepared to listen with deference to his views on that subject, but I waited and waited in vain for any special reference to the licensing portion of this Bill. The right hon. Gentleman was almost silent on the subject, and I want to ask the House, especially those Members who heard his eloquent peroration—the invocation of the days when all sections of the community would blend in brotherly love together, not wishing one of them to take advantage of the other—to remember what it was that the Lord Advocate said when the Debate on the Licensing Bill was in progress, and I want to ask the Prime Minister, as I am entitled to ask him, whether what the Lord Advocate said, meets the approval of and describes the policy of His Majesty's Government. I have here a report from "The Times," which has never been contradicted, of a speech delivered by the Lord Advocate addressing a meeting in October last year:—

If that is an authoritative statement, that accounts for much which is in the Bill. But I have another report of the speech of the Lord Advocate on the same occasion, in which he said:— pretty plain hint during the progress of the Licensing Bill in this House of what the Government meant to do if this House had the iniquity to reject the measure.

I am one of those who are proud to number themselves among the most idolatrous admirers of the intellectual supremacy of the Prime Minister. I regard listening to one of his speeches as one of the greatest privileges which Membership of this House confers upon any man. I have learned to study, and, I hope, to appreciate the subtleties of dialectical language ever since the Prime Minister made me applaud him when he said that a uniform Income Tax of 1s. in the pound in time of peace was a scandal, and made me quite overlook the little word "uniform," and when he told me that he had laid the nucleus of old age pensions by setting apart a million and a half and ear-marking it for the purpose, and then I subsequently discovered that that sum had found its way into the Sinking Fund, and could not be got back without special legislation. I have become accustomed and been in the habit of listening critically and reverently to the most polished phrases of the right hon. Gentleman, and during the Debate on the Licensing Bill I waited, until at last my patience was rewarded, for some saving clause from the Prime Minister as to what would happen if the Bill were rejected. At the close of the discussion on the second reading, the Prime Minister, having to the entire satisfaction of his supporters here demolished the theory of confiscation, used these words:—

There is another reason. Why do you select alcoholic drink as distinguished from other kinds of luxurious drink? It is a dwindling industry. The day is rapidly coming when the triumphant Tariff Reformer will go on the platforms of the country and say drink has gone, and the exultant temperance reformer— the hon. Member for Appleby (Mr. Leif Jones) anticipates the observation—will point to the proud time when a magnum of ginger ale will represent the limits of legitimate hospitality and a barrel of lager beer the crowning symbol of a Bacchanalian orgie. They will be great days from the point of view of the temperance reformer, and they will be piteous times for the Chancellor of the Exchequer. I throw out to the Government the suggestion that if you tax any kind of drink because it is a luxury you should tax teetotal beverages as well as alcoholic ones, and add patriotism to the other virtues of the temperance party. I welcome the beginning of a system of Super Tax upon large incomes. I welcome the indirect commencement of a system of graduation, very remote indeed and very unsatisfactory, and I welcome the beginning of the recognition that the married citizen is entitled to some differential treatment from the unmarried. I do not quite like the matter as it stands to-day. Philoprogenitiveness may be a very desirable thing from the point of view of the Territorial Army, but if it is to be made the basis of financial relief I am not at all sure that its advantage from that point of view will not be counteracted by an alarming increase in mortality amongst the parents. In any case, some differential treatment is due to married citizens. Since 1882, although the husband has no sort of control whatever over the income from the property of the wife, it is still regarded, for Income Tax purposes, as a portion of his estate. That is an anomaly which ought to be altered, and when you come to giving some allowance to children, whether under 16 or not, you must go a bit further. You must have regard to other obligations of citizens. There are many families who have to keep grandchildren, and if yon begin the scale it is very difficult to say where the limit shall end. In your Finance Bill you make legitimacy a test, a very embarrassing sort of inquiry to impose upon Commissioners. I suggest that you should differentiate between married and unmarried citizens, and not treat their joint incomes as one and the same thing for purposes of assessment.

There is another portion of the Bill on which I should like to say a word—that is in regard to Death Duties. I know it is very difficult to work up any enthusiasm in regard to a corpse, but I am one of those who do not regard the clap-trap phrase which so much irritates the Prime Minis- ter, about driving capital out of the country as being empty and meaningless. I believe that liquid capital employed out of the country upon works involving no necessary interchange of commodities with this country, the building of harbours, docks, and railways, as a very great misfortune, and I believe it is time we looked around to see if, within the limits of our present policy, we cannot find some fresh source of taxation. That brings me to one of the main subjects I am desirous of forcing upon the attention of the Chancellor of the Exchequer. I have from time to time suggested to him sources of revenue, but he has not seen his way to accept them. Many of them I will not repeat. I will save them till the next Parliament, when I am sanguine enough to hope still to occupy this corner of the House. But there is one matter in respect of which I think the Chancellor of the Exchequer, to use a schoolboy phrase, has got very hot—the matter of stamp duty reform. I can indicate in this connection a source of revenue of anything from ten to twenty millions a year, which will involve no hardship upon anybody, and which will especially commend itself to the Chancellor of the Exchequer, because the only objection which the ingenuity of man can devise against it is that it might tend to discourage gambling.

I wish now to refer to those portions of the Bill which relate to taxes upon Stock Exchange contracts. Need I remind the Chancellor of the Exchequer that since 1891—and I hope I shall be able to make this point clear to everyone even without Stock Exchange experience—the law has been this in regard to other property. If you buy a house or land the conveyancing stamp or duty is payable on your contract. In other words, you are not allowed to escape, but that is not applied to transactions in stocks and shares, and there you have this result that where two people buy the same stock, one of them, a bonâ fide investor, pays for it, and takes it up, and the other, a professional gambler, carries it over from time to time on the Stock Exchange. Assuming that they both buy at the same price, and that both subsequently sell at the same price—say at a profit if you like—the gambler gets his profit, less only the interest paid for carrying over the stock, and the bonâ fide investor gets his profit, less the interest on his money, but in addition to that he has to pay the Government an ad valorem duty of 10s., and under the present Bill it will be £1 per cent. on the purchase money. That cannot be right. I take a concrete case. About six weeks ago I was concerned in a transaction with two friends. I had advice on a certain South African mine, and I was the means of conveying information to them. I was not the vendor, and there was no question as to the duplication of shares or any secret profit. These two friends each bought 500 shares in the South African mine at £12 per share. One of them, being a bonâ fide investor and not a gambler, paid his money and got possession of the shares. The other, not intending to take them up, said to his broker, "Carry them over." After a lapse of six weeks, they both sold their shares, and the bonâ fide investor had to pay the Government £30 for transfer stamps, but the gambler did not pay a penny. Having paid the broker interest for carrying over the shares, he sold without having taken delivery, and the investor who had got possession of his shares was out of his money for the period while he held them. I speak subject to correction when I say that all that the gambler did was this. He paid what is called a contango, that is, the rate charged by the broker for carrying over the shares, and a stamp, a matter of 6d. or a shilling on the contract, but the investor paid first of all the purchase price, and was thereby out of his money, and had, as I have pointed out, to pay the Government £30. My suggestion is that you should apply the principle of the 1891 Act, which relates to freehold property, to stocks and shares. Make the Transfer Duty payable on the contract of purchase. Why! the result will be a financial revolution, and it will get over the objection which the Stock Exchange has to the present propoals in this way: The objection that you will drive business away from the Stock Exchange in this country in bearer securities, American stocks, and Foreign Government stocks would be removed. It is said that that business will be driven to Paris and New York, but that objection would go by the board. My proposals mean that every man who pays for a registered stock will be assumed in fact as in law to be a bonâ fide investor. At present "time" bargains in stock are illegal, and come within the Gaming Laws. Therefore, you have to put into practice that which you have in theory, namely, that the purchaser of stocks and shares is engaged in bonâ fide and genuine transactions, and by the simple act of making the Transfer Duty payable on the contract of purchase you bring in these transactions without having to pass a preliminary Resolution in Committee of this House. You would simply have to put the transfer stamp on the contract of purchase, and you would then bring into the pool of the Chancellor of the Exchequer about 80 per cent. of the whole business of the Stock Exchange, which at present escapes every penny of taxation. From that point of view that is well worthy of consideration. There is no objection to it, and I challenge any Member of the House who is connected with City affairs to find that it is wrong. You may here and there find some reckless gambler who is not prepared to pay, in addition to the price of the stocks or shares, 1½d. or 2d. per £1 as an extra Transfer Duty. If the Chancellor of the Exchequer would give serious consideration to that suggestion he would find that he wants no Resolution of the Committee to enable him to carry it out. The law assumes that every sale is made to a bonâ fide purchaser, and by simply putting the Transfer Duty on the contract you would in that way bring an enormous amount of revenue into the coffers of the Exchequer.

I just want to say a word or two about matters which are not in the Finance Bill. I will not be tempted to enlarge on the proposed suspension of the Old Sinking Fund. It does not come upon this Bill. We have now a very small encroachment on the Sinking Fund, and I venture to say, as a business man, that I have never been able to understand why you want two Sinking Funds. If you have got the old you do not want the new. The new Sinking Fund was established in 1876 for reasons which we all understood, and when the circumstances were very different from those of to-day. A whole generation has had the benefit of it. My own view is that if you keep the Old Sinking Fund, the New Sinking Fund should be seriously revised in respect of the purposes for which the money is used; and if you keep the New Sinking Fund you are entitled to dispense with the Old Sinking Fund, and utilise the surpluses for current purposes. I have said that I have no desire to press upon the Chancellor of the Exchequer taxes which he has rejected. I do not appreciate myself the practical objection to taxes upon high-priced theatre tickets, to graduated receipt stamps, to a tax upon advertisements, or to a small stamp duty on share certificates; but the advisers of the Chancellor of the Exchequer think differently. They may be right, and perhaps at some other time I may be more successful; but there is one matter with respect to which I wish to say a word.

I have on previous occasions called the attention of the Chancellor of the Exchequer to the enormous gold mine waiting for him if he will call upon the banks of the United Kingdom to disgorge their unclaimed balances. When I first called attention to this, the Chancellor of the Exchequer made no new inquiries, but told the House that he was advised that the total amount represented by these unclaimed balances was between £500,000 and £600,000. In a subsequent answer, forgetting the reply which he had formerly given, the right hon. Gentleman said that such a movement as this would dislocate entirely the banking of the United Kingdom. As to that, I would only say that if this would dislocate the banking business of the United Kingdom the banking business must be in a bad way indeed. Since then something has happened. I obtained the assent of this House, by a majority of four to one, to the First Reading of a Bill to compel the banks to make returns of this unclaimed money, and I do think that, as a matter of respect to the House—I leave myself out—the Chancellor of the Exchequer might appoint a Committee or take some cognisance in his Budget arrangements of this alleged source of wealth. If the Chancellor of the Exchequer knew as much of this matter as I do, if he knew that in one private bank alone there are £2,000,000 of unclaimed securities and cash, and if he knew the fears of the bankers lest this wealth should be taken from them, he would appoint a Committee. We now have a Public Trustee. The institution per se is one I am very much in favour of. If there be in the banks of this country these unclaimed balances, I do not care if you say the amount is only £500,000 or £600,000, which does not belong to them, who is the proper custodian of that money? It is the Public Trustee, and I do ask the Chancellor of the Exchequer to make a note of the fact, that the House, by four to one, has expressed the opinion that this is a matter which deserves attention. I thank the House very much for allowing me to make these more or less discursive observations on the provisions of the Bill. I offer them in no spirit of captious or carping criticism. I hope that as time goes on to be of service in Committee in making more effective some of the provisions of the measure. My sentiment is one of genuine admiration of the spirit which permeates the Budget, and the policy of the right hon. Gentleman responsible for it. My desire is that, before it leaves Committee, it shall be so amended and improved, and so purified, if I may use the word, of all suggestion of political spite and of electoral expediency, as to place to the record of the right hon. Gentleman, if he does not actually achieve the whole of his object, that he at least introduced a measure which will go down to posterity as the foundation of the twentieth century charter of hope and happiness to the workers of these realms.

I have listened with great interest to the speech of the hon. Gentleman who has just sat down (Mr. Bottomley), and I am sure that his concluding remark, approving of the spirit which permeates the Budget—though I gathered from his speech that he very much disliked the substance of it—expresses the feeling of many on that side of the House. I believe that practically the whole of his speech was a trenchant criticism of the proposals of the Chancellor of the Exchequer, and it does not lie with us on this side of the House to reply to that. I will leave that to the Chancellor of the Exchequer. We have more than enough to do in attempting to criticise this Bill on the Second Reading. This is much more than a Budget. It is an omnium gatherum of lost causes. It contains proposals each of which is in itself amply sufficient to occupy this House for the greater part of a Session. For instance, a new proposal of great magnitude is to graduate the Income Tax. That alone is a matter which certainly deserves careful consideration in all its aspects. Then there is the question of Licences. I need not repeat the observations of the hon. Member for South Hackney (Mr. Bottomley). They amply prove that this matter of licences is not primarily one of revenue under this Bill. It is a political matter, which was originally embodied in a Bill which the Government have failed to pass, and they now include it in their Budget. Then we come to the question of land values. There we come to an absolutely new principle, a principle of enormous magnitude, involving very large issues in taxation under the Budget itself, but admittedly by the Chancellor of the Exchequer leading to very much larger issues in the future. I remember when the Chancellor of the Exchequer was introducing his Budget he used the words that this was a beginning. This is a basis of future taxation, a totally new basis, which may have an unlimited extension. It is a political question of the very first magnitude. It is rolled up into this Budget among other questions only of less magnitude than itself, and we have on a Second Reading Debate to go over all and to attempt to criticise all these political questions. It is usually considered to be sufficient if we have to criticise the methods proposed by the Government to provide the financial requirements of the year. On this occasion we have not only to do that, but we have to consider the requirements of many years to come. There has been criticism already. There has been detailed criticism of the taxes, and the proposals of the Government have, I venture to believe, been criticised from this side of the House in a perfectly fair spirit. Questions have been asked, important questions, upon the practicability and justice of the proposals. The answers received from the Government Benches have not been adequate. They have been confined to generalities and statements of the first principles upon which their proposals are based. We are perfectly willing to agree with the desirability of the principle that the burden of taxation should fall upon the rich, and should not fall upon the poor, but the House and the country are fed up with generalities; and in the speeches and replies which we have heard from the other side of the House it is difficult to find any detailed answers on which further criticisms can be based. So far as we have had answers I should like to deal with them successively. The argument which, perhaps, has been put forward most often on the other side of the House is that the land taxation, which is proposed in this Budget, is justified by the fact that land is different from all other kinds of property; that the land belongs to the people; that the people have an interest in it; and that it is wrong that it should be in so few hands. Does the Budges do anything whatever to redress that grievance? It is not sufficient to enunciate a principle and state that a Budget is drawn in accordance with that principle. It is necessary to prove to the House of Commons and the country that the evil which you deprecate is going to be remedied by your Budget and your proposals. Does the Chancellor of the Exchequer propose in this Budget, or in any of the measures which the Government have ever passed since they have been in office—are there any proposals to enable more people to get a bit of land?

Yes.

Which measures?

The measures introduced by the Government to enable people to get a little more land.

To own a little more land.

I thought you said to get.

That is exactly the point. Not only are the Government not doing anything to enable people to own more land, but they have consistently used their best endeavours to prevent people from owning more land. I do not know whether the hon. Gentleman has studied the Small Holdings Act. Is he aware that under the Small Holdings Act small holders are to pay the whole purchase money of the thing which they hire from a county council? They are to pay the full value of that thing by instalments, and then they are not to own the land. What is there proposed under this Budget to enable more people to have an interest in the land? Are you going to give land to more people? Are you going to enable more people to acquire land? You are not going to give an interest in land, as far as I can discover, either by ownership or tenancy, to one single human being, rich or poor, under this Bill. All you are doing is to place a tax on land in the payment of money, and that money is to be paid out in old age pensions and for other purposes. How does the fact that a sovereign is raised by a tax on land, and not by a tax on some other commodity, and is paid to old age pensioners, show that land is different from any other property? How does this help any interest in the land of the country? There is an object behind all this. It was obvious to me. I do not know whether the right hon. Gentleman realises it. It is difficult for us to discover, and we have not yet discovered whether he is himself the originator of these proposals or whether he has taken them from others who see rather farther than he does, because it is the obvious purpose of all the Government land legislation to drive the land into as few hands as possible, so that there may be less resistance to confiscatory taxation. It is obvious in the Small Holdings Act. On what other principle did the Government proceed—what other object could they have—in enacting that a small farmer who has paid for his land is not to own it, but that the county council is to continue to own it, although the occupier has paid them for it in full? I will put it a stage nearer, and venture to suggest to the right hon. Gentleman that they had then in mind the proposal of placing a heavy tax on ownership of land, and they knew perfectly well, although many inconsistencies are possible to a Liberal Government, it is possible to go too far, and it might appear too inconsistent even for them to create thousands of small holders in one year and then to place 20 per cent. tax on them the next. Under this Budget what is to be the effect of these Land Taxes? What is to be the effect, exactly in the same way, of the Licence Taxes? They are penal taxation. They impose an immensely heavy burden upon two different forms of property. What must be the effect of penal taxation imposing a specially heavy burden upon a particular class of property? The effect is obviously and must be, it cannot be denied, that only rich men can hold these forms of property. Therefore the imposition of these heavy penal taxes upon land must drive land more and more into the hands of the few and leave it less and less in the hands of the many. Exactly the same applies to licences under this Act. The smaller licence holders will be driven out, and the whole liquor trade will be more and more driven into the hands of men of large resources who can afford to pay the taxes and can afford to hold on, waiting for better times and increased profit.

I do not say that that is the object of the right hon. Gentleman, but it is the obvious object of those who have proposed these taxes first, and, after all, we have a sequence of events. We have these very proposals which are embodied in this Budget previously embodied and discussed and advocated by Gentlemen who are the distinct advocates of a further step to which this is a preliminary, namely, the confiscation of land and other property by penal taxation. Are we not justified, when at the suggestion of these Gentlemen the Government adopt the first step, which is the valuation of this class of property and the placing of a tax of this nature upon it, in asking what security have we got, if the Government take the first step, that they will not naturally follow to the other step, and what security have we got that if the right hon. Gentleman has allowed himself to be persuaded by these advocates of Mr. George's policy to adopt this step, that he and his successors will not be equally persuaded to adopt the further step? All of us, in considering this matter, are bound, whatever our political opinions may be, to look at this Question from the point of view, not as put forward to the House by the right hon. Gentleman, but as put forward by those who are the real sponsors of the proposal, and whose obvious desire is to force land out of the hands of the small owners and to concentrate it as far as possible in the hands of a few large owners, in order that they may be able to impose heavy taxation upon it, and that the resistance to this taxation may be so reduced that those who are left will fall an easy prey. There is one more point on that. We are told that land is different from all other property. May I ask the right hon. Gentleman whether land which is held by rating authorities is an absolutely different article from land held by private individuals? Do the principles which apply to land held by rating authorities differ absolutely from those applied to land held by others? And we have heard rumours lately—perhaps the right hon. Gentleman, when he speaks, will let us know what confirmation there is of them—of arrangements being made by the Government with other owners of land who are not rating authorities, such as friendly societies, assurance companies, and others. Is the land held by those corporations of an absolutely different quality, and is it to be regarded as being subject to different principles of taxation from the land held by private individuals? I do not think for one single moment that the right hon. Gentleman will find that even those on his own side of the House will subscribe to that proposal. If the argument for these land taxes is that land is of a totally different character from other forms of property, then carry that to a logical conclusion, and put your tax on all land, whoever holds it. Then you are consistent. But to select various kinds of ownership of this particular commodity and then try to tax them, and then try to defend that by saying that the commodity is different from all other commodities is such an obvious absurdity that I cannot believe the House of Commons would swallow it.

Another argument with which we have been confronted is the argument of the foreign example. I think the House will agree with me that if we are to have foreign examples we require definite chapter and verse for them. The mere rising in this House and stating that a tax upon land values is imposed in this country or in that is no argument whatever. We must know the whole details of that tax and the principles upon which it is imposed, the proportion which it bears to the property, and also its relation to the remaining taxes on the same property. And all we have had is a Parliamentary Paper issued the other day, with some examples from America.

No, I think the hon. Member will find that Papers were published years ago giving what happens on the Continent.

If systems of taxation in those countries alter as rapidly as they do here the statement of what happened years ago will not be relevant to what we are discussing to-day.

The last was published in August, 1907.

The right hon. Gentleman said "years ago."

Two years ago.

Even taking the cases laid before us quite recently by the right hon. Gentleman himself about taxation in America, I do not think that the reports which we have from America are very full, and even so far as they go, they do not bear out the right hon. Gentleman's contention. I will not weary the House by reading them, because everybody has read them. But there are three principal towns in America in regard to two of which the reports definitely state that this taxation of land values fails to carry out the objects the right hon. Gentleman has in view, any in these cases—I have got the words here—it is said:—

"It is difficult to differentiate the specific facts of particular districts of a city. [This is Boston.] Or departments of businesses or enterprises, but an unfavourable influence may be said to have affected generally the real estate market of late years. Undoubtedly the high tax on land and buildings appears to have an adverse effect on buildings and improvements and then on trades, particularly on the establishment of industries at Boston."

That is not a very favourable example.

Will the hon. Gentleman say what tax is taken?

This is America's experience of the Land Tax—the general effect of the Land Tax reported upon by Consul-General Ray, who deals with the tax on land values. This Report gives an unfavourable character of the tax, and the hon. Gentleman opposite (Mr. McKinnon Wood) immediately declares that it is of a quite different nature to his own tax. May I ask the hon. Gentleman if he can produce a case in America or any of the Colonies or in any other country where there is now a tax exactly the same in every particular as the tax proposed by the Government?

The tax in Queensland is not exactly the same as the tax proposed by the Government, but it is charged upon the basis of land values.

With very bad results.

I cannot discuss it now.

It would be better to allow the hon. Member to continue his speech uninterrupted.

I think we find ourselves in this rather peculiar position, that the Government have not produced an instance of a similar tax, nor has the hon. Gentleman who interrupted me, so that there is no precedent in the world, so far as they know, of a tax on exactly similar lines to the tax they now propose. They have produced a Report of a form of taxation which goes about as near as it can to any other form of taxation which is to be found anywhere, and the Report on that is distinctly unfavourable. All I can say is, so far as I understand this American form of taxation, the taxation proposed by the Government is infinitely worse, it is infinitely more complicated, the valuations are infinitely more obscure and more difficult, it will raise a great deal less money, and do a great deal more harm. Therefore if this taxation in America injures industry—I was just about to read the second part of the Report, but I do not wish to weary the House, as time is short—[Cries of "Read."]—this is the case of California, and the Report says:—

"Land is not uniformly taxed in different districts' and these do not uniformly bear the burden of taxation."

I think that will apply to our own case.

"High assessments obtain in one locality and lower ones in another, which has a tendency to drive rich and influential men and Corporations, whose energy and wealth and influence are of great value to the com- munity, into a less suitable place where the assessment is low. Great powers are given by the law to assessors, especially in cases of the assessment of businesses."

I do not know whether the power given to these assessors is as great as those supposed to be given to the Commissioners and to the referees by the right hon. Gentleman, but I can clearly conceive that to be possible, and it is obvious that if taxes of that character are to be supported by arguments drawn from abroad we must have something a great deal more precise and a great deal more reliable than anything we have yet had from the right hon. Gentleman or his Friends before we can accept that as a fair argument. I will go to another comparatively small point which was raised by the right hon. Gentleman himself. In defending his Death Duty proposals the right hon. Gentleman used an argument which had apparently great weight. He said that in the case of the Death Duties they were so easily paid that people rarely availed themselves of the opportunity to pay the Estate Duty by instalments, and that they nearly all paid the Death Duties in one payment, proving how easy it was to pay those duties. I take, from practical knowledge, a view which is exactly opposite to that of the right hen. Gentleman, and the reason is perfectly obvious. In the case of these very heavy Death I Duties the instalments are in themselves so large that it is impossible to meet them out of the ordinary income, and therefore the man who has to pay them is bound to borrow the money and to put it over a considerably longer period than the eight years which are allowed. The reason, therefore, why these Death Duties are not paid by instalments, but are paid in a lump sum, is because they are so heavy that the money must be borrowed, and in most cases there is no other resource. Then the next argument which is used also refers to the Death Duties, but bears on the Land Tax. We are told that the valuation is easy, and the right hon. Gentleman has used this argument that it is easy to make the valuation because we have an exactly similar valuation made in the case of the Death Duties. Does the right hon. Gentleman mean to imply that the cases are the same or even similar? What is the Death Duty valuation? It is statics; it is fixed. Land valuation is dynamics, as the hon. Gentleman proposes it. The valuation for Death Duties is the valuation of a fixed unit at one particular moment. If there is building land the circumstances are different. Take an estate of 400 or 500 acres. The valuer takes the value of the estate, its rental, on a certain number of years' purchase. He then takes the whole value of 100 acres, and the extra building value of that 100 acres, and he lumps it together, and says, "I think the building value of that 100 acres amounts to about £50,000." The owner says that it is not worth more than £40,000, and the matter is then settled between them at a figure something which is between the two. I say that is a perfectly simple process, but what you propose to do under this Bill is not statics, it is dynamics. You have got a moving quantity at different times; you have absolutely different units.

No.

The right hon. Gentleman says no. But you have an estate which is a complete unit, and which you propose to value, and when you have settled the value of that estate you propose at some future day to value an unascertained portion of that estate which is to be sold, not at the will of the seller, but at the discretion of the purchaser, and to compare those two values. The problem is a totally different one, and it is obvious that where one might be a fairly accurate valuation, the combination of the two when you bring in additional factors, two different times, and two different valuations, the comparison is variable, instead of having a fixed unit, and you get into a region of difficulty which is wholly beyond anything that has ever been attempted. Then with regard to minerals. The right hon. Gentleman has been very fond of quoting the case of Rosyth. He used the expression, which he afterwards withdrew, that the owner of Rosyth had extorted £15,000 from the Government for minerals. I am only quoting the word "extorted" to show the bent of the right hon. Gentleman's mind, and simply for the purpose of an illustration.

I used the word; yes.

It showed the bent of the right hon. Gentleman's mind. The word slipped out. I do not use it for any other purpose than to recall to the House what was the bent of the right hon. Gentleman's mind. What was his point? His point was that it was quite easy for the owner to value when he was selling the property. But the right hon. Gentleman told the House a good deal about the valuation of Rosyth, though I think it would have been a little fairer to the House and a little fairer to me if he had added the information that the Admiralty had obtained from Lord Linlithgow for £15,000 mineral rights at Rosyth which they sold from that land to the contractor now at the works for £100,000—exactly the whole purchase money for the land paid to Lord Linlithgow. The right hon. Gentleman could not have been ignorant of that fact, because he was so well informed of the whole question about Rosyth. I would ask the right hon. Gentleman what is the value of the minerals at Rosyth under this Act. How is it to be ascertained? Is it not perfectly obvious that the minerals in the hands of the Admiralty at Rosyth have been worth up to now, within a year, £100,000? They have got that amount; they have realised it, and there may be additional stone lying there, and there may be other minerals. The right hon. Gentleman, two years ago, and perhaps even two weeks ago, thought £15,000 was an exorbitant price. Can you possibly have a better example of the uncertainty and injustice and impossibility of attempting a valuation of ungotten minerals? It cannot be said that I have gone out of my way to find an example which is going to be specially favourable to our case, because I have merely taken the example which the right hon. Gentleman himself has given. The next argument is that land is going to be cheapened by this process. Does the right hon. Gentleman seriously advance that proposition, because it really seems unnecessary to answer it? He cannot really have considered this proposal. It is a perfectly simple statement that if land is worth £100 to-day, and you put a 20 per cent. tax upon it, you are taking 20 per cent. from the present owner, and the next man who buys it will only pay to him 80 per cent of what the land was worth, and the remaining 20 per cent. will be in the form of a tax. You are taking 20 per cent. from the present owner, you are leaving the price of the land to the new owner at exactly the same sum, only he pays 80 per cent. to the original owner and 20 per cent. to the Government. There is no answer to that; it is a plain fact. It is not an argument.

No.

It is a question of fact.

Not even of fact.

It apparently is not in the Bill. It is very difficult to know what is in the Bill. I am not arguing against the justice or injustice of the tax; I am answering the argument that it is going to cheapen land. What is meant by the word "cheapen"? The word "cheapen" means that there is going to be an inducement to somebody else to buy land because they will get it for less money. But they will have to pay the original owner the value of the land less the amount of the tax, and the two amounts will total the present value of the land. That fact cannot be got away from. So far as it is going to drive land into the hands of municipal corporations, is that going to lead such authorities to cheapen land? Do municipal authorities and rating authorities who own land part with it on more favourable conditions than other people? We have hardly had a speech in support of this Budget without a reference to the iniquity of landlords holding up land. I observed the other day, in a report of the London County Council, that the leader of the Radical Progressive party on the council strongly objected to the proposal to sell cheaply land which was now held by the London County Council, and his advice was "hold it up until you can get a better price." I suppose that is a legitimate operation when the land is held by the London County Council or by the Crown, but if it happens to be a private individual it is then iniquitous robbery. There is a limit beyond which you cannot tax the intelligence even of this Assembly.

I come now to an argument which I admit is the most difficult to deal with, and the one in which, perhaps, the country takes the greatest interest, and that is the use which hon. Gentlemen propose to make of the money when they have got it. They spent their money before they got it, or at least some of it. The two objects are national defence and social reforms in the form of old age pensions. Have they adequately carried out either of those two objects? That is the point of view which the country takes, that we are being asked, for two objects, to find this gigantic sum of money, and it would be some justification perhaps if the objects were being carried out to our satisfaction. But not the one or the other, so far as the country is aware, are being satisfactorily dealt with. A small incident which came to my notice a few days ago, and a rather re- markable one, showed the position the Government are in as to raising money. I was in Harwich Harbour, and I heard that the only really serviceable gun at the fort of the mouth of the harbour had just been sold by the Secretary of State for War. I should like to know to whom it has been sold, and at what price? That is certainly not adequately providing for the defences of the country. I will not enlarge upon that point, perhaps it would not be in order. I think, though, it would be in order to refer to it, because they have perpetually advanced such justification for these taxes.

As to old age pensions, it is obvious that the need for them has not been met so far, from the point of view of those who are receiving those pensions I think all are agreed, and possibly right hon. Gentlemen themselves believe it would have been far better had he made a closer study of the question before he introduced legislation, and if he, instead of placing the whole burden upon taxation to meet this charge for old age pensions, had followed the principle of insurance, and that the trades should bear their own burden. You would then have had a system which would have avoided placing an intolerable and growing burden upon the community and creating all the difficulties which are created. It is obvious that no single individual who is receiving this pension has any right except that of poverty to receive it. [HON. MEMBERS: "No, no."] After all that is the test. The person who receives it has no greater right than any other taxpayer except that of poverty. This is money raised from taxation which is given on the grounds of poverty to certain deserving citizens. It is only their poverty which differentiates them from any other taxpayer in the country. Surely that principle differs little, if at all, from the present principle of outdoor relief. You would obviate all those difficulties of selection, and you would make the pension ten times more grateful to those who receive it if they felt that they were receiving it as part of what they had actually earned through employment. I do not mean that each individual should contribute to his own individual pension, but if you had placed the burden on the trade of the country, upon the actual wages contributed to both by employer and employed, you would have the system to which I refer. That is what the right hon. Gentleman himself now proposes—a contributory scheme of the kind, but he proposes that, having burdened the country with £9,000,000 of taxation, which is going to cripple trade and industry and cause unemployment, and, having taken that course, he has no right now to come and justify this taxation by reciting the step which he has taken and which he himself admits now by his future proposals to be unwise.

In regard to the Income Tax and the assessment for Income Tax, especially upon agricultural land, the right hon. Gentleman has admitted that there is a hardship, and, yesterday, the right hon. Gentleman the Lord Advocate used the expression, and he could hardly have used a stronger one, "I admit we are fleeced under Schedule A." The right hon. Gentleman (Mr. Lloyd-George) himself has admitted that the present assessment for Income Tax on the owners of agricultural land under Schedule A is an unfair one. I do not know, indeed, that he used the word "unfair," but, on the merits of the case, I think he used the expression that our case was "an unanswerable one." There is nothing in the Finance Bill—not one word has been introduced to meet that case. I do not know whether the right hon. Gentleman expects us to insert our own Amendments to meet that point, and at this stage I will not enlarge upon the matter, as it has been sufficiently discussed. I think the general sense of both sides of the House is in agreement that before this heavy increase of Income Tax is given effect to that it is essential that there must be some readjustment of the assessment on land, and that the income derived from the ownership of land should be assessed on the actual profits of income derived from it, in the same way as income derived from other forms of property. [HON. MEMBERS: "Hear, hear."] I am glad to find that is generally accepted by both sides of the House.

As to the Liquor Licence Duties, I wish to refer to the remarkable admission made by the right hon. Gentleman the Chancellor of the Exchequer, that, in order to obtain £4,200,000 of duties from the trade in all he was going to endow them to the extent of £4,000,000 in regard to the retailers of spirits and about £20,000,000 in regard to the beer trade.

The hon. and gallant Member says that I said the effect would be to give them £20,000,000. All I said was that if they charged one half-penny on beer—I do not think they are justified in charging that at all—that would undoubtedly give them £20,000,000.

I am quite willing to take that statement, and I am much obliged to the right hon. Gentleman for correcting me. I start with the statement the right hon. Gentleman has just made, and I ask does he deny that at the present moment the brewing trade is in great financial difficulty? Does he maintain for one moment that the brewing trade can pay as a whole, and in fact that the majority of the brewing trade can pay this additional burden of taxation out of the profits which they are now making? I do not think the right hon. Gentleman can maintain that. I entirely admit that the amount of the tax by no means represents the rise of a halfpenny per pint or a farthing per glass; but you cannot increase the price by less than a farthing per glass, and if you cannot sell at the present price then I say it is obvious that the tax imposed by the right hon. Gentleman involves and forces the rising of the price of beer by a farthing per glass.

Let them water the beer.

I do not know what right the hon. Gentleman has to say that of another trade. I do not think he has any right to assume that. Does the hon. Gentleman mean to say he advises them to water the beer?

I think they will get it out of the consumer by altering the manufacture of the beer so as to meet the consumer in some way or other in the process of manufacture, and not by rising the price by an exorbitant sum.

In other words, give them worse beer. Either course must be adopted, either the rising of the price of beer or the giving of a worse article. That is just one of those Free Trade fallacies, for if there is one thing upon which they are more determined than another it is that when a tax is imposed upon any article the whole of the increased cost which is caused by that tax shall go into the revenue. In regard to the Spirit Duty, the right hon. Gentleman has definitely said that the price must be raised, and he admits that a sum of £4,000,000 will go, into the pockets of the sellers. I do not know whether that is a Free Trade principle, but I do not think it lies in the mouths of right hon. Gentlemen and hon. Gentlemen opposite to object to a tax on imports because the amount which is raised by the tax, the amount of extra price to the consumer paid on every article throughout the country may be greater than the sum which was received by the Chancellor of the Exchequer as revenue. And now I come to one special hardship under these Licensing Duties, and that is the hardship meted out to the wine merchant. The wine merchant is treated under this Bill as a wholesale and retail wine and spirit off-licence holder. He has no monopoly, and he is open to any competition, but under the terms of this Bill he is to pay the following licences. Suppose him to be the occupier of premises of the annual value of £100, and compare him with a publican who occupies premises similarly valued at £100, the publican will have to pay licence duties of £50. The wine and spirit merchant occupying premises of the same value of £100 will pay duties aggregating £79 8s. 9d., although he has no monopoly, and he is open to competition on every side, and he cannot obtain the publican's licence because of the monopoly retained by the Government. The publican is heavily taxed, but he has a right to sell beer, spirits, wine, and liquor of every description both on and off the premises. He has to pay a duty of £50. The wine merchant who is carrying on a perfectly legitimate business is restricted to off-sales, and has to pay £79 8s. 9d. That does seem to me a very gross hardship, which I trust the right hon. Gentleman will see his way to remedy.

I will conclude by saying a few words in regard to the Land Tax. To my mind the whole kernel of the 28 clauses lies in the valuation clause, and I cannot help thinking—I do not know about the right hon. Gentleman himself—that a great many of those at whose instance he is proposing to ask for this valuation would be perfectly satisfied if the rest of the Bill were dropped and the valuation clause only remained. The whole inwardness of this and what they really want is to obtain from the owner of the land a valuation of his realty for the purposes of future taxation. That is the real underlying object of this Bill, and I do not know that it is possible to find a precedent anywhere for placing upon the owners of realty the burden and the cost of this valuation of property which they themselves possess. The cost of the valuation in innumerable cases will enormously exceed the amount of tax to be levied on the property. The right hon. Gentleman will admit that there are thousands of cases under this Bill where no tax will be payable at all for a long time, but in every such case the cost of valuation has to be met. [The CHANCELLOR OF THE EXCHEQUER shook his head.] I am very glad that the right hon. Gentleman says no; but I am bound to say there never was a case where it behoved the owner to be more careful and to be more accurate in the valuation he has to obtain; nor I think there ever was a case where any mistake in the valuation would have more direful consequences to the owner.

Where the owner is, as in this case, in cleft-stick, if he names the value of the property and it happens to be rather high he falls under the Undeveloped Land Duty—to-day a ½d., and possibly to-morrow 1s.—and, what is more important, the valuation will be taken against him for the purposes of the Death Duties; and, on the other hand, if he values too low, the next time the property passes it will fall under the increment value of 20 per cent. To call upon a man to place his own value on the property, and to go to the expense of making that valuation, is a process which, so far as I am aware, has never previously been adopted by any civilised state. My next observation is that it is generally considered throughout the country that no burden is placed in this Budget upon agricultural land. [An HON. MEMBER: "Hear, hear."] The hon. Gentleman cheers that, and thinks there is no burden on agricultural land. Has the hon. Gentleman studied this Land Bill? Does he think agricultural land is exempted from increment value? I honestly do not think that the House understands that under this Bill it is proposed to value every square acre and every square foot of realty throughout the country, agricultural or other—whether a house is upon it or not, every square foot of realty, agricultural or other, is to be valued at the expense of the owner, and all land, agricultural and other, is to pay increment value and duty, and there is no exemption. And what is the effect of this? We had a very interesting speech from the hon. Member for the Woodbridge division, and he gave a concrete case where agricultural land bought for £8,000 some years ago had been sold for £800, but I could state another case, within the knowledge of many Members of this House, and that is, that taking the general ordinary value of agricultural land throughout the Eastern arable district today, it is bought for not more than half of what it was bought for 30 or 50 years ago. The land which was bought from 30 to 50 years ago is to-day worth half what was paid for it then—that is to say, for every £1 paid for land in those years, 10s. now represents the value to the owner. Or, to put it in other words, that which cost £1,000 is now worth £500. On a farm worth £1,000 it is safe to say that £300 at least per £1,000 for the whole area is a low figure of value of the landlord's improvements. The site value will be the difference between those two figures. Houses, buildings, fences, drains, and all the landlord's improvements have got to be imagined removed, and putting them at £300, that leaves a site value at £200 for every £1,000, at which the land was purchased in that former period.

Now we hope—and the right hon. Gentleman opposite expressed the hope—that we are likely to see an improvement again in agriculture; the price of cereals has shown a tendency to rise, and it is a perfectly reasonable thing to hope that in the course of the next few years we may see the value of the land raised to something like the same figure at which it was at the time it was purchased in the former period. When that farm changes hands, or on the owner's death, that site value will again be taken. The landlord's improvements will still be worth £300, and out of the £1,000 the site value will be £700. The taxable site value will be the difference between £700 and £200, which is £500, of which £100 will be taken by the Exchequer. So that on agricultural land that will mean, if the land goes back to its former value, 10 per cent. of the whole of that value, or 20 per cent. of the increment value, will be taken by the Chancellor of the Exchequer on purely agricultural land. I say it is most grossly unfair, and I hope that the owners and occupiers of agricultural land in England will understand that they are by no means free under these proposals; but that, on the contrary, an extremely heavy burden is to be placed upon them. I would mention one other point. I feel sure that the Chancellor of the Exchequer will consider the necessity for exempting from Spirit Duties drugs which are used in our hospitals. I and other hon. Members have received letters pointing out that, throughout the country, the hospitals, in regard to which funds are extremely difficult to obtain, will certainly be injured by this Budget (because there is no doubt that the taxes proposed will affect the subscriptions), and that it is hard that they should at the same time have to pay an increased duty upon drugs which have to be used in those hospitals. I do hope that the right hon. Gentleman will find some means of meeting that case. I would ask the right hon. Gentleman whether he believes that in taxing the land industry he is taxing an industry where the conditions of labour and the conditions of life are worse than those that obtain in other occupations? If he examines the conditions of the agricultural labourer and applies the test, he will find that the case is exactly otherwise, and that in agricultural districts, although things are not exactly as we would like to see them, we have a condition of affairs where the man is the breadwinner of the family, and with a cheap house and the garden he is enabled to keep his family in decent comfort under conditions of life wholly satisfactory, and women labour and child labour is practically unknown in the rural districts. And surely it is the ideal condition that the man should be the breadwinner of the family and be able to support his family in comfort without calling upon his wife and the young women to go to labour. Do these conditions prevail in other industries which are not to be taxed? I have papers to show that in Bermondsey there are hundreds of women and girls working ten hours per day at wages ranging from 2s. 6d. per week to 10s. Why is it that in this district of Bermondsey these girls and women are working for low wages and for ten hours a day instead of the men? I have chapter and verse for it that the fathers and brothers of these girls are out of work. Why cannot they obtain work? Largely because owing to foreign competition and to prices being so low. Employers in these trades—I am not attempting to explain; I only state facts—instead of paying full trade union wages to the men, prefer to pay low wages to the women and girls for work which ought to be done by men at higher wages. Well, I think that the conduct of their affairs by owners of agricultural land particularly, and indeed by owners of land throughout the country, does not compare unfavourably with employers in other trades and industries, and I think if the right hon. Gentleman desires to impose taxes on any industry—because, after all, taxes, if imposed upon any part of industry, must fall upon that industry as a whole, and is a burden borne by all connected with it—he should have chosen other industries. In selecting the land he is selecting that which is already bearing an unfair burden. I stated here that 100 years ago the income of the country derived from land was 35 per cent. of the whole, and that only 5 per cent. is now derived from land. The hon. Member for Merthyr Tydvil (Mr. Keir Hardie), commenting upon that, said that in those days, when land bore a proportion of 35 per cent. of the total income of the country, it paid 70 per cent. of the taxes, and that now, when it is only paying 5 per cent. of the income of the country, it pays 15 per cent. of the taxes, and the proportion was therefore much less. If the hon. Member will consider he will find that, instead of being a decrease, 15 per cent. of the taxes on 5 per cent. of the income is a 50 per cent. greater share than 70 per cent. was when we paid 35 per cent. of the income. So that land to-day is paying a 50 per cent. bigger share of these taxes than it was paying 100 years ago. Certainly the conditions on agricultural, on land at large, are, on the whole, better, and certainly no worse, than in any other industry in the country. I do seriously hope that the right hon. Gentleman will adopt some easier method, such as that suggested by the hon. Member who has just spoken, who has told us that £10,000,000 may be abstracted from the Stock Exchange without their feeling—

£20,000,000.

I can assure him that the £10,000,000 extracted from an industry that will not feel it will be a better method than extracting £10,000,000 from that industry which has nothing to spare and on which the taxes will be most oppressive and difficult to bear.

Very little has been said on either side of this House with regard to the question of expenditure. I should like to say a word on this subject, because it seems to me that both sides of this House up to the present have neglected it, and it is a subject which neither side can permanently neglect. I do not think the House fully realises the enormous rate at which we are now increasing expenditure, nor do I think the Members on this side fully realise how greatly that increased expenditure departs from the pledges which I think all of us made on the question of economy at the last General Election. I take the expenditure of the late Government of 1905–6. It was £156,000,000. The proposed expenditure for this year is £163,800,000. To that should be added £3,000,000, of which the Chancellor of the Exchequer has robbed the Sinking Fund, making a total of £166,800,000, or an increase of more than £10,000,000 in four years by a Government pledged to economy! Now perhaps the Government may say that their pledges of economy were vague; that they were not precise. But unfortunately that was not the case. Their pledges were very precise. If we go back ten years, and take, say, the words of Sir Henry Fowler in 1901. Sir Henry, still a member of the Cabinet, though under another name, brought forward in this House a Resolution declaring:— regard to the old Sinking Fund, I think we may regard that proposal as dead. Incidentally I should like to refer to the speech made by my hon. Friend the Member for Gloucester, who, I think, was misled by getting hold of one of the two returns issued on the National Debt. He got hold of the confused return (not the other), with the result that he told the House that the old Sinking Fund was never used to pay off debt. That, of course, is inaccurate. I have taken the trouble to work out the figures from 1836 down to the present time, and I find that during that period the old Sinking Fund wiped off £82,000,000 of debt. Is that not a fund worth preserving?

What are the figures with regard to our present debt? I regret that the Prime Minister, when he spoke upon the debt last year, I think it was, misled the country—of course unintentionally, but he certainly did mislead a great many people—by quoting the year 1889 instead of the year 1899; thus giving altogether a false representation of what our financial position is. He also made the further serious mistake of dealing only with what is known as the Dead Weight Debt, whereas the important thing is what are our aggregate liabilities? I take the aggregate liabilities. I take the year 1899 and compare it with 1909. In 1899 our aggregate liabilities were £635,000,000. Now they are £754,000,000. What is the good of wiping off debt when in ten years you have increased your aggregate liabilities by £119,000,000? That is the real fact the country has to face—that our aggregate liabilities are now increased by £119,000,000 in ten years. But that is not all. There are contingent liabilities. There is the liability of the State for the Post Office Savings Bank. By the way, my hon. Friend opposite has devoted a great deal of attention to this matter, and no doubt will deal with it more fully than I can. There is also the Irish Land Stock. It is a very serious contingent liability. When you add these contingent liabilities to our understood additional liability of £119,000,000 you see our financial position is a very serious one. That is not my whole argument on the question of the Sinking Fund. There is another, and even more important, point from the moral point of view. We borrowed—that is the taxpayers of this country borrowed—for the South African war no less than £159,000,000. What has become of that debt? The Liberals at any rate, and I think the Conservatives too, said that this generation ought to bear the burden, because this generation was responsible for making the war, rightly or wrongly. Have we done so? No. If we take account of all the money used to pay off debt, apart from the debt for which there is a special Sinking Fund; if we allocate the whole of it to the war debt there remains owing to-day a war debt of no less than £91,000,000 which this generation has incurred. I maintain that there is a responsibility resting upon this generation to pay off at least £10,000,000 a year of that £91,000,000. Therefore, I contend the new Sinking Fund ought to have been maintained in its present magnitude, which is about £9,500,000 to £10,000,000 annually, until this debt is paid off. We are doing nothing whatever to pay off that debt which we inherited from our ancestors, and, as a matter of fact, we are incurring new responsibilities. I will deal presently with the causes of what I regard as this reckless finance.

First of all, I should like to say something about the methods which the Chancellor of the Exchequer proposes for meeting his needs. I will not say very much about the proposed Land Values Tax. I have already spoken of that, and perhaps there may be other opportunities to speak on it. Land Values taxes, too, are not a method of raising money. They are not finance. They are political warfare. When I compare the magnitude of that portion of the Finance Bill which is devoted to the Land Values Tax, and the injuries which it will inflict upon certain classes of the community, with the little revenue it will yield, I am reminded of a cartoon which I saw many years ago in a French paper at the time when Midhat Pasha started his first Turkish Constitution. It was a fancy sketch of the new Turkish Parliament. On one side of the House were a number of comfortable armchairs; on the other side there was a row of sharpened stakes, which are used in the East for impaling the victims of Oriental justice. These sharpened stakes were labelled: "Seats for the Opposition." Now the Chancellor of the Exchequer is not so crude in his methods. He belongs to a more Western civilisation. He is a humane man. He would not use physical violence, except so far as it may be necessary to overcome the possibility of resistance to his adventures in the farmyard. What he does is much simpler. Let us hope it will be less painful. It will still be unpleasant. He looks around the country and he sees that certain classes of the community are wicked enough to vote against the Liberal party. Perhaps even they subscribe to the funds of those opposed to him. He says to himself: "This cannot be tolerated; come, let us tax them out of existence." And he proposes to do that, not by constitutional methods of laying down merely what taxes are to be imposed, but by an entirely novel method, in which the assessment of every man's land is to be assigned, without appeal, by a bureaucratic body. The ex-Chancellor of the Exchequer the right hon. Gentleman the Member for East Worcestershire (Mr. Austen Chamberlain) said that in his judgment the Finance Bill ought always to be clear and simple. I agree with him, and I think the Chancellor of the Exchequer missed a great opportunity. He might have made a marvellously clear Finance Bill of only one clause: "Be it enacted that after the passing of this Act the Commissioners of Inland Revenue shall tax whomsoever they choose at whatever rate seems just to them." I desire now to say a few words upon the speech delivered by the right hon. Gentleman the Lord Advocate last night, and before doing so I should like to express my regret at not having been able to be here to hear it. There is one point on which he and I have arrived at agreement, and that is that taxes are paid by persons, and not by things. I am very glad indeed we agree on that point, because if people would only keep that in their minds I think we should be very likely to arrive at a conclusion. What was the main point in his answer to my argument? He took the point which I quoted from the hon. Member for Dulwich (Mr. Bonar Law), about the prairie value of the Lord Advocate on top of a Scotch mountain, and he dealt with that in some detail, and he admitted that if he were alone on top of a Scotch mountain he would not have much value, but he assumed that after he had been some time alone on top of a Scotch mountain a great population would arise around him. Possibly that is as a result of a tax on bachelors. He said that in these circumstances the Lord Advocate would begin to have a value, especially if the population were litigious, and he argued that the difference between that and the value given to the land would lie in this fact: the Lord Advocate, in order to realise his value, would have to keep up his brain and work hard, whereas the owner of the land would not find it neces- sary to do anything at all. That is perfectly true. But that would carry the Lord Advocate not further than he wants to travel, but further than his colleagues want to travel, for if his argument be followed out, and if you tax the owner of land because he is not working it, why put a tax only upon what is called the increment? Surely upon that argument you are justified in taking from him the whole of the present value of the land. Many hon. Members below the Gangway opposite take that view, but the rest of the Members of the Government beside the Lord Advocate have not adopted that view yet. The Lord Advocate has already reached that point. In a speech made recently at Armada's he said:—

There is another concession which they make in the Bill to which reference has already been directed, namely, the curious concession with regard to Irish landlords over English and Scotch land-owners. Every English landlord, rich or poor, is to be called upon to make an expensive valuation of his own land or else to run the risk of having it taxed without appeal. Irish landowners are not to be subjected to this obligation. I am inclined to think that is not the only exemption with regard to Ireland we shall see made as these Debates progress, and that this is but a prelude to the complete exemption of Ireland. [An IRISH MEMBER "Hear, hear."]

Exactly, but is that fair? I do not mean to England and Scotland; I mean to Ireland, on the principle now professed by Members of the Government, because they have adopted as their prophet Mr. Henry George. They have accepted as their bible "Progress and Poverty," and what do we find there as to this proposal to tax rents. Mr. Henry George says:— landed property improves in value above all other things. That, of course, is pure Henry Georgeism. Mr. Henry George came from California. It was a new country when he was born; he had no education outside that country, and he imagined that all the world was like California. He saw land improving in value all round him, rising by leaps and bounds as population poured into California from the old world, and he assumed that this tremendous and rapid increase in the value of land was a normal factor all over the world. I believe he was rather surprised when he came to England, and found other subjects to be dealt with, but what are the facts as regards California? On that point we have interesting evidence from the return already in our possession with regard to the taxation of land values. There is a passage in it relating to California, and the effect of it is this: Undoubtedly the greater part of the wealth of the State consists of monies, solvent credit and other personal property—the greater part of the wealth of the State which produced the American Prophet. Is that not even more true of this country? Does not everybody know that the greater part of the wealth of this country is not land, but personal property, and that it increases more rapidly than land. Relatively the value of land in this country is declining. It has declined in reference to wages for manual work. An hon. Member on this side of the House attempted to answer my illustration of a doctor by saying they are liable to competition. But in spite of the competition they may improve their positions on account of the growth of population. Everyone knows that physicians' fees are higher now than a generation ago, and does not that afford proof of unearned increment? Let me take another case. I believe that when Milton sold "Paradise Lost" he received £5 for the copyright. I am sorry that the President of the Board of Trade is not here to correct me if I am wrong, but I heard it said of the President of the Board of Trade that he has sold other works at a larger figure. Allowing for the relative value of the two classes of work we may perhaps fairly assume that if the President of the Board of Trade had lived in Milton's time he might have sold his work for £15 or £20, but the price would not run to four figures. Why does he get that price now? Because he lives in a time when there are millions of people speaking his own language with many thousands of them possessing sufficient money to buy his books. His profit is unearned increment as much as the profit of any man who holds land.

I wish now to refer to a very important document issued by the Government in support of their proposals. I hope the Attorney-General has studied it. I remember his predecessor in office or rather I think it was the previous Lord Advocate who produced in this House once before a document dealing with the taxation of land values in the Colonies. But, unfortunately, he had not read beyond the preface. I do not know whether the Attorney-General has read beyond the preface of this document. I fancy the Chancellor of the Exchequer has not read beyond the title page, because, as a matter of fact, it has nothing to do with the taxation of land values. There is no special taxation of land values in the United States. All property is taxed equally, and to put this forward as an argument for the taxation of land values is really to throw dust in the eyes of the House. Let me take page 5. I take the State of New York. This is the way they manage taxation there:— attention of the State than unearned increment. I cannot imagine anything harder than the case of a man who has learned a skilled trade and finds himself thrown out of work by the introduction of new machinery which takes his place and makes him useless. He has to suffer by an invention which is a boon to the whole community. Surely that is a case where we ought to interfere and compensate him, so that he shall not lose by the community's gain. In exactly the same way, when a man has bought land and laid it out with roads and made sewers, hoping the population may come, and instead of the population coming it drifts another way, surely he has a claim for unearned decrement? But you cannot in practice deal with this unearned decrement. Directly you attempt to do so you will be met by a multitude of bogus claims, to investigate which you require an army of officials, and even then you would be swindled. It is in practice impossible to compensate unearned decrement, and therefore logically you are bound to leave people to take the benefit of unearned increment, because if you give a man the chance of loss you must leave him the hope of gain. So much for that portion of the Budget.

The other proposals of the Government seem to me far less objectionable. I think the Chancellor of the Exchequer has adopted the right principle in asserting that you must tax superfluities rather than necessaries. I think, however, it is most disastrous that in times of peace we should have to impose an Income Tax of 1s. 2d. in the £; but the House has wished it. The House adopted old age pensions on both sides, with a few exceptions, and we have got to pay the price. Incidentally I make one remark about the Income Tax, and it is that I think the Chancellor of the Exchequer has gone too far in his exemptions. I cannot see why a professional man earning between £2,000 and £3,000 a year should be picked out specially for favour. It seems to me very unreasonable that a woman left with £700 a year should have to pay is. 2d. in the £ whilst a successful professional man earning £2,000 or £3,000 pays only 1s. in the £. I hope the Chancellor of the Exchequer will withdraw that exemption.

With regard to the super-tax, in theory there is probably nothing to be said against it. In theory a graduation up to the highest point is desirable, but in practice it is extremely difficult and costly, and I do not think that the advantages we shall get out of it will compensate for the extra cost and worry and annoyance involved. I am rather inclined to suspect that this super-tax is proposed not for the sake of obtaining any more scientific system of taxation, but merely to gratify what I can only regard as the rather vulgar envy of rich men. The Leader of the Opposition said the other day that rich men in themselves are no injury to the community, and what we want to get rid of is poverty, and not riches. It is very much as if a man approaching a distant town observes a number of magnificent steeples and towers, and all around a number of very low houses. He says to himself, "Come, let us knock down those steeples and towers, and then the other houses will look taller." They will look taller, but not an inch will be added to one of them. With regard to the super-tax the real point is not whether it is desirable to tax the man with £5,000 a year more than the man with £3,000, but whether there is any great reason why you should not tax the man with £3,000 as much as you do the man with £5,000. In other words, your maximum tax should begin at £1,500 or £2,000, and all the graduations should be on the lower level. It is the lower levels where the pinch is felt most. Above all, it is important on the levels you have not yet reached by the Income Tax. You make a great deal of fuss about the man with £2,000 and £5,000 a year, but you ignore all the time the cruel injustice which is going on, because a man with 15s. a week is being taxed at the same rate as a man with £3 a week. That is an injustice we ought to try and get rid of before we bother ourselves about this minor injustice at the other end of the scale. The only way to get rid of it is to abolish taxes on the necessaries of life, and substitute a universal Income Tax so that every man will pay his share.

With regard to the Death Duties, I regret that they have to be raised, but the House has wished it, and next to the Income Tax they are one of the best forms of taxation. More especially I think the Chancellor of the Exchequer is justified in increasing the scale on collaterals because, in the case of a collateral, when money comes to him, it is in the nature of a windfall, and he can pay a very much larger tax than a direct descendant. In regard to the increased tax upon spirits and tobacco, there again those articles are more or less superfluities, and it is right that they should be taxed. With regard to liquor licences, I venture to think that the Chancellor of the Exchequer would have done more wisely if he had adopted a more simple method. This idea of taxing liquor licences exceptionally arises from a confusion with regard to what is called monopoly value. When the State grants a licence, it gives a man something which is very valuable, and the State is justified at that moment in asking for a large price in return for that grant. That is done in the case of the Bill passed by the Leader of the Opposition, but the proposition is entirely different when you are dealing with old licences, where perhaps the monopoly has been bought and sold half-a-dozen times. [An HON. MEMBER: "It is only an annual privilege."] Yes, but the value of it has been bought and sold, and this has occurred more especially since the passing of the Compensation Act, and they have now got a sort of statutory right. Therefore, it is unfair now to step in and put a penal tax upon the last purchaser, because it is merely the last purchaser who will have to pay the tax, whilst the previous purchasers have walked off with the money. It would be far fairer if the Government, instead of putting an extra duty on licences had put a tax on beer. It would have been fairer to those brewers who do not own licensed property, and there are a good many who do not, and who will practically escape this tax. It would be fairer as regards public-houses and clubs, because the latter are going to get off almost scot free. I believe a tax on beer would have yielded a very much larger revenue and it would have cost nothing additional to collect, whereas in the case of the Licence Duties you have to set up entirely new machinery to collect the duty from the clubs.

I will not say anything about motor cars, except that I think they might have been taxed a little more. They are not only a luxury, but an offensive form of luxury, because many motorists—I do not say what proportion of them, but a certain proportion of them—have a practice of tearing about the country poisoning their neighbours and splashing about dust of all sorts without the least consideration for the convenience of pedestrians. With regard to the Petrol Tax, I do not think the Chancellor of the Exchequer will find it possible to collect that tax in the way he proposes, because I do not see how he can discriminate between the different users of petrol. It will be necessary to have a great many Excise officers. With regard to alternative taxation, I do not know whether the right hon. Gentleman the Member for East Worcestershire (Mr. Austen Chamberlain) has another Budget up his sleeve. Of course, we do not expect him to disclose it, but I think he might at least have given us a hint. The Leader of the Opposition asked very pertinently, "Is this finance or philanthropy?" We ask in regard to the proposal of the Opposition: "Is it finance or is it protection," because the two things are very different. If hon. Members opposite are still under the delusion that they are going to get a large additional revenue by their fancy schemes of finance, I would recommend them to study the German scientific tariff, and what it means. Here you have in Germany the home of tariffs, a magnificent system of tariffs under which 1,000 or 2,000 articles are taxed, and what is the financial result of it? What does it bring in? For the year 1907–8, only 14 months ago, this German scientific tariff levied over a population of 60,000,000 yielded £29,000,000 sterling. Our mere Cobdenite tariff levied upon a population of over 44,000,000 yielded £32,000,000 sterling, as against £29,000,000 sterling under the German system. Does that look as if there was much revenue to be got out of tariff reform?

Will the hon. Member give the figures for the United States of America?

I have not furnished myself with those figures, but the United States is double the size of this country. We should also remember that part of the bargain which has been promised is that the taxes on tea and sugar are to be abolished under the new system. I venture to suggest that hon. Members opposite have not yet thought out the elementary principle that revenue and Protection are antitheses. The man who wants revenue—and the Chancellor of the Exchequer desires to raise revenue—wants the foreign goods to come into the country in order that he may tax them, whereas the man who wants Protection wants to keep them out in order that they may not compete in our markets. These two forces are always pulling against one another. In spite of this antipathy you sometimes get a big revenue. But is it scientific to try and get a revenue by the casual results of this antipathy between two hostile systems? If you want a revenue from Customs the only line you can proceed upon is by taxing things which are not made in this country. Nor have Members opposite faced the serious question of what they are going to tax. They tell us that they are not going to tax our raw material. But are they agreed on that point? I see the Leader of the Opposition and the right hon. Gentleman the Member for Wimbledon sitting in brotherly love on the same Bench. It was not always so. There was a time six years ago, when the Leader of the Opposition had just abolished the Corn Tax, that the Member for Wimbledon headed a deputation to his right hon. Friend asking him not to abolish it. The Leader of the Opposition then said that

The Leader of the Opposition, looking perhaps a little further ahead than some of his supporters, sees these difficulties, and we see his difficulties. It is interesting to watch the struggle which is going on in the party opposite for the right hon. Gentleman's body and mind—a prize worthy of winning. I think personally that the Free Traders, in spite of some discouragement, will win. I am convinced that deep down in the recesses of the right hon. Gentleman's mind, buried beneath the graceful superstructure of transcendental philosophy which we all so much admire, there still breathes a living faith in the old-fashioned bourgeois doctrine that two and two make four. Hon. Members opposite complain that our Budget—I mean the Budget of this Government—will harass industries. When they attempt to frame a Budget on the lines of Tariff Reform they will harass industries. The root of the whole trouble is expenditure. It is not only military and naval expenditure, and not even primarily, which is at the root of the problem. After all, we are not our own masters in that matter. We must defend ourselves, and I venture to ask whether there is any purpose on which we can spend the nation's money which is half so precious as that of national security? I personally believe we are spending on our land forces more than we need do, but, on the other hand, I am afraid that what we are spending on our sea forces is barely adequate. But the real trouble is the growth of Civil Service expenditure. There are many causes for this, and one cause is the defective accounts of the nation. I do not think many hon. Members realise the hopeless confusion in which the national accounts are kept. The other day the Secretary of State for War had to confess that he was not aware that half a million of money spent on the Army appeared in the Civil Service Estimates. A portion of the cost of the Navy actually appears on the Irish Votes. Another great cause of confusion is the practice of Appropriations in Aid, and I do not think that hon. Members realise the extent to which the practice is carried. We vote for the Supreme Court of Justice £339,000 a year, and for the officials of the County Courts £5 a year. The reason is that in one department fees are paid into the national revenue, and in another department they are treated as Appropriations in Aid. No less than 3½ millions were raised one year by the sale of Army stores, and the sum was treated as an Appropriation in Aid, while the sale of old rags, amounting to £12 14s. 11d., went to national revenue. The sale of publications in the British Museum, amounting to £2,300 a year, is treated as an Appropriation in Aid, while the sale of photographs in the National Gallery, amounting to £16 11s. 5d., is treated as an item of national revenue. The result is that no one knows, and no one can know, what is the total expenditure. It is not known at the Treasury or anywhere else. I should like to take this opportunity of thanking the officials of the Treasury for the trouble they have taken in preparing a Return which I asked for. Beyond this muddling of accounts there is a hideous Departmental extravagance. Let me take only one illustration. When Lord Lansdowne was at the War Office that Department cost £243,000 a year, but under the present Secretary of State the cost is £593,000 a year, considerably more than double in 12 years. While the cost of the Army has only gone up 50 per cent. the cost of the Department has gone up more than 100 per cent. There is only one exception, and that is the Stationery Office, and that is due to a Committee which inquires into the Stationery Department. My hon. Friend the Member for Bury, who presides over that Committee, has been able to save a hundred pounds here and a hundred pounds there, amounting to thousands in the course of a year, but, apart from that, there is no economy going on in any other branch of the Government. The Government themselves have done nothing to check expenditure. What is the excuse of the Chancellor of the Exchequer for this reckless expenditure. He told us what it was in his Budget speech. He told us that the part of economist is not a very attractive or popular rôle. Then is it the sole duty of the Chancellor of the Exchequer to hunt for popularity? We have had other Chancellors of the Exchequer, and one of them—I think the greatest of them all—I mean Mr. Gladstone, said in 1879: "No Chancellor of the Exchequer is worth his salt who makes his own popularity either his first consideration or any consideration at all in administering the public purse. In my opinion the Chancellor of the Exchequer is the trusted and confidential steward of the public. He is under a sacred obligation with regard to all he consents to spend." I contend that it is not only the duy of the Chancellor of the Exchequer, but of all Ministers and all Members of this House, to protect the public against undue expenditure. I should like personally to thank the right hon. Gentleman the Member for East Worcestershire for the language which he used the other day in dealing with the Post Office Vote. He said: "Of all things that threaten the democracy to have your democratic franchise used to promote particular interests at the expense of others is one of the most demoralising and one of the most dangerous things in public life." Let me quote words used by Mr. Cobden:—

The Chief Secretary says that statement is a lie. There are no cases of fraud in Ireland.

I will assume there is only fraud in England and Scotland.

There are some frauds in this House.

There are numberless cases in England and Scotland where people have deliberately made over their property to relatives in order to claim old age pensions. I will take the proposals of the Chancellor of the Exchequer with regard to pensions. He said that a man with twelve shillings a week would be granted one shilling a week for tobacco. Is it a public service to provide an old man on 12s. a week with gratuitous tobacco? If so, why do you put an additional tax on the tobacco of a man who has got 13s. a week?

The whole of this trouble arises by reason of the House having adopted a charitable system of pensions instead of a contributory system. I should like to call attention to what the Chancellor of the Exchequer said about this system in Germany. He told the country it would have been impossible to introduce a contributory system at once. I am surprised that during his holiday in Germany the right hon. Gentleman did not ascertain that it was introduced there at once, and I venture to assert it could have been equally well introduced at once into this country if he had taken the trouble to think out a scheme. The whole trouble has arisen from the lack of a clear principle to guide our expenditure, and, in consequence of that lack, we have all sorts of wild-cat schemes foisted on us with the promise that they will make a new heaven and earth. The right hon. Gentleman the President of the Board of Trade complained of my criticising some of his proposals. He said I seemed to be always adopting the line of asking, "What is the good of anything?" But when we are dealing with other people's money surely it is better to adopt an attitude of cautious criticism than to embrace every fad that has a momentary appearance of popularity from an All-Red Route to an Afforestation scheme. I believe there is much to be done in this country for social reform, provided we proceed on right lines, and by right lines I mean that the reform must be such as to build up the character of the individual, so as to enable him to add to the strength, wealth, and happiness of the nation. The social reform which the Chancellor of the Exchequer and the President of the Board of Trade appear to be enamoured of seems to resolve itself into a policy of perpetually subsidising somebody at somebody else's expense. I will venture to wager that in their dreams my two right hon. Friends picture themselves as Oriental monarchs, riding in state through crowded streets and scattering to the mob the money they have wrung from the taxpayers. Personally I am opposed to any policy based upon such a principle, because I realise that the inevitable end of such a policy is national ruin—ruin brought about not so much by taking from individuals their present wealth, but by destroying in individuals the motive for creating new wealth. What are the motives which lead a man to create wealth? Why does a man go forth day by day to work? Why does he put out his strength, his muscle, and his brain? It is to provide for himself and his family, and if he is a true man he is not content with that. He is not content with providing for his or their immediate wants. He looks ahead, and sees rainy days may be in store, and he puts by something, so that when he is gone those who have been dependent upon him and those whom he has loved shall not be destitute. Those are the motives which lead men to work and to save, and so to build up the wealth of nations, and if we but leave that mighty power unimpaired we may fearlessly draw for our national needs upon calf national purse, for it, like the widow's cruse of oil, will ever be filled again.

The hon. Member who has just spoken seems to have attacked every possible policy. He has attacked nearly every principle laid down by hon. Members on this side of the House, and he has attacked every possible policy advocated by hon. Members opposite. He has denounced Mr. Henry George, and with equal vigour, and in still stronger language, he has attacked John Stuart Mill. There seems to be no party and no policy which finds favour with him, and there are not many principles which do not at one time or another come under the lash of his denunciation. Singular to say, however, be appears to have one unique creed left. He apparently firmly believes in the hidden Free Trade principles of the Leader of the Opposition. It certainly seems a some- what shadowy foundation on which to build a political creed. He has also one great apprehension among others. He is afraid that the policy of my right hon. Friend the Chancellor of the Exchequer will make men cease to try to be rich. A statesman in this House, with a large majority at his back, can do much, but I do not believe he can very substantially affect the desire of his fellow-creatures to become rich. To do that they do not need the motives described by the hon. Member. No doubt those motives may be taken into account as being most excellent incentives to make provision for a family; but good as the motives generally attributed to mankind are, I think they are not inadequately safeguarded by the desire of men to get wealth for themselves. My hon. Friend was not content with attacking the policy of those to whom he is opposed but with whom he has acted hitherto, but he proceeded—and here I venture to say he did not distribute his favours very impartially—to attack the motives of those who sit upon that side of the House which he still adorns. I think his attack was not worthy of himself. He charged the Government with introducing a Budget of a vindictive character. One would expect such attacks from the other side of the House, and if they had come only from that side I probably should not have detained the House very long in dealing with them. But, as a matter of fact, they came from one who sits as a Liberal for a Liberal constituency, and I may, therefore, be permitted to make one or two observations upon the grounds upon which the attack was made, and the justification advanced for it. The demand for the taxation of land values is one of the oldest and most persistent which has been made. For 30 or 40 years it has been steadily growing as a Liberal principle. Probably the hon. Member cannot be accepted as an authority on Liberal principles, but I may tell him that this demand goes back at least 30 or 40 years. More than that, during the last Parliament—and I am in the recollection of hon. Members on both sides—it became an accepted creed on both sides of the House. Although in the early days of the last Parliament land taxation did not always meet with a very favourable reception, as that Parliament neared its close, as the General Election began to loom, I might almost say began to illuminate the scene, Land Taxation Bills secured majorities on second reading in this House, although they were Bills far more severe and wide-reaching than anything we are proposing to-day. And they secured majorities in a House in which there was a great Tory preponderance, and the greater part of their majority was composed of those who sit on the Tory side of this Chamber. Is it fair, under these circumstances, having regard to the history of this question, to say now that the Government are going in for this form of taxation, not because they feel that they have in this matter a mandate from the constituencies that sent them here, but simply and solely in order to vent their spite upon those who have been opposed to them in the past? There are limits, and pretty wide limits, to the observations we are entitled to make about each other's motives, but I am bound to say I think my hon. Friend on this occasion has exceeded those limits.

I do not know whether he himself dealt with this question of Land Taxation when he was before his constituents at Preston. I wonder what they would have said if he had told them that he was against the taxation not merely of food, but also of property. That is his present attitude. He is denouncing any taxation which may have the effect of diminishing the capital value of property. My hon. Friend puts taxation out of consideration as being unjust, and he is taking an attitude in favour of the non-taxation of property which I do not think his constituents would appreciate, be they Tory or Liberal. He has gone on not merely to attack our motives, but apparently to attack our intelligence. He expressed the greatest astonishment that this Ministry should actually have issued such a Return as that relating to the taxation of land values in New York, Boston, and San Francisco. He asks, Why issue this Return? Was it issued as part of our defence for the taxation of land values? He asserts that it has no bearing on the subject, and he inquires whether my right hon. Friend the Chancellor of the Exchequer has ever seen the title-page and whether any other Members of the Ministry have read the Return. I do not like to be unkind, but I wonder how far he has read it?

Every word.

My hon. Friend says every word of it. Then I am afraid I shall have to use unkind language, because I cannot understand how he could have read every word of it and not see the extraordinary and almost conclusive importance of this return on the very question which we are discussing. It is true that the early part of the Return does not deal with land values, but with the taxation of capital values, which is not exactly the proposition which we have now before us, but is a subject which is well worth the time of the House to consider it, because the information which it gives, however controversial, will be found valuable from one point of view or another. The most important part of the Return, however, is that which relates to land valuation, and that gives a most excellent and instructive statement as to the facility with which site values may be ascertained. It tells us what took place, when the part of America with which are now concerned, some years ago, thought it was desirable to separate the valuation of the total hereditament which had hitherto been made, into the value of the site and the value of the structure. I think up to 1903 the American rating and taxation authorities had valued the composite structure as a whole. In 1903 it was desired to ascertain the site value as well as the value of the structure. It does not matter why, the fact was it was desired to do so, and that should be sufficient for our purpose. The valuers were directed to distinguish between structure and site. In other words, they were instructed to do the impossible, that which my hon. Friend has denounced and derided, and that which hon. Members opposite have spoken of in terms more moderate than those which occurred to my hon. Friend, but still in sufficiently condemnatory language. That is what these unhappy valuers were ordered to do, and the return goes on to point out that they were given no extra time in which to do it, and they were not confined in their inquiries to the then city of New York. They did it without any extension of time, and without, as far as I can ascertain, any addition of cost. Why were they able to do it? Because this impossible thing had been regularly a part of their daily business of valuation. Up to the year 1903, though directed only to the value of the composite hereditament, consisting of the site and structure together, in order to reach the value of the hereditament they had first of all taken the site value and then the value of the structure.

I did not say that was impossible.

In other words they had been valuing sites for a long time, and knew perfectly well that all they had to do when they were called upon to give the site value was to refer to the already existing memoranda and put them forward, and from that time forward the city of New York got what it wanted and proceeded to deal with the site value as well as the value of the structure. There is a still more striking point upon the face of the Return. We hear a great deal said about the difficulty of a fresh valuation. My right hon. Friend himself has referred, I think, in guarded terms to the cost and the difficulty which might arise upon the first valuation, and I do not think that anybody can deny that to a certain extent, under existing conditions in England, there may be difficulty. But this Return, which we have not read, and which nobody but my hon. Friend has read—this Return gives a most useful and excellent illustration of a first valuation. It tells us how in 1898 it was desired to incorporate in the city of New York a part of Queenstown, which was a territory with 129 square miles, consisting of many towns and villages. It had been most imperfectly mapped and planned when it was incorporated, and it was thought desirable that it should he subjected to this valuation, which, as we know, was a valuation comprising or based upon a distinction between site and structure. What was the cost of that operation? What was the length of time it took? There were, I think, hereditaments valued altogether of the value of 21 millions sterling, or close upon 21 millions sterling—I am turning dollars into pounds sterling—there were 113 separate parcels, and the cost of the process of valuing and distinguishing between site and structure in that case was £5,000 odd, amounting to 27 cents per pound, and yet my hon. Friend—I am sure he felt he was only doing it under the strongest sense of public duty—asked the House to believe that we have not read this Return, and that if we had read it we would know that it contained nothing of material use upon this controversy. I admire independence, even when there is a passion for isolation, but I do not think that consistency and isolation ought to be incompatible with a limited amount of impartiality. My hon. Friend went on to make a grave attack upon Henry George, but he is welcome to his opinions of Henry George. I share them, so I can scarcely be expected to deal with them by way of repudiation. All I venture to suggest is that they are not strictly material to the matter we are discussing.

My hon. Friend makes a great attack upon Henry George, as though he had some supporters in this House, but I do not think he put that fact as being germane to the attack upon His Majesty's Government, because whatever may be said of us, we are not all supporters or advocates of Henry George. Then my hon. Friend made a great attack upon increment value, and put forward the old argument, though I do not say he is not entitled to use old arguments; he said you have no right to tax unearned increment unless you make provision for unearned decrement. That is certainly a startling principle. I wonder if he is willing to give it universal application? For instance, his favourite tax is the Income Tax, and I think he would put nearly the whole of this deficit upon Income Tax and beer and spirits. My hon. Friend is nothing if not logical, and my reply in logic is, What right have you to tax a man's income unless you make it up to him in years when he has no income? He said—I did not get the exact phrasing—he said you had no right, it was confiscation, and if you taxed unearned increment you must compensate a, man for undeserved decrement, and if you tax a man's income I suppose we must make some provision for compensating him when he has no income. The argument is that because you tax a particular form of property you must give some compensation to those who do not possess it, and I think that is scarcely worthy of an economist who believes that John Stuart Mill was not only an over-rated man but that his reputation is a matter of general astonishment to persons who know better than he did. I have listened really anxiously for my hon. Friend's taxes, because I wanted to know what hon. Members opposite would think of them. I knew that there is no one from whom he does not part company sooner or later, and I wondered what he was going to propose. With regard to the Super-tax, my hon. Friend, who is prepared to tax the beer of others and the tobacco of others, had something to say about it, and he made a more ungracious remark than I expected from him. He said he thought that the Income Tax proposals showed a vulgar envy of the rich man. Perhaps the House will agree with me that no answer is necessary to such a statement as that. My hon. Friend would not tax trade, nor food, nor land, nor wealth. It will be very interesting to see his Budget when he has to deal with the taxes of the country. He would tax beer, tobacco, and spirits, and I suppose, of course, that one does not regard the poor with much vulgar envy, and that therefore you may tax them; but I rather wonder at the spirit of my hon. Friend who deprecates taxation which falls upon the extremely rich and was so generous with regard to taxation which falls upon the extremely poor. It is not exactly the tone that I should expect from one professing his opinions.

May I interrupt for a moment. I stated distinctly I was in favour of the Income Tax and the Death Duties, and in favour of the whole of the Budget except the Land Tax.

He is in favour of taxation by way of Death Duties!

So I am.

Then I am afraid my hon. Friend must recast that peroration. Perorations are dreadful things. Those who have been brought up in the unhappily controversial sphere, in which it has been my duty to spend the greater part of my life, are well aware that the most skilful advocate may, if he gives way to his feelings, throw the whole case away by a few words in his peroration. Nothing needs watching more carefully than perorations, and that is the reason by perorations are almost going out.

I do not think I need spend further time over my hon. Friend. I would like to make some observations upon the speech of the hon. and gallant Gentleman (Mr. Pretyman). He complained that this Budget covered so much ground—that it comprised so many subjects. He did not confine himself apparently to the Budget. He had some very emphatic observations about old age pensions and about the sale of some guns. But he also was not content with attacking the substance of the Budget. He also dealt, not unkindly, with the motive of those who had framed the Bill, and he ascribed to us quite a new motive. One is beginning to find out what one's motives were. He said the object of the Budget was to drive the ownership of land into a few hands. He seemed to think that our insidious design was to get all the landlords of the country into the smallest possible compass, like the revolutionist who wanted all the aristocrats to have one neck that he might kill them at one stroke. He then complained that we had done nothing to encourage a more general distribution of land ownership. I think he would agree that we had done about enough in our Budget. That we do not add to it a Small Ownership Bill and a Small Land-holders Bill seems a very singular complaint to make against it.

What was the next complaint that he made against it? He said land-owners would be compelled to sell at a discount, by reason of the tax, so that the next purchaser who came in would hold the land practically free of the tax.

I did not say so.

Then I must have misunderstood what the hon. and gallant Gentleman said. To-morrow's Report will show. However, I will not pursue the point further. But is it the fact that our Budget can possibly have the effect of driving ownership into fewer hands? I thought the great complaint against it was that it forced them to sell; that they could not hold their land; that land was cheapened. I understood the Leader of the Opposition to draw a moving picture of land in the neighbourhood of a great city being so cheap that people came in from the country to buy it and live there, so that his complaint that we are driving ownership into a few hands is one I need not dwell on very long. The hon. and gallant Gentleman also gave an instance of the evil operation of taxes of this character in America, where he said rich men were driven from one locality to another—a very significant remark. Why are they driven from one locality to another? Because of the unequal assessment in the different localities, which, I think, shows that there is some use in having this tax first of all handled by a central authority, so that we shall not have our unfortunate rich men, who are in such ill straits, driven from pillar to post, or from one locality to another.

Then the hon. and gallant Gentleman challenged us to mention a single tax on exactly similar lines to the present tax—that is to say, any tax in any other country exactly similar—he was rather careful to lay stress on that word—to the tax which we are introducing here. I believe there is none exactly similar. Every tax in any degree corresponding to the taxes which we are introducing is much more severe. I should like the hon. and gallant Gentleman to study the case of Frankfort. I am informed that there the increment is collected on the total hereditaments and not merely on the site values. That is a most important consideration. Then he spoke of Death Duties, and he said it is true that they are paid in general at once on death, but he resisted the inference drawn from that circumstance by my right hon. Friend that they are therefore not oppressive, but that they are easily paid out of the personalty which is left by the testator. He said that is not so, but that the money is borrowed. Is he really right about that? Has he thought it out? The State is willing to leave the money on the land at 3 per cent. Is it likely that anyone is going to borrow—it is not easy to do it at much less than 4 per cent.—in order to buy off a creditor, who will leave the money lying there at 3 per cent.?

Then he went on to deal with minerals, and he raised great cheers by his observations on that subject. I had a little difficulty in understanding the cheers. He said the Chancellor of the Exchequer had drawn attention to the fact that £15,000 was charged for ungotten minerals at Rosyth. No doubt the Chancellor of the Exchequer was showing that ungotten minerals were taken into consideration on sale, and that they were not very inadequately valued. Then the hon. and gallant Gentleman went on to say—entirely non sequitur for purpose of his argument—is the Chancellor of the Exchequer aware that the Government have since got £100,000 worth of stone out of the site? I could not get a better illustration of the operation of the tax. The purchaser makes an estimate of the ungotten minerals. He has to buy them at an arbitration price, and the price is £15,000. When he begins to develop then the value of the minerals goes up. He has only paid on the ungotten minerals. The taxes would not be laid on the £100,000. Would it be a very iniquitous tax to put it on the £15,000 when the £100,000 was lying so near in the neighbourhood?

The hon. and gallant Gentleman asked me where is there a tax like this, and I told him there was a worse tax at Frankfort. What is the machinery for collecting the Increment Tax? I am quite sure hon. Members will be assisted in Committee if they look now at the clauses which set up the machinery of the Increment Tax. First of all, you have to get the original site value, because later on you will have to compare that with the value which exists at the time you collect the tax, and it is the difference between the two which makes the increment upon which you impose your duty. You must therefore get your original site value under clause 14. That gives you the definition of site values. Mark these steps in order to see what justification there is for charging the Government with vindictiveness. When the House comes to look calmly at each of the steps, when it comes to consider the safeguards that we have taken against anything like an excessive amount being placed upon the land, it will be seen that we have handled these questions with the most careful consideration, and the most careful moderation. First of all, we eliminate all buildings. We make a deduction then for any permanent works in fitting the site for buildings. I noticed some correspondence in the newspapers which seems to treat this as a most extraordinary process. One gentleman—I do not know whether he was not an hon. Member—speaks of the destruction of the property, and then winds up a letter to "The Times" by asking, is it a joke to hypothetically eliminate all the buildings and all the works of a permanent character? If it is a joke, it is one for which the landlords of the country ought to be extremely thankful, because it immensely restricts the operation of the tax. It is a most important point, which differentiates this from other taxes of like character. If it is a joke, I am sure the landowners of the country will, for once, appreciate my right hon. Friend's fiscal humour.

Then it is an open site, and allowance is made for the expense of fitting it for building purposes; and then comes the most important qualification—more important when one comes to deal with undeveloped land than when one is simply dealing with the increment of value. That is that there is a deduction for any part of the value of the land which is attributable to the building. You do not get here the complete site value. Mark what deductions you make on the site value. It is a very important step to sweep all your land clear of buildings before you begin to put the tax on. But that is by no means the furthest that we go. Having got down to the site we proceed to make deductions on the value of the site. If the owner, by putting buildings there, has given it a value peculiar to itself we make a deduction for that. When we have got this very much diminished value we do not tax it. We promptly proceed to exempt it, and on what terms do we exempt it? We do not merely value it as for its existing use. We say we may take into its present value all that belongs to the market value, that is the prospect of the future increment of value. You take in your expectation; you put that into the site value, and when you have got them you have the original site value to which no tax attaches—that is to say, no increment value attaches. That shows on the part of all those who have been concerned in devising this tax some care, at all events, to ensure that they shall not be exaggerated, and, above all, that they shall not be vindictive. I repudiate the charge that this is an oppressive tax. It is not an agreeable duty to put a tax on anyone. It certainly is not agreeable for those who have had such an economic upbringing as that in my own case. We believe that all taxes are bad, but we make some exceptions. We make an exception in favour of a tax on beer, and we are making an exception in favour of a tax on untenanted land, and there are other exceptions, but save as regards these exceptions we believe that all taxes are bad, and we do not want them to be big. We have done our best in framing this Budget to take care that they shall not be exaggerated in any way whatever. You cannot make them to fall with perfect equality and with equal incidence on everybody. It would be vain to attempt it. Take this tax on site values at the point to which I have now brought it. What do we tax? We tax only that which the land-owner gets at the time the site value was taken and which he did not expect to get. We tax that which he did not value originally. We tax only the fruition of some vague expectation which had no market value at the time the land was acquired. That is a very moderate and temperate plan. Of course, it is founded upon the effort to eliminate from the subject-matter of taxation everything that properly belongs to a man's labour and enterprise. That is the fundamental idea of the tax. Is it an unjust idea? I wonder what the alternative plan of the right hon. Gentleman the Member for East Worcestershire (Mr. Austen Chamberlain) would do when he comes to apply it? Will he safeguard the interests of labour and productive capital with the same care and religious anxiety that has been displayed in connection with this tax? The right hon. Gentleman has reminded us of his alternative. I am not going to discuss it, but, after all, it is at the back of our minds as that which is necessarily to be put in comparison with our proposals. So far from the plan of the right hon. Gentleman safeguarding the interests of labour and enterprise, it is aimed at getting exclusively on to labour and enterprise.

Quite untrue.

The right hon. Gentleman says that is quite untrue. My opinion is that it is to get taxation on to labour and enterprise. What is the meaning of this attempt to exempt land? What is the meaning of this argument of which we have heard so much and which has been repeated by the hon. Member for Preston—the argument that if you put a tax on property it is putting it on the present owner exclusively?

I do not want to interrupt the hon. and learned Gentleman, but I wish to say that the argument he is putting to the House is not the argument used by me or by my hon. Friends, and it was repudiated by the hon. Member for Preston a moment ago.