I beg to present a Petition from the Blackrock Urban District Council, praying that such Amendment may be made in the existing law as may enable leaseholders in towns who have built under building leases to obtain compensation at the termination of their leases.

The Bill which I am asking leave to introduce is to amend the law relating to the deportations of British subjects in India. Its object is to bring the law under which British subjects are liable to be arrested and deported without being charged and without trial, into line with what is known as the Irish Coercion Act, under which certain powers were given during the administration of Mr. Gladstone to the Lord Lieutenant of Ireland to arrest people on the warrant of the Lord Lieutenant, and put them into prison without any charge or trial. That Bill contained several safeguards for the persons who were affected.

On a point of order, Mr. Speaker, I desire to call your attention to a motion in the Order Book, on page 37, standing in the name of the hon. Member for the Glasgow and Aberdeen Universities (Sir Henry Craik), which reads as follows:—"East India—To call attention to the affairs of the Indian Empire, and to the measures rendered necessary for the suppression of sedition; and to move a resolution." Under these circumstances, I wish to know whether it is in order to bring in a Bill dealing with this question?

I thought the hon. Baronet knew that a motion cannot block a Bill, although a Bill can block a motion.

I will state very shortly what is the law in India, and how I propose to amend it. Under the law in India there is more than one regulation, passed nearly a hundred years ago under the East India Company, giving power to the Executive to arrest and deport prisoners, and put them in gaol, or fortresses, without stating any charge or subjecting them to any trial, if, in the opinion of the Governor-General, such a step is necessary to secure British dominions either from foreign aggression or internal commotion. If the Viceroy in Council is satisfied that a particular individual is dangerous for either of the two reasons I have mentioned he issues a warrant to a policeman which merely states that—

"Whereas for good and sufficient reasons A B has been ordered to be deported and imprisoned, you, the policeman or gaoler, are required to keep him in custody for an indefinite period." We all know that during the last 18 months a considerable number of British subjects have been deported under warrants of that kind, and are in prison under such warrants at the present moment. The danger of that is that any man may, however good his character or record, have his house invaded at any moment by a policeman, and may be asked, on the production of this warrant, to accompany that policeman to a fortress or gaol, and there be kept until the Executive Government sees fit to order his release. That man has no opportunity of knowing why he was arrested, and he has no chance of removing any ground of suspicion. He is forbidden from taking any proceedings under Habeas Corpus after he comes out of prison, and he cannot institute any proceedings for a malicious prosecution under any circumstances. He is, therefore, to the end of his time prevented from exculpating himself from the unknown charge for which he has been punished and put into prison. I think that is a very unsatisfactory state of things in a free Empire. The necessity for amending the law becomes more acute when you remember that in this particular part of the Empire the police largely concerned in carrying out this law have been found by the Government Commission appointed by Lord Curzon, and lately by several judges of the High Courts in India (including within the last few days the Chief Justice of Bengal), to be utterly untrustworthy in carrying out arrests for such offences, and as regards the secret information they give against the persons they arrest. What I propose in the way of amending the law is not to do what I should like, which would be to repeal these regulations altogether as being, in my opinion, absolutely hateful, but to suggest something which is likely to meet with approval in every part of the House. The moderate Amendment I am proposing simply introduces those safeguards which were thought to be necessary by the Liberal Government under Mr. Gladstone when conferring the same powers upon the Lord Lieutenant of Ireland.

First of all, a British subject must be reasonably suspected of having been guilty of treasonable practices or of a crime punishable by law, being an act of violence or intimidation, and tending to interfere with or disturb the maintenance of law and order. That insures in the first place that a man must have been guilty of some definite offence. At any rate, it is intended to provide for that. At the present moment, under the Regulations, as I have already pointed out, no offence is stated or is recorded before a deportation is carried out. My second Amendment is that every warrant whereby any person is declared to be reasonably suspected of any crime shall contain a definite statement of the character of such crime. The warrant at present states nothing of the kind, neither does the deported person or the police who issue the warrants know what the offence is. The officers have not the slightest idea of the offence charged against the deported person. My third proposal is that a copy of the warrant of arrest shall be given to each person arrested on the occasion of his arrest. The fourth Amendment is one taken from the provisions of the Act of 1881. It is to the effect that a list of all persons for the time being detained or deported, with a statement opposite each person's name of the prison or other place in which he is detained for the time being and of the grounds stated for his arrest in the warrant under which he is detained, shall be laid before each House of Parliament. Within the first seven days of every month during which Parliament is sitting and when Parliament is not sitting, such list shall be published in the "Indian Gazette" within the first seven days of every month. The object of this is to secure that this House shall be sure that the person who is deported knows what he is charged with, and that this House, which is responsible for the government of India, will know why the extraordinary steps which have been taken have been considered necessary by the Government of India. Effect has been given to a provision in these Regulations which gives the deported person the right to make a representation to the Governor-General in Council with regard to the ground of his arrest. If a person is forbidden to know why he has been deported it is impossible for him to make representations as to the cause of his arrest. Under my proposals he will remain fully aware of what he is suspected, and therefore he will possess the right to make representations. As a further safeguard, which is taken from the Act of 1881, on the expiration of every period of three months after the arrest of each person detained or deported, and so from time to time on the expiration of each succeeding three months while such person is detained, the Viceroy shall consider the case of such persons and decide thereon. His decision shall be certified to the official who holds the warrant under which the deported person is detained, and that official shall endorse the Viceroy's decision on the warrant. That Amendment will secure, in my humble judgment, the impossibility of a British subject being deported without knowing what he is deported for. He will be able to show that he should not be deported, and, in case his representations are not effectual, his friends will be made acquainted with the reasons for his deportation, owing to the fact that those reasons will be laid on the Table of the House. These safeguards will, in my opinion, prevent a man being a victim either of malice or mistake. I am simply proposing reform which would protect persons from flagrant injustice—a flagrant injustice to which British subjects are at the present moment liable, and from which men of the highest character are suffering at this moment in India.

rose together.

I rise to criticise the Bill.

Does the hon. Member for the Montgomery Boroughs oppose it?

I oppose it, but I do not intend to divide against it. I submit that, although the hon. Member for Newbury has the right to make a speech in introducing his Bill, it is not desirable that he should avail himself of the occasion to bring charges against the Government of India. I am always ready to approve of the introduction of any Bill, but—

I rise on a point of order. You, Mr. Speaker, ruled me out of order because I was not going to oppose the Bill—only to criticise it. Am I, therefore, not entitled to speak as well as the hon. Member?

I am going to oppose it.

I do not quite know what the position of the hon. Member is. The Rule says that any hon. Member who wishes to oppose a Bill is to make "a brief explanatory statement," and I think that the Rule contemplates that the Member means to go further and divide against the Bill.

Of course, I shall immediately accept your ruling, but I submit to yourself, Mr. Speaker, and to the House, that in introducing the Bill the hon. Member for Newbury has accomplished the object which he had in view.

The hon. Member for Newbury brought a Bill forward under the Standing Orders of the House, and he is entitled to make a brief explanatory statement, and therefore he was perfectly in order. If any hon. Member carries his opposition to a Division he is entitled to speak.

Question put: "That leave be given to bring in the Bill."

Who is prepared to bring in the Bill?

Mr. Bennett, Mr. Cobbold, Mr. Hart-Davies, Sir Alfred Thomas, Sir Henry Cotton, Mr. F. E. Smith, Mr. Ramsay Macdonald, Dr. Rutherford, Mr. Fenwick, Mr. Morell, Mr. Henry J. Wilson, and Mr. Mackarness.

My name is on the back of the Bill. When I gave the hon. Member permission to use my name I was under the impression that the Bill went very much further than he now states.

Order, order. The hon. Member is now making a speech. His best plan will be to approach the hon. Gentleman, and ask him to take his, name off the Bill.

May I now explain why I wish my name taken off the Bill?

Will the hon. Member for Newbury bring the Bill to the Table?

presented the Bill, which was read the first time.

I rise to lay respectfully before the House of Commons a view of this Debate which has not so far been put forward during the course of these discussions. I intend to ask this House to consider these proposals from the point of view of Ireland. It is perhaps not surprising, remembering what the treatment of Ireland has always been at the hands of this House, that no mention whatever has been made of the effect that this Budget will have on the fortunes of the Irish people. Hon. Members must know from past experience the views of Irish National Members upon financial matters connected with Ireland, and they therefore will not be surprised when I announce that we intend to cast our votes against the second reading of this Bill. I am not concerned in dealing with this Bill from the British point of view. From the British point of view this probably is regarded, and rightly regarded, as a democratic Budget. It certainly does embody some great Radical principles with regard to land valuation, unearned increment, the graduation of the Income Tax, and the Super-tax, which are of enormous value to the democracy of this country. But I would ask hon. Members for British constituencies to be kind enough to remember that these great principles have been brought within the range of practical politics largely by the assistance given by Irish Nationalist representatives in this House when there was not a handful of men in any part of this House to advocate those principles. With reference to Land Valuation and Income Tax, the Irish Nationalist representatives always, in season and out of season, have advocated these questions. Therefore I am not disposed to deny that from a purely British point of view this Budget as a whole may be a good one. But we have not come here to discuss measures from the British point of view. We are here against our will. We are here in a permanent minority; we are here always in opposition; we have no control over the Government of our country or over its finances; we have not come here to form a part of the House of Commons in the sense of its being the governing body of this country and Empire. We have come here simply because we are forced to come here to endeavour to wring from an Assembly which, when it is not hostile, is largely ignorant of Irish affairs, some concession of our rights. From the Irish point of view I think I shall be able to show every impartial, fair-minded man who does me the honour of listening to me that this Budget is bad and oppressive. The great democratic principles enshrined in this Bill to which I have referred, have, in their application to Ireland, by reason of the peculiar circumstances and conditions of that country, little or no value to us, whereas the remainder of this Budget inflicts upon the people of Ireland a cruel additional burden; and it inflicts it upon the poorest population in any part of the Empire. This is a most anomalous Budget from our point of view. It is a Unionist Budget proposed by a Home Rule Government, and the strangest thing about it is that it is a Unionist Budget proposed by a Home Rule Government which violates not only the spirit but the letter of the Act of Union. This Budget has been drafted, as all Budgets have been drafted for the last century, from the point of view of Great Britain alone. Ireland was of no account in the drafting of this Budget. The truth is the present Chancellor of the Exchequer, like his predecessors, in considering this great question of finance, recognised that he could hope to get but little in the shape of large sums of money from Ireland. In fact, he and his advisers looked upon Ireland as a negligible quantity, and they, therefore, proceeded to draft a Budget which they thought would be good for England, giving no consideration whatever to the conditions and circumstances of Ireland, or whether what might happen to be good for England would be good for Ireland. Ireland was simply thrown in.

This has been the history of the whole century. It has been a history of budgets passed in the interests of England which had the effect of robbing and plundering Ireland. You may tell me that the Old Age Pensions Act of last year was a boon to Ireland. Well, I admit that, but allow me to point out that that very matter of old age pensions for Ireland is a strong illustration of the argument I am raising. The Chief Secretary for Ireland said that old age pensions was the only good thing Ireland had got out of the Union. The old age pensions were, no doubt, valuable for Ireland; they were so much gain, but we have this financial condition, that we are always obliged to endeavour to grasp any financial advantage we can get for our country. Let me ask the Chancellor of the Exchequer this: Does he imagine—does the House imagine—that if an Irish Parliament were sitting at Dublin, and if Irishmen had the control of the Government, and of the finances of their own country, and they suddenly found themselves, under present conditions, with 2½ millions a year to spend for the benefit of their country, does he seriously tell me that they would spend it on old age pensions? It is, no doubt, a valued concession to us. It has brought relief to many a stricken and unfortunate family in Ireland, but I am not afraid to say, notwithstanding, that in my deliberate judgment in the condition of Ireland at the present moment, to spend 2½ millions a year in this way on old age pensions was extravagance, and extravagance which would not have been indulged in by an Irish Parliament composed of Irishmen responsible to the country and knowing the conditions of that country.

We have supported old age pensions, and I think we are glad that we have got this large proportion of them, but for the benefit of Ireland, for the future of Ireland, would it not have been far better if a large portion of that money were spent, say, on increasing transit facilities in Ireland, if a large portion were spent on arterial drainage on Ireland and on the general development of the country? I therefore quote these old age pensions as an illustration of my argument that Budgets are prepared with a view to England and without any consideration of the special needs and requirements of Ireland. In this case the Chancellor of the Exchequer never stopped to consider whether he could not spend two and a-half millions better in Ireland than on old age pensions; England demanded old age pensions, and old age pensions on a scale suited to England therefore were granted to England, and because we were tied up in this financial union with this country Ireland had to be thrown in, and we had this particular system of old age pensions extended to our country, without any consideration or any consultation whether in Ireland the money, or a portion of the money at any rate, might not have been spent in a different and more productive way. But we were glad to get it, and I agree with the Chief Secretary that it is the only good thing we ever got out of this country since the Union. That is the only exception. On the other side of the picture there has been continuous robbery of Ireland, and wholly because we have the privilege of being tied up in financial union with this country we are obliged to pay our share of every extravagance and every crime that this country may be guilty of. We have to pay our share of the bloated military armaments of this country, we have to pay our share of the bloated naval armaments of this country, we have to pay our share for the conduct of wars which are absolutely hateful to us, we have to pay our share even for the beautification of the Imperial capital. There is not one of your public buildings erected at the cost of millions of which poor Ireland has not had to bear her share or some share. In the past every extravagance, luxury, or crime that this country embarked upon Ireland has been called upon to pay her share. Therefore I will say that the whole incident about this Budget and the whole financial history of the case between England and Ireland is the strongest and most unanswerable argument in favour of Home Rule.

Ireland is tied to a rich country, and she is forced, because she is tied to a rich country, to bear her share in the extravagances and caprices of that country. Mr. Childers, in his draft Report of the Financial Relations Commission, put this in a sentence in the clearest-cut way. He said:— of the Union was three millions, but in 1817 it was six millions, and therefore for the first 17 years of the working of the Act of Union you had Irish revenue rapidly declining, and Irish taxation and Irish debt rapidly increasing. In 1817 the Exchequers were amalgamated, and a system of so-called indiscriminate taxation was applied to the two countries, and between 1817, when that operation was effected, and 1894, when the Financial Relations Commission held its sittings, will it be believed that the taxes per head of the population in Ireland increased by 170 per cent. Under the system of indiscriminate taxation 170 per cent. has been the increase per head of the taxation of Ireland, and there is a decrease of over 11 per cent. per head of the population in England. And all the time we have been suffering in another way. Your taxation in England has been fairly enough divided between direct and indirect, but in Ireland, by reason of the extreme poverty of the people, the only way to raise money has been by taxing the necessaries of the people, and the result is that to-day—and it has been so all through—72 or 73 per cent. of the entire taxation has been borne by the indirect taxes paid by the poorest class of the community on commodities which are really the necessaries of life.

The Financial Relations Commission which sat in 1894 and 1895, by a practically unanimous Report, because I think there was only one Commissioner who did not agree with the statement I am going to make, reported that Ireland was overtaxed to the extent of two and three-quarter millions a year in proportion to a fair contribution according to her resources, and Sir Robert Giffen, whom you recognise as one of your greatest financial authorities, summed up the matter in this way in the year 1886, even before the Commission sat, when he was a voice crying in the wilderness. Sir Robert Giffen said:— down, her population has diminished since the Commission sat by a quarter of a million people, and during the same years her taxation has increased by about two millions a year.

The whole of this is in direct violation not only of the spirit, but of the letter of the Act of Union. This is a Home Rule Government, in this sense, at any rate, that every man on that Bench is publicly pledged to the principle of Home Rule. They say under present conditions they cannot give us Home Rule. Will they give us, at any rate, the benefits of the Act of Union? Englishmen are very fond of speaking of this not as an Act, but as a treaty. We have never regarded it as such. We never felt morally bound by the Act of Union. We always felt, and we feel today, that we should be morally justified in tearing it to pieces at any moment and disobeying it and trampling it under foot. But their case has always been that this is a treaty entered into between two sovereign Parliaments and two free peoples. Article 7 says:— And when some great Englishman in this House, opposing the Union and criticising the action of Mr. Pitt and others, asked what guarantee would Ireland have once her Parliament was abolished that this country would keep faith with her, and that the united Parliament would give her the exemptions and abatements which they said in the Act of Union would be given to her, he replied:— the truth of the finding of the Commission that Ireland was overtaxed to the extent of 2½ millions a year, and every time we raised it, and we raised it very often, practically the whole of the Liberal party and the Gentlemen who form the present Government, voted in favour of our Motion. What was the Commission? Sir Edward Clarke, whose testimony will be accepted, I think, in all parts of the House as an impartial and fair man, with no predilections in favour of Ireland, in a remarkable speech as to the character of the Commission, said:— intensifies it. By the new Whisky Tax the Government are discriminating in favour of England and against Ireland. [An HON. MEMBER: "No."] Yes, the paragraph I have read from the Report touches this point. Identity of impost does not mean equality of burden. You are taxing whisky in Ireland and in England as well, but you are not taxing beer. Whisky is the drink largely consumed in Ireland, and, I believe, also in Scotland. Beer is the way in which alcohol is taken in this country. Why do you not put a tax upon beer? You would have got your money with the greatest possible ease. A very small impost on beer would have given you the money you want. But no; instead of going any distance to remedy the injustice from which we suffer, you impose a tax which discriminates against Ireland, a poor, impoverished, and plundered country, in favour of England, a wealthy country, which is well able to bear an additional impost. You put a crushing impost upon the one of the only remaining industries in Ireland. Whisky distilling is one of the few industries left to the people. You discourage dillage by discouraging the growing of home barley. You hit agriculture, you hit employment, and you promote emigration. Let me say further of this Whisky Duty—and I regard it as one of its most serious defects—you promote the circulation and consumption of bad liquor. The temptation will be irresistible to offer inferior spirits for sale, and those of us who are acquainted with Ireland know that, so far as drunkenness is concerned in that country, especially the rural parts, it is almost entirely due to the fact that people drink bad spirits. You are going to add to that; you are going to give an inducement for the consumption of inferior spirits, and, so far from doing a benefit to the cause of temperance, I believe you are doing the worst work for the cause of temperance you can do. In the Licence Duties you are going to destroy the small traders of Ireland. I base my opposition to the second reading of the Bill on broad national grounds, and I do not intend to dwell on details at any length.

Let me say a few words on this Question of Licence Duties. The cases with reference to licences in Ireland and England are entirely different. This may be an admirable provision for England, but, as I shall show, it is entirely unsuitable for Ireland. First of all, the last Licensing Bill, or "Confiscation Bill," as it has been called, was not extended to Ireland. Nobody suggested that it should be extended to Ireland. Why? Because not only its promoters, but everybody who discussed the Bill in this House, admitted that the conditions and circumstances of Ireland in the matter of licences were such that separate lgislation would be necessary. Therefore we have your admission that the circumstances of Ireland are different from those of this country. Licence Duty in Ireland is not paid by the brewer. In this country it is paid by the brewer. In Ireland Licence Duty is paid by the individual licensee. The man who has bought the property and invested his capital in it has to pay the Licence Duty himself. The law has been different on this question of licences all through in this country and in Ireland. In Ireland there has always been, ever since a well-known decision of the Law Courts many years ago, a well-recognised vested interest held by the licensees. That is quite different from the state of things under your law as it stands in this country. Another difference is that in England and in Scotland, I believe, also the licensed premises are in reality simply public houses. In Ireland—would you believe it?—96 per cent. of all the licensed premises are premises where a mixed trade is carried on, and where liquor is the least part of the trade. They are generally shops selling soft goods, groceries, and all sorts of things besides liquor. What are you going to do by the Bill? You are going to enormously increase the Licence Duties, and you are going to calculate the scale of the licences not only on the portion of the business—which in most cases is very small—used for the sale of liquor, but on the whole premises and business, thereby inflicting a grievous injury on these small traders.

Let me take another point which seems specially to hit Ireland. I do not for a moment accuse the Chancellor of the Exchequer of attempting to hit Ireland, but it is the old story. He did not consider Ireland in this matter, and he did not ask his officials what effect these proposals would have upon Ireland. His mind was too much employed with the great problem how they would affect England. The right hon. Gentleman, following his predecessors, and even Mr. Gladstone in 1853, when he put two millions of taxation upon Ireland just after the famine, has made proposals under which the small traders of Ireland are the men who will he hit. In regard to this I have some startling figures. The minimum Licence Duty at present paid in the whole of the United Kingdom applies to 7,952 houses, and of these 7,190 are situated in Ireland. Therefore, any legislation which has a tendency to hit these small traders paying the minimum licence hits them hard, and it hits them harder than in England, because the proportion is enormously larger in Ireland than in this country. Most of these small traders in Ireland are in very small towns. Our average town is quite different from your average town in this country. Your county town is one with a population anywhere between 10,000 and 50,000. Perhaps in some cases it is 100,000. Anyhow they are all considerable aggregations of population. That is not so in Ireland. In Ireland our average town has 5,000, 6,000, or 7,000 people, and very few of them are up to 10,000, and fewer still over 10,000. Let me just quote how this minimum licence will affect these small traders in these small towns, taking the limit of population as provided in the Bill. In the little town of Athy, with 3,599 of a population the minimum rate of licence which is now £4 10s. would be £10. In the little town of Armagh with a population of 7,588 the minimum would be £15; in Athlone, with 6,617, Carlow with 6,513, and Ennis, the capital of county Clare, with a population of 5,093, just 93 over the population limit, the tax would be raised to £15; while in Clonmel and Kilkenny, each of which is just over 10,000, and in Newry, which is just over 12,000, the minimum rate will be £20 instead of £4 10s.—that is an increase of 75 per cent. This provision cannot hit England in the same way, because, as I have shown, in England the proportion of these small houses is much smaller, and the law in England is entirely different in character.

There is just one other point. There is a provision in this Bill which entirely alters the law of those licences in Ireland where drink is taken off the premises. The provisions of the Licensing Bill in England which prevent liquor being taken away except in a certain quantity did not apply to Ireland. Now the right hon. Gentleman is making a proposal which will prevent liquor being sold from these shops except in quantities of a quart and over. I tell him if he makes inquiries he will find I am speaking the exact truth in saying that if that provision is carried into law it will absolutely ruin hundreds and hundreds of these establishments. Owing to the nature and custom of the trade they will be unable to carry on, and in cities like Belfast I am told it would completely destroy an overwhelming number of these houses. Having mentioned that point, I come back to the main question of principle on which we object to this Budget, and I say to the right hon. Gentleman that the only honourable and fair and just way of dealing with this Irish financial question is to exempt Ireland from the operation of the whisky tax and of the licence proposals. He may have other devices. Let him tax beer instead of whisky. But from my point of view, and from the point of view of financial justice to Ireland, I demand that he should act up to the spirit of the pledges of British statesmen in both countries, on the faith of which the Union was carried, and that he should carry out not only the spirit but the letter of the Act of Union, and that he should carry out the recommendation of his own Royal Commission, manned by Englishmen, and founding its Report upon English financial expert evidence. He should—and this I think ought to touch his English colleagues—carry out their own pledges given publicly in this House to Ireland when they were in Opposition; and they ought to remove this injustice from Ireland by relieving her under the terms of the Act of Union from this additional taxation, and in that way put an end to the injustice which has been deadly in its effect upon our country, and which has all through the century swept over our country just like the breath of war sweeping over her plains. I beg to oppose the second reading of this Bill.

It is not my intention, and it is certainly not my duty, to try to support the speech to which we have just listened. In some respects I am in agreement with it. I think that the new Spirit Duties will be fatally unfair and unjust both to Ireland and to Scotland. I think also that the principle upon which they are imposed is entirely wrong. Indeed, I altogether agree with the canon of finance, which came from a curious quarter, one of the hon. Gentlemen below the Gangway, that the Chancellor of the Exchequer should tax the citizens of this country, not according to what he thinks their virtues or their vices, but on some other principle. The Spirit Duties are imposed with some idea of improving the virtue of the citizens of the country, but I am bound to say that the hon. and learned Gentleman (Mr. John Redmond) has an advantage in the case of this unjust taxation which does not apply to the rest of us. The present Government are not easily moved by arguments based on reason or on justice, but I have never known a Government which is more impressionable to argument based on Parliamentary advantage. The hon. and learned Gentleman has the remedy, I can assure him, and he knows it, in his own hands. If he chooses to take off his coat he can be sure that this tax will either be taken off or greatly diminished. He has got to make his choice. He has to decide whether it is more to his advantage to insist on having a Land Bill carried through this House, whatever happens to it afterwards, or having this unjust taxation removed. On his choice this issue will depend. This subject is an enormous one, and, as it happens, this is the first opportunity I have had to speak on it. I shall try to be reasonably brief, but the subject really covers the whole field of our social and political welfare, and perhaps temptation may be too strong for me, but I hope not.

It seems to me that it is difficult to imagine any contrast more glaring than that which is presented between the first and even the second Budgets of the present Government and their subsequent efforts in the same field. The Prime Minister began his career as Chancellor of the Exchequer, I believe, with the intention of conducting the finance of this country on sound lines. He had the hope, I am sure, of taking a worthy place in the long line of those who had preceded him in the distinguished office, which had included so many and so great men. That was his ambition in the first two years. It had to give way to other considerations. It was in the earlier period that the Prime Minister associated himself with, as he said, all his predecessors in declaring that an Income Tax at a rate of 1s. in the £ was impossible to justify. The Prime Minister is not present, and I must not take advantage of that to omit the magic word "uniform" which he used at the same time. That excuse which is used to cover the inconsistencies of the right hon. Gentleman, which, after all he has gone through during the last three years, seems scarcely worth his while. It is too pitiful to be worthy of serious argument. The Income Tax was not uniform at the time he spoke. It was graduated downwards then, as it is graduated now both upwards and downwards, and every argument which he could have used to justify his statement then, is just as strong to-day as it was at that time. It was in the earlier period also that the right hon. Gentleman, speaking of the Sugar Duty, said, looking forward to the needs of the country, he could see no prospect of remission. A year passed, and the duty which he said could not be remitted was reduced by half. By a strange coincidence it happened at the time the remission was made that a distinguished Member of the Government had just missed one safe seat, and was in search of another, and the constituency which he was wooing happened, by one of those remarkable coincidences which frequently occur, to be the one town in the Kingdom which was most likely to be pleased by the remission of the Sugar Duties. It was also during the earlier period that the Government greatly reduced the debt of this country. That was a great achievement, and they are very proud of it. I have never been able to understand why. At the time they attacked our Government on the question of Finance, the one ground on which they attacked us was—the Prime Minister used the argument on hundreds of platforms—that we had raised the normal annual expenditure of the country. Have they reduced it? They have increased it, and yet they boast that in their hands an increase of the annual normal expenditure is a great triumph of economy. But, at all events in the earlier period, they did reduce the debt. What are they doing now? The Prime Minister suddenly gave us last year full warning of what we had to expect. He said to us in effect: "Look how virtuous we have been; look how many months, even years, we have been total abstainers. Have we not earned the right, to a debauch? We are going now to paint the town red"; and they are doing it, and with a vengeance.

The same Government, whose one boast on finance is that they reduced the debt, are this year proposing to diminish by three million pounds the fixed fund for the remission of the debt, and at the same time to do away altogether with the old Sinking Fund, to which so large an amount of the debt remission during their period of office was due. The principle on which their first Budget was framed was perfectly plain. There was sound finance. The principle on which the other Budget has been framed is perfectly plain. It was almost openly avowed by the Attorney-General the other day, who told us we had not yet seen the effect of the Budget on by-elections. The new principle is to use the control of the finances of the country to win back the popularity which they have lost. The new principle began last year. They introduced and carried through the House the old age pensions. I do not say anything against the principle of old age pensions, but after it was all over the Chancellor of the Exchequer, who was responsible for it, took a voyage across the North Sea and discovered Germany, and incidentally at the same time he discovered that he and his Government had been absolutely ignorant of the very elements of the question which they had dealt with. He began last year, and now we have the amazing production which we are discussing to-day. Here, again, the Government, as they did last year, are taking a leap in the dark, trusting to luck or their own ability to land on their feet. Into this Budget they have thrown haphazard every one of the extreme nostrums which have been current coin at Socialist meetings at street corners for years. They have thrown them into their Budget with so little consideration that even after the criticisms in Ways and Means they have not been able to state in a clear manner, and no one, least of the Members of the Government, have the smallest idea as to how these taxes are to be collected, on whom they will fall, or what will be their general effect. I said that their principle was to secure popularity, but that has two sides. There is a negative and a positive way of doing it. The positive way is by bribing every class which they hope may possibly vote for them. The negative way is by punishing the classes which they are sure will vote against them. Does anyone doubt that the principle of punishment does run through this Budget from beginning to end? If anyone has any doubt, let him refer to the Budget speech of the Chancellor of the Exchequer. In that speech he told us that he was not going to put a duty on beer. The hon. and learned Gentleman (Mr. John Redmond) wondered why he did not do that. I think he probably had a shrewd guess. But the right hon. Gentleman said, "I am not going to put an increased duty on beer, for that would fall upon the consumer." His plan was very simple. It was to wring the last farthing out of the trade which could be got without raising the price of beer, which might have a political disadvantage. That was the plan, and it was a cunning plan. It might have succeeded but for one thing—the animosity of the Government to the trade was stronger even than their cunning. They overshot the mark, and now they are face to face with the fact that a disagreeable political neces- sity will arise after all. But now the right hon. Gentleman tries to change his ground. His agility is one of his greatest attributes. On the last occasion on which we were discussing this subject he posed as the saviour of the trade. He claimed to have endowed it by his method of taxation with wealth almost beyond the dreams of avarice. I am not going to dwell further on that, and I wish to confine myself to one or two of the other taxes. The first one to which I shall refer is the increase of the Death Duties, and the other the new increase of the Income Tax.

I should have liked, if I had time, to refer to their effect on the ownership of land, for this reason, that in my opinion the most immediate, and, I believe, one of the worst effects of this Budget will be to make a complete revolution in what Lord Rosebery calls "our rural civilisation." That is, however, a large subject, which would take me a long time to discuss. When the right hon. Gentleman sees that he is actually going to destroy the present system of ownership of agricultural land, has he any idea of what is going to take its place? He may think that all he is doing is merely hastening the inevitable tendency. The existing system has brought into that industry co-operation between capital, as represented by the land owners, and labour, as represented by the tenants, to a greater extent probably than any other industry, and it is my belief that co-operation, and that alone, has made it possible for our agriculture to retain even to a comparative degree the prosperity which it now enjoys. Let us consider what the effect of these new duties—the Death Duty and the Income Tax—is going to have upon other forms of property. Like my right hon. Friend the Leader of the Opposition, I see no objection on grounds of justice to graduation upwards in the Income Tax any more than the graduation downwards, provided that it is done on fair, moderate, and reasonable lines. I see no objection to it on principle; but there is a great deal to be said against it as a question of expediency. As a matter of fact, I have no doubt whatever, from the point of view of the revenue, you will get, that it would have been wise to make your tax begin, as the hon. Member for Preston suggested, at £2,000, and at most £3,000, and have the rate uniform after that figure. That is entirely a question of expediency, but I do say, looking at it from the point of view of expediency, that, if by these taxes you drive out of this country capital which might be used in it, you are doing a very unwise thing, and, more than that, if you make the taxation upon that kind of property higher here than it is in other countries to which it might go, you will inevitably drive it to those countries. Some hon. Gentlemen on the other side of the House smile at the idea of driving capital out of the country. I know that there are some people who think that that is not a bad thing. There is one school of thought, which is represented by the hon. Member for Blackburn, who I am sorry not to see in his place, but who said the other day he did not care at all if all this paper capital went out of the country.

"Hear, hear," as long as you leave us the country.

I am surprised to hear that interruption from the other side of the House. I am not going to argue whether that is true; but when we remember what a large proportion of our needs for industry and for our daily existence is imported from abroad, and when we remember that this imaginary wealth, as they consider it, would be expected in payment for what we import, that seems a hard doctrine even for the faithful. There is another school of thought, represented by the Prime Minister, who said at the beginning of the Session that the more capital goes out of the country the better. He qualified that afterwards by saying that he only meant the surplus capital. I agree, if there were sufficient capital available for every purpose for which it could be used at home. I do think that right hon. Gentlemen who sit on that Bench should speak with the same voice. What is the use of the Prime Minister saying that capital for industry is available when the President of the Board of Trade, and when the Chancellor of the Exchequer at the time he filled that office, both said that railways, one of the most important industries in this country, and which in every other country is the test of other industries, find it impossible on any terms to get the capital that they require.

On reasonable terms.

I think the hon. Gentleman will find that I am not far out in what I have said. The Prime Minister and the Chancellor of the Exchequer now say that there is no danger of capital leaving the country. On this question the Prime Minister and the right hon. Gentleman hunt together. One of them makes a statement, and the other repeats it. As regards France it was the Prime Minister who made the statement that Income Tax and other direct taxes in France are going to be far higher than in this country. He admitted that the French Senate were considering the subject, but in admitting, that he made a characteristic sneer against that assembly in general. That is to be expected. It is part of his principle of abolishing the Second Chamber in this country, and he naturally does not see much use for similar institutions in any other country. But the French Senate does exist, and it is at least an open question, I think more than an open question, whether the proposed taxes will ever become law. At all events, so far as we are concerned, and it is what we are chiefly concerned with, we have the Income Tax and the Death Duties, while France has neither Income Tax nor Death Duties.

No.

I beg pardon, I have tried to get the best information I could. It is easy enough to contradict. As regards Germany, it was the right hon. Gentleman the Chancellor of the Exchequer who said, and the Prime Minister naturally repeated it, that there is a 2s. Income Tax in Prussia. Where in the world does he get his information? There is no such tax. I think I know how the right hon. Gentleman arrived at the figure. He took the State Tax in Prussia, and he took the tax for local rates in Berlin and other towns, which is also raised on the Income Tax basis, and he added them together and said there was an Income Tax of 2s. Even on his own method he is entirely wrong, though the difference is so slight coming from him that it is hardly worth while referring to it. The highest rate of Income Tax levied upon any kind of property in Prussia is 4 per cent., which is not 2s., but 9½d. or thereabouts. The rate tax in Berlin, added to the 9½d., give together 1s. 7½d. and not 2s. But that is really very unimportant, coming from the Chancellor of the Exchequer. The real point is, how in the world can he compare these taxes with our State taxes? Even in the case of Prussia the State undertakes some duties and bears much of the expense which is borne by our local authorities in this country. But the absurdity is almost really beyond belief when he includes municipal taxation in the same breath. Everyone knows, as he ought to know, for it ap- peared in the Report of his own Department when he was President of the Board of Trade, that the main local taxation in Germany is derived from the Income Tax and nothing else, and how in the world has he the face to put that against our taxation, without giving at the same time a statement of what our corresponding local taxation is. I admit it is not easy for a private individual to get exact information, but it is easy for the Government to get exact information, and I challenge the right hon. Gentleman to have prepared in his Department, not to give it as an obiter dictum in a speech, but to be laid on the Table of this House, a statement which will give a clear comparison of the taxation of wealth for Imperial State and municipal purposes in Germany and in this country. Will he accept that challenge? If he accepts it he will never use this argument on the floor of the House again. But the fact that they found their comparison on France and Germany is the best proof you can have, not only of the weakness of their case, but that they know the weakness of their case. It is not to France and Germany that British capital is likely to go, for it is going now to other countries, and largely to the United States of America. Why does he not give us a comparison with the United States of America? Let me give it. Take the State of New York, which is the centre of the money market in America. There is no income tax, and the death duties in the case of direct descent is almost nominal. I think this is important. Let me put to the House a case showing what the difference really is. Supposing a man in this country had an income of £6,000 a year, that he paid Income Tax for 30 years, and died leaving a fortune of £100,000. On that the Death Duties would be £10,000, and he would leave to his children £90,000. Take a man in the same conditions living in New York. The payment of Income Tax at the rate proposed in this Bill, spread over 30 years, at compound interest would mean £30,000. That would be an addition to the fortune. He would pay Death Duties, not at 10 per cent. but 2 per cent., and the legacy to his family in the one case would amount to £127,000, and in the other to £90,000. Yet, in the face of these figures, the right hon. Gentleman has the courage to say to the House "to what country can capital go where it would not have less benefit?"

May I ask the right hon. Gentleman if he has allowed for the annual tax which is equivalent to an Income Tax on real estate and personal property?

The hon. Gentleman. who knows New York, is perfectly well aware of their method of raising local taxation, and the only way to bring that into comparison is to compare, as I have already stated, all taxes with all taxes. Capital is going out of the country. Nobody with any connection, however small, in the City can doubt it. I know that personal experiences unless you can vouch for them are not of great value, but let me give this for what it is worth. A week after the Budget I met a friend in London. He told me that he had lodged a sufficient number of foreign securities in an American bank on the Continent to bring his income below the £5,000 at which it would be liable for the Super-tax, and that he had instructed the manager of that bank to collect the dividend and to invest it abroad as he should direct. I asked him for permission to use the name of the bank, but he declined. The point of the story is that the manager of the bank said to him:—

Capital is being driven abroad not only on account of your Income Tax and your Death Duties, but for another reason. What is the inducement now for anyone to invest in British railways when he can invest say in American. The rate of interest in America is higher. Yet till the advent of this Government British citizens preferred to invest at home, and why? Be- cause they thought the security was greater. Now what do you do by this Budget? You are not only driving it away by income Tax and Death Duties, but by other efforts you are making the security of property of every kind less than in any civilised country in the world. There is, however, probably one good thing which even this Budget is doing. You are driving capital out of the United Kingdom, and you are inflicting far greater damage than you imagine, but you are at least benefiting our Colonies. Canada is, I know, receiving a great deal of it. Canada is a very democratic country, more democratic in some ways than the United Kingdom, and it is sane. It is a country in which, as Lord Rosebery said the other day, it is not yet a crime to accumulate wealth. In Canada there is no Income Tax, and they are doing everything they can, and wisely, to attract the capital which you are doing everything you can to drive out of the country.

I come now to the new Land Taxes, which are from many points of view the most interesting and, from the point of view of principle, the most important proposals in this Budget. They are most important as regards principle for this reason, that they show clearly and unmistakably that we are face to face in this country for the first time, and I hope, so far as our lifetime is concerned, for the last time, with a Socialist Budget. Hon. Gentlemen opposite do not like to hear that said. They do not believe it is Socialism, or at least they say they do not believe it, but are they the best judges? I should say that, perhaps, the Socialists were as good judges as they. They ought to know as well as anybody whether the Budget does or does not carry out their principles. What do they say? We all know. They have expressed their opinion in no uncertain sound on those benches. The hon. Gentleman the Member for Blackburn (Mr. Snowden), whom, I am sorry to see, is not present, congratulated the right hon. Gentleman on being a great pupil. [An HON. MEMBER: "Apt."] I think "great" was the word used, though I think "apt" was right. Another hon. Member, the Member who had the satisfaction of driving me out of Glasgow, the Member for the Blackfriars Division (Mr. Barnes), said the principles for which they had been working and suffering for years were now embodied in the Government Proposals. There are different kinds of Socialism. The Socialist cause is getting pretty hot for some Socialists. The gentlemen to whom I have referred are considered by their colleagues as the old gang, but on this point, if on no other, the old gang and the new gang are at one. Let me read what the "New Age" said. I believe it represents the new gang, and this is what it said:— The late Sir William Harcourt said that the title to land was exactly the same title as the title to the coat on his back, namely, that he had paid for it. It is obvious, therefore, that if you are in any way to justify these proposals you must prove that land is entirely different from all other forms of property. The hon. Gentleman the Member for Preston (Mr. Harold Cox) stated that the Government had made no attempt to prove that. I think he did them an injustice. They have made an attempt, and I shall now examine some of their attempts. The one to whom I must refer first is naturally the Prime Minister. This is his contribution to the solution of the problem:—

It is obviously untrue, and if you want a direct proof of it take an illustration from the city of Glasgow. That city has had prominence as having led the way in the course which is now adopted by His Majesty's Government. They hold at this moment building land, unused, which is valued at £600,000. They have held it for a great many years, but they have now some sensible men on their council. It has greatly improved since I left Glasgow. A committee of the corporation has been issuing a report, and in that report they state that this £600,000 of building land has cost them at the rate of £15,000 per year, and they would be very glad to sent for the amount that they originally gave for it So much for the rise that is continual, normal, and the rest of it. Then we had another contribution to the same controversy from the Secretary of State for War. I am sorry he is not here, but that is not my fault. Some hon. Friend of mine incidentally spoke of clear thinking. The Secretary of State for War thought that that was personal, and immediately got up. I do not like the clear thinking of the right hon. Gentleman. I am not unduly sceptical; I take it on faith; but clear thinking by itself is not enough. It may be very useful to the right hon. Gentleman as a mental gymnastic exercise, but it is no use to us till it is translated into clear speech, and that is the last thing which the right hon. Gentleman does. He gave us a contribution of about half an hour to the solution of the problem, but the light which he threw on it was only sufficient, and barely sufficient, to make the darkness visible. Then the Chancellor of the Exchequer had to have a try at it himself. That was inevitable. He took a plunge into this troubled sea, but I think he very soon got beyond his depth. This is his contribution:— to land and the same arguments by which they support it are separated only by the shortest steps from the full programme of hon. Gentlemen below the Gangway.

I have sometimes wondered how it is that there is so little restiveness at these proposals by the majority on the Benches opposite. I fancy that they would have rejected them with scorn if they had applied to other forms of property. What is the explanation? There is plenty of wealth among them; but it is wealth which has not been invested in the form of land. So long as these proposals apply to land their withers are unwrung. But do they imagine that the proposals are going to stop at land? If they do they are living in a fool's paradise. Hon. Gentlemen below the Gangway are under no such delusion. They have told everybody as plainly as words could do that they, who are the authors and source of these proposals, intend to apply precisely the same principle to every form of property. If proof were needed of that, it would be found in an interesting little book, written by the Member for Blackburn, called "The Socialist Budget," which, so far as one can judge by results, is the only economic text book to which the Chancellor of the Exchequer has gone for lessons in the philosophy of taxation. In that book the Member for Blackburn says:—

I would like to examine in a little detail some of these particular proposals. I will take first the Reversion Duty. In itself I think that that tax is absolutely impossible to justify on any principle. No attempt to justify it has been made, and no attempt can be made. There is no principle whatever on which it can be justified. It is to be a tax on a particular man because he does his business in a particular way. If one man owns apiece of land and sells it out and out, he gets the full price; if he does not spend it, it accumulates at compound interest, and the Government does not touch it. But if another man sells his land at a lower price with the reversion to come later, the Government steps in and says it is going to take a part of it. If there is any increment or anything else, it applies as much in one case as in the other. Why do they not apply the same principle to both? The only reason is that the Chancellor of the Ex- chequer seems to have a theory of taxation that a man is to be taxed according to his deserts. Some people deserve property and others do not. There have been different forms of tyranny in the world. I remember reading that Nero had a courtier whose face he did not like—perhaps his nose was too long or his eyes were the wrong colour—and so he cut off his head. That is not the democratic method. The right hon. Gentleman does not cut off his head, but because he does not like the man's method of doing business he cuts off part of his capital. It really means nothing else than that, according to this new doctrine, security for property is to depend, not on what the law says belongs to a man, but on what any individual who happens to be the Chancellor of the Exchequer may say a man deserves.

Then let us look at the Undeveloped Land Tax. That is not robbery in the clear barefaced way that the Reversion Duty is. I admit that. I say that whether you raise the necessary revenue by taxation on capital or on income is not a question of justice; it is a question of expediency. But if you raise it by taxation on one form of property and not on other forms of property, it is not a question of expediency; it is a question of justice. Let me read what was said by John Stuart Mill on this subject. I like to quote authorities when I agree with them:

Now let us turn to the Increment Tax. Exactly the same principle applies there. On what possible ground can you say that the unearned increment on land is to go to the State, and unearned increment on other things is not to go to the State? For instance, what is the justice of saying that if there is a big rise in securities the State is to get nothing, but if there is a rise in land the State is to get a great part of it? What possible justification is there for such a proposal? The President of the Board of Trade, who is not wanting in courage, and who is always willing to step in where angels are unwilling to tread, gave an explanation. He said:—

I have no, judges, and can make nothing.

If I accepted that, it would be a bad illustration, but I would rather accept my right hon. Friend's in- come. My right hon. and learned Friend I began his career at the Irish Bar. If he had continued there, with precisely the same ability, industry, and energy, he would never have made the same income that he has made in London. On the principle of the Lord Advocate you would have an unearned Increment Tax on the difference between Edinburgh and London. But really the whole idea that there is any wealth which does not depend on society is absurd. All wealth depends on society; all wealth falls or rises in accordance with something which is happening in society. We are all on the same footing. I remember that an hon. Friend of mine, when contesting one of the divisions of Glasgow at the last election, was asked by a heckler, "Are you in favour of putting an income tax of 20s. in the £ on all incomes above £500 a year?" And the hon. Member for Paddington, who, I believe, agrees generally with the Budget, wrote an article in the "Daily News," in which he said:—

I will say a word or two, by way of conclusion, on the general effect of this tax. The Government do not pretend that these taxes are imposed for revenue. They are imposed, as I understand it, in order to lower the price of working-class houses, and to improve the housing of the working classes. It seems to me a curious thing that the way to lower the price of houses is by taxing the land, which is part of the raw material out of which the house is built. That is the Government method of lowering the price of houses—taxing the raw material. That is the last and greatest effort of Free Trade economics! But I do not deny that by unjust taxation you can lower the selling value of any kind of property you like. Of course you can. But it does not follow from that that you are going to lower the price of the house on it. Take, for instance, this very trade. No matter how much you lower the value of the land retained by the present possessor, if you diminish the demand for building you will raise, not lower, the price of that building. I say undoubtedly the effect of this Bill is to injure, and permanently injure, the building trade of this country. The hon. Member opposite questioned my hon. Friend this week by saying: "In what way?" I say in what way will it not injure building? I commend to the House the statement which has been already referred to, the statement by the Society of Surveyors. They know about this subject. Their view is all the stronger, or ought to be, because it is so temperately expressed. Among all classes who are burning with indignation against the Government on account of this subject there is no class which is so indignant, and feels it so much, as the men engaged in the building trade all over the country. Is it not evident that it must injure the building trade? Take one method in which it will injure it. There is no trade in the country which is carried on to such a large extent on borrowed money—no trade. What is the effect of the Budget? Do you suppose that any sane man will lend money on the security obtaining, and on the same terms, as he would before the Budget was introduced? Builders may be able to get mortgages, but they will get them only for a smaller amount, and at a far higher rate of interest, and the people who talk about this as lowering the price of houses really ought to try and consider what is the relative proportion that the price of land bears to the price of houses. A gentleman in Scotland who is very familiar with this subject, and has given his reasons for it, deposed that in Glasgow no well-built house for a working man, if you got the land at half its present price, where the rent at present is £10, would be reduced below £9 10s. If you got the land for nothing you would only reduce the rent to £9. In other words, the rate of interest, whether it is high or low, does make a far bigger difference in the cost of a house than can possibly be made by the price of land.

Take one other example in which it must hit building. Building is a very speculative operation. I know some men in Glasgow who are engaged in it. The ordinary process is for a man of that kind to see land, and if he thinks it is suitable for building purposes to buy it and build houses on it in the hope of selling them. He buys land all over the city if he has the money to do so. I say that under your proposal, if he sells a house and makes a profit on one of his transactions, is it to be an increase of value, and has he got to give the Government a part? But every business goes on averages. He will some- times make a profit, and sometimes lose. If in another part of the city he actually loses, will the Government give him an equivalent or part of the tax back again? That in itself must be sufficient to deter people to some extent from engaging in this trade. Take the effect upon the people who buy their houses. One of the commonest forms of investment in all parts of the country for men of small means, for tradesmen, for foremen, and others, is to buy a house with the intention of living in it during their life, knowing that they can leave it when they die as a provision for their families. That is a form of investment which any Government in the world—except this one—would encourage! Surely nothing can be more advantageous to a country than that the people should invest in the property of the country itself. What happens under your Bill? When a man dies his widow has to go through some formula. An irresponsible genius or idiot comes from Somerset House and says: "There is increment value," and she has got to pay the Government one-fifth. Yet she does not sell the house. She has no intention of selling it. By the time it is sold, instead of there being increment, there may be a decrease in value. Do you suppose that anybody, if you take away the incentive underlying all this, is likely to buy houses and be injured in that manner—or that anyone will invest in that form of property They will find another form. If you want to know the actual effect of this tax you need not go to theories. You need only to look around. I was speaking only this week to a large builder in London who told me that at the present moment unemployment in all branches of the building trade is greater than he had ever seen it in the whole course of his life at this season of the year. He said it is greater than usual in winter. I put it to the House: Is that not evidence that while there is all this uncertainty as to these new taxes nobody will go on with work that can possibly be postponed?

But, it may be said—with some truth—that this is only temporary, and that when the Act comes into operation that those concerned will not find it as bad as they anticipated. Possibly. Few things are. But we have the means of estimating over a longer period. The Lord Advocate has been doing a great work in Scotland—a great work! He spoke in the House the other day, and in doing so cooed as softly as any sucking dove. The Lord Advocate is one person in the House of Commons, but when you let him loose on his native heath he is a perfect terror. Contrast the speech that he made in the House and the words that he used only the other day on a public platform:—

We have had as usual from the hon. Gentleman the Member for Dulwich (Mr. Bonar Law) a very ingenious deliverance; but in one respect it differs from every speech that I have heard from him. It is the only speech in which there has been no allusion at all to Tariff Reform. That is I think rather pathetic. Here we are discussing the method of raising £16,000,000 of money, the best method of raising it; and the hon. Member who has just spoken for an hour on the question of the best method of raising this money has never even been allowed to say a word about Tariff Reform. He says it is the first time he has spoken on it. Well, he has evidently toed the line at last. Instead of the speech to which we have been accustomed from him, we have had served up to us the same old stale, mouldy, matter which night after night we have recently heard about a Socialist Budget, about confiscation, and about robbery. We have heard it all before, and we have been getting it secondhand from the hon. Gentleman. His one criticism of the Socialist Budget is a quotation from some obscure pamphlet written by somebody who, I believe, is a Member of the Socialist party. Well, now, I really would as soon hold the Leader of the Opposition responsible for the views and rantings running through all Mr. Leo Maxse's writings as I would hold the Prime Minister responsible for views which are published in a pamphlet written by somebody who is not even a Member of the Party to which he belongs. We have absolutely nothing to do with leaflets issued by other parties. We say these are proposals which we submit, which have a precedent in this country, which have a precedent in other countries where Socialistic doctrines are repudiated. The hon. Gentleman has only one thing in this speech in common with every other speech he has delivered, and that is that his facts are absolutely unreliable. That is the common characteristic of it. [An HON. MEMBER: "Prove it."] Certainly, of course I will. That is a charge which I feel hound to prove. I recollect a speech which the hon. Member made in the course of these Debates in reference to a speech which I delivered a short time ago on stamps, and he said it had been reserved for this Government for the first time—

No, no.

The hon. Member contradicts me, but I consulted the Report the following morning, and I found it was so—

The right hon. Gentleman is mistaken.

Well, the hon. Member has said to-night there is no Income Tax in France and no Death Duties in France. Will the hon. Gentleman really believe it, as a matter of fact, there are very heavy Death Duties in France. Did not he really know that in France there are Death Duties running up from 1 per cent. to 20½ per cent.? Here is an hon. Member who ventures to instruct us in this House, and always does it with great confidence and assurance, especially on questions of fact, talking about France, and saying that there are no Death Duties there, when there are Death Duties in France ranging from 1 to 20½ per cent. With regard to Income Tax in France, does he know that the present Income Tax legislation is simply a consolidation and extension of the present system? He does not know that—

It is nothing of the kind.

Before the hon. Gentleman has done with the Budget, he will know something about the facts which evidently he does not know now. Does he know that at the present moment in France the equivalent of this Income Tax is to be found in taxes on dividends, taxes on land—they are the equivalent of Schedule A here—and on trade? Does he know that there are taxes running to over 20 millions a year raised at the present moment in France, and that the present Income Tax duty is simply a consolidation and extension of that? The hon. Member never knew that, yet he comes and declares in the House of Commons that there are no Death Duties in France, and no Income Tay in France, while France is raising about thirty or forty millions at the present moment by these methods. That is just a sample. Let the House of Commons bear in mind the facts upon which charges of robbery are made by the hon. Member as against Members of the same House as himself. Here is another sample of the sort of fact we get from the hon. Gentleman. He said never before was there such a flow of capital to the United States of America. Where on earth did he get that from? Does he not really know that twenty or thirty years ago there was an infinitely greater flow of capital to the United States of America, when they were building and extending their railways there?

Nothing of the kind.

By millions, when they were developing the railway system of America, and when they had not the same surplus of capital as at the present moment. They were bound to depend upon our markets, and the flow of capital then was infinitely greater than at present. Here is another fact. The hon. Gentleman said: There is at any rate one good that comes out of this Socialistic Budget. Money is flowing to the Colonies, and that is a good thing. If it is flowing to the Colonies it is flowing to countries where there are Bills based upon the principles of this Budget, enacted already. In New Zealand, to which a good deal of our capital has gone, in Australia, to which a good deal of our capital has flowed and is flowing, they have got valuation, they have got taxation of land, but because it is Colonial and has got a Colonial brand upon it, it is statesmanship, but the moment it is in a more moderate form here it is robbery. So capital is going to run away from a halfpenny tax upon undeveloped land, but it is going to New Zealand where the tax is infinitely higher, it is going to Australia where the tax is treble and quadruple what it is here. Why should it run away from a halfpenny here in order to be turned into a sovereign? That is really the sort of stuff we get, if I may say so.

Then the hon. Gentleman said there are so many inconsistencies between the speeches delivered on the Budget by my right hon. Friend the Prime Minister and myself, the President of the Board of Trade, and the Secretary of State for War. If he had really listened to these Debates he would have noticed what I have noticed, namely, the inconsistency of the charges made with regard to this Budget. I am not sure that he himself has not been guilty of some of them. Take this: "We are robbing the rich and pauperising the poor!" That is one. Then there is another: "We are robbing the poor man of his tobacco and his whisky; we are plundering a small class and putting the whole taxation upon a small section of the community." Another charge is, we are attacking every trade and industry and class in the country. One charge is that we are inflicting the most oppressive and cruel taxation upon the landlords of the country. The next charge is that we are taking the time of Parliament and wasting it in order to raise the paltry sum of half a million. One charge is we are specially selecting the great land-owners in order to break up their estates. Tht hon. Gentleman himself said so. You are going to destroy them, and what will you put up instead of them? He said it is our object to destroy them—

I did not say that.

No; he said the effect of this Budget will be to destroy all these great landed estates The charge brought by the hon. and gallant Member for Chelmsford (Captain Pretyman) yesterday was that the effect of the Budget was to concentrate land in the hands of the few. There is one charge brought by the hon. Member himself amongst others. He said we are crushing the liquor trade under a load of taxation for vindictive purposes. The next charge is, we are endowing it with millions a year. Now, which is it? How can we do all these things? Are we endowing them? [An HON. MEMBER: "Who said so"] How can we do all these things for vindictive purposes? The Leader of the Opposition said we are endowing the Trade.

I never interrupt unless my opinion is asked. What I did say was—speaking in reply to the statement of the right hon. Gentleman—I said he proved by his own confession that he was giving four millions to the distillers and twenty millions to the brewers. I merely described that as endowing them, and surely it is if the facts are as stated.

It is not often the right hon. Gentleman allows anyone to profit by an interruption of his, but on the present occasion he has. He just got up to confirm the statement I made. The Leader of the Opposition said we are endowing the trade by 24 millions. Now another hon. Gentleman says "No," we are vindictively putting taxes on in order to crush the trade out of existence. Well, really, they ought to make up their minds which line of attack they are going to take. Suppose they cannot, then I think there ought to be a choice of epithets in these matters. We cannot be both spoliators and endowers. We cannot enrich people and at the same time burglarise their property. It must be one or the other, and I would really like to know which it is. The hon. Member for Dulwich devoted the first part of his speech to repeating the charge that we were introducing the Budget with the view of penalising our political opponents. I think these are very serious charges to make. I say that any Government or any Minister who is capable of introducing a Bill for that purpose is not merely unfit for his position, but ought to be impeached. [OPPOSITION cries of "So he ought."] We agree. What is the charge? Let us examine it, because it is repeated not merely here, but outside. We are raising 13 millions of money by taxation. If we wanted to penalise, of course we would raise the whole 16 millions, and raise, as the hon. Member for Sheffield (Mr. Samuel Roberts) said we ought to raise, 16 millions by taxation. He said we ought not to take three millions from the Sinking Fund, and therefore the whole sum should be raised by taxation. There is no dispute about the sum we ought to raise for the purpose. How do we raise it? We raise it by Death Duties, by Income Tax, by whisky, by tobacco; we raise it from licences and we raise it from land. The sum we raise from licences and from land only comes to three millions out of the 13. Now let us take the 10 millions. 13 it suggested that these are vindictive taxes? If so, why? Do not Liberals save money? Do they not pay their extra 2d. Income Tax upon their unearned increments? Have they not got to bear Death Duties? Do not Liberals smoke? Nine-tenths at least of my supporters in my Constituency take their share of the Tobacco Tax, and take it very kindly. Then you come to whisky, and here is another inconsistency. We are told we are vindictive, yet we are told we are hitting Scotland and Ireland harder than England. Scotland, at any rate, we have no grudge against, because Scotland has been faithful. Scotland is Liberal, but it is being taxed, and we do not tax it for vindictive purposes. I have no vindictive feeling against Ireland, because, however much hon. Members from Ireland dislike the Government, they hate the Opposition still more. You cannot have it both ways. Where does the vindictive tax come in? This is entirely a question of land, liquor and licences. That is the "vindictive Bud- get," six-sevenths of which is not vindictive; and it is purely this fraction that is alleged to be vindictive. Let me examine that proposition. Nobody doubts that we have to raise the money. I listened to the speech made by the hon. Member for Dulwich (Mr. Bonar Law), and not once did he challenge the fact that we have got to raise this money. I believe the hon. Member for Dulwich voted for old age pensions; in fact, he voted for extensions of old age pensions which would have involved an expenditure, not of £9,000,000, but of £12,000,000 or £13,000,000. Then take "Dreadnoughts." The hon. Member wants what we have provided, but he wants more as well. The hon. Member wants still more, although he will not pay for what he has got.

Let me follow this charge of vindictiveness. Who is this vindictiveness against? Is it against the great land-owners? If so, where? Let us see where it comes in. It is really a serious charge, and I should like to see where there are any traces of vindictiveness against that great and powerful class, or any other class, in this Budget. I am going to deal first of all with agricultural land, and later on with urban land. The charge is that the great agricultural land-owners are the people against whom we have a vindictive feeling, and how are they treated by this Budget? This Debate has been conducted as if we were levying special Death Duties and a special Income Tax upon agricultural land. Agricultural land is not being subjected to this duty.

Yes; there are four new duties.

Evidently the hon. Member did not hear what I said when I stated that I proposed to deal with urban land later on, and I will confine my attention now to agricultural land. I am not going to shirk the other question, but I want first of all to confine myself to agricultural land. Let me examine this Question. I do not say that the method of levying the present Income Tax is altogether fair to agricultural land, but that is not my responsibility. The Income Tax was imposed by a Conservative Chancellor of the Exchequer 50 or 60 years ago, and that same method has been adopted by subsequent Chancellors of the Exchequer. Let me put this point to the owners of agricultural land. The only relief they have ever had on Schedule A came from Sir William Harcourt, a Liberal Chancellor of the Exchequer. Let them bear that in mind. Again, the only promise they have had of further relief with regard to Schedule A came from another Liberal Chancellor of the Exchequer. Therefore, with regard to the Income Tax, we are doing nothing to disturb the present system beyond promising to disturb it to the extent of giving further relief to agricultural land under Schedule A. A deputation of landowners came to me the other day on that particular Question, and I invited them to submit their accounts to me. I remember that the right hon. Gentleman the Member for East Worcestershire (Mr. Austen Chamberlain) said they would willingly submit their accounts to him, but they would not trust me with them. When I asked them to submit to me accounts of 20 typical estates, they willingly did so.

I made no general statement of that kind.

No, it was a very specific one.

I am sorry to have to interrupt a serious argument, but my trouble was that my correspondents did not authorise me to do so.

That, no doubt, is what the right hon. Gentleman intended to say. I only want to state that the accounts of the landowners to whom I have referred have been examined, and I think they are making out a case for the consideration of their position. Therefore, we are examining the position of agricultural land not with a vindictive feeling, but with a real desire to do what is fair. We feel that by the present system the best type of landlord is hit hard, and we are desirous of meeting him. Let us follow the arguments with regard to agricultural land. I should like the House, on this point, to look at the figures, because they are rather important. What are the burdens we are imposing upon agricultural land? I should like to ask the hon. Member for Preston to bear these points in mind, because yesterday he made certain random and wild charges without even attempting to support them by arguments. The hon. Member for Dulwich went through the form of attempting to prove his charges, but my hon. Friend the Member for Preston did not seem to think it was necessary to give a single fact in support of a charge of that kind.

Let me give to the House the figures with regard to agricultural land. The total Death Duties under this Bill will increase the burdens on agricultural land by £480,000 a year. The Super-tax will increase the burdens of agricultural land by £120,000 a year, and the two penny Income Tax will increase those burdens by £280,000 a year, so that the total increase in the burdens on agricultural land is £880,000 a year out of a total of £13,000,000. Now let me put the contra account. This money is being raised for the purpose of defraying a heavy charge in respect of old age pensions. We are also raising money for the purpose of spending a large sum on highways. It is well known that the rates have gone up, especially in the rural districts. I remember the right hon. Gentleman the Member for South Dublin (Mr. Walter Long) gave a case on this particular point in the Debate on the Address last year showing the enormous increase in the highway rate, and that is especially the case in the country districts where the motors tear up the roads, causing the highway rate to go up.

We are raising £600,000 to improve the roads. All that involves great relief to agricultural land, and what is the amount of that relief? I have reckoned it up, and I am prepared to substantiate the figures. It is a moderate estimate to say that there will be a relief of at least fourpence in the pound on the rates on agricultural land. In addition to that, the pensions at present borne by the rural landowner are either being taken off altogether, or partly taken off, in consequence of the 5s. old age pension which is being given. Sometimes they reduce the pension by 2s. 6d. or 3s., and I think they are perfectly entitled to do so, and that means a relief of at least £120,000. Besides that, we are proposing a grant for the purpose of doing that class of work which is now very largely done by the great landowners themselves in relation to agricultural development, and this will come to at least a quarter of a million a year. So that the burden we are relieving agriculture of by our Budget arrangements will come to very nearly £1,000,000 a year, and we are charging them £880,000 for it. In addition to that, I want the House to bear in mind that from the beginning I have recognised the case of the landowners with regard to Schedule A, and I promise to do my best with the means at my disposal to extend to them relief. It may be said that that is a very vague thing. [OPPOSITION cries of "Hear, hear."] I would remind hon. Members opposite that they have got three or four months before them to convert that vague promise into something more substantial. Probably I shall hear the Leader of the Opposition state that this is a Bill for endowing landowners. I think I am entitled to say, at any rate from these figures, not merely that there is no trace of the mean and contemptible spirit of revenge with which we are charged, but, on the contrary, we are dealing honestly with them.

Now I come to the question of urban land. I do not wish to shirk this question, and now I will deal with it. Is this tax vindictive? I cannot get an answer, and I assume that this tax is part of the penal provisions of the Budget. But why should they be? We are only putting a halfpenny in the pound upon that part of the value of the land which is in excess of its agricultural value. We are rating at only a halfpenny in the pound that part of the value of the land which is in excess of the agricultural value. Is there a country in the world where the Land Value Tax is so low as that? Do hon. Members realise that this is a recommendation made by Royal Commission after Royal Commission, not, however, to put on a mere halfpenny tax, but to put on a heavy rate for local purposes on the basis of the capital value of the land? Do they realise that this is against them, and not in their favour? What is it that they object to? Are they objecting to the principle of taxing the capital value of urban sites or to the appropriation? If they are objecting to the principle of taxing urban sites, those recommendations are good, but if they are objecting to appropriation, that is a matter for discussion and arrangement. There was a Commission presided over by Lord Balfour of Burleigh, who is a great landowner. Of course, the hon. Member for Dulwich is not a great believer in the fiscal views of Lord Balfour.

I have the highest opinion of Lord Balfour.

Then he agrees with me. When I quote Lord Balfour I am quoting a great authority, for he is fair to his own class and every other class. A minority of the Commission headed by him reported in favour of this tax on urban sites.

Let us take another case. Here is a still more important Report—the Report of the Royal Commission on the Housing of the Working Classes, of which the then Prince of Wales, now our Sovereign, was a member. I am anxious to call the attention of the House to the terms of this Report:—

The date?

Twenty-four years ago. It is suggested that at the present moment we are imposing this tax in order to punish a class, and that we have suddenly produced these confiscatory proposals in cur Budget. As the hon. Gentleman has pointed out, these proposals were made 25 years ago by a Royal Commission. I have another authority—a very considerable authority—who was a predecessor of mine in the office which I have the honour to hold. I have another quotation to make, and it is from a speech of Lord St. Aldwyn. It is really so very appropriate to the present occasion that I invite the Houses to listen to it. He was discussing the Death Duties. It was an appeal to Sir William Harcourt. He said:— it they say, "You bandits!" I will go on with this quotation:— looks at the whole of the land and takes it at a certain number of years purchase, and works it out accordingly; he depreciates the value with a view to paying for deferred realisation. Therefore I suggest £300. This figure is rather a higher figure than I am advised would be assessed upon land even in the neighbourhood of London. I am taking it purposely at a high figure. They say you spend money upon developing it. Let me take it that £100 per acre is spent in that way. Land valuers tell me it costs about £100 per acre to lay down drains and make roads, etc. [Cries of "Oh, oh."] Well, if it takes a great deal more I can only tell hon. Members that they are strengthening my argument. I will take any figure they like. I will put it at £150 if they choose, but I am willing to fix it at £100, although it is against myself. That means that over and above the agricultural value there will be £270, minus £100, and a halfpenny tax on £170. What does it represent? It represents 7s. per acre, and that is the tax which we are told is going to ruin the landowners of this country. Is it not preposterous to exaggerate in that way, and thus to talk about a small tax of 7s. per acre in respect of land which has risen in value from £30 to £300 through the industry and enterprise of others?

Then I come to minerals. What is our proposition in regard to them? I take first, and I hope I am not wearying the House, our proposition with regard to worked minerals. I had the advantage during the short Recess of paying a visit to one of the greatest coalfields in this country, and I did it under the auspices of a gentleman who hates every tax that I have proposed in this Bill. He will, therefore, be by no means prejudiced in my favour, but there is no man I know of who is better acquainted with the question of royalties. I am referring to Sir William Thomas Lewis, who represents one of the greatest royalty owners in the kingdom, and who runs about half a dozen coal mines. During my visit I saw a monthly sheet of the expenses of a colliery, giving the wages of the miners. Please remember I am talking of miners merely. I am not including the surface men. I am referring to those who hew and cut coal. Their wages came out at 3s. 10d. per ton. But next came the item for way leaves and royalties. You have not merely to pay your royalties—you have also to pay something for every ton of coal you pass underground beyond your own land to the bottom of your shaft. You have to pay for that 1d. per ton. The royalties and wayleaves amounted to 1s. 2d. per ton, as against 3s. 10d. for the miners' wages. What is our proposition? For 1s. 2d. per ton the miner would have to work two hours extra per day in order to pay the royalties and wayleaves on coal. The Coal Consumers' League—a rather shabby body—has been touring the country and suggesting, not that you should relieve the miner of this extra duty, which is of an arduous and perilous nature—and I would venture to mention that in the very next colliery to the one I visited there was an explosion not so long ago which resulted in 300 deaths, and this shows what a terrible occupation it is—the Coal Consumers' League has never a word to say about a charge which would involve two hours' extra labour on the miners, and they have never condemned it. But what do I propose? Here is a fund to provide for those who survive, and to provide for sickness and for widows and orphans. All I ask is that out of the 1s. 2d. they should spare ½d., and yet, in view of this, we are told that this is a vindictive and oppressive proposal! I really appeal to the sense of fair play on the part of hon. Members opposite. Is a tax of that description unfair? I venture to say that they will admit that it is fair—all of them, perhaps, except the hon. Baronet the Member for the City of London.

Let us take next ungotten minerals—minerals in mines which have not been developed. Here I have a little controversy with the hon. and gallant Member for Chelmsford and I come back to Rosyth. When we were discussing the Question of ungotten minerals on a previous occasion, I said they could be valued, and the hon. and gallant Member, who was himself, I believe, responsible for valuing ungotten minerals at Rosyth—[CRIES of "Oh, oh,"]—well, I do not say that he valued them, I am only saying that he admitted there was a capital value in them, and I am not suggesting whether it was too high or too low—that is not my argument—my only object is to prove that they can be valued. We have been told that £15,000 was the value put on them in this case. The hon. and gallant Gentleman does not deny that, but he says it turned out, when the land came to be developed, that they were worth £100,000. What has that to do with it? If he knew anything about coal-mines, he would know that one has to pay for a field before it is developed a comparatively small price, but when one begins to open it up, and to find it contains the right sort of material, the cost goes up enormously. But the hon. and gallant Member is wrong in his facts. He said yesterday that that £15,000 was paid for stone for which the Admiralty had given £100,000.

I said the Admiralty had an arrangement with the contractor at Rosyth by which he gave them an equivalent to £100,000 for the stone.

The hon. and gallant Gentleman, at any rate, said or implied more than that. He implied that the stone was included in the purchase price of the mineral rights. That is his. suggestion, but, as a matter of fact, it was the ungotten minerals for which he paid £15,000. It is not the fact that the stone was included in the price of the mineral rights, but it was included in the price of £100,000, which was paid for the whole estate.

Not including, minerals.

I beg the hon. Member's pardon. If he will just restrain himself for a minute or two I can quote his own words as to what happened. The Admiralty bought the whole of the Rosyth estate, but the minerals were reserved. Lord Linlithgow said: "You have stone, and you have shale here; therefore, I want a price for the minerals." So, first of all, he sold the whole estate, reserving the shale. The hon. and gallant Member still says that they reserved the stone. Does he mean to suggest that they reserved the stone in the first purchase?

They reserved the minerals, which include stone.

Well, I have a quotation here. On 10th July, 1903, Mr. Pretyman said:—

"A part of the land was purchased with complete mineral rights, but Lord Hopetoun's property was purchased subject to the addition of a valuation for minerals, if they should be found there. Stone was included in the price, but the mineral question resolved itself into a question of shale. Shale beds existed on the south side of the Forth, but experts were of opinion that these beds did not extend to the north side of the Forth. The minerals, if they existed, could not be worked by the owner without destroying the amenities of his property, and it had been arranged that any valuation for the minerals should be subject to a deduction on this account."

This is my information from the Admiralty The whole property, stone and all, was sold to the Admiralty for £100,000; but the shale beds were reserved, and it was for them that the hon. and gallant Member paid £15,000. That is really all that happened. I mention this to show that if it were possible for purchase purposes by the Government to value the shale beds, it must be equally possible to value them for the purposes of taxation. I have here another illustration which deals with this point of undeveloped mineral rights. A farm was shown me for which the owner had paid £10,000. The farm was on the coal measures, but the agricultural rent of it amounted to £126, which, at 30 years' purchase, would represent £3,600; so that £6,400 of the price was for ungotten minerals which had not been developed. Everybody knew that the coal measure was there, but that it might take 10, 20, 30, or 40 years before it was reached. That £6,400 would, by a halfpenny tax, pay £13. Is that unfair? Supposing the owner of that property—and I should like to put this straightly to hon. Gentlemen opposite in order to show the facts—supposing the owner of that property, instead of buying mineral rights, had put his money into agricultural land. Have they figured out what it would amount to? I have, and I am taking it that in both cases he would get 3 per cent. for his money, that would be a rent of £300 for purely agricultural land. He would have paid, on £300, 1s. 2d.; he might have to pay the super-tax, he would pay the rates, and his rates alone would be 5s. in the other case. He would pay on that £10,000 a contribution towards public purposes which would be £65 a year. What is his contribution now? His contribution now is £26 9s., and even if you add the 1s. 2d. tax it only makes £39 15s. 8d., so the owner of purely agricultural land contributes more to local and Imperial purposes by £26 a year than the owner of a similar investment to the same amount in mineral rights even with this vindictive and tyrannical tax. The same thing applies entirely to land in the neighbourhood of towns, and therefore I say it is a perfectly fair tax. It has been exaggerated in its amount and its results. It is a tax which is imposed in other countries, and there is no reason why it should not be imposed in this country. But I admit that although it is a small tax it is a growing tax. As we are providing for growing social needs, is it unfair to ask those gentlemen who are making money out of the community, out of the aggregation, out of the enterprise and industry of the community—is it unfair to ask them for a fair return in respect of the fruit of that industry. I say it is a perfectly fair proposition, and with regard to the Increment Tax, as I have pointed out repeatedly, it is the alternative which is put forward by the Conservative party in other countries, where proposals are made of a much heavier tax. Here we have to raise £13,000,000 of money for public purposes which are not challenged. We have not yet been told, in spite of weeks of Debate, except by the hon. Member for Hackney (Mr. Bottomley) where we are to find the money, not even by the hon. Member for Dulwich (Mr. Bonar Law). Hon. Members opposite scoff as if that were not a contribution that was due from the critics of the Budget, but let them take the criticism of the Budget in France and Germany; it is a criticism which is always backed up by the suggestion of an alternative, and all those who have attacked the Budgets there have said, "This is the way in which you ought to raise the money." Why not here also? I have had endless suggestions from outside, but not from hon. Members opposite. But I have never seen a good workable suggestion which would have worked more fairly and which would have yielded better, with less oppression to the community, than the taxes which we suggest now. Every Chancellor of the Exchequer has all sorts of suggestions that come to him, mainly of a penal character, such as for taxing cats—a very ancient suggestion—and occasionally, in a female handwriting, for taxing bachelors; but, after all, taxation is a burden wherever you impose it, and it produces the same effect here as it does in every other country—a desire on the part of the party on whom the tax is imposed to shift it to other shoulders. It is always the case. The only deputation I have had in favour of a tax was a deputation from the hackney cab drivers imploring me to stick to the tax on petrol. But surely in the main what I have mentioned is the inevitable result of a tax, and I have no doubt that every Chancellor of the Exchequer appears a very brutal and oppressive person to whoever has to pay the tax. It is the unfortunate position in which the Chancellor of the Exchequer is placed, but he has got to raise the money somewhere, and I have not yet heard any suggestion of a better method, and I have had no criticism of the objects of the tax. The hon. Member for Preston did in a lordly way make an attack upon the President of the Board of Trade and myself about our scattering wealth like Oriental potentates. But what are we doing? We had the misfortune to follow the advice of my hon. Friend himself in regard to a contributory scheme. That was the song of my hon. Friend last year when we tried him with pensions, and he did not want them. He wanted a German band. This year we discoursed to him his own contributory tune, and he will not dance, he kicks. What are you to do with a man like that?

Make him a lord.

Not at all a bad idea. I believe, if my hon. Friend made his speeches in the House of Lords, he would get the Budget through, because the Lords would realise how very little there is to be said against it. The fact is my hon. Friend quarrels with himself for lack of someone else to quarrel with. He reminds me of what Carlyle said of John Milburn. He said he was a very critical person, and if he were the only person in the world he would split himself up into two, and John would attack Milburn, and Milburn John, and I believe my hon. Friend is a little inclined that way. My hon. Friend said that this is the road to national ruin. What? The road to national ruin to give 5s. a week to poor old people who must have worked industriously all their lives, otherwise they would not have kept out of the poor-house. Five shillings a week is the road to ruin; but I would ask the hon. Member if he would have them shift for themselves? He says that is the way to national independence. Is that his idea with regard to national defence? Would he leave each man to shift for himself in defending his country? Would he say we must not have "Dreadnoughts" and Territorial Armies, but leave each man when the enemy comes here to hit out in a manly way? He would organise protection for our homes against the foreign invader, would he not organise some sort of protection of our homes against a much more imminent and more permanent occupation of hunger and poverty? Remember, the pride of this country is that its flag has not been lowered before an invader for centuries. I think it might also be the pride of a great country like this, that under the same flag the honest labourer is not requited with beggary, and it is for that reason that we are raising this money, and we hope that it will help to do something for them.

The right hon. Gentleman has made, as he always does, a very eloquent, interesting, and entertaining speech. I assume that the object which the right hon. Gentleman proposed to himself was to demonstrate to the House and the country that the proposals of this Bill are fair and just, but I do not think for my part that he in any degree succeeded. I thought it was significant that at the opening of his remarks I understood the right hon. Gentleman to say that he would confine himself to the proposals of the Budget in regard to licences and land; but I thought it was even more significant that during the course of his speech he entirely forgot about licences, and confined himself to the proposals with regard to land, or at any rate to a few of them. The right hon. Gentleman defended them against the charge of vindictiveness, and as we listened to the right hon. Gentleman's description of them, it became quite clear that the real effect of the Budget as regards land is to give a tremendous financial advantage to the landowners of this country. I do not know how that will commend the proposals to the party of the right hon. Gentleman, but I am bound to say that it is an extraordinary defence of the proposals which are regarded by those upon whom this advantage is conferred as being in the highest degree unjust and undefensible. Then the Chancellor of the Exchequer entirely forgot the speeches which have been made from that Bench before him on these proposals, and particularly that of the Lord Advocate. That right hon. and learned Gentleman defended the Budget; and how did he do it? He spoke, no doubt, on behalf of the Government, and, after full consideration, frankly and openly hoisted the Jolly Roger above the Treasury Bench. He said that we had a great new taxation to meet, and the Chancellor of the Exchequer had had to consider how best to raise it. The Chancellor had been round the country, and on a certain small class and one or two particular industries he proposed to put a great amount of the new burden. It is because that is the principle of the Budget, because of its unequal and partial taxation that I think it ought to be opposed. I admit that we are in the presence of a financial emergency. I admit the difficulties which the right hon. Gentleman has had to face, but I think the House ought not to forget that every one of those difficulties have been created with their eyes open by His Majesty's Government. The party opposite came into power pledged, if ever a party was pledged to anything, to retrenchment, frugality, economy and sound finance, and after three years they have faced the House and the country with an unparalleled deficit of 16½ millions, because in every Department of national expenditure there has been not only no retrenchment, but a great and, as I believe, an unnecessary increase, and the only retrenchment in this Budget is a retrenchment in the provision for debt. Putting aside the figures which were given on successive Budget statements, which I think deceived the right hon. Gentleman himself and misled even the hon. Member for Preston yesterday, the real expenditure which the Government found in 1905–6 was £166,300,000. The expenditure this year as the result of three years' administration of the party of retrenchment and economy, and excluding large supplementary Estimates, is £176,500,000. In other words they have increased the expenditure of the country in three years by at the very least £10,000,000 per annum.

We are told we may find consolation for that in what the Government has done with regard to debt. They have made such tremendous boasts about what they have done in regard to reducing debt that I think it is of importance to realise what these boasts amount to. In his Budget speech the right hon. Gentleman said that during the first three years of the present administration provision had been made for the net reduction of dead-weight debt to the extent of no less than 47½ millions. That is not only not the case, but has no relation whatever to any fact in regard to it. The dead-weight debt to which he alludes is a term of art, and it consists of the funded debt, the unfunded debt, and the terminable annuities. Funded debt in the three years of the present administration has been reduced by £12,000,000, unfunded by nearly £23,000,000, and the terminable annuities by 5½ millions, and the real reduction of what he calls dead-weight debt is not anything like forty-seven millions, but ½40,532,080. That dead weight debt of which we hear so much consists of the only three categories of debt in which there has been any reduction at all, and hon. Gentlemen opposite, in talking about debt, leave entirely out of account the other almost equally large categories of debt in which there have been large and heavy increases. They leave out of their calculations the tremendous head of debt which is known in the accounts as "other capital liabilities," in which they have the increased liability by over 5½ millions. They forget altogether the enormous increase which has gone on under their administration in that huge liability of the State to the taxpayers in the Post Office Savings Bank, which cannot be put at less than £27,000,000, and which certainly has increased at least by £4,000,000 during the three years of the present administration. Moreover, they always forget that, as Mr. Gladstone constantly reminded the House, the decrease in the Exchequer balances, of which there has been a very large amount between 31st March, 1906, and 31st March, 1909, is, of course, equivalent to an increase of debt. The Exchequer balances as between 31st March, 1906, and 31st March, 1909, have been reduced by £4,100,000, and therefore as against the £40,000,000 by which it is true the dead weight debt has been reduced you have to put an increase of debt in other respects at the very least of £13,760,000, and the real truth is that the reduction of debt which this Government has effected, though I admit it is considerable, is not £47,500,000, which the right hon. Gentleman is always boasting of, but £26,767,818. They have reduced it at the rate of £9,000,000 a year. That, no doubt, is to be said in favour of the party opposite. Having found a debt of £812,000,000, counting in everything they have paid off £9,000,000 a year, only just over 1 per cent. of the total liability, and having done that the. Bill proposes to halve that 1 per cent., the old Sinking Fund is to be abolished entirely, the new Sinking Fund is to be reduced by £3,000,000, and what provision for debt would that leave? The only provision in future will be the new Sinking Fund. This year it will be 7½ millions roughly. In the future, being reduced by £3,000,000, it is to be 4½ millions or, counting the loss of interest which will have to be paid on the debt, let us say five millions. Therefore, the proposals of the Government at this moment with regard to debt are very little. We have a total liability of £785,000,000, and they propose to pay off only £5,000,000 a year, or rather less than three-fifths of 1 per cent. I do not believe that proportion has ever been reached in any year previous to that. Having, therefore, increased the expenditure in every branch, and having diminished unprecedentedly the paying off of debt, they face us with the situation of 16½ millions of new taxes.

That is not all, because by an extraordinary departure the Budget speech was mainly concerned with the opening of great, new avenues of expenditure for the immediate future. In almost the first hour of that speech the right hon. Gentleman pointed out new landscapes of expense, golden hills and silver rivers of sovereigns and shillings, and if that speech really represents, as I believe it does, the policy and intention of His Majesty's Government, at any rate I hope we shall hear no more of what has become the perfectly ludicrous pretence that the party opposite is in any real sense of the word at all the party either of retrenchment or of economy. Under the proposals of this Bill we have to raise 16½ millions of money, and how do the Government propose to do it In the first place, the 16½ millions is to be reduced to 13 millions by reducing the fixed charge by £3,000,000. I do not think there is anyone with any feeling for finance who does not know perfectly well that that is an indefensible proposal. Secondly, the first 28 clauses of this Bill are devoted to the new Land Taxes, which appear to me to be defensible upon no ground at all either of revenue, of machinery, or of principle. As to revenue, they are of course negligible, at any rate as far as the present year is concerned. As to principle, what is the principle? It is simply that you are to single out one particular class of persons, one particular industry, and punish it for having the impudence to exist. I can understand, and I should agree, that anyone who says that in a financial emergency capital must pay its due share. But no attempt throughout all these Debates has been made to show why, if that is true, and it is true, it should not be all capital in all its forms equally. We have asked again and again, and have had no answer, and I believe there is none. What is the justification for picking out of all capital capital invested in land, for picking out of all persons landlords, and for picking out of all industries the industry of the land, and saying that capital, those persons, that industry alone shall bear what is admittedly an extra proportion of the burden of the new taxation. Why the land? The Lord Advocate told us that, in his opinion, landlords and the land at this moment not only bear their full share—in his opinion they are at present fleeced by Schedule A of the Income Tax and by the taxation they already have to bear. Having been fleeced up to now, the Government propose, as I understand, to skin them. I have not heard any real justification for singling out any particular class and saying they, and they alone, are to pay more than their ordinary share as capitalists and as partakers in industry. The same defect applies in even a stronger degree to the Liquor Tax. There again you are singling out one particular class, often for what is nothing less than extermination. I believe when we get into Committee and consider these proposals, and indeed there have been speeches from Gentlemen opposite which show that that is so, it will really be found that the right hon. Gentleman cannot stand to the Licensing Duties in their present form, and they will have to be fundamentally recast. As to the Death Duties, the right hon. Gentleman proposes a great alteration in the scale of graduation, an alteration by which he is going, he thinks, to get something like 2½ millions extra. My firm belief is that that is an entirely mistaken proposal. The Estate Duties are in principle an excellent form of duty, but they have necessarily this defect, that the great yield of Estate Duties must necessarily come from a relatively small number of persons, and they are exactly those who, if they desire and intend to do so, can most easily evade your taxes altogether. Therefore, if the yield of Estate Duties is to be maintained it is quite clearly essentially important that temptations to evasion should be as low as possible. That has never been done since 1894. The fact is that the scale of 1894 was, as was repeatedly pointed out at the time, a tremendous temptation to defeat the tax. That has been going on to an enormous extent. It is not a matter of opinion; it is a matter of demonstrable fact. In the last ten years, while the riches, capital, and activities of the country have been admittedly increasing on every hand, while incomes coming under the review of the Inland Revenue have increased from £791,000,000 to £1,000,000,000 this year, the capital which has come under the review of the Department for the purposes of Estate Duty has either stood still or gone down. In the year 1899–1900 the total amount which came under the review of the Department for the purposes of Estate Duty was £288,695,000, and in 1908–9, the last year for which figures are available, it had fallen to £271,500,000. In this present year the yield of the Estate Duties is £1,130,000 short of the Budget Estimate. The Estate Duties, no doubt, are uncertain; they depend on adventitious circumstances; but the fact that over a period of ten years the total amount coming under the review of the Department should have gone down in the way I have indicated surely demonstrates beyond the possibility of any doubt that there is evasion. Indeed, everybody knows that that has happened as the result of the enormous height of the duties. This recasting of the scale now proposed, whatever other effect it may have, must, it is quite clear, have the effect of increasing these evils and tendencies, and that the Government realise this is clearly shown by the absurd and unjust proposal to substitute five years in place of the present period within which a man may make a gift. Every gift that a man makes of his property is to be fraudulent, as respects the Estates Duties, if he dies within five years after making the gift. If he does not die within that period, it is a good gift. I really do think that that is indefensible, and I shall await with great interest the Debates on this matter in Committee. The sound rule, and the rule always applied in the case of the Legacy and Succession Duties, is that if a man has made a gift with the object of evading duty, the Inland Revenue must prove it, and until they have proved it no duty can be charged. Here you have a far more onerous provision than in the case of the Legacy and the Succession Duties. You have this extraordinary proposal that every gift a man makes is deemed to be fraudulent, and an evasion to escape the payment of duty, if made within five years of his death. I cannot reconcile these two methods of procedure.

As to Income Tax, I am bound to say it does seem to me to be foolish in the highest degree to set up this Super-tax, which all authorities, I think, say, as it stands, can only yield very little, and which appears to go very far to break up the whole fabric on which the Income Tax at present rests. What is the great glory, after all, of our Income Tax? It is, as everybody knows, the system by which two thirds of the whole yield of the tax is deducted at the source automatically without cost and without friction. The revenue is made to drop lightly, like the gentle dew, into the Exchequer. That is what happens under the system of deductions and rebates. The proposed machinery for the collection of the Super-tax is the exact antithesis of that, and it is a departure from the system of deduction at the source. As the new system of personal assessment increases, so it will be seen more and more, it seems to me, that the one system cannot co-exist rationally with the other. Either the existing system is the proper system, namely, automatic deduction, or the proposed system of personal assessment is right, and if it is right the whole system should be worked in that way, and the whole should depend entirely on personal assessment. For my part I am convinced that the system of deduction at the source, which is the great value and the great strength of the Income Tax, is the right method, and it is because this is a departure, and a hostile departure, from it, for a very insignificant yield, I regret exceedingly that the right hon. Gentleman should have proposed it.

When you come to the increase in the graduation, I wonder whether every hon. Gentleman in the House realises how enormous the graduation of the Income Tax is at the present moment. Taking the tax at 1s. in the pound, a man who has an income of £161 pays Income Tax at the rate of seven one-hundredths of 1d. in the pound, because he only pays on £1. If a man has an income of £700 he pays at the rate of 10.8d. in the pound. The difference is as one hundred and fifty to one in the rate of payment. The graduation, therefore, is enormous, and I do think that the proposal to increase it in the direction of a Super-tax, while perhaps defensive in principle—though I think there is a great deal to be said in regard to that—is thoroughly mistaken in expediency. It. will yield little, and it will lead inevitably to enormous irritation and confusion. You will have to have direct personal assessment from I do not know how many people. I do not suppose that the hon. Member for North Paddington (Mr. Chiozza Money) will disagree with me when I say that you will have to set up a demand on between 100,000 and 120,000 persons in this country. That was the evidence given before the Select Committee, and I doubt very much whether it will be many fewer, and you will have to do that in order to get the Super-tax from 10,000 or 12,000 persons. It is quite true that at present you demand direct personal assessment from 700,000 persons, but there is a great difference between that and the proposal in the Bill. These 700,000 persons to whom you send a direct requisition at this moment, first of all, cannot be required to make a return. They may decline. Secondly, in the case of the great majority they are the recipients of simple incomes in the shape of salaries; and, thirdly, if they make the assessment return they are rewarded by being given a reduction in taxation. The exact opposite will be the case with this extraordinary new assessment. In the case of those whom you believe to be the richest in the community you demand a return, and they may not decline. They are bound to make a full disclosure of their whole financial position from beginning to end. Their incomes will be not simple, as in the case of the other persons, but they will be complicated incomes, involving delicate disclosures of family arrangements of every kind, and in respect of every one of these they will be subject to stringent penalties if they fail to make a return accurately. They will be taxed extra, and submitted to an additional burden as the reward of their candour. I do not myself see how a system of that kind is to be administered, except with extreme inequality. I believe this will result in a great increase of the difficulties which are experienced in collecting the whole tax. It will put people in violent opposition to the Income Tax as a whole. In order to obtain this perfectly negligible yield it must increase the cost of collection, and when you have imposed the Super-tax you will have gone a long way to break up what is, perhaps, the most beautiful instrument of extortion that has ever been devised in this or in any other country.

Those appear to me to be the main objections to the Bill. You are reducing one Sinking Fund and abolishing another. The proposals you make, it appears to me, as regards the Estate Duties and the Income Tax, will go far to break up both of the taxes on which they depend. It does seem to me that in connection with the new taxes there is a spirit to impose unequal taxation, to penalise special classes, and to put different taxes upon every man according to his business or profession. That is a spirit which I, for my part, very much regret, and I think the Government will find it very hard to defend it. We are told that we must accept the Bill because it is the only alternative to a return to Protection. I deny that altogether. What, according to hon. Gentlemen opposite, is the cardinal principle of Free Trade? It surely is that it is wrong to tax the whole community for the benefit of certain selected and favoured trades or individuals. In the first place, as I understood the Chancellor of the Exchequer, by a great part of the new proposals in this Bill—the liquor proposals—you are going to do that very thing. You are going to tax the great mass of the people in this country who drink beer or spirits; you are going to take from them £5,000,000 or £6,000,000 in order to put £4,000,000 into the pockets of brewers and distillers. In the second place, hon. Gentlemen opposite say that it is wrong to tax the whole community for the benefit of a few individuals. Do they deduce from that that it is right to select certain small classes in the community and rob them for the benefit of others. If that is so, I cannot follow them. We are told again that taxation should be for revenue only. I quite agree, but does anybody in any quarter of the House pretend—I do not think anybody does—that the taxes proposed in this Budget are for revenue only? It is not denied by the Chancellor of the Exchequer that, at the best, they are for carrying out, not revenue, but political and social objects of various sorts, and I think at the worst it is constantly suggested that they are taxes not for revenue but for revenge. I hold that free trading is one thing and freebooting is another, and if hon. Gentlemen opposite insist on confounding the two and imagining they are the same, I, at any rate, draw the clearest distinction between them.

All those matters, after all, we shall deal with, I hope, fully in Committee. What I wish to do now is to draw attention to what seems to me the fatal, mortal defect of the proposals of this Bill. The truth is, this Bill is not a Finance Bill at all; it is a very great deal more. It is a Bill which, it is not too much to say, if it passes as it stands at this moment, or in anything like its present state, will go far to overturn every one of those principles of taxation which are secured to us in England by innumerable statutes, and which we have been accustomed to look upon as safeguards for our liberty, and which hitherto have been assumed to be quite elementary. This Bill, if passed, I am firmly convinced, will necessarily raise the greatest constitutional issues. In the course of these Debates mention has been made by my right hon. Friends below me of the Stuarts and the Tudors, and those references have been received with merriment by hon. Gentlemen opposite. May I ask them to consider, if they will, for one moment what it really was that was at the root of the constitutional troubles of those times. It surely was that those monarchs attempted to set up in England a system of taxation assessed, carried out, and collected by arbitrary tribunals from whose decisions there was no appeal, and whose whole proceedings were entirely withdrawn from the ordinary course and Courts of Law. That was the whole thing. Henry VIII.'s Commissioners, the Court of High Commission, the Court of Star Chamber—all those things which in every school in the country are regarded as a synonym for oppression and tyranny—the whole point and complaint about them was that they went about the country taking men's land and fining men in respect of their property, without appeal and without any remedy being possible against their decision to the ordinary Courts of Law. Now I say, and I trust I am wrong, if any hon. Gentleman will look into the first 28 clauses of the Bill, and indeed into others, he will see that this Bill attempts to, and if passed will, set up exactly that very same thing. The taxes proposed in the land clauses of this Bill will be taxed and assessed under a system entirely withdrawn from the Courts of Law—a system under which no appeal of any sort to those Courts is possible, and a system which rests in the sole uncontrolled hands of Commissioners, house agents, clerks, and valuers, who swarm around them, from whose decisions, as far as I can see, there is no possible appeal.

I may recall to the House for a moment some of the expressions. Take the increment duty. The new site value upon which everything depends is to be "subject to such deduction, if any, as the Commissioners allow." If the original value has subsequently to be divided, it is to be divided "in such proportions as the Commissioners think just." The amount of the duty due is to be "such an amount"—clause 3 (1)—"as the Commissioners determine," and the duty assessed by the Commissioners is to be a debt due to the Crown; so also with the Reversion Duty and the Undeveloped Land Duty. Lands which otherwise would be chargeable will he exempt altogether, if the Commissioners, to use the words of the clause, "are of that opinion." The whole of these proposals are entirely in the uncontrolled hands of Commissioners and valuers. Justice, in future, in regard to these matters, as to what a man is to pay in taxes, is to be what a Commissioner thinks just. The amount payable is to be what the Commissioners determine, and the taxes are to be put or not put on the land according to their opinion and their opinion only. Who are these gentlemen in whose hands the land and other property of the subject of this country are entirely confided? As far as I can see, there is no check over them of any sort whatever. No rules are laid down for them in this Bill except in one or two quite minor particulars. They are to make their own rules as they go along. The only stipulation in the world is that they are to be bound by the rules which they themselves make and which they may alter no doubt as easily as they make them. There never was, since the time I mentioned, at any time set up an authority so utterly irresponsible and wielding such enormous power over men's property as this authority; and from all their decisions the only method of appeal is to be to a referee, one of an indeterminate number of glorified house agents who are to be appointed under the terms of this Bill, and with whom I suppose we are to be merely concerned in voting their salary. I say with great respect to the Government that that system of taxation by commissioners without appeal to the ordinary Courts of Law which have been cut out is a deadly and indefensible system, and I feel very strongly that the House ought not to entertain it, and at any rate it ought to be submitted, as I hope it will be, to the most careful consideration in Committee when we get further on. May I, in concluding, emphasise what I have said by reading to the House one sentence from the Act which abolished the Court of Star Chamber in the time of Charles I. After reciting the evils of that Court, the last clause of that Act reads thus:— sioners appointed by the executive working under that name, and it was because that was so that they were hated and repudiated and destroyed by our ancestors. One of the best short descriptions of the whole system I think that was ever put in words was the definition of the word "excise," given in Dr. Johnson's dictionary. He says that excise is "a hateful tax levied upon commodities and adjudged, not by the common judges of property, but by wretches hired by those to whom excise is paid." The hon. Gentleman knows well enough that every jurist of any eminence or repute whatever has repeatedly denounced the system of irresponsible Commissioners, acting independently of Courts, and has warned future Parliaments against it. I hope I have made clear the system to which, for my part, I do take very strong objection. It is setting up again the same old system that I have described. If these land clauses were adopted as they stand, then in spite of what the right hon. Gentleman says, I do think that the Patron Saint of England will have become Saint Henry George, and the right hon. Gentleman, having overturned the fundamental statutes on which our liberties rest, and the whole system of taxation which we have learned to look on as elementary in this country, and having filled the whole country with commissioners and valuers, clerks and estate agents, all at good salaries, in whose uncontrolled hands the property in land of the whole of this country will lie, and having ousted and denied the King's Courts in regard to the taxation of the subjects, will be able to say with Falstaff in the play: "The laws of England are at my commandment. Happy are they which have been my friends; and woe to my lord chief justice." There are many remarkable examples, which many of us know, that what is called democracy in its working out really can amount to little more than bureaucracy. This is a system which appears to me to be all bureaucracy. We have seen a remarkable example of the same sort of tendencies in the extraordinary action of the Treasury recently in regard to the administration of old age pensions. The system is a thoroughly bad one. It is attempted to be applied at this moment to the rich, but the system, if started to work on one class, is sure to spread rapidly with regard to all classes. The sources of riches of our country are great, and I am quite certain that all classes, rich and poor, are ready to contribute to the necessities of the situ- ation. But I do not believe that any class, rich or poor, will permanently, or for long, submit to the sort of system which is sought to be set up by, at any rate, the first 28 clauses of this Bill, under which a man's property, and what he has to pay to the State are to depend not upon what is his ability to pay, but upon what class he belongs to, and what business he is engaged in, while the whole amount and condition of his contribution are to be left in the uncontrolled and inexperienced hands of persons outside the ordinary jurisdiction of the Courts, and from whose decision there is to be no appeal to the ordinary Courts of Law.

There is one question in which I am interested which has come before the House in the course of this afternoon. I ventured some time ago to contradict very directly the hon. Member for Dulwich (Mr. Bonar Law) in the terrible mistake which he made in the statement that there were no Death Duties in France. Of course, I imagine that it is no longer maintained. It is shown in Blue Books and Reports of the fullest possible description which are before this House that these Death Duties are in force; and these Death Duties have been increased in France since those Reports were made a few years ago. It is now proposed to increase them, although they are already far higher, proportionately, than here. We have had a proof of that recently in the death of a shopkeeper who had a large business, who left a sum which produced a very large return in taxes. It is impossible to compare fortune with fortune in France, because the whole system of computation is completely different from ours. It is only the results that you can compare. You cannot say they are higher in one case and lower in another case. Having looked into this matter, on the whole I am perfectly certain that the net result is that, substantially, these taxes are proportionately higher already than are ours. It is a curious fact, but it is officially before the House in Blue Books, that the matter has been the subject of a sort of treaty between the two countries. An arrangement was made between the two Governments which concerned in some degree Income Tax, but mainly Death Duties. There is a matter—I do not try to make party points out of these cases—which was the subject of previous debate, namely, as to the character of the present French Income Tax. The late Minister of Finance and the present Minister differed on certain points, but they agreed in both their statements laid before the French Chamber in support of the view that the Income Tax levied according to the English plan would have to be 8¼ per cent. all round to produce the amount already obtained in France from some four or five taxes which they propose to abolish. Some of those taxes amount to an Income Tax of 33 per cent., and that those taxes, in the nature of Income Tax, are patchy, uncertain, and enormous in amount there can be no doubt. The importance of the argument—I am quite prepared to give authorities—is not, of course, in the details, but in the conclusion based upon them. The Member for Norwood believes, as a good many believe, both inside this House and outside, that this new tax will be the last straw which will cause capital to fly from this country to other more favoured lands. There is going to be a great deal of evasion and avoidance, as the hon. Member said, and I think I gathered from the short argument used earlier in the evening by the speakers on the Front Bench opposite, that there would be in the future a flight of capital. I am perfectly certain that among different authorities, who differ widely in regard to some of the details, there is a real consensus of opinion as to foreign investments and as to the effects of the Tax.

I base myself upon papers by writers who belong to all shades of politics—the writer in "The Quarterly Review," the writer in "The Economist," "The Statist," and a writer like Mr. Wilson in "The Investors' Review," and several Agents-General for Colonies. Among all such authorities as those there is a consensus of opinion that there has not been that sudden increase in foreign investment which is accepted almost as a commonplace on the other side of the House. The matter is now being continually debated. There is no doubt that the amount of foreign investments is enormously larger than ever has been supposed, and that at this moment it is at least three and a quarter thousand millions, from which the return receivable in this country is not less than one hundred and sixty millions, in addition to all the enormous revenue, not far from one hundred millions sterling, earned by our shipping. These figures are so stupendous that they go to confirm the view which I have expressed in this House and out of it that in the long run there is a great deal of money which will be obtained from the Super-tax, and that the full declaration for the Super-tax which we are now to get, and which we. have already legal power to obtain, combined with a more complete information obtained as to the Death Duties, will lead in the long run to a very substantial gain, one which will infinitely exceed, not next year or the following year, but in three or four years, the figures which have been officially given to this House. There comes the question as to foreign investment, which is supposed to be caused by these high taxes. There is any amount of evidence to be quoted from men of weight on this subject. I have here a bit of evidence which was given before the Income Tax Committee which puts the matter as well as it can be put. It was the evidence of Mr. Coghlan, the Agent-General for New South Wales, who is a man of great weight and authority on these subjects, a great statistician, and who has had great experience on the question. In that Committee he was asked by an hon. Member opposite:— in the flow of capital to Canada and. Australia. That was so a few 3 years ago. The great increase has been to Argentina, with which we do an enormous trade, and from which we are receiving an increasing amount of grain. The increase of investment for the last three years has been mainly in Brazil, Mexico, and Argentina. Compare the figures of our trade with American trade during the last three years. If you look at the trade of Mexico, which stands side by side with America, all the railways being owned by the United States, you find that our trade with Mexico has increased by leaps and bounds, as it has also increased with Brazil. I frankly confess to the House that I have no doubt it is to the advantage of this country that there should be foreign investments of that kind. All the Protectionist countries believe it to be to their advantage, but not the Protectionists of our own country, to have these investments abroad. French Protectionists believe it to be an advantage to themselves, and an overwhelming advantage to us under our system. I support the Land Tax of this Budget, as I support the Budget generally, though I have had a long-standing opposition to the Tobacco Duties and to that increase in them to which Members on the Irish Benches have called attention. There is a special local circumstance which concerns my own Constituency, and which I feel is a violation of the whole principle on which revenue ought to be raised. I mean the uniform tax of five guineas on the little makers of cider and perry. I am sure it is indefensible from the point of view of the Government; but, apart from these matters, I wish to speak on one question only, and that is the effect of the taxes on the land.

The question as to the future relation of these taxes between the Imperial taxes and the rates has not been raised, and I had every reason to believe it would be. I need hardly say after the quotations from the Report of 1885, which have been read to-day, that I am in favour of taxes of this description. My hon. Friend who has just spoken thinks that one of the drawbacks lies in the fact that the system proposed in the Bill would be more advantageous under local direction. No doubt collection by parties at a distance, and the cost with local resistance constitute disadvantages. But what of the position of the municipalities as to these taxes. As regards the theory formerly these taxes were non-contentious Everybody was in favour of them. The Report to which I have referred was signed by most of the Conservative members, and similar statements were made by Lord Balfour of Burleigh and by Lord St. Aldwyn. At that time these taxes for local purposes were looked on as non-contentious. [An HON. MEMBER: "As rates."] I think so. That is my argument, and that is why I am speaking to explain that view of the Question before the House in this Debate. There may be great advantages in treating them as municipal, but whatever the purpose the theory is the same. I can see how objection could be made to the whole theory, but I cannot understand how that objection would be applicable to the tax as a tax, and not to it as a rate. [An HON. MEMBER: "It is a different kind of tax."] It is, no doubt, but I am not able to understand how theoretically objection can be made from an economic point of view.

We are told now that Mill, who was in favour of this, was no economist, but every man who has had the faintest reputation in our time as an economist accepted his view in favour of these taxes. They conceived them to be without economic objection. I do not know where my hon. Friend, who has attacked them so bitterly, learned his own economics. He was a Cambridge man. He was before Professor Alfred Marshall, and cannot have learned from him, or from Mr. Venn, who is still teaching in that university. All the disciples of Mill—Fawcett, Courtney. Stanley, Jevons—have accepted the principle. There may be differences in detail, but the principle has not been objected to by any considerable economist in this country. There is talk of Henry George, and it is becoming really ludicrous. Henry George was a man who with great eloquence revived doctrines which had been preached by great men a century before. I do not believe in the single tax, and it is not due to the intervention of Henry George that a great many of the schemes have passed in part or whole into our legislation and into legislation in all parts of the world. When I look at these clauses—28 clauses, I think, and 15 pages—forming the first portion of the Bill, I am reminded of the little volcano near Messina, which makes more noise than any other in the world, but never hurts the fishermen's cottages, as it only throws out a few stones, so that one wonders why it makes such a tremendous noise.

These clauses cannot he defended as they stand. They do not produce enough money as they stand, and they only raise the question of what are they going to lead to, and what is coming next. Are we to look forward to them as Imperial or to deal with such as the educational system? Quite apart from education it is a thorny subject. There has been lately a tendency in this country to throw increasingly great national duties on the county council. That has been done with the continual promise of the allocation to the local authorities of new sources of local taxation. That has not been confined to any party in the State. Now is the time to know what is likely to happen. We had A Debate on these principles on a most unlikely occasion. I do not know whether the Leader of the Opposition may remember it. When Sir Michael Hicks-Beach (now Lord St. Aldwyn) had been in South Africa he came home very full of the question, which was discussed privately, namely, the official revenues to be derived outside the centre of the gold fields from the royalties on ungotten minerals. On that occasion Lord St. Aldwyn thought he would pay the whole expenses of the war out of those unworked mineral rights. The principle is accepted, and the real question is what we are going to do with them. The hon. Member for Dulwich (Mr. Bonar Law) referred to a clear mind and clear power of speech, and distinguished between the Secretary of State for War and some others. If ever there was a man who sat here, whatever he may think of his opinions at different times, who was admitted to have a clear head and a clear power of expression, it was the Member for West Birmingham (Mr. Joseph Chamberlain). There was a set-to on this question between him and the late Lord Salisbury, who accepted the principle that there was a difference between land and other kinds of property. The Member for West Birmingham on the occasion said:— And to that the Member for West Birmingham replied:— to support the clauses; but I desire before parting with the second reading of the Bill that we should see our way rather more clearly with regard to the promises which have been made. I will not quote the pledges which have been given, but the first was in 1884. The present Prime Minister has pledged himself as strongly as possible that these taxes should be used for local purposes, both in Opposition in 1903 and in office in 1906. The municipal or local rating authority were to get them. We know also that Sir William Harcourt stated publicly after his retirement that if he had remained in office it was his intention that these taxes should be for the local rating authority. That pledge was renewed in 1907, I understood, and it was undoubtedly renewed on 18th February last year, the essential words then used being:—

I do not propose to follow the right hon. Baronet on the matter of local rating, but I think there is another aspect of the question that ought to be before the House when the annual Budget is under consideration. I do not think that anyone has yet called attention to the enormous sum collected annually in connection with local expenditure. It would not be in order to go into that question fully, but I think it ought to be in the mind of every Member of the House, and certainly of the Government, when they are asking the nation to contribute £176,000,000 for the expenditure of the country, that there is local expenditure going on, the money for which has to be drawn from the ratepayers and taxpayers for burdens which they cannot escape, amounting to certainly £163,000,000, and probably £165,000,000. That is a very serious additional burden, and I think that every Chancellor of the Exchequer should bear it in mind when proposing to increase taxation. The right hon. Baronet dealt at some length with the question of Income Tax. I think the Income Tax payers expected to pay their share of the increased expenditure of the present Government. My fundamental objection to the increase of the Income Tax is that it is drawing upon the great reservoir of our resources for war or any other emergency. It is drawing upon the source of revenue which is most readily available and most valuable in such time of emergency. To that extent the Government are undoubtedly imposing upon the country in time of profound peace a war expenditure; they are drawing upon resources and diminishing the national credit which may be required for the defence of the country at some future day, a day which may not be so far distant as every citizen in this country would desire it to be.

It has been stated that the proposed taxation would not drive capital abroad, and that there was another consideration which largely affected the investment of money in all parts of the world, namely, the security. Have hon. Members considered how far the proceedings of the present Government and the proposals of the Budget have already affected the security of capital in this country? That is, a most serious question. Whatever opinion may be held on the matter in some quarters of the House, it is an undoubted fact, known to every man of business and to every man of experience in financial transactions, that that security has been most seriously shaken. It has also been said that, on the whole, the export of capital from this country is not a matter to be deplored. I agree that properly considered investment of capital abroad is not a thing to be entirely condemned or entirely deplored. But no one ought to be forced to invest capital abroad. One of our great complaints against the whole system of taxation proposed by the Government is that it proceeds on a fallacy held by hon. Gentlemen below the Gangway. It appears. to be imagined that the wealth of this country cannot be diminished, and that by taxation and legislation it may be divided between the various classes of the community, so that it may be distributed in the different channels in some new ratio That is an absolute fallacy. One remark with respect to the Death Duties. They are a distinct evil, and diminish the aggregate capital of the country. They are an appreciable tax upon the capital of the country, and this at a time when we have a falling contribution to the Sinking Fund and a decreased repayment of debt. The great increase in the Death Duties seems to me to be a most dangerous and foolish expedient.

With reference to a subject that has been very little touched upon hitherto—the Licensing Duties—I do not propose to go into it very fully. But I do not think it is denied in any part of the House that the new duties which it is proposed to place on the sale of intoxicant liquors are a very great increase, and are intended to be a very great increase. The argument by which these duties are justified is that the licensed trade of this country is not paying anything like its fair share of taxation. I only need to give one or two illustrations. The question is how this increased taxation is justified? I have here a schedule of the way in which some of these duties will work out. I find that in Middlesex the increased taxation will amount to 175 per cent.; in the North of England it will be 82 per cent.; and in some cases it runs up to 680 per cent. increase.

In London it will be 60 per cent., and in Buckinghamshire only 68 per cent. All these increases are very great and very alarming. Let me take the case of a large free licensed house, a house that actually exists and which is now valued for the purpose of the rating at £1,200 a year. At the present moment it pays a duty of £60. Under this Bill the duty will be increased to £600. Well, how is the owner of that house to meet the charge that is to be laid upon him? I am not, of course, in a position to give the actual profits of any particular individual. But take the total gross profit of such a house—the profit of trading. It will be something like £2,000 a year. Well, out of that profit various charges in connection with the house have to be met. There is a mortgage no doubt. If not, the man had invested his money which will entitle him to a return of 4½ per cent. In a case of that kind the mortgage might be taken to amount to £1,200. There is licensed duty to be paid, rates and taxes, and other charges, and with this new licensed duty of £600, this will wipe out the whole of his profit, and the man will have nothing! Is that just? Is it a reasonable proposition? The whole of the finance of this man invested in the business has been thrown away. Is it just to come down with a Budget of this kind, and to tell a man that the whole of his livelihood is to be taken away and that his business is to be ruined? Of course the tendency of these increased charges must be that these men who are still free and untied—and who are considered by hon. Members opposite more deserving of sympathy than the ordinary publican—will have to go to some wholesale brewer or distiller in order to get somebody else to take up the burden and discharge the liability which under the new condition of things he will no longer be able to bear. The inevitable result of the Budget must be that every man with a free house in this country—unable to bear the increased burden—must go and tie his house at the earliest possible moment. The right hon. Gentleman, in making his Budget speech, said:— cent. of the money which was earned, and we only have 29 per cent. of our earnings left to divide between the preference and ordinary shareholders. Hon Members must easily see that those brewers who have largely invested in licensed houses, and already pay licence duties and heavy rates, are making an even larger contribution to the revenue of this country, and this new charge is unjust, and it is utterly impossible for the licensing trade generally in this country to meet these increased charges which the Government intend to impose. Why does the Chancellor produce this increased duty of 3d. per barrel in the form of Licence Duty? He knows practically that a charge of £1 on the first hundred barrels, and 12s. on each succeeding barrel is only a Licence Duty in name. It is a duty amounting to nearly 3d. per barrel of beer brewed. Why is it not brought forward in a more convenient form as an increase in the Beer Duty. The Chancellor of the Exchequer wants to take away from brewers any shadow of excuse which would enable them to increase the price of beer. His officials must have told him that the inevitable result of this increased duty would be an increased charge upon the consumers of this country, and he wants to be able to say—I hope I do not malign him—at any rate, his followers want to say in the country, in the public speeches on the platforms, there is no increase in the Beer Duty; we have only made an increased charge upon the Licence Duties of this country. I have only one more remark to make upon this side of the Question. I have kept for a good many years now an account of the earnings made by the brewing trade in this country, so far as I have been able to ascertain them. I am quite ready to hand it to the right hon. Gentleman if he shows any interest in the result. I find there has been a steady falling off in the profits of the brewing trade, and I have kept that calculation, writing down depreciation of capital, according to the values on 31st December in each year, the market values, as far as they can be ascertained. On the depreciated capital I find there has been in the last five years a very steady and marked decrease. The first year I kept an account was in 1898, and I find that the earning upon the ordinary shares was £5 11s. per £100. In 1908 they fell to £4 15s. I take the figures for 1893, taking the ordinary and preference capital, and I find in that year the earnings were £4 9s. 9d., and in the last five years they have fallen to £4 4s. 3d. There is not much margin there to bear this enormously increased burden of taxation, which the Chancellor of the Exchequer proposes to impose upon the trade in his Budget.

I only want to make one other remark. I see that the Licensing Duty is not to be deducted from the value of the licensed premises, when they are assessed for duty. That is to say, the value is to be fixed once for all empirically. I do not think that is a proposal which can receive the consent of any hon. Member in this House who seriously thinks about it. It may be answered that the licensed premises in this country are much undervalued. That is a statement often made. The Chancellor of the Exchequer was asked by my hon. friend the Member for Taunton on Monday last a question about values in London. He then said London values, taken upon the whole, approximate to the real value. It cannot be contended that the value of London premises will not fall by reason of the increased duties. Of course it will. It must fall. The Government, at least their followers, the Member for Cumberland and others, contend that the Government are appropriating a portion of the value for the purposes of the State. Well, if this duty is paid it means that each property is to be depreciated to that extent, and yet the property is to be valued as if that depreciation had not taken place. Why is that? Because the right hon. Gentleman is constrained to avoid the attack which is certain to be made upon him by the local authorities. These local authorities, of course, are clearly losing a portion of their local rates. The right hon. Gentleman is going to take from them, he is going to tax them upon a value which has no relation to the real value, and he is going to tax this property on a valuation which can no longer exist. I put the case of this unearned increment. Five pottery towns lately amalgamated and became one great urban district. The result is that under the Budget the minimum duty will be no longer £20, but £35, yet the Government and the Treasury are going to confiscate that difference in value which is certainly not owing to them, but which, if it belongs to anyone, belongs to the local authority, who by reason of their amalgamation improve the local government of the district and give greater facilities under which the licensed property might be held. The Government, in these licensing proposals, are confiscating something which does not belong to them. The only possible reason for making the increased charges on licences might be advanced on the ground of local taxation. The Government are going to put these increased charges into their own pockets, and they are going to depreciate the property, and they are going to impose upon the ratepayers an increased charge in proportion to the amount which has been extracted from licensed houses for the benefit of the Government. I believe the more this Budget is examined the more inequalities and injustices it will reveal. It is an unsound Budget financially. It is certainly a Budget which the taxpayers and electors of this country will reject if ever they have the opportunity of rejecting it, and it is a Budget to which, on national grounds, on financial grounds, and on grounds of individual liberty and justice to the taxpayers, I certainly shall offer my most continuous and strenuous resistance.

It has been asserted by hon. Members opposite that this Budget will injure agriculture. The hon. Member for Chelmsford says agriculture will be injured by the Increment Tax, and when I challenged him he suggested I had not read the Bill. It is clear that he has not read clause 3, which says that:— year 1834 to 1879 he will find that the value of agricultural land increased by no less than 26½ per cent., and that has taken place notwithstanding the abolition of the Corn Laws. The fact is that during the last 50 years there has only been a depreciation in agricultural land of less than 10 per cent., and not 50 per cent., and in some parts of the country there has been no depreciation at all. I know that in North Wales there has been an actual increase, and we have had it from a Member of the Government that there is going to be an increase in the price of agricultural land owing to the creation of small holdings.

The argument that the value of agricultural land will be depreciated by the Budget is due to a confusion of two things. In the first place, it is not realised that land has two values—one which depends entirely upon the productivity of the soil, its natural capacity, and upon what labour can obtain from it, that is, the agricultural value. The other is the building value, which depends upon nothing the owner does, but upon extraneous circumstances, such as the population of the district and the accessibility of the land. The whole mischief of our system of rating is that it is based upon the lower, the agricultural value, and that it ignores the building value. I am going to suggest that far from depreciating agricultural land this. Budget is the first serious attempt to place agricultural land on the same basis for taxation and rating as urban land. Everybody knows that urban land in some cases commands an enormous price, and I am willing to concede that the rates and taxes on agricultural land are too high, because the productivity of land is limited, and a large share of the product has to go in rates and taxes. On the other hand, the rates and taxes on urban land are often purely nominal, whilst the rates and taxes on agricultural land are based upon its capital value. The present system of rating is based upon the annual value, but the annual value of agricultural land is its full value, and it has to pay rates and taxes on that value. The rating and taxing of urban land is, it is true, based upon its annual value, but I am quite sure no one in this House would suggest that the annual value of urban land bears any relation to its capital value. Whereas agricultural land is rated and taxed upon its full capital value, the urban land of the country pays only a purely nominal amount on its annual value, and which is much less than it ought to be, and this fact in itself increases the burden upon agricultural land.

The present system of taxing and rating is unfair to both the owners of houses and factories. I will take as an illustration a piece of land with a building value of £900, which some time ago had to be acquired by the county council of the county I represent. We were asked £900 for the landless than half an acre in extent—and its rateable value was less than 5s. a year. A house in the same town worth £760, sold by public auction, was rated at £30 a year, and assessed at £33 a year for the Income Tax. Consequently it will be seen that the urban landowner escapes his fair share not only of the local rates, but also of taxation. It Las been asked over and over again in the course of this discussion why is it that a man who invests money in Consols escapes taxation, whilst a man who spends the same amount of money in purchasing, land is subjected to both rates and taxes? I will put a parallel case, and ask why the man who invests £40 in an acre of land is rated at £2 an acre, whilst a man who invests £700 in building land contributes practically nothing to the local rate or the Imperial taxes? The proposal of the Government is to put a halfpenny in the £ upon undeveloped land, and that represents a tax of 1s. 0½d. in the £ as an annual tax. Agricultural land is already subjected to an Income Tax of 1s. in the £ and it will be subjected to a tax of 1s. 2d. in the £ when this Finance Bill is passed. So that all the Government propose to do by this Land Tax is to make the urban land subject to the same amount of taxation which is now paid by agricultural land by way of the Income Tax. It has been argued that the fatal thing about the Undeveloped Land Tax is that it is a capital tax. The hon. Member for Aberdeen said the fatal thing about the tax is that it is a capital tax, but every capital tax can be expressed in the terms of an annual tax. I have never understood that there was any difficulty in the matter, and I believe this tax can be represented by a tax of 1s. 0½d. in the £.

It has also been argued that if you put a tax on land it will fall upon the present owner. It seems to me that this argument is inconsistent with the Free Trade position, because I have always understood the Free Trade argument to be that by putting a tax upon a commodity you increase the price. Therefore I am curious to know how by increasing the tax on land you are going to depreciate its value to the owner, whilst, on the other hand, it is claimed that by putting a tax on a commodity you increase its price. The question, after all, is this: Is the land being held back where there is a demand for it? ["No."] An hon. Member opposite says "No." If no land is being held back in this country why was the Small Holdings Act passed? Why were compulsory powers needed? If land was not being held hack compulsory powers would not have been necessary. Let me give the hon. Member an instance. The county council of Carnarvon wanted to acquire land for public purposes. The price asked for the land was £2,300 an acre, and yet the rateable value was £2. Was not that kept back? There is always a difficulty in obtaining land in North Wales or in obtaining mining licences. I know of cases where landowners have refused terms. Yet in those cases where the mining leases were asked for every security was offered, and where permission to work the minerals was refused there was serious unemployment—there was loss of wealth to the community and of rateable value to the county.

I understand that the hon. Member for Merthyr Tydvil objected to land coming into use because it would interfere with wages.

I must leave the hon. Member for Montgomery Boroughs to reconcile himself on the matter with the hon. Member for Merthyr Tydvil. I will not detain the House any longer, but I wish to express the opinion that there is nothing in this Budget which is going to increase the burdens on the working classes. Hon. Members opposite describe the Finance Bill as confiscatory or robbery. On the other hand, let it be pointed out that in ten years there has been an increase of £250,000,000 in incomes that are taxed. That large sum has not reached the working classes, nor did it go to the lower middle class, and the proof of that lies in the fact that it will be found that only one estate in three exceeds the sum of £1,000, and clearly the lower middle classes, with energy and hard work, have not participated in that increased wealth. It seems to me that their share of it has been exceedingly small.

The Chancellor of the Exchequer has apparently endowed two sections of the community by the Budget. We understand that the licensing trade will benefit to the extent of £4,000,000. He said that the other day. To-day he went so far as to say that the land-owners would benefit by no less a sum than a million pounds. I waited to hear that the owners of mining royalties had been endowed, but I waited in vain. I desire in the few minutes which are at my disposal to say a few words about the financial proposals of the Government. I object to the length of the Bill and the number of clauses which it contains. I think we can also admit that the Finance Bill, as it has been brought forward, has a very strange resemblance to several measures introduced by the Government, but rejected in another House, and which, I think, would have also been rejected by the country had the country had an opportunity of expressing an opinion upon them. There is no doubt about it that this Bill should have been divided up into clauses. I think we can agree on one point, and that is that the measure has been brought in in a vindictive and punitive spirit by the Government. I think, also, in this respect, the bringing in of a Finance Bill with these vindictive ideas is certainly an entirely new departure in regard to the manner in which the finance of this country is conducted. I consider that the Chancellor of the Exchequer has adopted a very different method to those taken by Finance Ministers in the past, and he has perhaps lost sight of one duty which is the duty of every Chancellor of the Exchequer, namely, that when he is endeavouring to fill the coffers of the State for the purpose of defraying the expenditure of the nation he should do it in a way causing the least possible injury, and the least possible burden to any individual in the community, and to the community at large. I think he has transgressed this rule by his proposals in every shape and form. It appears to me that the object of the Government is to effect by the Finance Bill what they have failed to effect in their short stay on the Treasury Bench by means of legislation. A colleague of the right hon. Gentleman has admitted this. I think it was the Minister for Education, who made a speech in which he deplored that the Licensing Bill had been rejected in 1908, and admitted that in the Finance Bill they had the second best method of carrying out what the Government had proposed to do in regard to licensing.

I have every reason to believe that the right hon. Gentleman in estimating his Budget this year has considerably underestimated the amount it will yield. I should like to ask why he has gone so far as to under-estimate that yield. Is it that he desires to replenish the Development Grant in a method which I consider entirely unconstitutional, or is it his desire next year to be able to remit taxation on those sections of the population which he thinks will vote for his party when they desire to obtain at the polls the suffrages of the electorate? I think that the silence of hon. Gentlemen below the Gangway—and I see there are very few present at this moment—is certainly significant. I think we should all of us recognise the reason for silence, it is that they see in the Budget one of the most powerful weapons for promoting that policy which they do not hesitate on all occasions, both in this House and in the country, to put forward. We are told that this is Free Trade finance. We have heard a great deal about Free Trade finance lately, and the Lord Advocate went so far the other day as to say that this Free Trade finance would be the death-blow of any other suggestion for bringing forth financial proposals in this House. If this is Free Trade finance it appears to me to be extraordinary that it should be opposed by a Free Trader like the junior hon. Member for Preston (Mr. Harold Cox) or by that other Free Trader, Lord Hugh Cecil, in his communications Lo "The Times." If you term a system which penalises success and discourages thrift Free Trade finance, well, then I say, the sooner we hear the last of it and adopt entirely different methods, so much the better will it be for the vast community which depends upon our financial proposals. We heard yesterday the Attorney-General say he still believed it was the desire of men to get wealth for themselves. I believe that is the object of most people, but beyond that they have a further idea. They desire to accumulate wealth for the benefit of posterity, and they desire to put something by for the families which they leave behind them. I think that perhaps is the foremost idea in the mind of every true member of this nation. Now, I believe the most important provision, and possibly the most dangerous provision in this Budget, is that which is contained in section 71, which deals with the reduction of the permanent annual charge for the National Debt from 28 millions sterling to 25 millions sterling. I believe this is a very serious proposition indeed. This is not the occasion for recrimination, but I believe there is hardly an occupant of the Treasury Bench who at one time or another has not condemned proposals for raiding the Sinking Fund. I think they have been perfectly correct in doing so. This is not a party question, and I venture to assert that the only occasion on which it is justifiable to raid the Sinking Fund is an occasion of national emergency. There is not such an occasion at this moment. There is no need for such a raid. It is perfectly true we have been plunged by this Government into reckless expenditure, and it is also true that the Chancellor of the Exchequer has challenged any of us to complain, because he is called upon to raise an extra 16 millions. We are asked, I know, to provide for extra "Dreadnoughts" and with that I am entirely in accord. We have to provide for old age pensions, and with the principle of that also I am in accord, but I think the manner in which the Chancellor of the Exchequer brought the Old Age Pensions Bill in, without any idea as to how he was going to defray the expenditure, was one of the most unconstitutional and unprecedented courses which any Chancellor of the Exchequer ever adopted. But the time has gone by for recrimination. We are now bound to provide the money to defray these charges. I repeat that to adopt this method of raiding the Sinking Fund can only be characterised as reckless on the part of the Government. The charge may not be a very large one. I cannot say I consider it to be a very large charge for the National Debt of this country, but it has this advantage, that year by year it grows more effective for the purpose of defraying the debt. I would suggest, however, that an additional £500,000 per year should be put by for the purpose of paying off the debt, and even that would be nothing whatever in comparison with the manner in which the wealth of the country is increasing. In my opinion, a great deal more than £28,000,000 Should be set aside for defraying the National Debt charges. We know perfectly well the view of some hon. Members below the Gangway with regard to this question. We know that they would repudiate the National Debt. But so long as honesty is the chief idea of the Government of this country that view is not likely to gain acceptance. I repeat that the best manner in which these charges can be defrayed is by increasing the annual expenditure derived from revenue in regard to the National Debt.

I should like to say a few words with regard to the licensing proposals. I do not think it is possible for anyone now, and I would venture to ask the one representative of the Government present (Mr. Masterman) whether he is in a position to deny that the proposals which have been put in the Finance Bill in this regard have not been in lieu of the Licensing Bill which was rejected last year. I do not think that proposition can be denied, and I think that under that heading these proposals are of an entirely vindictive character, and it is for that reason that they have been brought forward. I think it is proved by the inconsistency and inequality of the legislation. We have seen enormous Licence Duties—Licence Duties that have been entirely extortionate and out of proportion brought in, but, at the same time, the distribution of liquor in clubs is chargeable to a very small extent. This is not the occasion to go into the question to what extent legislation has any effect upon temperance in this country, but I am certain of this, that the chief factor in the promotion of temperance in this country is not legislation. It may do good, incidentally, towards promoting temperance, but we know that temperance depends upon public opinion and upon the power which education has upon the people of this country, and to proceed to legislation in advance of public opinion only serves to reduce the number of public-houses out of proportion to what is required, and only serves to drive the people to secret drinking on the one hand, while it is obvious on the other that clubs will spring up like mushrooms. With regard to the tax on liquor, I do not want to quarrel with it, although I think it would be possible for me to adjust the tax better myself, but, as regards Licensing Duties, I have heard nothing, nor do I believe that anything can be said, in their defence. In regard to Licensing Duties generally, however, I think there is something which could be said for a graduated scheme, but a graduated scheme on an entirely different basis to that on which these duties are levied in this Finance Bill. I think we must all agree that they act in an unequal manner, and that they act more hardly on England than they do on Ireland and Scotland.

There are innumerable instances of hardship, but I will venture to trespass upon the indulgence of the House just to give one instance which comes within my own knowledge. It is the case of one firm of brewers. The dividends which have been paid on the ordinary shares in the last two years have been £50,000. By the extra duty which it is proposed to levy with regard to licences it means that the taxation of this one particular company will be increased by £59,000, which is £9,000 more than the dividend which it is proposed to pay on the ordinary shares. This brewery company has an alternative, but the alternative must be adopted by every one throughout the country, or they cannot do it, and that is, to increase the price per barrel for beer by 6s. If they do that they will decrease their taxation, so that instead of being £59,000 it will be £23,000, which means that they will be able to pay A dividend, instead of 4 per cent., of 2 per cent. on their ordinary shares. That is the penalising effect which the extra duties on licences proposed to be levied by the Finance Bill will have upon the publicans of this country. There is something which can be said with regard to a tax on beer in this way, that a tax on beer operates equally over all methods Of distribution, and I think that perhaps it tan naturally be said that there is every justification for a tax on beer. It first of all fulfils what should be the main object of the Chancellor of the Exchequer, filling the coffers of the State and at the same time inflicts as small an injury as possible on the community. In the second place, a tax on beer may promote temperance by decreasing the consumption of beer; and, thirdly, it is a tax upon a luxury. There is one other objection, and that is, that I think it is a tax which operates too hardly in proportion upon the lower classes of the community as compared with the other and higher classes.

May I be allowed to say a few words with regard to the tax on land? It is obvious that although the yield from the tax on land this year is only £500,000, still, for the reason that it has been put in the forefront of the battle, and that it takes up 28 clauses of this Finance Bill, it is obvious that that is one of the most important points that the Government desire to put forward. I do not know whether they propose to stand or fall by it. We have heard that expression before with regard to the licensing duties, but I venture to prophesy that they will fall by it at no distant date, and I would ask the sole occupant of the Treasury Bench whether this i3 an attack upon the landowners, whether the ulterior motive of the Government, because every clause has some ulterior motive, is an attack on landlords, and whether this is a substitute for their previous Bill. I do not know whether a suggestion to the Government will be accepted, probably it will not be, but I would venture to suggest, as this is a tax which this year produces such a small sum to the Treasury as £500,000, the Government would go so far as to separate this question from the Bill and discuss the land clauses after the other portions of the Finance Bill have been discussed in this House. I think it would be a good thing, because the other clauses bring a certain amount of money into the grasp of the Chancellor of the Exchequer, but the land clauses, which are very important, will hang up the whole Bill, and I would urge upon the hon. Gentleman to confer with his colleagues and see if they cannot put back the 28 clauses to be discussed after the other clauses of the Bill have come into operation. What I would like to put forward is that these land clauses differ from former proposals to tax land in three very important ways. The first of these is with regard to this Land Tax, that the State and not the local authority is proposing to take the proceeds, and the second manner in which they differ is because they form a new burden and do not go, as the Land Tax has always been advocated, in relief of existing burdens. The third manner in which they differ is that the tax is not an annual one, except in the case of the halfpenny on undeveloped land and the occasions on which it is levied in other cases, fall at uncertain periods. I think these differences should be carefully noted, because the arguments which have been put forward by most land taxers in the past fall entirely to the ground.

Now I come to the question of valuation. Clause 16 imposes on all landowners, which includes all leaseholders where more than 50 years are unexpired, the duty of making a return, first, as to site value, and, secondly, as to the total value. With regard to the large landowner I do not think the right hon. Gentleman has ever considered this question of valuation. It imposes a certain amount of difficulty op the landowner to have his property valued, and it certainly takes a great deal more than 30 days. It would take something nearer 300 days to value a large estate. The man who owns the house he lives in has to produce his valuer, and we know perfectly well that to find a valuer is not in any way a cheap proceeding. It is a matter which entails a great deal of expense, and to most working-men owners there is no possible opportunity by which they can gain any guidance as to their site values. Ground rents give no guidance whatsoever. The Royal Commission on Local Taxation, I think, showed very conclusively that ground rents vary even on similar houses in various parts of the country. Ground rents are heavy on some houses in the same locality, because the builder has endeavoured to defray all the cost which he has paid for the land by large ground rents on a few houses, which he has built at the beginning, and so in the same locality you find heavy ground rents on similar houses in one corner of the estate and smaller ground rents on the other. For the purpose of valuation ground rents give no guidance whatsoever. I should like the Chancellor of the Exchequer to inform the House what steps should the owner take for the purpose of estimating his site value. Is he to call in a valuer at his own expense, or is he to estimate the property himself. On what line is he to proceed? I think it is advisable to point out the difficulty which the owner will have to face when he comes to value the site of his house. There is one thing on which we will all agree, that no two valuers will agree together, and that even if they do all the labour will be in vain unless the Commissioners agree also. I think the owner must, before anything can be done, solve the following conundrums. Is he to have regard, first of all, to the use to which the site could be put, or is he only to have regard to the use to which the site is put? Where buildings unsuitable for the neighbourhood exist on the property is he to presume that these buildings are to be demolished, or that they will remain standing, and how is he to form his valuation on that? Is site value to be based on hypothetical or on actual use of the site? That is a matter of great importance, and one on which we are entitled to information.

With regard to unearned increment there is no justification whatever for taxing it on the ground that it is unearned. It is part of a bargain. It has been a speculation. It might have entailed loss, and if it does it represents deferred interest. This is another question where we have to look to see whether there is an underlying object on the part of the Government. Do they consider that by this method of taxing unearned increment they will make the land cheaper or in any way more accessible? I have always understood that the Free Trade belief is that the incidence of taxation falls on the consumer. Is this case going to be different in any way? I do not think it will. The land will remain at exactly the same price to the buyer, but the State and the owner will share the profit, though the owner's share will be smaller. I think the 20 per cent. charged on unearned increment can only be characterised as an extortionate tax, and I also consider that, in conjunction with the other taxes, it is perfectly possible that the Increment and Reversion Tax and the Death Duties can be levied on the same property in one year, and that is a burden which might be unbearable and is entirely unjustifiable. In estimating the amount of the Increment Duty there is nothing in the Bill which leads us to believe that an increase in the rates will be taken into consideration? It is obvious that an increase in the rates must decrease the value of the land to the owner. The new proposals I consider are opposed entirely to all the arguments which have ever been used by the land taxers. The argument for the taxing of site values was that the burden on building should be relieved. The Chancellor of the Exchequer proposes to tax site values, and at the same time does not propose to bring in a corresponding decrease in the taxation for building, therefore buildings will not bear less but land will bear more. I think that proves at once that the buildings cannot under any circumstances become cheaper, and that accommodation will consequently become inferior. I have been trying all this time to discover what has been the object of bringing in the tax on undeveloped land, and I can only see that it is with the object of penalising all individuals who are unfortunate enough to own land in proximity to large towns, and it also appears to me to be based on the entire fallacy that land in proximity to large towns is always of great value. I do not think that is borne out by experience. It goes further than this. I believe this ½d. on undeveloped land will have the effect of preventing the development of land for building purposes. I know the Government think it will bring more land under building, but I think it will have the opposite effect. I have to go to the evidence which was brought before the Royal Commission on Local Taxation, which I think held most indisputably that land which was ripe for building was seldom withheld from the public, but that the tendency was to put land on the market before it was ripe for building. By the incidence of this ½d. in the £ on undeveloped land the Chancellor of the Exchequer is taxing land which is not ripe for building, but is ripening; and it has been pointed out to the Royal Commission that land even possessed a prospective building value long before it was actually ripe for building. The only effect which this can possibly have is to retard the development of land for building purposes, because you are taxing a man on his future profit.

The manner in which the State has stepped in with this unheard-of taxation is causing what one can only call the violation of contracts in all parts of the country. We have but to look at the Reversion Duty, which affects property, which has been the subject of agreement between two individuals, based actuarially on the mutual benefit of both. After these contracts have been arranged perfectly satisfactorily to both individuals to the contracts, the Government steps in and impose the taxes proposed under this Bill. I sincerely hope that before this Debate ends I shall be able to obtain from the right hon. Gentleman answers to the questions which I have asked. The answers necessary to make this Budget clear would occupy not four days, but 40 days in this House. If we desire to hear clear statements in the House in explanation of the proposals in the Budget the time available for Debate should be prolonged. Whatever explanations the Chancellor of the Exchequer can give, I do not think that enough condemnation can be heaped upon the proposals brought forward by the Government.

It is quite clear from the various speeches delivered on the second reading that the main controversy of this Budget will rage violently round the question of land. Hon. Members have spoken of other matters, such as licensing, but in a few moments they have come back to the land, and I am not very much surprised, because I think that is the question which makes the Budget really interesting. Other matters of taxation are more or less on conventional lines. The proposals with respect to land are more or less a novelty, and they will be regarded by hon. Members opposite as revolutionary. I must admit that the proposals of the Chancellor of the Exchequer in this Budget are not altogether the proposals which we who are land reformers have always aimed at. They are not our pro- posals; but still we look upon them as extremely valuable, because we get a valuation of the land, and that we look upon as a matter of supreme importance. Although the proposals are not exactly ours, still they do deal with land, and it is a matter I think of great congratulation that the land has at last been deemed a fit subject of taxation and discussion instead of being looked upon as a sacrosanct form of property which ought not to be discussed in any way. The idea of land reformers is that there ought to be a single tax or rate—it does not make much difference whether you call it a tax or a rate—on the land, and no tax on the buildings or on the improvements on the land. It ought to be solely and entirely on the land. [An HON. MEMBER: "Why?"] I can hardly put the answer to that question forward now, but I hope that before the discussion is entirely over hon. Members will at least be able to grasp that land should be treated differently from all other forms of property. It has been explained over and over again that that should be done because land is a monopoly, because it is not the result of human industry, and because it is in the hands of private individuals, and is a thing which everybody has to use. If that is not a reason why land is a fit subject for taxation, I must confess that I cannot but understand the imperviousness of hon. Members opposite to any form of argument. We who are land reformers should have preferred a universal tax or a universal rate, but I think it will be interesting to see how far these proposals of the Government will help towards the realisation of our hopes in the future.

As regards the Reversion Duty, I suppose nobody has a very strong objection to that. I have always looked upon the long leasehold system as one of the worst forms of dealing with land it was possible for human ingenuity to imagine. Anything that throws obstacles in the way of the leasehold system I think will be welcomed by most land reformers With regard to increment, I must admit that the State has every right not merely to take the increment, but to assert its claim to the increment not earned by the owner of the land. I think this duty will have a tendency perhaps to make the transfer of land rather more difficult and less frequent, and that, I think, is a bad thing. I think it is quite possible that it may act as a block to the realisation of our future ideal of having a universal tax on land, because owners will say: "We are taxed already." They will say that a proportion of the increment of the land is already taken by the State, and that you have no business to put a tax on the increase of the value; that you have no business to put a tax upon the land, as they are already taxed on the value. It is open to that objection. Still, I am quite willing in matters of land reform to take what I can get. I do not myself object in any way strongly to that proposal. As to the tax on undeveloped land, I can see practical difficulties in the way of the realisation of this tax. It will be hard to say what is developed and what is undeveloped, and it will be hard to say in the case of developed land when it ceases to be developed land and becomes undeveloped. That will cause a certain amount of difficulty, but when hon. Members say that this tax will not have the effect of bringing land into the market which otherwise would be held up, I think they are stating what is contradicted by all our experience. I read with great interest the Consular Report with respect to the taxation of land values in the United States. Although the hon. Member for Preston did not find it interesting, I found it very interesting. I found that in the whole of the States in which taxation of the value of land was applied the tendency was to bring land into the market which otherwise would have been held up. I have seen land held up from time to time, and I held up land myself. Many years ago I went to a Colonial town, and I thought I would buy up land on the outskirts and wait until the people of the place gradually made that land valuable by the construction of roads, drains, and tramways, of which I would reap the benefit when the people desired to build at that place. [Cries of "Shame."] Shame! Yes. These were the days when I had not the same keen altruism as I have now, and when I had not the same idea of my duty towards my fellow creatures. Well, I bought land, but in that place unfortunately there was, as in many other places, taxation of bare land, and every year I found that my land was valued, and as the land went on increasing in value the taxation went up, and, after holding the land for some years, I was literally taxed out of existence. I did not want to build houses there. I was taxed on the value of my land, and the consequence was that I had to give up my land, and all my dreams of gigantic fortunes in the future faded away. When I went to bid farewell to the officials of that city, so far from expressing any regret at my departure, they intimated that they were rather glad I was going. They said they had not got any use for me. They said I was the kind of citizen that they wanted to get rid of, the kind of citizen who held up the land. I was what the newspapers call a busted boomster. Hon. Members who have been in the Western States of America perhaps know what is meant by a busted boomster. If I had been in England I should not have been a busted boomster. My land would have been extremely valuable, and I should not have been taxed out of it as I was in this comparatively wise Colony.

I believe that this tax when in operation will be found to be thoroughly valuable. I know what takes place in England. I know where land is being held up, and where the result of this tax will be that those lands will be brought into use for the benefit of the people at large. One or the principal advantages of this tax is that it will work in quite satisfactorily with our future universal tax on land. That is the dream of all reformers. I should just like to say one other thing about the Budget. I would like to join with hon. Members who pleaded the cause of the grocer. I believe he has been extremely badly treated; but I may say, after all, we have not got so very many friends that we can afford to lose the grocer, and I hope the Chancellor of the Exchequer will take the harshness of his case into consideration. If it is desired to destroy the grocers' licences altogether that is all very well, but I understand they do not mean to do that; so I hope that pity will be extended to the grocers. I also wish to put in a word in reference to the Tobacco Tax. That is a very hard and crushing tax. It offends all my Liberal principles, because it bears most hardly on the poor man and does not bear so hardly on the rich. The rich man smokes his 2s. cigars and pays hardly anything in tax. The poor man with his ounce of shag and his pennyworth of tobacco pays an enormous proportion on the value of his tobacco. There is one thing that I have never been able to understand, though I asked a great many questions in the house about it. Every succeeding Chancellor of the Exchequer makes the same answer—that the matter will be taken into consideration. I hope that the matter has been, but as yet we have not got any results from it. I have never been able to understand why the man who keeps a small shop, and sells a few wretched packets of cigarettes in the year, should pay 5s. 3d. as tobacco sellers' licence, and that Salmon and Gluckstein should pay exactly the same. That seems to be absurd. The answer I have always had is this: "This licence is a registration licence, and does not readily lend itself to graduation." That would have been all very well, but I observe that in this Budget the brewers' licence, which also was a registration licence and did not lend itself to graduation, has been graduated; and I do not see why the tobacco sellers' licence should not be graduated in the same way. I believe it would be a popular way to do it, and I believe that it would bring in a good sum to the Government. A still grosser absurdity is what they call the tobacco cutters' licence—that is, the tobacco manufacturers' licence. If a man manufactures 120,000 pounds of tobacco he has to pay a licence duty of 30 guineas, but if there is a company like the Imperial Tobacco Company, which manufactures probably some billions of pounds every year, it pays exactly the same sum, for some inexplicable reason. It is like the case of the licence duty on a public-house, which now stops at £60. I never could understand why that should be. I believe that if a graduated licence duty were introduced it would bring in not only a considerable sum into the coffers of the State, but would also he popular with manufacturing vendors in the end. I now come back to the land. I am quite sure that it is by these provisions as to the land that this Budget will stand or fall. I believe they are the most valuable provisions of the Budget. I am quite sure that the question of land reform is a question that is very popular among the mass of the English people at the present time. It is one of the burning questions of the day, and one which is inseparably mixed up with all our hopes of social reform and all our hopes of a bright future for the people of England. I remember many years ago talking to the late Warden of Toynbee Hall. He said:—

Although the House has been diverted more especially with the very naive statement of the hon. Member who has just sat down that the Government should take care not to lose their few remaining friends, the grocers, yet, before pursuing that argument, I should like to deal, perhaps, first with a few general observations about the Bud- get, which seems to me to be appropriate upon the second reading, and which I imagine can hardly be brought in at any other subsequent stage. Those who have spoken from the Government Benches have always been very indignant whenever anybody on this side of the House has had the temerity to challenge the Budget as vindictive and punitive in its operations. But I think that the Government are expecting that we on this side of the House should have rather short memories, because if they will cast their eyes back to a not very distant past I think they will recollect that we have had hints innumerable from very important Members of the Government as to the kind of legislation—and I say legislation advisedly—which would be attempted by this Budget. The Prime Minister made a great Liberal pronouncement at a dinner of his party shortly after the Licensing Bill had been thrown out by the House of Lords. Looking through that speech I find the very pregnant and significant sentence which I think sheds a great deal of light upon this Budget. It was this:— that you can employ taxation as much as you like to injure your political opponent, to make the rich poor, but that the moment you employ taxation to improve trade, to make the rich richer and the poor richer, by increasing their probability of employment, then you are at once committing some very great fiscal heresy which -cannot be too strongly denounced by those who hold the views of hon. Members opposite. I think that the argument you must employ your taxation for revenue purposes only can never be used again by the Liberal party. Surely if it is justifiable to say to employ that argument when you are going to do to large sections of the community .a very serious injury, it is far more justifiable to employ it when you are going to confer a very considerable benefit on large sections of the community. It is of no use the Government pretending that one of their chief objects in the Budget is not to dish Tariff Reform.

We know very well that the object of this Budget is to show that Free Trade finance is inexhaustible, and that the resources of this country under Free Trade are by no means limited. That is one of the reasons I imagine why their estimates have been put so extremly low. But I think they will be disappointed in two ways, and so far from dishing Tariff Reform the Budget will give it a very great stimulus. One way in which they may be disappointed is that they may not get the surplus owing to evasions, which are very likely to be practised. Another way in which they may be disappointed, and a way I think which will be very disastrous to the country, is that their taxes will have such an effect on trade generally, and upon the confidence of those who invest their capital in this country, that they will find unemployment increasing to even a more alarming extent, and that Tariff Reform will come as an irresistible demand—I think it has already come—from the working classes, a demand which will be stimulated by the nature of the proposals you are making in this Budget. It seems to me there can be only one possible justification for the nature of this Budget, and that is if the Government think that, by their Budget they can alter the distribution of wealth, or rather, if their wish is to alter the whole distribution of wealth. The Government proposals look as if they thought that the distribution of wealth was wrong, and could be altered by making the rich poorer. We know very well that hon. Members below the Gangway think that is so. I have often read their writings upon this question of finance, and I have often heard them say in this House that the only way to remedy unjust distribution of wealth at the present time is to make the rich poorer, and they think that by so doing they will make the poor richer. Coming from hon. Members below the Gangway this Budget would be quite logical and quite comprehensible, but what I want to know is, Do the Government think so? Do they think that they can alter this distribution of wealth by making the rich poorer? Do they think they are going to make the poor richer by the proposals which are contained in this Budget? We know very well that hon. Members below the Gangway enthusiastically approve of this Budget. The hon. Member for Blackburn (Mr. Snowden) has said that the Chancellor of the Exchequer is "an apt pupil." If the Budget is not based upon the principles adopted by Socialist Members of this House below the Gangway, at all events the Government cannot deny that the practice of them is exactly the same as the practice which is constantly urged by those Members below the Gangway.

I do not think the hon. Member who represents the Government at the present time on the Treasury Bench can approve those views, even if he attempted to do so. There is in this Budget evidence of a considerable animus against wealth. The Government pretend that these taxes which are imposed, more especially upon land, are taxes which are imposed for revenue only, and that the revenue must be raised in some way. That is an argument which could be used just as freely by any Government, no matter how Socialistic, which was raising taxes in the way it is proposed to raise them by this Budget. It would be understood if the Government held the Socialist view, that land originally and really still does belong entirely to the people. If they take the Socialist view the quickest way is to restore the land to the people—first of all to buy the owner out at market value, and then to get back the money by taxing the land at 20s. in the £. If they took that view one could understand the proposal. If they hold the Socialist view that all wealth is due to labour, and therefore capitalists as such are nothing but robbers, then one could understand it. But it seems to me, as it is, that they are putting into practice, as I think I can show, the views which hon. Members below the Gangway have always advocated. It seems to me that the Government in doing so, without holding the principles of those Members, are acting in a most illogical manner, and also in a most shortsighted manner. Do they or do they not regard people of great wealth—I will say millionaires—as of economic value to the country. It looks to me, by the way, they are acting as if they desired to discourage millionaires coming to this country. By the way, in which the Prime Minister ignores the danger of capital leaving this country, it also seems to me that the Government think millionaires are of small importance. But I venture to put this proposition before hon. Members on the other side of the House, and it is that the possession of a few very wealthy men in the country is by no means economically a bad thing. In fact, on the contrary, it is a very good thing indeed; after all, they do not, as one would sometimes suppose by hearing hon. Members opposite, keep their millions in stockings. Their millions are invested profitably for the benefit of the trade of the country, and those millions are the lubricants of the commercial engine. The millionaire, however rich he may he, can only spend a very small proportion of his income on luxuries. Therefore, if wealth is in very few hands, the amount spent on luxury by these few does not really amount to anything very serious. If you break up these millionaires' properties, and divide their wealth into sums of £9,000 or £10,000, then I say the larger proportion of the income would no longer be available to oil the wheels of industry. I think that it is an indisputable argument that the presence of a great number of millionaires in any country is of very great value, and that nothing ought to be done either to prevent them coming here or—when they are here—to drive them a way.

To show that the idea of capital leaving the country is not illusory, as the Prime Minister and the Chancellor of the Exchequer would have us think, I will give him an actual instance of what occurs, and is occurring every day at the present moment. I have been informed of an actual case that occurred. A man has been accumulating for the last few years, and putting by £5,000 per year. As that is surplus over the income which he requires he does not draw the interest on it and leaves it to accumulate. That man, as soon as this Budget was introduced, seeing the tendencies of it and the effect of it, decided that he would no longer allow that sum to accumulate in this country, and sent it to America to lie there and accumulate there. Of course, he will get over such proportions as he may require when he has need. That would be done extensively, and I think no one will deny that that is a very bad thing indeed for this country. After all, there is that money going to finance American industry and enterprise rather than finance the industry and enterprise of this country. [An HON. MEMBER: "That man is thinking Imperially."] I did not know that America was part of the Empire.

I have in my pocket a very interesting little book, which has been written by the hon. Member for Blackburn (Mr. Snowden), which gives the ideal Socialistic Budget. The reading of it is very instructive and useful, because it helps one to understand this Budget so much better than one would otherwise understand it. It is a remarkable coincidence that every tax recommended in this book is a tax which has been proposed by the present Government. The book recommends that revenue shall by raised by increased Income Tax, by increased Estate Duties, and by increased taxes on land values. They are not ashamed of the road which they propose to travel, and perhaps I may be allowed to read a portion of it to show the Government the road on which they are walking. Proceeding, the hon. Member quoted—I would like to ask the attention of the hon. Gentleman (Mr. Masterman) to these last words—and pointed out that

The Death Duties are, I think, one of the worst features of this Budget. The Chancellor of the Exchequer, in his speech the other day, made very light of the effect which the Death Duties would have upon agricultural estates, but I think that in doing so he has ignored the actual effects which have occurred since the year 1894, when the Death Duties were first put on in a heavy form. I do not think I shall be accused of exaggeration, or that I could possibly be so accused, in saying that by those Death Duties many families and many individuals, I would say hundreds, have been practically ruined. I do not care what the economic effect may be for the country, if taxation ruins a single individual then taxation is going beyond the purposes it was really meant to serve. You may tell me that it does not matter if one family in a countryside is ruined and that somebody else will take their place. That may be, but we ought in taxation to recognise as one of its first canons that no particular individual or no particular industry should be brought to ruin by its operation. We know plenty of cases all over the country where the hardship of the Death Duties has been very severely felt, where people have to make every struggle in order to keep their homes and their property in their own hands and to avoid selling them. The fact that such a struggle is necessary has the effect of diminishing the capital which is available for use on the estate, and it therefore diminishes the amount which would otherwise go on the estates in the form of buildings, and in keeping up all those requisites which are necessary for the proper administration of agricultural property. If the owner does not sell he is inevitably impoverished. That is in itself calculated to have a prejudicial effect on the whole estates.

What is the object of putting on the Death Duties at so high a rate that the man must be forced to sell some of his property? I do not think we have ever had an answer to that question from the Government. I think the Chancellor of the Exchequer was rather inclined to admit in the course of the discussion on the Death Duties Resolution that large agricultural estates are not at all an evil, but, on the contrary, a great benefit, because they admit, more than small estates, what I think everybody agrees to be a most desirable thing in agriculture, that is a great variety of the size of the holdings on the estate. You get that variety much more on large than small estates. I think, therefore, to compel the breaking up of estates among different landlords, because it is not as if those estates went to the tenants, I think that such a result is a thing which is prejudicial in a majority of cases to those who are cultivating the land. I remember very well that not long ago Lord Carrington, who, I suppose, was speaking on behalf of the Government, in the course of a speech said he could not think why it was that so many owners of land wanted to sell their land, and he remarked how disastrous it was to a great many of the tenants on those properties. I think that he was referring at the time to the intention of the Duke of Bedford to sell some of his property. How can you expect anything else when you have those Death Duties, which inevitably and in a very short time make it necessary for any landowner, either in the second or in the third generation, to dispose of a large bulk of his property?

I believe, if the facts could be got at, that the Chancellor of the Exchequer would find that there is hardly an agricultural estate to-day in a flourishing condition and where the owner has been able to spend freely upon it which depends entirely on agriculture, and that nearly all those cases where you find landowners are more or less wealthy people the reason is that they are drawing incomes from some other sources, and are spending some of it freely on the land. I need not labour the effect of the Death Duties, and it is nearly as serious in the case of industries. Nothing could be more disastrous to a small industry, or perhaps even a large industry in the case of a single industry, than to have a great lump of capital taken away at a critical moment. [An HON. MEMBER: "They can insure."] The hon. Member says they can insure; but in a great many cases insurance is absolutely impossible, and I may point out to him that insurance does not affect the rising of the rates such as this. Therefore, though the next person may effect an insurance, he will have to pay the extra rate.

Then I wanted to say a word about the taxation of land values. In this connection it is interesting to see what the Chancellor of the Exchequer says in the country, because it is so very different to what he says in this House. In a speech delivered at Liverpool in English—there are probably even greater gems in the Welsh, which I have not the privilege of understanding—he says:— Government are singling out land for this very exceptional burden. I am sorry I had not the privilege of hearing the speech of the right hon. Baronet the Member for the Forest of Dean (Sir Charles Dilke), because he brought out a point which interests me very much, namely, that this tax, if it is imposed, ought undoubtedly to go into the local exchequer. It seems to me that it is a monstrous thing to snatch it into the Imperial net instead of allowing it to go to the relief of local taxation. But, because I say that, do not let me be understood to be in favour of the principle. I think the tax is an unfair one altogether, but if it is imposed at all it should go to the relief of the rates. I think the Chancellor of the Exchequer was a little unfair when he referred to the rather ancient Report of 1885, and gave the House to understand that the late Lord Salisbury had been in favour of such a tax.

No; I think I made it perfectly clear that Lord Salisbury was a member of the Commission, but that he signed the Minority Report.

As a matter of fact, he signed the Report with the reservation which the Noble Lord had in his hand.

I need not bother to read the whole of the reservation, but I should like to mention one part where Lord Salisbury rather discounts the value of this recommendation in the Report. He says: greater. Then he will recoup himself by letting the land out at a higher ground rent than originally he would have done if this tax had not been proposed. It comes to this; that as a matter of fact, instead of freeing land for the purposes of building, the very likely result will be a prohibitive tax upon the builder, and the development of land will be made more difficult and more slow than at the present time. That tax, I am pretty certain, will not hold water. The Government have really brought forward no arguments in support of it which are at all valid. One may sympathise with the wish to get land on the outskirts of a town to relive overcrowding. But if one has that view, I say it would be much better to bring in legislation to enable the municipality to acquire the land. Such a plan would be far better for everybody concerned than the ridiculous plan of taxing people into a condition to do what they do not want to do.

I am not satisfied, in spite of what the right hon. Gentleman said this afternoon, that agriculture is thoroughly safeguarded under these taxes. I quite appreciate that it is the right hon. Gentleman's intention to safeguard it. But I do not think the words of the sub-section are quite sufficient to safeguard agriculture. The section 11, sub-section 2, says that no part of the site value shall be reckoned which is attributable to the value of the land for agricultural purposes.

How can you say whether land near a town has its value because of agricultural reasons or because it is near a town? It is a combination of the two. Land near a town naturally is of greater value than land away from a town. You cannot say whether the value is due to agriculture or due to the town, and so the only result of this tax, no matter whether the right hon. Gentleman wishes it or not, will be that land nearer a town which will ultimately be used for building—land in the process of ripening—will inevitably be taxed, that is, this undeveloped land. That will have a very bad effect upon agriculture near a town. It will probably hit harder more the dairy industry than anything else. I cannot help thinking that it is very unwise, because you are taking this tax, in a particular instance, especially from people who cannot possibly develop their land in a way in which it is proposed to make them by this Bill.

I must hold over any further remarks for another occasion, but I think that it is absurd for the Government and the Chancellor of the Exchequer to blame us on this side of the House for not bringing forward alternatives. It seems to be an absurd proposition to suggest to us when we criticise the tax that we should replace it. That is not a business position. The right hon. Gentleman receives £5,000 a year for doing that work, and his colleagues get their salaries too. They are responsible for the taxation of the country. If they have not got sufficient imagination to find taxes fairer in their incidence and less open to objection than those which we are now discussing, then all I can say is that the sooner they make room for those who can the better.

We had a powerful and able speech from the hon. Member for Dulwich (Mr. Bonar Law), and one which I venture to think was most damaging to the Budget. He was followed by the Chancellor of the Exchequer, who adopted a somewhat peculiar course. It is quite true the right hon. Gentleman challenged some of the statements of my hon. Friend with regard to taxation in France, from which the Chancellor of the Exchequer told us that a revenue of £40,000,000 was being derived at present from the Death Duties and from the Income Tax. I am afraid that my knowledge of the taxation of France is not all that it ought to be, but I was somewhat surprised I know at the statement. I want to ask the right hon. Gentleman is that the amount that has already been raised by taxation under these duties in France—is that the amount which has been collected or raised?

What I said was that there were taxes at the present moment which were substantially the same as the Income Tax, a tax upon dividends and businesses, and I said that by these taxes at the present moment between £30,000,000 and £40,000,000 were raised.

That is really what I wanted to know. I understand there is no Income Tax in France at the present moment. I was quite aware there had been an Income Tax proposed, and that the matter has been discussed, but I understood that it was not yet passed by both Houses. I think that is so?

No, no, no. The tax is in the nature of an Income Tax. It is a tax on dividends and on incomes, and it is more or less a substitute for Schedule A in this country. There is a substantial tax on every business or unearned increment of the people who have investments in France.

Death Duties have been in force?

Yes.

For some little time. But I was surprised when I heard the statement of the right hon. Gentleman, and he will forgive me for saying so, but I was somewhat sceptical about it. I thought it was not accurate. There is another statement he made the other day with regard to an Income Tax of 2s. in Prussia. I also observed that that statement was contradicted by my hon. Friend to-day, and that the error was pointed out. But the right hon. Gentleman had nothing whatever to say upon that point in reply.

The Member for Dulwich forgot that there is a new Income Tax in Prussia. I agree that the old Income Tax was 1s. 7d.; but the present Income Tax goes to not merely 2s., but to 2s. 1d.

Has it been carried?

It is before the Prussian Parliament.

Then I am perfectly justified in what I said.

That was all I said.

:I was sceptical—there is no imputation at all upon the right hon. Gentleman—but I was sceptical as to what he told us to-day, because, as a matter of fact, he was inaccurate about the Income Tax in Prussia.

That is all I said.

Some days ago—some little time ago—the right hon. Gentleman, unless my memory deceives me, pointed out that there was an Income Tax of 2s.

dissented.

Very well, we must agree to differ. With that exception the House will observe that the right hon. Gentleman was most careful to abstain from replying to the damaging criticism of my hon. Friend which he made on the numerous details of this Budget. The right hon. Gentleman began his speech in. reply by expressing his great surprise that there was no mention made of Tariff Reform. Why should he be surprised. The Noble Lord who has just sat down has pointed out with perfect truth the business of an Opposition is to criticise the legislation which the Government has submitted to Parliament, and we are endeavouring to carry out that duty in the course of these discussions. The right hon. Gentleman adopted a much simpler, though not very novel, method by proceeding to vindicate himelf against a charge that his legislation was vindictive. Now I have heard it described as vindictive in particular in regard to its licensing provisions. Let me give two instances, one of which has been quoted to-night. In one particular brewery the new tax will amount to £59,000 a year, £50,000 a year being all at the present time there is for division among the shareholders. Then I am told of another case, in which a brewery now pays Licence Duty to the extent of £17,037 a year. I quote this case because the right hon. Gentleman, in the course of his speech, said he heard no complaints from the brewers. Under this new Bill that brewery will have to pay £45,514, that is a difference of £26,000. These are very striking and remarkable facts, and they do lead me to think there is some justice in the charge that this legislation is, to all appearance at any rate, open to the charge of being vindictive. But the right hon. Gentleman spent a quarter of an hour or twenty minutes in vindicating himself against another charge, which was never made against him at all with regard to agricultural land. He defended himself with the greatest vehemence against it. Why did he consider it necessary unless it was that he was anxious to escape from the speech of my hon. Friend the Member for Dulwich. No one ever charged him with being vindictive in that particular instance, and, so far as I am concerned, with regard to agricultural land, I took an early opportunity of pointing out in this House that while I altogether disapproved of the Development Grant, I thought some of the objects to which he proposed to devote that grant in connection to agriculture were admirable in themselves, and that, so far he had taken them from us. Why the right hon. Gentleman thought it was necessary to spend fifteen minutes vindicating himself against a charge which was never made against him, unless it was that he was anxious to avoid the much more difficult task of replying to the criticisms of my hon. Friend, I really do not know. I pass from that to one or two general observations with regard to the Bill itself, and the first thing I wish to say is this, that a further acquaintance with the proposals of the right hon. Gentleman, now that we have had an opportunity of seeing the text of the Bill, makes one thing perfectly clear, as my hon. Friend also pointed out, that it would be impossible for anyone to deal with the endless objections to the right hon. Gentleman's scheme within the limits of any single speech whatever. If I am right in what I have said it seems to me that unless the provisions of this measure are to be dealt with without even the semblance of reasonably adequate debate, are to be forced through the House—that is an alternative which I put on one side altogether—the Government would do well and wisely to consider whether it would not be desirable when we come to the Committee stage to divide this Bill into one or more parts, and proceed with those which are really essential for the financial requirements of the current financial year in the first instance. I say this because it will be found that in the pages of this measure there are contained not one or two or three but half a dozen different schemes, all of which really are separate Bills in themselves of the greatest magnitude and of the first importance.

This is no exaggeration. My hon. Friend has dealt with three or four of these schemes this afternoon, but in addition to those there is the Valuation Bill, which is founded entirely on new principles, untried before in this country. There is also a licensing scheme, which is certainly as difficult as the measure which was rejected last year by the House of Lords. Then there is the scheme dealing with the Death Duties, which, under the experienced guidance of Sir William Harcourt, occupied between 35 and 40 days in this House. That being so, how is it possible that all these different schemes can be dealt with satisfactorily in this House in a Session in which we have already reached the middle of June? There never was such a proposal in my recollection made to Parliament before. We are confronted with this extraordinary and formidable list of measures to which I have referred, and there are many others not mentioned. That is the task we have before us. It is for that reason that I nave made the suggestion I have done for the serious consideration of His Majesty's Government. I believe in the long run it would save time, and in all probability a great deal of temper as well, which is perhaps more important. But I always wish to be perfectly frank, and I am bound to add that there is nothing that can shake my objection to this Bill in the form in which it is placed before us at present. Having done my very best to arrive at the real meaning and effect of what, in my opinion, is the most complicated and intricate Budget which it has ever been my misfortune to study, I am opposed root and branch to this Bill for reasons which I will state to the House. I object, firstly, because I think in numerous cases, if not in most, it is grossly unjust, and in some cases it has all the appearance of being vindictively cruel as well, especially with regard to the licensing, proposals. Secondly, because it is inquisitorial, arbitrary, and in some cases, where it is connected with the machinery of the Bill, tyrannical to a degree hitherto unknown. In other respects I find it to be foolish, ridiculous, and absolutely impracticable and, finally, because in some cases the doctrine and methods of the right hon. Gentlemen are the gravest departure from the practice and precedents which were observed—aye, and most jealously—by the greatest of all his predecessors.

As an instance of what I mean, take the Income Tax to begin with. My hon. Friend has already spoken on the Income Tax. I propose, with the permission of the House, to deal with it from another and a different point of view. What I wish to say with regard to the right hon. Gentleman's proposal as to that tax is this—that whatever we may think of it, whether we believe him to be right or whether we believe him to be wrong in the policy which he asks the House to adopt, one thing is perfectly certain, and that is that the policy of the right hon. Gentleman as regards the Income Tax is an absolute, a complete, and even a violent departure from all the traditions of the great men in the past who have made finance famous in the history of the Liberal party. It is because I hold as strongly as ever to their older and better traditions in regard to this question, and because I am utterly opposed to the modern and charlatan doctrines of what is called Free Trade Finance, that I ask permission to speak on this particular branch of the Budget tonight, and I must say that I was amazed when I heard the right hon. Gentleman some time ago, in reply to my right hon. Friend, ask this question:— He also said:— right hon. Gentleman, or any other Chancellor of the Exchequer, would ever have stopped for a moment to ask that question. The Income Tax has been held by all his great predecessors to be a weapon which ought to be held in reserve for any great national emergency that may at any particular time arise. I should like, if the House will allow me, to quote just one single passage from a statement made by Mr. Gladstone himself upon this point. I will not delay the House more than a single moment, but it bears so strongly upon what I have been saying that I really think it is worthy our most careful attention. What Mr. Gladstone said was this:—

They learned then for the first time that the whole of our policy of naval construction had been based upon two assumptions by this Government, in regard to both of which they were obliged to confess they were absolutely and entirely wrong. One of those assumptions was that the programme of Germany was not likely to be realised, and would certainly not be exceeded. That turned out to be absolutely untrue. The other was that while we could build ships in 24 months, Germany would take 30 months to build ships of the same kind, and that again turned out to be perfectly wrong. That being so, I am not surprised that the country was alarmed. I am not the least surprised of the condition almost of panic which appeared for some time to prevail, and supposing that now we were to agree with the proposals he is making to this House with regard to the Income Tax, which Mr. Gladstone considered would be, if not our first, our second line of defence in a case of great national emergency, in which this country may be called upon to make some gigantic effort for the defence of itself and its fortunes—if we were to agree to his proposals, what guarantee shall we have that in less than two years perhaps the Minister may not be obliged to come back to this House and confess that with regard to the Income Tax he was mistaken, just as he was in regard to the construction of ships? How was this question viewed by the Prime Minister himself when this tardily ascertained progress of Germany was obliged to be put before this House—when at length he took Parliament into his confidence? No graver statement, I believe, in the history of this country with regard to its naval position was ever made by a Minister to this House than was made by the present Prime Minister at that time, and as I am one of those who think that the country cannot be reminded of this position too often, I shall take the liberty of recalling, without making any apologies, to the recollection of the House what he said then. He was speaking of the enormous progress, the enormous development that had been made in their power in Germany, and then he said this:— use for the salvation of the country in time of great national peril and disaster. I have done my best, fairly I hope, to put before the House the two sides of this question. There are two schools of opinion with regard to it. There is the old school, and there is the new school. On the side of the old school are ranged all the great names of Pitt, Peel, Gladstone, Harcourt, and Lord St. Aldwyn. On the other side are the names of the Chancellor of the Exchequer and the Prime Minister only, and yet, with regard to the Prime Minister, it would not be very difficult to find words even for him which show something more than a leaning towards the older and the better views with regard to Income Tax which I have described as being held by all these great men in the past. He said once that a uniform tax of a shilling in the pound was intolerable in time of peace, and tended to destroy, or at any rate to contract, the most readily available resources on which the State can draw in a sudden and unforeseen emergency. That is precisely the very emergency for which I have been doing my best to contend with all my heart and soul to-night, and although it does not rest with us to decide what course Parliament shall take in regard to this vastly important Question, at least it shall be said, whatever Parliament does, that it did it with its eyes open and not without warning, and if evil should come of this policy which is proposed at any time in the future, which God forbid, the whole and sole responsibility for it shall rest with that party alone.

I should like to say one or two words with regard to the new, taxation contained in the measure now before us. The Chancellor of the Exchequer when introducing the Budget told us that agricultural land was entirely exempted from all these different duties proposed to be imposed by this Bill. I did not understand whether to-day he adhered entirely to that statement, and whether that is still his intention. I hope and believe that it is his intention, but I cannot see that it is carried out in the Bill as it stands now. Clause 1 lays down that land of any kind, without any limitation, is to have the increment duty imposed upon it I can find nothing in the Bill anywhere which subsequently exempts it. I heard nothing in the speech of the Attorney-General last night or in the speech of the right hon. Gentleman (Mr. Lloyd-George) to-day to make me think it is so. In any case, the position as regards agricultural land, in spite of all the goodwill which the right hon. Gentleman expressed, is very obscure. I daresay it may be the intention to exclude it, but, if so, that ought to be made perfectly clear in the Bill when we come into Committee. I hope the right hon. Gentleman will give us an assurance that that will be done.

I pass now to the general Question. Clause 14, sub-section (2) begins by attempting to define site value. It says that site value "means the amount which the fee simple of the land, if sold at the time in the open market by a willing seller, might be expected to realise …" I do not know that I can better express my views on this subject than by reading a note I made on the margin when I read the clause—"How on earth is such an amount to be arrived at by valuation?" There is really no way of arriving at it except by putting the land up to auction without reserve, and seeing what it would fetch. Is that the intention of His Majesty's Government? I have had some experience myself in the valuation of land, I have had a good deal of experience in Parliamentary Bills, and I have taken my share in the framing of some of them, but I should not know how to proceed under this clause if I were called upon to make a valuation of property. It seems to me that what has happened is this: The Bill requires a valuation of every single house and the land on which it stands separately, and then all the rest of the land is to be valued besides, and then, the Government having imposed what seems to me an impossible task, which neither the Government themselves nor the Commissioners of Inland Revenue are prepared to undertake, coolly call upon the landlords to make the valuation themselves, and to make it subject to penalties if they decline or neglect to do so. The penalties are enormous, and they are to have no appeal from any valuation the Commissioners may be pleased to put on the land themselves. In addition to that—and this is really the climax of tyranny—the valuation is to be made in 30 days. I hope that the right hon. Gentleman will forgive me if I submit, speaking with some practical knowledge and experience of the valuation of land, that a more foolish and more impossible proposal never was made. The most ignorant clerk in any surveyor's office in the country would know perfectly well that to be called on to make a valuation of any considerable estate in the country under those conditions, and to do it within 30 days, would be an absolutely impossible task. I do not suppose that any such proposal as this has ever been made before. It seems to me exactly like what we might have expected if this had been the work of some member of the Fabian Society or some of those extreme Socialist associations which we have in the country at the present time; but certainly no such proposals as are contained in the machinery under this Bill for the valuation of land have ever been worked by a responsible Government before.

There is one other matter to which I desire to call attention which does seem to me to deserve the attention of the Members of the Government who are responsible for this Bill. I ask the right hon. Gentleman's attention to section 24, because here I discover, unless I am completely mistaken, one of the strangest anomalies I have ever found out in a Bill. Under this section rating authorities are altogether exempt from the imposition of these new duties. Among other rating authorities there are the Corporation of Bristol and of Preston, and, I believe, that there are several others, five or six others, in the country—I have not got the particulars yet—who happen to own the docks in their particular towns. But you must remember at the same time that there are a great many other docks all over the country which are not owned by the rating authorities. For instance, if I could gain the attention of the right hon. Gentleman for a moment—you have just created a great port authority in London. You have created a great trust which now has an enormous capital and in which immense interests are involved. But what is to be the position of these docks, who have, all of them, especially as in the case of London, any amount of undeveloped land of their own, when they will be in competition with some of the docks owned by rating authorities which are exempted from the imposition of all these duties I It may transfer a great deal of the trade of London to other places; but certainly it is a matter which deserves explanation on the part of His Majesty's Government, which, up to the present, I do not think has ever been explained. I am not going to deal with many numerous questions which I might, but I desire to say, in conclusion, that it has often been a marvel to me why it is that Liberal Governments always seem to take every possible opportunity they can for treading on the toes and putting up the backs of so many different classes in the community. No one will deny, I am sure, that this has been the result of the introduction of this Budget by His Majesty's Government.

And what is the Chancellor of the Exchequer's excuse for all these things? There is one which is always made to do duty on every occasion— them, nominally at all events, to depart from the strict doctrines or what they call Free Trade. Although in this Bill, in that very last clause to which I called attention just now, as a matter of fact they are giving to those rating authorities who are the owners of docks an enormous bounty over all other docks in the country. I think the right hon. Gentleman cannot deny that. They were driven into the admission of the farce of that statement.

I remember another Liberal Government, a good many years ago now, who had succeeded in the same way in irritating nearly every class of people in the country. I remember also the charge that was made against them by a very distinguished man at that time—Mr. Disraeli—and I am going to quote it to the House to-night, because history often repeats itself. What he said of that Government appears to be singularly applicable to this Government at the present time:—

:I should like to refer to one or two of the difficulties which present themselves to me after listening to the speeches on this side from the opponents of the Finance Bill. I have listened to a great many of the speeches, and the longer I listened the more puzzled I became, until the right hon. Gentleman's (Mr. Chaplin) last few sentences, and then I think it becomes quite clear to me that we have reached the parting of the ways with regard to the raising of the finances needed for the old age pensions and the increasing or improving of our Navy. All the other speeches I have listened to to-day seem to indicate that the speakers were most anxious to keep the whole of the burden from their shoulders. [HON. MEMBERS: "No, no."] One Noble Lord seemed to be quite disappointed because the Chancellor of the Exchequer is not endowing what he calls royalties. He listened, he said, with great attention to the Chancellor of the Exchequer saying what endowments were going to every class, and he was listening with great anxiety, he said, for some endowment for mining royalties. He said that. I was wondering whether he was joking. I am really inclined to think some of the language I have listened to to-day from this side has really been joking, because it seemed that the tax was vindictive if you were not really helping those who already have the wealth. This Finance Bill puts the heaviest weight on the broadest shoulders. I think that is quite clear from "The Times." More than once it has made that clear to its readers. "The Times" says:— howling about that. Nobody said we were short of money then. You can find £8,000,000 a year for a few favoured ones; it is only when you want £8,000,000 for 600,000 old people, 70 years of age, who have had no outdoor relief from the rates, that you are told that you will not find the money without hurting somebody. What is the real position? Here are these 600,000 old people, and the Chancellor of the Exchequer comes along in the centre, and he says: "At the other end of the scale you have six millions of wealth, largely held by less than six millions of people. I am going along to these six millions of wealthy people, and I am going to tap this source to help 600,000 old warriors at the other end, who have not had a chance." Then what do you hear the patriot saying? "If you touch this wealth, £100,000 of it, that we have fenced round, and put a little cushion by the side of, and sit and enjoyed—we have had the Navy to protect it, and the Army at our bidding, and whenever we wanted the protection of the police force to look after it it was there—if you touch it we will invest it abroad." These are the patriots! That is patriotism! You touch this that the people at the other end of the scale have helped to make. They have had the misfortune to reach the age of 70, and have had nothing from the rates, but have been helped by sons and daughters in service—you touch these millions and we are off!

I have listened to speeches on these Benches yesterday and to-day. There is no tax in the whole lot that they agree with. We want £16,000,000, and they will not give us a thousand of it voluntarily. I think they are willing to find £700 of the £16,000,000. The Income Tax is wrong! And so are all the rest! The right hon. Gentleman says: "Go to sugar again!" Go to tea and sugar; bread and meat; these poor beggars have not a chance, and they have not enough money to go abroad. They cannot run away. If you tax these millions we are off! I say that when the working men of this country realise this position they will know what they are doing, and it is for them to stand by their own cupboard door and say: "We are going to defend our sugar basin, and our teapot, and our bread and meat against the invaders." And this: that to the women who manage the household this invasion is far more important than any German invasion.

My hon. Friend here (Mr. Fell) was at Yarmouth among the bloaters, and he told the people that after the Finance Bill he would not be able to go to the theatre so often nor his wife be able to buy as many flowers. This was all very interesting to the people at Yarmouth, who depend more upon bloaters than flowers or theatres. I want hon. Members to remember that to the poor man his cupboard is of vast importance. And we have to realise that if you are not going to tax wealth in fair proportion, if you do not put a fair burden on wealth, you must put an unfair burden on poverty. We say these Budget proposals are far better, even from the workers point of view, and he is not hit very hard except on his tobacco, and he may be hit on his beer. I noticed the other day that in one village they threatened to raise the price of beer, and 200 of the men declared, "If you raise the price we will strike; we will have no more beer for three months at any rate." And it had the desired effect. The price has not been raised. I want to recognise this: that to the working man if lie does have to pay extra it is better he paid on beer, it is better on tobacco than on bread, and for this reason: In the home where the family lives the man must have in his home more loaves of bread than ounces of tobacco. Bread is of more importance to him, and every working patriot says, "I ought to pay part of the taxes. You are not hurting me much upon my tobacco." It is a serious item to him, but if he smokes four ounces it is only twopence extra for the Navy and old age pensions, and when he knows the real amount of his burden he feels ready to bear that charge and he will do it without grumbling. A tax on his tobacco and on his whisky and on his beer he will have, and he will pay his share, but he says, "keep it off my bread and meat and the raw materials for our factories! Keep it off these! If you are forced to put on taxes, put them on other things." I would say to the Tariff Reformers, when you come to the working man with these questions of taxes you will find he is beginning to ask what will he Lave to pay the Tariff Reform taxes on. If taxes are put on tobacco, he will have to pay, if it is licences he will have to pay on his beer, if it is on whisky he will have to pay if he drinks it. Is there then any magic between tobacco and bread, so that if a tax is put on tobacco he will have to pay it? But according to the Tariff Reformer, if the tax is put on bread he will not have to pay it. That is a problem which the working man cannot yet understand, and it is a problem he will be very anxious to understand. I am delighted, although I admit that in this Budget there are some things with which fault may be found, with the principle of the Budget. The principle is sound; it goes along safe lines, and the more the workers understand it the more they will realise that those who can afford it and have the means have the greatest charge to pay, and that the true patriot, however heavily he may be hit, will be ready to pay. I admit it does not hit some of us very hard. That is not our fault. I will make an offer to hon. and right hon. Gentlemen on the Opposition Benches. I would say to them: "If you really have these big incomes, and if you really feel this Budget is going to be a hardship which you cannot bear, I will change with you; I will take all the risks, I will take all the responsibilities, and I will promise not to grumble."

Motion made, and Question: "That the Debate be now adjourned "—[ Mr. Care ]—put and agreed to.

Debate to be resumed to-morrow (10th June).

"That an humble Address be presented to His Majesty praying that the rules of the Intermediate Education Board for Ireland for the year 1909–10 be not sanctioned till they are amended in the following particular: Rule 12, leave out paragraph (b)."

I have put down this Motion to disagree with one of the rules made by the Intermediate Education Board for the conduct of its examination next year, because very strong opposition has been shown to it in Ireland, both on the part of parents and teachers, and because, in my opinion, no adequate reason has yet been shown for imposing this condition upon candidates for examination. This particular rule—to which such strong exception is taken—provides that a student will be ineligible for examination in a grade in which he has already passed. On the face of it, perhaps, this may not appear to be a very unreasonable restriction to impose, but when it is considered in reference to what has been permitted hitherto in connection with these examinations, I venture to submit that there are overwhelming seasons against making the change now proposed. It has been understood for years that a student who had passed the preparatory grade, in the intermediate examinations at the age of 13, had two years in the junior grade; and the custom has grown up in the schools of presenting pupils in the first year for a pass, and in the second year for honours. Under this new rule this understanding will be broken through and the custom will be abrogated.

A student who passes in the junior grade in the first year in which he is eligible to sit will not be permitted to take the advanced honours course in the following year in the hope of getting an exhibition or a prize, and as he will be too young to enter for the senior grade, he will be under the disadvantage of having to work for a year without the incentive of an examination at the end of it. That must be bad for the student, and it is not calculated to promote the efficiency of the secondary schools. So far as I know there has been no attempt made publicly to justify this change of method.

The only reason for it that I can find is that a few pounds will be saved in grants. But if the motive of the alteration is simply a desire to economise, it would be far the best plan to revert to the rule which formerly was enforced—and provide that grants shall not be paid a second time on any student unless he rises from pass to honours. I understand that the schools would not object to a rule of that kind, and it would certainly appear to me to be wiser not to close the door in the face of junior students who desire to test their advance in knowledge by means of an honours examination. I understand .the Chief Secretary has received a memorial on this subject from the Schoolmasters' Association, in which it is pointed out that the Rules now under consideration provide only four examinations for an educational period of five years, and consequently some students must either remain outside the scope of the examinations for one year, or must proceed from grade to grade through each year, and finish one year under the prescribed age. I do not think it will be doubted that if students remain outside the scope of the examinations for a year the effect upon them will be demoralising. On the other hand, if the alternative course is adopted, and they are pushed on from grade to grade too rapidly, the result would be in many cases that pupils would be forced beyond their capacity, and suffer injury to their health and physical development. The intermediate programme provides two distinct courses in each grade—pass and honours—and the only object which I have in view is to secure that pupils shall not be deprived of the opportunity of taking these two courses successively in the same grade, when it is clearly to their advantage to do so. There is one point about this objectionable rule which illustrates very clearly how illogical it really is. It seems that a student who fails at the pass examination in 1910 will be allowed to enter for honours in 1911; but the student who just manages to pass in 1910 will he debarred from taking the higher examination in the next year. That is putting a premium upon failure, and reduces the whole scheme to an absurdity. I am loth to take the only course open to me of objecting to these Rules of the Intermediate Board, but the teachers have approached the Board on this matter without any satisfactory result, and this is the only opportunity now open to us of discussing the matter and getting the decision of the House of Commons upon the question. I beg to move.

I wish to associate myself with what has fallen from the hon. Member for Mid Armagh (Mr. Lonsdale) in desiring that this rule should be altered. I hope that the Chief Secretary will not tell us that this Intermediate Education Board is one over which he has no control, for we are aware from experience that if Parliament refuses to sanction a rule and takes objection to it, the inevitable result is that the rule is changed. My objection to this rule is that it provides that a pupil shall be ineligible for examination in a grade which he has already passed. We assent that that is injurious to education in Ireland, and I propose to state briefly the reasons. May I first suggest what I believe to be the motive inspiring this change in the rule. No doubt it is a motive of economy, because there will be fewer fees to pay. Up till the present there have been five occasions on which an Irish student might go up for examination, but now it is proposed that he shall only be able to compete successfully in three years. He will only be able to earn for his school three sets of fees. For my own part, if the proposal was to assimilate the power of earning fees for the school to the power of earning exhibitions for himself, I should not object. If it were laid down in this rule he may earn fees in passing the junior, middle, and senior grade, and then go on to earn exhibitions, it would be reasonable enough, but it appears to me that no student in future will be sent in for the junior grade until he is fifteen years of age, although. as one knows, a reasonably clever boy can compete successfully in the grade at 13 or 14 years of age. it is wasting his time, therefore, to retain him there until he is 15 or 16 years old. But supposing a boy goes in at 13 or 14 and passes, he cannot go in again and try to get an exhibition. The result of this new arrangement will inevitably be that the schoolmaster will endeavour to ensure that he gets the maximum that is available in his own interest, as well as in the interest of the school, and the result will be to greatly retard education. I wish to urge that elasticity should be given, and that a boy should be allowed, for instance, to go in for his junior grade once or twice, take honours, and perhaps exhibition, and in the second year—two years after—go in for the middle grade. I think anyone who is familiar with the system knows that the steps at that point are very steep. As a matter of educational policy I would ask the Chief Secretary not to make this a Government matter, but to leave it to the House to decide whether it will on this subject be guided by the opinions expressed by Irish Members speaking from different parts of this House.

Although undoubtedly it is the fact that these rules are not the manufacture, in any sense, of the Irish Government, but are the work of the Intermediate Board—a Board in Ireland composed of many eminent and distinguished men—they require the sanction of the Lord Lieutenant before they can be laid on the Table of this House, and having been laid they are subject to criticism. I can only say, having given this matter my best consideration, it does appear to me that the new rule which has very properly been postponed for a time in order that ample notice should be given, does seem to be in accordance with sound educational principles. It prevents the masters of any schools getting fees which they obtain out of the revenues of the Intermediate Education Board twice over for the same examination. It is to my mind somewhat of an anomaly that a person who has passed the preparatory or junior, or intermediate, or final examination, having succeeded in obtaining a certificate of school work sufficient to entitle him to that distinction, and when the school to which he belongs has received a considerable sum—5, or £20, or more, according to the number of persons presented for examination—it is, I say, a strange idea that he may be sent up again the following year for the same examination—not, of course, encountering the same questions; that would, indeed, be ton idle—but for an examination in the same standard and in the same degree. All this new rule really provides is that in future a student will be ineligible for a grade in which he has already passed. The hon. Member for Galway (Mr. Gwynn) has suggested that there may be good reasons for that sometimes, but undoubtedly those acquainted with the system of intermediate education in Ireland are satisfied that in the great majority of cases it works hardship upon the young people themselves, largely for the sake of the school and for the sake of the fees, and they are in large numbers subjected to a somewhat singular system of education, viz., by being sent up again the following year for the same examination, and the view which is put before me by the Intermediate Education Board is:—

"Rule 12 (B) was adopted by the Board after full consideration on educational grounds founded on experience. They were well aware that the course taken might not receive support from all heads of schools; but, nevertheless, they were convinced that their action was in the best interests of the schools; although not in every instance in that of the masters. A practice had crept into the system, by means of which the heads of schools obtained payment of grant on any given student, not merely four times, which should be the normal number of payments, but five times without any educational justification. This is particularly noticeable in the case of those students who are about to enter the universities. After passing in the senior grade, these students very frequently remain at school for the purpose of preparation for their matriculation examinations, and for their university courses generally. Should they happen to be under the limits of age they are almost without exception sent in the second time as senior grade students, although the training for the examinations of the Board could not directly be a benefit to them in their university career, and in fret might often be detrimental to their best interests. The only motive of this procedure on the part of the heads of schools, and so far as the Board were able to discern, must have been a desire to earn an increased grant at the expense of the needless labour of the students. The Board are of opinion that the amount of the grant payable with respect to an individual student is too great an inducement for teachers to keep back students who are qualified to proceed to higher grades. A student who has already missed in a grade may be regarded as being certain to pass in the same grade on a subsequent examination, but there may be very considerable uncertainty as to his chances of passing in the next higher grade. The action of the Board is therefore a means of safeguarding the students against the evils that result from the natural desire of the heads of schools to secure as large a grant as possible."

It is no slight matter. It appears that in the junior examinations the number of students who gave notice in 1907 was 6,239, and of these, 2,021 were students who had given notice of the same grade in 1906, so that one-third of the total number gave notice to proceed to go in again in the same examination. Who can doubt that in a great number of cases the object of that was to obtain the fees? It may not be very much. For preparatory the fees are £3 2s. 4d.; for junior, £6 4s. 3d.; middle, £9 7s., and senior, £14 0s. 6d. That is the fee-earning capacity of these people who go in for these examinations. I think the Intermediate Education Board, who now have had this matter before them for some years, came to the right decision. The hon. Member for Galway said economy was their motive, not economy in the sense of saving money to be devoted to other than educational purposes, because the whole of the revenues of the Intermediate Board are to be devoted to intermediate education; but it is true that very considerable sums, running into thousands a year, which they expect to save by this, I think, obvious rule, will be devoted to the much nobler purpose of inspecting the schools and paying for the inspectors who will go round about and see that the schools themselves are fit and proper places to give intermediate education to children, which is a far better way than this perpetual repetition of examinations. It is far better to be satisfied that the school is a fit and proper place than it is to pay fees twice over for people who are sent up to these examinations.

The right hon. Gentleman persists in regarding this as a question of payment of fees solely, but there is another side of the matter also. There is the payment of rewards to students. The two things are not logically connected. You can stop the repetition of fees to the school while leaving the student to take his honours and subsequently an exhibition.

That is an educational device which does not commend itself to my mind. It is that a person goes in for an examination when he is eligible to earn fees. If he is fit he passes the examination, but does not get the honours or the exhibition. Therefore, he says he will wait another year and present himself again in the same grade and possibly the second time he would succeed. That certainly was not the original intention of the promoters of this scheme. It is a practice which has crept in, which has received very considerable support no doubt from the teachers themselves, and which fosters the craze for examinations which, in my judgment, is educationally unsound, and at all events its spends the fixed income of this Education Board in a manner which I think is not nearly so well as it would be if they were allowed to spend their funds in their own way, and by laying down this rule they will save a very considerable sum of money which they devote to purposes of greater advantage, namely, to seeing that the schools themselves are fit and proper places to impart intermediate education.

Has this practice not prevailed from the beginning?

No, I am told not.

Is it not a fact that the Intermediate Board, who are not perfectly free in this matter, were asking for several years for an additional grant, which was refused them, in order to pay the inspectors, and have not they been forced to economise because of the parsimony of this Parliament?

I do not think that is so. No doubt the Intermediate Board, like all other Boards in every part of the world, were desirous to have an increased income, and having got it no doubt they would have devoted it to increasing the number of inspectors. But they are perfectly satisfied that this reform is educationally advantageous to intermediate education in Ireland, and it is a result which will flow from it that they will be able to have not, indeed, in my judgment, a sufficient number of inspectors, but still a considerable number for this good work. I can only say that the Intermediate Board are satisfied that the practice of entering students the second time in the same grade was not contemplated in the original Act. They set out various quotations with which I do not trouble the House, but their view is that this is a practice which has grown up, having for its object the general supply of funds to the schools, too often, though not in all cases, at the sacrifice of the students themselves. In my judgment they were well justified in sanctioning the rule, which I believe is in the interest of education, and it is one which I cannot myself consent to see altered.

I am afraid that hon. Members in this part of the House will not be satisfied with the right hon. Gentleman's answer. I do not intend at this late hour to enter into the question of paying the intermediate teachers by fees from the scholars, for the whole question is a large one. Neither do I intend to deal with the question of examinations, on which there might be varying opinions. What we are concerned with now is simply this rule to which the Motion refers. When the rule was established by the Intermediate Board it was delayed last year in order to give sufficient time to inquire as to the schools, and to enable the schools to make the necessary alterations in the course of studies. This year it is proposed to put it into practice. My hon. Friend has, I think, made a reasonable suggestion. He simply asked that the student should be allowed to go in and pass the first year, and that if he desires to go in for honours he may continue his studies. I do not see how that will affect the Treasury. He would he paid once only. It would be an advantage not only to the teacher but to the student. I think it is unreasonable on the part of the Chief Secretary to refuse a demand of that kind. It is undoubtedly a fact that the Intermediate Board in their reports have been asking additional money in order to appoint inspectors and to change the whole system of written examination which has hitherto prevailed. We have been informed that inspectors have been appointed and that money must be found somewhere. The Treasury refuse to find it, and, that being so, it is to be found by curtailing the fees which should be paid to maintain the excellent system of intermediate education which would be maintained if properly conducted, and if a different system of examination were introduced. I think it is very unfortunate that for the sake of a small economy, and in order to get inspectors to do the work, a radical change injurious to the interests of intermediate education should be attempted to be carried out.

I desire to associate myself with what has been said by my hon. colleague (Mr. Lonsdale) and by my hen. Friends below the Gangway. The Chief Secretary seemed to imply that in the past improper advantage has been taken of the grants these heads of schools were entitled to receive. I think that, so far as these grants have been used for students, they have been used in the highest and best interests of education. Anything that is calculated to encourage students to take their junior examination a year earlier than otherwise would be the case is distinctly advantageous and helpful to the students in later years. I am obliged to the Chief Secretary for being so frank as to the purpose underlying the change in the rule; but I think he should have gone on to say that the additional inspectors he believes to be so necessary—and in regard to that I am not disposed to disagree with him—were appointed months ago. So, after all, what the Commons are doing in this suggested modification of the rule is to find a means of discharging monetary obligations they have already undertaken. In other words, by consenting to the modification of this rule, which would be a great disadvantage to school students in Ireland, we are asked to relieve the Treasury again of obligations which they are under to Ireland. I have no hesitation, as a governor of one of those institutions which is doing the best possible work we can with the limited funds at our disposal, in saying that the Chief Secretary, in supporting the Commissioners in this movement, is doing a disservice to the young students in secondary schools in Ireland, and if my hon. Friend goes to a Division I shall be most happy to support.

I desire to associate myself with what has been said from the Benches above the Gangway and also these Benches, and I would make an appeal to the Chief Secretary to reconsider his position on this matter. He has taken up the attitude adopted by the Board of Intermediate Education. I would like to ask him has he once consulted any of the heads of the secondary schools in Ireland with regard to this matter? If he did he would find this, that both in the Catholic schools and in the Protestant schools there is a unanimous desire with all the secondary schools in the north, south, east, and west of Ireland that this rule ought not to be sanctioned by Parliament. It is all very well for the Chief Secretary to cone to this House and say that this is a rule which has crept in in recent years in the intermediate system. I have gone through the intermediate system, and many of the Members on these Benches have gone through the intermediate system, and I can say that since 1879 at least this rule has been in force under the intermediate system in Ireland. What does it amount to?—that in the junior grade, after passing from the preparatory grade students had two years to go through the junior grade course. I went through the junior grade course myself. I am sorry to say in the first year of it I failed in the examination and I had another year to go up, a second year in the junior grade, and I passed that time. But I would like to point out this: there is in the intermediate system in Ireland a very great advance between the junior grade and the next grade—the middle grade. Students under the system have always been accustomed to have two years for the junior grade. Why was that? Because it was considered necessary in the great majority of cases that they should have that time before they were sent up to the higher grade; in other words, that educationally the middle grade was two years beyond the students when they entered the junior grade. With regard to the justice of this proposal, the Chief Secretary has admitted frankly that the reason for this proposal is to enable the Commissioners to make a saving in the expenditure on the schools in order to provide inspection. For my part I heartily approve of the new system which they have already brought into operation with regard to inspection, but I do say that it is not fair to create that new system of inspection at the cost of the efficiency of the schools. Ever since this system has been in operation in Ireland the secondary schools have learned to look for the income they receive from these fees during the first and second years of the students in the junior grade. The schools over in Ireland have suffered a reduction in the amount of the grant they have received, owing to the increase of temperance principles in Ireland; because I may remind the House, as has been pointed out on more than one occasion from these Benches, that the more sober the people in Ireland become the less money they have to spend upon secondary education, because some of the money provided for secondary education was from whisky. This Budget will undoubtedly further hit the income for secondary education in Ireland. Owing to that injustice their income has been largely decreased, and it is not too much to say that at the present time they are hardly able to make ends meet. This proposal of the Commissioners will further increase that injustice by withdrawing from the schools the amount of money they get under the present system. I would, therefore, appeal to the Chief Secretary not to persist in the attitude he hay adopted in this matter. Even from the educational point of view, he will find, if he consults the school authorities in Ireland, that they entirely dissent from view of the Commissioners for inter- mediate education that this will be an educational improvement. The only ground for it is the ground they have advanced that it will enable them to come to the British Treasury to spend money on extensions. I do not think this should be the way to secure this money, because you are doing an injustice to the pupils, and an injustice to the schools, while you will be impairing the educational efficiency of intermediate education in Ireland.

My hon. Friend who has just sat down (Mr. Hazleton) laid stress upon an important point in connection with intermediate education in Ireland. A s a matter of fact, the headmasters of the schools only become aware of the rules when they are printed and circulated from this House, and that is why for the first time we have succeeded in obtaining from the Chief Secretary that the moment the rules are laid on the Table of the House they shall be printed and circulated. In previous years no headmaster of a school was able to find out what the rules would be that would affect his school in the coming year, unless he was able to obtain them from some Member of the House who took the trouble to copy them out for him in the library. The result, therefore, of our having raised this question on this particular rule is that we now have the rules printed and circulated. As a matter of fact these particular rules were not circulated until about a fortnight after they were laid on the Table of the House.

But, to come back to the main question before the House, I do think the Chief Secretary, if he cannot grant us the full claim, at least should go as far as was suggested by the hon. Member for Galway Borough (Mr. S. L. Gwynn). Surely it is not a wrong thing that a boy should be able to come up twice for examination. In your competition for the Indian Civil Service, and I believe for entrance into the Army, you do not prevent a boy from coming up a second time because he has failed on the first shot. It used to be in the Civil Service that a clever boy who had made an effort to pass in the first year and did not succeed should have an opportunity of coming in the following year so long as he was of proper age. All we claim in this particular case is that you should not prevent a boy from obtaining an exhibition because he happens to have gone up in the previous year and had not succeeded.

Because he passes this examination.

Perhaps the Chief Secretary will meet us on this point that fees are not to be paid twice over, but that a boy will be enabled to go up a second time and at least have the opportunity of winning an exhibition. It does seem rather hard in educational matters affecting us in Ireland, when a question of this kind is raised, the Chief Secretary has to read a communication from the Intermediate Board, a nominated Board which has had no communication whatever with the headmasters of the secondary schools in framing those rules, and that the only time when the headmasters of the country have any opportunity of expressing themselves is when the rules have been laid on the Table of the House, and the Members of this House have to speak for those headmasters. Surely in any country in which education is being conducted in the proper way, you would at least expect that the Board which controls education should in some way or another be in touch with the headmasters throughout the country. As the Chief Secretary alleges that there has in this particular lately been some effort to earn more fees than perhaps should have been earned, at least he can meet us in this way—that boys will be allowed to obtain exhibitions, even though the double fees may not be paid. If he can do so, it will not be necessary to go to a Division; otherwise we must do so.

I desire to mention one fact which I think will enable English Members to understand why it is we are engaging in this discussion. The present system of secondary education has been twenty-nine years in existence in Ireland, and during the whole of that time there never has been a single discussion of the fashion in which it was conducted; nor is is now possible to have a discussion on the secondary system because of the fact, mentioned by the hon. Member for Galway (Mr. Gwynn), that secondary education is financed out of purely Irish sources and does not appear in a Parliamentary Vote. It is partly a fluctuating income depending upon licence duties and other sources. There is one point I wish to make. I confess I do not like to be in the position of asking the British House of Commons to disapprove of a rule framed by an Irish Board. After all the Intermediate Commissioners are an Irish body, of a kind, and a number of men of ability have even got on to the Intermediate Board, by some happy accident or other, from time to time.

I was merely pointing out that the Intermediate Commissioners have not been free in their policy. They are strictly limited in their income by the Act under which they work. For five or six years I have had the opportunity of looking up their annual reports, in which they asked two things of Parliament. They asked for a change in the Act which would enable them to make grants to the schools upon another basis than that of examination results, to which the Chief Secretary objects, and to which I know I most certainly do object. They asked for that change, but the change has not been made, and there has been no change of any kind, except one Act of very trifling import, since the passage of the Intermediate Education Act in 1879. There has been no attempt to bring the machinery up to date. The other thing the Intermediate Commissioners asked for was that they should be provided with funds to pay the inspectors of all intermediate schools. This year they have been able to appoint inspectors for the first time. But even yet they are so limited that the inspection must to a large extent not be exactly illusory, but fall short of its purpose. The Chief Secretary has turned a deaf ear to the moderate suggestion of the hon. Member for Galway, although the change would not cost the Treasury anything.

So long as this House retains the Government of Ireland in its own hands, it is really responsible for the system of education or the Act under which it operates. Pending the introduction of a Home Rule Bill, are we to have no guarantee whatever that any change will be made by which the powers of the Intermediate Board will be enlarged, the Act under which it operates brought up to date, and a Vote provided by which the policy of the Board can come under review in this House? This is a very serious matter. This House does not vote a single penny of Imperial money in subvention of secondary education in Ireland, and consequently Parliament is largely in the dark as to the principles upon which that education is based. I only regret that the Chief Secretary has not given us a more favourable reply.

May I suggest that this matter should remain over until to-morrow night, in order that the right bon. Gentleman might bring up an amending rule, as he did last year? On the abstract question there may be a good deal in what he says as to the educational value of this new rule, but every Irishman knows that a grievance will be inflicted if the rule remains as it is. I hope, therefore, the right hon. Gentleman will agree to the suggestion; otherwise we shall have to go to a Division.

Question put: "That a humble Address be presented to His Majesty praying that the Rules of the Intermediate Education Board for Ireland for the year 1909–10 be not sanctioned till they are amended in the following particular: Rule 12, leave out paragraph (b)."

The House divided: Ayes, 32; Noes, 114.

And, it being after half-past Eleven of the clock on Wednesday evening, Mr. Speaker adjourned the House without Question put, in pursuance of the Standing Order.

Adjourned at Seventeen minutes after Twelve o'clock.