House of Commons
Monday, June 24, 1912
Private Business
Brighton and Hove General Gas Company Bill [ Lords ],
Read the third time, and passed, without Amendment.
Keighley Corporation Bill,
London County Council (Money) Bill,
Read the third time, and passed.
Ystradfellte Water Bill [ Lords ],
Read the third time, and passed, with Amendments.
Houghton-le-Spring District Gas Bill [ Lords ],
To be read a second time To-morrow.
Tees Conservancy Bill [ Lords ],
Read a second time, and committed.
Woking District Gas Bill [ Lords ],
To be read a second time To-morrow.
London and North-Western Railway Bill [ Lords ] (by Order),
Second Reading deferred till To-morrow.
Land Drainage Provisional Order (No. 2) Bill,
Read the third time, and passed.
Local Government Provisional Orders (No. 2) Bill,
Third Reading deferred till To-morrow.
Sea Fisheries (Lynn) Provisional Orders Bill,
Read the third time, and passed.
Message from the Lords
That they have agreed to,—
Taff Vale Railway Bill, with Amendments.
That they have passed a Bill, intituled, "An Act to incorporate and confer powers on the Bordon and District Gas Company; and for other purposes." [Bordon and District Gas Bill [ Lords. ]
Bordon and District Gas Bill [ Lords ].
Read the first time; and referred to the Examiners of Petitions for Private Bills.
Intermediate Education (Ireland)
Copy presented of Rules and Schedule containing the Programme of Examinations for 1913 [by Act]; to lie upon the Table, and to be printed.
Superannuation Act, 1884
Copy presented of Treasury Minute, dated 14th June, 1912, declaring that William James Pope, Telegraph Clerk, General Post Office, was appointed without a Civil Service Certificate through inadvertence on the part of the Head of his Department [by Act]; to lie upon the Table.
Finance Accounts
Copy presented of Finance Accounts of the United Kingdom for the year ended 31st March, 1912 [by Act]; to lie upon the Table, and to be printed.
Factory and Workshop Act, 1907
Copy presented of Scheme approved by the Secretary of State for the Home Department, in pursuance of the powers conferred on him by The Factory and Workshop Act, 1907, for the regulation of Hours of Employment, intervals for Meals and Rest, and Holidays of Workers in respect of the Home of Industry, Bow Villa, Morpeth [by Act]; to lie upon the Table.
National Insurance Act
Copy presented of Provisional Regulations made by the Irish Insurance Commissioners as to Claims for Exemption of Irish Migratory Labourers [by Act]; to lie upon the Table, and to be printed. [No. 170].
Copy presented of Provisional Regulations made by the Irish Insurance Commissioners as to Claims for Exemption [by Act]; to lie upon the Table, and to be printed. [No. 171.]
Copy presented of Special Order providing that Section 46 (8) shall apply in certain circumstances to men of the Naval Reserves, the Army Reserve, and the Territorial Force, who are being trained at the date of the commencement of the Act or at any time within one month of that date [by Act]; to lie upon the Table, and to be printed. [No. 172.]
Trade Reports
Copies presented of Diplomatic and Consular Reports, Annual Series, Nos. 4916, 4917, 4920, 4922, and 4924 [by Command]; to lie upon the Table.
Copy presented of Diplomatic and Consular Reports, Miscellaneous Series, No. 682 [by Command]; to lie upon the Table.
Oral Answers to Questions
Pilotage Certificates (British Ports)
asked the Secretary of State for Foreign Affairs whether any treaty concluded with France in 1881 could be construed as empowering French masters or mates of merchant ships to obtain pilotage certificates for British ports?
My right hon. Friend has asked me to reply to this question. The bearing of the Anglo-French Convention of 1882 upon the rights of French masters or mates to obtain pilotage certificates is not free from doubt, but His Majesty's Government propose to meet the representations which have been made to them by the French and other Governments by means of a Clause in the Pilotage Bill which has been recently introduced.
Can the hon. Gentleman state what other Governments besides the French Government have approached His Majesty's Government in this matter?
I could not state without notice.
Are there several?
I think there is one other.
May I ask the hon. Gentleman whether he is going to placate the French nation at the expense of the pilots of this country, and whether he cannot find some other way out of the difficulty?
Persia
asked the Secretary of State for Foreign Affairs whether he has any official information regarding the continued insecurity of the roads of Southern Persia; and will he say what steps His Majesty's Government propose to take in the matter?
I have received no recent reports indicating any improvement in the state of the roads, but a detachment of the newly organised gendarmerie under Swedish officers has now reached Shiraz, and it may be hoped that the good effect of their presence will be felt immediately.
May I ask the hon. Gentleman if there is any improvement in the state of the Karman road?
I do not think we have any news of improvement.
Opium Trade (India and China)
asked whether any communication has been received from His Majesty's Minister at Peking regarding the illegal prohibition imposed by the Chinese Government on the Indian opium trade; whether opium valued at upwards of nine millions sterling is affected; and whether the British Government intends to allow the Chinese authorities to defy the provisions of the Anglo-Chinese opium agreement in favour of British traders while they are not observing the conditions imposed by that instrument upon themselves?
His Majesty's Government take a very serious view of the situation that has been created and His Majesty's Minister at Peking is making strong representations to the Chinese Government, whose inability to enforce observance of their recognised treaty obligations both in this and in other matters in the provinces must, so long as it continues, delay the recognition of the new Chinese Government.
Technical Education (Agriculture)
asked the President of the Board of Agriculture whether he will use his best offices to obtain the co-operation of educational authorities of adjoining counties in the matter of technical education in agricultural subjects where assistance is offered by recognised agricultural societies, whose influence and sphere of usefulness in such adjoining counties is undoubted; and whether he will consider the advisability of granting certificates of proficiency to those who prove successful in competitions organised by such societies for ploughing, rick-building, thatching, hedging and ditching, and farriery?
The Board will welcome and encourage co-operation between neighbouring local education authorities and agricultural societies in the promotion of agricultural education. The question of granting certificates of the character referred to in the second part of the question is a matter rather for local education authorities than for the Board.
Development Fund
asked what is the present total income of the Board and what portion of it is allocated to purely agricultural purposes, and what proportion consists of Grants from the Development Fund?
The aggregate net expenditure of the Board, including the various Grants made to local authorities, agricultural department and colleges, and other bodies, is estimated to amount to £409,869 for the current financial year, 1912–13. Of this sum £95,330 will be received from the Development Fund. In addition, £49,993 will be provided in other Votes for expenditure in connection with the work of the Board. It is not possible to distinguish the cost of purely agricultural business from the other expenditure incurred by the Board.
May I ask whether the first figure does or does not include the expenditure at Kew?
It includes all the expenditure which comes under the control of the Board.
Johne's Disease
asked whether, in the opinion of the veterinary experts of the Board, Johne's disease can in all cases be differentiated from tuberculosis with out a post-mortem examination when the latter disease is accompanied, as is not uncommon, by both wasting and scouring?
The Board's veterinary officers are of opinion that it would be rash to say that a differential diagnosis could be made with certainty in all cases without a post-mortem examination.
Swine Fever
asked the President of the Board of Agriculture whether, in view of the steadily increasing prevalence of swine fever, the character of the existing Orders and Regulations, and the present enormous expenditure of public money on compensation and administration under this heading without any appreciable result, he proposes to reverse or modify the policy of the Board in connection with this disease?
I do not contemplate any drastic change in the present procedure pending the receipt of the final Report of the Departmental Committee on Swine Fever and the issue of the experiments now being conducted on their behalf. The present unsatisfactory condition of affairs is, however, receiving my most serious consideration, and I hope it may be possible to devise some more satisfactory means of checking the disease.
Has the right hon. Gentleman any idea as to the time when the Report of the Departmental Committee will be published?
I am afraid I do not know.
Will the right hon. Gentleman consider the advisability of modifying the recent Swine Fever Regulations in counties where there has been no swine fever?
No, Sir, I am afraid I could not do that at the present time, for that would be flying in the face of the advice I have already received from the Departmental Committee.
Foot-and-Mouth Disease
asked the President of the Board of Agriculture if he will say when it is proposed to publish the evidence given before the Depart mental Committee on Foot-and-Mouth Disease?
To-morrow afternoon, I hope.
May I ask the President of the Board of Agriculture a question, of which I have given him private notice—whether there is any corroboration as to the reported outbreak of foot-and-mouth disease near Penrith?
There is any amount at the docks.
The Board received a telegraphic report yesterday (Sunday) morning that foot-and-mouth disease was suspected on a farm about two miles from Penrith. Six cows were reported to be affected. One of the veterinary inspectors of the Board proceeded to Penrith last night, and has this morning reported by telegram that the animals are affected with typical symptoms of foot-and-mouth disease. There are forty-nine cattle and ninety-two sheep on the farm—sixteen milking cows are affected. Two cows have been recently moved on to the farm, and one cow was sold about three weeks ago. On receiving the report of suspected foot-and-mouth disease the police imposed restrictions on movement not only of the animals on the farm itself, but also as regards those on two adjoining farms pending further veterinary examination. They also arranged with the proprietors of the Penrith Auction Mart that no cattle or sheep from the district where the suspected outbreak of disease had been reported should be allowed to pass through their auction mart, which is held to-day (Monday).
Small Holdings (Sinking Fund Charges)
asked the President of the Board of Agriculture if he will state in how many cases county councils are now throwing sinking fund charges in connection with small holdings on the ratepayers in exoneration of the small holders; and whether the Public Works Loans Commissioners still decline to approve loans to county councils which propose to adopt this course?
I understand that three county councils, namely, the West Riding of Yorkshire, Glamorganshire, and Cardiganshire, are paying sinking fund charges in respect of the purchase of land for small holdings out of the rates. With regard to the second part of the question, I am not aware that the Public Works Loans Commissioners have altered their practice as regards the making of loans. I am in communication with my colleagues on the subject.
Has the right hon. Gentleman communicated with the Public Works Loans Commissioners on this matter since the Debate which took place upon it in this House?
No, Sir, it scarcely comes within my province to communicate with the Public Works Loans Commissioners, but I understand there have been communications of an informal character.
May I ask whether, as the freehold of the land is to be vested in the council, there is any reason why the sinking fund should not be paid for out of the rates?
That is scarcely the point raised by the question, and I have on previous occasions stated the views of those who administer the Small Holdings Act. For my own part I see no reason why the tenants should have to bear sinking fund charges when the land on which they pay is to become the property of the county councils.
Fatal Factory Accident (Wednesbury)
asked the Secretary of State for the Home Department whether his attention has been drawn to the report of an inquiry into the case of George Challinor, who met with his death in a tank of hot water at the works of Messrs. John Russell and Sons, Wednesbury, the jury returning a verdict of accidental death, but suggesting that the firm should make the tank safer; whether he is aware that one witness stated that he worked almost continuously from dinner time on the Monday till five o'clock on the Tuesday evening; and whether any official action has been taken in the matter?
I have obtained a report on this case. It appears that the tank is situated outside the factory buildings, and it is supposed that Challinor, who was not seen alive after 1 a.m., when the meal interval was taken, sat on the low retaining wall of the tank, which was occasionally used as a seat by the workmen, and, falling asleep, overbalanced and fell into the tank. The place where the tank is situated is reported to be well lighted. The statement of the witness mentioned in the question referred to his own hours of work, and not to Challinor's. On the night when the accident occurred Challinor commenced work at 6 p.m. At the request of the factory inspector, the retaining wall has been made higher and a sharp coping placed on the top.
Hackney Assault Case
asked the Secretary of State for the Home Department whether his attention has been drawn to the recent police case tried at Hackney, in which a husband and wife were charged with assaulting a man; whether he is aware that the husband was sentenced to two months' and the wife to three months' imprisonment; and whether, in view of the discrepancy in the sentences, he will advise that that, of the wife be reduced?
I find on inquiry that the wife committed two distinct assaults, each upon a different person, and the magistrate, in passing sentence, directed that the sentences be consecutive.
As the wife was trying to assist her husband, I would ask the right hon. Gentleman to consider whether the double punishment is justified?
I understand there were two separate assaults.
Prisons Vote
asked when the House will be given an opportunity to discuss the Prisons Vote?
I am unable at present to answer my hon. Friend's question.
National Insurance Act
Welsh Commission
asked the Secretary to the Treasury whether Post Office clerks were specially invited to apply for posts under the Welsh Insurance Commissioners; how many Post Office clerks have received appointments under the Welsh Commissioners; and what is the grade of those appointed?
The Civil Service Commission circularised the entire Civil Service inviting applications for posts under the Welsh Insurance Commissioners. Up to the present none have been transferred from the Post Office. The clerical staff of the Commission is not yet completed and Post Office applications will receive consideration with others when further additions are made.
Domestic Servants
asked what, if any, is the penalty under the National Insurance Act upon the employer of any person who abstains or declines to get an insurance ticket, either through an approved society or through the Post Office; and whether, in the case of a domestic servant, such penalty is imposed upon the mistress or the head of the household in case such happens to be a man?
The employer whether master or mistress is not liable to any penalty as regards payment of contributions if he pays the contribution at the proper time and in the proper manner, and if the employé fails to produce his card when required means have been provided by which the employer can himself obtain the necessary card and so fulfil his statutory obligation. In normal cases the head of the household is legally responsible for payments if he happens to be a man.
asked whether the leaflet issued by the National Health Insurance Commissioners relating to the contributions payable in respect of domestic servants was submitted to and approved by the Advisory Committee, or whether such leaflet was issued on the sole authority of the Commissioners?
The two leaflets relating to domestic servants, Nos. 16 and 17, which correctly and exactly state the law as to the contributions payable in respect of them were issued on the authority of the Commissioners. In Section 58 of the Act, the function of the Advisory Committee is defined as giving advice and assistance in connection with the making of regulations under the Act, and it is no part of their duties to examine documents issued by the Commission containing explanations of its provisions or statements of the law.
asked when the tables showing superannuation benefits for female domestic servants will be issued; and if such tables will take full account of the favourable character of the conditions of life of the women to be insured and of the small prospect of many of them making any claim for sickness or sanatoria benefits?
The deliberations of a special Departmental Committee to which certain questions affecting these tables have been referred are now almost completed, and I expect to be able to publish the tables and some model schemes based on them at a very early date. The tables will show the equivalent substitutes for sickness benefit and disablement benefit or for sickness benefit only, but not for sanatorium, maternity, or medical benefits, for which substituted benefits cannot be given under Section 13 of the Act.
Pending the issue of those tables, may I ask will it clearly be to the advantage of domestic servants not to join any society until they see what the superannuation benefits will be?
I think it largely depends on the kind of service they are in. If servants are in service in which they are practically guaranteed sickness and disablement benefits, I think it would be advisable for them to wait until they see what superannuation benefits are offered. If servants have no such conditions that sickness and disablement benefits would be guaranteed, I think they ought to take the ordinary benefits.
Is the right hon. Gentleman taking any steps to communicate that information widely to employers and employed?
Immediately I have the tables, I am going to issue a statement and communicate it as widely as possible. I hope to have them in the course of the next two or three days.
Servants Taken Abroad
asked whether the National Insurance Commissioners will issue a Regulation showing whether an Englishman who lives ten months in each year abroad and the remaining two months in England must contribute to the National Insurance Fund in respect of his English servants during the time that they spend abroad with him and of his foreign servants during the time that they are in England with him?
The Commissioners have no power to make Regulations on the matter. No contribution is payable by the employer in respect of English servants while they are employed abroad; but the ordinary contributions must be paid in respect of foreign servants while employed in England.
What happens when foreign servants leave England and return to their own country?
If they go back to their own country they cease to pay the contribution.
What happens with regard to the contributions they have paid?
Their contributions are paid into a fund the purpose of which is prescribed by the Commissioners.
Could not the right hon. Gentleman arrange that the English servants who are ten months abroad might be considered as not depending for their living upon service while in England?
I am not sure whether that is not a question of fact or a question of regulation.
If that is not done then they will have to pay ten months for which they can get no possible benefit?
If there is any claim for future exemption such claim will be considered.
Will the contributions of foreign servants who return to their own country remain in this country, or will they be given to them?
That depends upon the Commissioners, who will prescribe to what purpose they are to be devoted.
May I ask what the Commissioners prescribe?
In due course the Noble Lord will see.
Employed Persons Seventy Years of Age
asked whether an employed person who attains seventy years of age between the 15th of July and the 1st of January next will have to pay contributions under the National Insurance Act until he attains that age?
The answer is in the affirmative. Such a person would come under the provisions of Section 49 of the Act, and would get such benefits as his society are able and elect to give to persons between sixty-five and seventy coming under that Section. The position of such an insured person is fully explained in Circular A.S. 29.
May I ask if the legal effect of Section 49 is to enforce contributions from a man between ages of 65 and 70?
If he is working.
Anyhow?
I would like notice of that question.
Was it not the impression of the House that the true construction of the Act was that no person over 65 is liable for payment?
I think it was clearly explained last Autumn that a person over 65 who is employed will pay, and the contributions will go to a special fund for such persons.
Approved Societies
asked the Secretary to the Treasury if he will cause to be exhibited prominently in all Post Offices and published in the newspapers the names and addresses of all societies which have been approved under the National Insurance Act?
Lists of approved societies with the names and addresses of the secretaries will be supplied free at all Post Offices, or on application to the Insurance Commissioners, and I am considering other means of making these lists known to insured persons.
Are they ready?
Lists of societies approved of up-to-date are ready and can be obtained at any time.
asked the Secretary to the Treasury if he is aware that friendly societies and trade unions are being discouraged in their work in connection with the National Insurance Act by the attempts made by profit-making institutions to monopolise national insurance for the indirect advantage of their industrial branches; and what he proposes to do to make the original intention of the Act, namely, to utilise and encourage the friendly societies and trade unions in their benefit work, effective; (36) if he is aware that the Prudential approved society is advertising that it is prepared to give all possible assistance to employers in connection with the National Insurance Act; and if, in view of the fact that there are no necessary or desirable relations between approved societies and employers under the Act, he will prevent the assumption by this society of undue influence in connection with its operations; and (37) if his attention has been directed to the fact that the Prudential Assurance Company, which makes a profit of £500,000 a year on an original subscribed capital of a few thousands, has formed an approved society section under the National Insurance Act, and is advertising at great cost and employing an army of agents; if he is aware that friendly societies properly so called and trades unions cannot afford either to advertise or to employ canvassers paid out of the small subscriptions of the poor; and what he proposes to do in order to make widely known to employed contributors the names and addresses of all approved societies in order that they may have a fair chance to make a good selection and not be left to the representations of interested canvassers?
I will take questions 35, 36, and 37 together. Lists of approved societies have been sent to public libraries, to Labour Exchanges, and to officers of Customs and Excise, and arrangements are being made for supplies to be kept at Post Offices. I hope to make them available so that all insured persons will be able to exercise a free choice among the societies open to receive them. The Commissioners cannot undertake either to recommend or to pronounce against any particular society or type of society. They have, however, taken all necessary steps to see that no undue advantage is given to employers by any particular society which might induce them to put any pressure on their employés to join that society.
Is the right hon. Gentleman aware that one of those institutions advertises asking employers to communicate with them with a view to bringing pressure on their employés to join that institution?
That has been withdrawn. I do not think it is quite fair to say that the society was asking employers to bring pressure upon their employés. Perhaps it would be fairer to say it was holding out inducements to employers and employés alike, but the particular system recommended has been vetoed by the Insurance Commissioners, and I understand the society has withdrawn the circular.
Is the right hon. Gentleman aware that since the issue of the embargo, or rather, since he made the explanation, the institution in question has had large-type advertise- ments in the newspapers reiterating the invitation to employers?
I will make inquiries if my hon. Friend desires, but certainly the officials of the society inform me they have withdrawn all such invitations.
Sextons
asked in the case of a person in regular employment during the week who is employed as sexton, clerk, or otherwise in connection with the Church, and paid for the duties in such capacity performed on Sunday, which day is considered the first day of the week under the National Insurance Act; and whether the vicar or rector is responsible as his employer for contributions under the Act in virtue of his employment on Sunday or, alternatively, the person in whose employment he is from Monday to Saturday?
The employment of sexton is included in National Health Draft Order No. 1 among the subsidiary employments to be excepted from compulsory insurance. Sunday is not the first but the last day of the week for the purpose of determining the first employer of the week under the National Insurance Act. "Calendar week" is defined in paragraph (11) of the Third Schedule of the Act as meaning the period from midnight on one Sunday to midnight on the following Sunday, so that the employer of Monday is the first employer of the week.
Would the right hon. Gentleman say where we can get Draft Order No. 1?
I shall gladly supply the hon. Member with copies. I tried to arrange to have them at the Vote Office, but as they have to be laid before Parliament they said they were unable to do so. I would be glad to have them sent to any hon. Member.
Notices on Church and Chapel Doors
asked the President of the Local Government Board whether he has arranged with the Insurance Commissioners that notices relating to the National Insurance Act should be posted by local authorities on all church and chapel doors in their area; and, if so, under what authority rural district councils can act as bill-posters for the Treasury at the expense of local ratepayers without the risk of surcharge by auditors?
In view of the importance of giving the widest publicity to the notices relating to the National Insurance Act, I should be willing, if objection were taken by the Auditors, to sanction, under the Local Authorities (Expenses) Act, 1887, any small outlay which may have been reasonably incurred by district councils in connection with this service.
May I ask would not equal publicity be given to this question if the bill-posting were refunded by the Treasury to the local authorities, instead of imposing fresh burdens on the local ratepayers?
That matter might be discussed, and perhaps arranged, after the auditor has made his recommendations.
Joiners and Millwrights
asked whether joiners and millwrights employed permanently in textile and other factories to keep the buildings and machinery in repair are included in Part II. of the National Insurance Act?
My right hon. Friend has asked me to answer this question. By Section 91 of the Act, decisions as to whether any workman, or class of workmen, come within the scope of the scheme of unemployment insurance, rests, not with the Board of Trade, but with the Umpire appointed under Section 89. I may mention that the Umpire has decided that contributions are payable in respect of joiners engaged wholly or mainly in the work of construction, alteration, repair, decoration, or demolition of buildings, and in respect of smiths and mechanics who are engaged wholly or mainly in the work of maintenance or up-keep of machinery, although the work is connected with businesses other than those included under the trades specified in the Sixth Schedule to the Act. Notice of these decisions was given in the Board of Trade Journal for the 13th of this month, of which I am sending my hon. Friend a copy.
Loss of Steamship "Titanic."
asked what fees have been paid to Members of this House in connection with the "Titanic" inquiry and telephone arbitration, respectively, out of public moneys, and to whom such fees have been paid; and what the sum total of such payments is likely to amount to?
No fees have yet been paid to Members of this House in respect of the "Titanic" inquiry and the case of the Postmaster-General and the National Telephone Company, nor is it possible to estimate to what such fees will amount. The Members of the House whose professional services have been retained are Mr. Attorney-General, Mr. Solicitor-General, and in the latter case the hon. Member for the Keighley Division of Yorkshire.
Customs and Waterguard Preventive Officers
asked the Secretary to the Treasury whether the Departmental Inquiry into the Customs and Waterguard preventive officers' case is, concluded, and on what date may the Report be expected?
I would refer the hon. Member to the answer I gave on the 13th instant to the hon. Member for East. Leeds?
Telephone Service
Government Factory
asked the Postmaster-General, whether he is aware that the employés of the Nottingham factory of the National Telephone Company, now taken over by the State, have been placed upon a new scale of hours, reducing; their hours from 62 to 48 per week, and at the same time reducing their payment by a similar amount; and whether this treatment is in consonance with his undertaking that no employé should suffer any loss by the transfer?
I would refer the hon. Member to the answers given in reply to similar questions on the 18th and 20th instant.
Is the right hon. Gentleman aware that in Nottingham they do consider that they suffer loss?
I think the hon. Member will find the matter dealt with in the replies.
Officers Transferred
asked the average length of service of the 123 officers of the late National Telephone Company whom he proposes to transfer to the Engineering Department of the Post Office as Civil Service assistant clerks; and whether he intends to count the whole of this service for the purposes of seniority?
I am not yet in a position to add anything to the statement contained in the Memorandum already submitted to this House to the effect that service with the company will have the same value as service on corresponding duties in the Post Office for purposes of seniority.
Post Office Employés (Sunday Duty)
asked the Post master-General whether, in view of the fact that it appears to be the general rule in most Government Departments outside the Post Office to grant payment at double the ordinary rates in respect of the per formance of duty on Sundays by Civil Service assistant clerks, he will state if a similar rule is extended to Civil Service assistant clerks employed in the Engineering Department of the Post Office; and, if not, what is the rule applicable in that Department?
Assistant clerks are very rarely employed on Sundays in the Post Office Engineering Department, and they have hitherto been paid at the authorised Post Office extra duty rates. I will, however, consider the matter afresh, and will communicate with the hon. Member.
asked the right hon. Gentleman if he will afford the two assistant clerks employed in the Engineering Department of the Post Office, who recently declined the offer of appointments to the grade of third class clerks, superintending engineers' offices, provinces, on the ground that such appointments were not considered by them as adequate rewards for meritorious service and ability, the opportunity of promotion to clerkships of the second division, either in the Accountant-General's or the Savings Bank Departments?
In ordinary course, the promotion of assistant clerks in the Post Office is effected within the Department in which they are serving; and I see no reason for making an exception in the case of the two officers in question.
Marconi Company Agreement
asked the Postmaster-General (44) whether he arrived at any estimate of the cost to the Marconi Company of installing the wireless telegraphy apparatus in the proposed Imperial stations before agreeing to pay them £60,000 per station, and what such estimate amounted to; (50) whether he arrived at any estimate of the working cost of the proposed new Imperial wireless telegraphy stations before he agreed to pay the Marconi Company 10 per cent. of the gross as distinguished from the net receipts of such stations, and what such estimate amounted to; and for what term of years such agreement will have validity?
The cost of erecting and working the wireless stations of the Imperial Chain was carefully considered before the provisional contract was made with the Marconi's Wireless Telegraph Company. The details will be fully explained when the agreement is submitted to the House for approval.
Franchise and Registration Bill
asked the Prime Minister whether it is contemplated under the terms of the Franchise and Registration Bill to defray from public funds the whole or any part of the expenses of a Parliamentary election now incurred by candidates; and, if not, whether he will, in order that the statutory sum to be expended in the prosecution of an election may be as accurately as possible known, grant a Return showing the estimated increase in the electorate of each Division of the United Kingdom in the event of the Franchise and Registration Bill being placed on the Statute Book?
The Prime Minister has asked my right hon. Friend (Mr. J. A. Pease) to reply to this question. The answer to the first part of the question is in the negative. Any estimate that could be made would be so conjectural that I do not think the value of the Return suggested would be commensurate with the trouble and expense involved in granting it.
May I ask if in future questions in connection with the Franchise Bill are to be addressed to the Minister of Education?
Yes, I have asked that to be done.
asked the Prime Minister when it is proposed to take the Second Reading of the Franchise and Registration Bill?
I cannot at present fix a date.
Volunteer Police Force (Stipendiary Magistrates)
asked the Prime Minister whether he will give an opportunity for discussing the Motion standing on the Paper in the name of the hon. Member for Newcastle-under-Lyme? [Mr. Wedgwood,—Volunteer Police Force (Stipendiary Magistrates),—That, in the opinion of this House, it is undesirable that the Hon. John de Grey, Sir Albert de Rutzen, and Mr. Chichele Plowden, stipendiary magistrates, should continue to serve on the grand council of the Volunteer Police Force, in view of the conflicts that are likely to occur between this body of strike-breakers and the trade unionists strikers, and upon which they may have to adjudicate.]
I fear that I cannot provide the opportunity asked for
May I ask whether trade unionists who are brought before those magistrates have the power to object to being tried by them pending a discussion?
That is a question of law which I should not care to answer.
Government of Ireland Bill
Eleven O'clock Rule
asked the Prime Minister whether, before introducing any resolution to set up a time table for the Committee stage of the Government of Ireland Bill, it is his intention to move to suspend the Eleven o'clock Rule and allow discussion on Amendments to be freely exercised until a reasonable hour of the ensuing morning?
I have no statement to make on the subject to which the hon. Member's question refers.
Is it not the fact that on the 1893 Bill the Committee were allowed to sit up freely and discuss Amendments?
To sit up freely?
To sit up late.
In 1893 we were accustomed to debauched habits of living in which we do not indulge now.
Traders and Railway Companies (Conferences)
asked the President of the Board of Trade whether he will state how many conferences or meetings between traders and representatives of railway companies have been held during the years 1911, 1910, and 1909, respectively, at the Board of Trade; how many of these questions have been referred to the Railway and Canal Commissioners; and how many of these questions have been settled without having recourse to the Railway and Canal Commissioners?
The number of meetings held at the Board of Trade between traders and railway companies under Section 31 of the Railway and Canal Traffic Act, 1888, in each of the three years mentioned was seventeen, twenty-seven, and twenty-six, respectively. Of these seventy meetings forty-one resulted in a settlement or partial settlement of the matters in dispute. Of the cases not settled eleven were concerned with matters in regard to which a certificate of the Board of Trade was necessary to admit of proceedings being taken before the Railway and Canal Commission, and in eight of these cases such a certificate was asked for and issued to the complainants. These figures do not, of course, include a large number of cases in which the complaint was dealt with entirely by correspondence. A report of the proceedings of the Board of Trade under the Section mentioned is issued periodically.
Motor Cars Imported from Canada
asked if there was any import of motor cars into the United Kingdom from the Dominion of Canada at the present time; and, if so, how many cars had been imported during the present year to the latest date available; and what was their value?
During the first five months of the current year 260 motor cars have been imported into this country which were consigned for sale from the Dominion of Canada. The total declared value of these cars was £41,385.
May we have a Duty on these cars?
Stoney Stanton Granite Company (Lock-out)
asked the President of the Board of Trade whether he was now able to state the result of his further inquiries into the lock-out of sett-makers in the employ of the Enderby and Stoney Stanton Granite Company; and what action he proposed to take in the matter?
The Chief Industrial Commissioner is in communication with the parties, and at present I have nothing to add to the reply which I gave to my hon. Friend on the 19th June.
London and North-Western and Midland Railways
asked the President of the Board of Trade whether his attention had been called to the fact that since the recent agreement between the London and North-Western Railway and the Midland Railway, and the con sequent abolition of competition, the traffic facilities on the Nuneaton, Hinckley, and Leicester line had greatly deteriorated; whether he was aware of the very serious complaints on the part of Hinckley manufacturers and tradesmen as to delay in transit, shortage of wagons, damage to goods, and delay in settlement of claims; and what action he proposed to take in the matter?
The Board of Trade have received two or three complaints from firms in Hinckley relating principally to delay. They communicated with the railway companies where necessary, and were informed that arrangements had been made to improve the transit. If, however, the facilities are still regarded as unsatisfactory, and the Board are furnished with particulars, they will communicate further with the companies.
Trade Boards Act
asked the President of the Board of Trade whether he intended to issue a Report on the working of the Trade Boards Act; and, if so, when he would issue it?
I am considering the question of issuing a Report on the steps taken to put this Act into operation, but I am disposed to think that the experience of the working of the Act has been too short to admit of any useful Report on the results achieved.
Great Southern and Western Railway (Ireland)
asked the President of the Board of Trade whether his attention had been called to the fact that the prices of week-end tickets to Kilkee and Lahinch had recently been raised 50 per cent.; that the effect of this action would be prejudicial to these seaside resorts at the most important time of their season, and that various public bodies in Clare, including the county council, had passed resolutions condemning the policy of the Great Southern and Western Railway Company and the West and South Clare Railway Company in this respect; and whether he could state what steps would be taken to remedy this condition of affairs?
I have forwarded a copy of the hon. Member's question to each of the railway companies concerned, and I will communicate with him on receipt of their replies.
asked the President of the Board of Trade whether the terms on which the Great Southern and Western Railway Company acquired the line serving county Clare permitted it to raise the railway rates to the disadvantage of the traffic of the county; and whether, in view of various differences of treatment which had been instituted in regard to these rates, as for example that the through rates to stations in Clare were consider ably in excess of the sum of the through rates to Limerick and the local rates to such stations from Limerick, a readjustment of the schedules of rates and of the service of trains would be imposed on the Great Southern and Western Railway Company?
When the Great Southern and Western Railway Company acquired in 1900 the Waterford and Limerick Railway, which served a portion of county Clare, the authorising Act provided that the existing rates on the acquired line were not to be raised without the sanction of the Railway and Canal Commission. I have received a complaint with regard to the through rates and the train service to Ennis, and I am in communication with the railway company thereon.
Royal Navy
Boots (Foreign Leather)
asked the First Lord of the Admiralty whether the privilege granted to boot and shoe manufacturers with regard to the purchase of uppers made from foreign leather for use in manufacturing boots for the Navy was in conflict with the general policy of the British Admiralty in insisting upon the use of British-made materials; what grounds there were for stating that uppers made from British leather were not as cheap, durable, and flexible as uppers made from foreign leather; and whether, in view of the importance of this question to British workmen, he would forthwith meet a deputation from the Light Leather Trades Federation and consult fully with them as to the best means of altering the practice referred to?
It is the policy of the Admiralty to specify British-made materials wherever this is essential on such grounds as the obtaining of a particular quality, or the application of special tests, or the avoidance of risk of failure to obtain suitable supplies, especially in time of war. In the present case these considerations do not arise. The Admiralty view as to the higher cost of British box-calf of the desired quality was based on trade opinion, which has received confirmation from the fact that the Light Leather Trades' Federation have not been able to show any consensus of British trade opinion to the contrary; and, as I said on Thursday last, in reply to the hon. Member for Darlington, the Federation have not responded to the invitation twice extended to them to test this matter further in the only practicable way, namely, by production of samples and prices for expert examination and comparison. When this essential preliminary step has been taken, I shall be willing to confer further with the trade if necessary. I may add that we are quite open to conviction in this matter, but cannot consent materially to increase the expense to the taxpayer for first issues of boots to the sailor, or to the sailor himself, who has to pay for subsequent supplies of boots out of his own pocket. The Admiralty is not entitled, in my opinion, to restrict competition, with the result, so far as I can see, that additional cost would fall both upon the general taxpayer and the individual sailor.
In future contracts will the right hon. Gentleman have embodied a Clause stipulating the rates of wages to be paid?
The boots are made in this country and the contractors are British, and the Clause is operative; but if the contractors obtain from abroad manufactured materials wherewith to make the uppers our Clause would not run.
That is the very point I wish to raise with the right hon. Gentleman—whether, if materials are manufactured in Germany, the same wages are paid as have to be paid in our own country?
Do I understand the hon. Gentleman to suggest that wages are lower in these protected countries?
As the right hon. Gentleman has challenged me, I shall be glad to give a report thereon.
asked the Secretary to the Admiralty if he could give the number of pairs of boots which it was proposed to manufacture with foreign leather uppers for the Navy; and if he could give the difference in price between the British and the foreign tenders, if any, or cost of material for such uppers and the cost of the finished boot?
The answer to the first part of the question is that it is quite open to contractors to supply British leather, if they so desire, for the whole of the boots ordered by the Admiralty. Under the new specification we expect to order annually about 100,000 pairs. All the tenders are from British bootmakers, and are for total cost per pair. The details as to the cost of the component materials are not shown in the tenders; but if British leather for the uppers were specified, it is estimated that the extra cost for 100,000 pairs would be roughly £1,500. Of this, public funds would meet annually roughly £500 in the first free kit issues. The sailors themselves, in the replacement of first free kit issues, would probably find the cost increased by about £1,000 annually.
asked if this was the first occasion on which foreign leather had been allowed and accepted for the manufacture of the uppers of boots intended for the Navy; and, if so, whether this was a precedent which it was intended to follow in the future?
In the pattern of boot ordered for the Navy before the orders were placed for the new pattern in October, 1911, English Kip leather was specified for the uppers. On the introduction of the improved and more comfortable boot, box-calf was adopted as being more flexible. The circumstances rendered it desirable to leave it open to contractors to obtain material equal to pattern and specification from any source. So far as I can trace, this is the only occasion on which this has been necessary so far as leather for uppers is concerned. But, on the other hand, it may be pointed out, that the new pattern boot favours British trade in respect of sole leather. The specification for the earlier pattern required British leather to be used for the middle and inner soles, and either British or foreign for the outer soles. Under the new specification the whole of the sole of the boot is now required to be made of British leather on grounds of quality. With regard to the last part of the question, the Admiralty practice and general policy are based on considerations explained in my reply to the hon. Member for Chippenham.
Russian Shipbuilding Programme
asked the First Lord of the Admiralty whether he could give the House any authentic information regarding the five years Russian naval programme, including the expenditure of £50,000,000 on shipbuilding, reported in the Press to have been sanctioned by the Duma?
The answer is in the negative. The Admiralty have no information beyond that which has appeared in the Press.
Small-Pox (Dartington, Devonshire)
asked the President of the Local Government Board whether he is aware that a case of smallpox was recently reported at Dartington, near Totnes; and will he state if the patient had been vaccinated?
I am aware of the case referred to, but I have no information as to whether the patient had been vaccinated. The case was not treated in hospital.
Motor Vehicles (Fatal Accidents)
asked the President of the Local Government Board whether, in view of the number of fatal accidents caused by motor vehicles, especially to children, he will introduce further legislation and apply with more stringency his present powers to limit speed?
I regret that there has been unfortunately an increase in the number of accidents due to motor vehicles. I have given, and I shall continue to give, very careful consideration to all applications for reduced speed limits which come before me, but as regards amending legislation I am disposed to think that the existing powers under the Act of 1903 are not inadequate. As regards the Metropolis, the matter is largely one of control of the traffic, and I am proposing to confer with my right hon. Friend the Home Secretary.
Is the increase in the number of accidents anything more than proportionate to the increase in the number of motor cars?
I should say not.
Hounslow Grove (New School)
asked the President of the Board of Education, whether the plans for the new school at Hounslow Grove were submitted to the Board as long ago as September, 1910; whether the delay was occasioned by the action of the Board in suggesting an entirely new school north of the tram lines at Hounslow; whether he is aware that five months was required for discovering and treating for a new piece of land suitable for a school; and will he say what further steps the Board considers that the local education authority could have taken in order to find the land in question?
Plans for enlargement of the school at Hounslow Grove were received in August, 1910. The proposals were not satisfactory, and in September the Board suggested the provision of a new school and warned the authority that the usual three months' notice under the Act of 1902 would be necessary. Plans of a site were not received until March, 1911. In the same month the authority were informed that the site was generally satisfactory, but that notices should be issued forthwith. In May, 1911, the Board again warned the authority that they could not give formal approval of the site until the expiration of the necessary notices. The notices were not issued until June, 1911. My right hon. Friend does not think he can be called upon to answer the last part of the question.
Might I ask the hon. Gentleman whether he is aware that considerable feeling prevails over this matter, and would he receive a small deputation from the local authorities?
I will ask my right hon. Friend, as soon as I see him, whether he will do so.
Indentured Labour (Lord Sanderson's Committee)
asked the Secretary of State for the Colonies whether the Colonial Office has indicated its concurrence with or dissent from the conclusion of Lord Sanderson's committee to the effect that the system of indentured labour is good for the labourer and for the country in which he labours?
The Colonial Office has not expressed any opinion on the conclusion referred to.
May I inquire if the Colonial Office will not record any findings on this report?
I hope the Colonial Office will express no opinion on any matter unless it is their duty to do so.
Can the right hon. Gentleman, says how the New Hebrides Convention respecting this matter is working?
That scarcely arises on the question. Perhaps the hon. Member will put a question down.
Super-tax
asked the Chancellor of the Exchequer whether Super-tax claimed on the income derived from a partnership and based on the previous year's assessment is levied for the current year when, owing to the termination of the partnership, no income has been derived from it during the current-year?
The basis of the Super-tax charge for any given year is the amount of the total statutory income for the previous year. Liability for the given year is not affected by changes in the sources or in the amount of the income subsequent to the previous year.
Customs and Excise (Amalgamation Committee)
asked the Chancellor of the Exchequer whether he is aware that the recommendations of the Customs and Excise Amalgamation Committee, and the changes subsequently announced by him to a deputation of Customs and Excise officials on 3rd May last, have resulted in granting the right of nearly all sections of clerks in the Customs as well as in the Excise branches to proceed to the maximum of the next grade, with the exception of Customs clerks of the first class, who have been allowed the right of progressing in salary to only half the next step above, in marked contrast to the two sections of Customs clerks of the second class, the immediate grade below, and the principal clerks, the immediate grade above; and whether he will explain why the principle of granting the full step has been adopted as regards these two and all other classes of clerks, but ignored in the sole instance of Customs clerks of the first class?
The case of each of the old classes in the two Services has necessarily been treated according to-its merits, and I cannot admit that the Customs first-class clerks have any grievance by comparison with other classes.
Port of London (Strike)
Attack by Picket
asked the Secretary of State for the Home Department whether he has made inquiry into the case of Patrick Sullivan, who was attacked and wounded by a picket, and subsequently given a pass by the secretary to the dockers' union at Grays, allowing him to use the King's highway?
I would refer the hon. Member to the reply which I gave to the hon. Member for South Birmingham on the 19th June.
After what loss of life does picketing cease to be peaceful?
That does not arise out of the question.
Is not the giving of a pass an act which in itself is liable to lead to a prosecution for obstruction, as inferentially it shows that these people are forbidden to use the highways?
That is a point to be determined by the Attorney-General.
Essex Police
asked the Secretary of State for the Home Department whether he is aware that during the years 1910 and 1911 bodies of the Metro tropolitan Police force were sent into the provinces upon occasions of actual or apprehended disorder in different localities; that this course was adopted under the order or by the sanction of the Home Secretary for the time being; and whether he can see his way to strengthen the police force in Essex at the present time by a supplement from the Metropolitan Police force?
The answer to the first two questions is in the affirmative; to the third, in the negative. The Metropolitan Police have been sent to aid provincial forces only at times when there was no exceptional demand for their services in London, and the Essex Police have already been reinforced by other police forces which are not involved in troubles arising from the present labour disputes.
Is the right hon. Gentleman aware that some of the Essex Police have incurred serious injury in the discharge of their duty, and have any arrangements for compensation been made on their behalf?
That is a question of which clearly I must have notice. The Essex Police do not report to me.
Is there any intention, if representations are made, to take this matter into account, having regard to the fact that the Essex Police have gone outside their own sphere at the request of the Home Office?
No, I do not think that is the case. The Essex Police carry out their duties in Essex, and any question of compensation would have to come up before the Standing Committee in Essex.
Extra Police (Remuneration)
asked the Secretary of State for the Home Department whether he is aware that in 1911 about 500 men of the Metropolitan Police force were sent to Hull to assist the local police; whether these men were ever taken off pay in London; whether the local authority contributed anything towards the pay of these men during their service in Hull; whether their pay during the time in question was made from the Metro politan Police Fund, and so borne by the Metropolitan ratepayers; and whether he has taken any steps to obtain any con tribution from the local authority in Hull, and with what success?
I find that, owing to a misunderstanding, a promise was made to the Hull authorities that they would not be charged with the pay of these men if required only for a few days. No charge for their pay was therefore made; but the Hull authorities met all the charges for travelling, lodgings, and maintenance, and no additional charge of any sort fell on the Metropolitan Police Fund.
Yes.
Am I to understand that the London ratepayers will be debited with the cost of the service in the provinces, and yet the Home Secretary has no command whatever over them after they have left London?
No. The hon. Gentleman is drawing a conclusion which is not justified by anything I have said.
Injuries to Workers,
asked the Secretary of State for the Home Department the result of his inquiries at the Poplar and London hospitals in respect of injuries inflicted on men working or willing to work in the docks and on the river; whether he has been informed that the almoners and others connected with both hospitals have reported that a wide system of terrorism exists in consequence of the assaults that have taken place and the threats used; and what steps, if any, he has taken to restore public confidence?
asked the number of patients that have been treated at Poplar Hospital up to and including Thursday, 20th instant, for wounds, bruises, contusions, or other injuries inflicted on them in connection with the present labour dispute in the dock area?
As the inquiries which I am making are not yet completed, I shall be obliged if the hon. Members would postpone their questions until to-morrow.
Has there been any increase in terrorism since the Leader of the Opposition said that they might try to lynch Ministers in London?
I do not think that there has been any material increase in terrorism.
"Blackleg."
asked whether there is any record in the Home Office of the official use of the expression blackleg, and, if it is or has been used, what signification it bears; and what attitude on the part of the Department its use connotes?
There is no record in the Home Office of the official use of the expression.
I understand that this special use commenced with the right hon. Gentleman. If so, is its use compatible with the ostensibly impartial attitude which he has adopted?
The expression was used in answer to a supplementary question, and I was merely using the same word as was used to me.
Is the right hon. Gentleman bound to adopt the expression?
No. I have endeavoured to adopt such expressions as hon. Members use to make my answers perfectly relevant to the questions.
If an hon. Member goes over from one party to another is he a blackleg?
Mr. BEN TILLETT
asked whether the Home Secretary has yet received the Report containing the definite threat of Mr. Tillett to shoot Lord Devonport; and, if so, seeing that this Report definitely states that Mr. Tillett will take a gun and shoot Lord Devonport, whether he proposes to take any action in the matter?
The answer is in the negative. The Report that I have seen contains no such definite threat as that alleged by the hon. Member.
Did the right hon. Gentleman receive two reports from me of what Mr. Tillett said?
The report said if it was necessary to do it he would do it.
If one of these suffragists said she thought it was necessary to shoot anyone, would the right hon. Gentleman take any action?
It would depend upon the circumstances of the case. I am quite satisfied, from the account of it, that Mr. Tillett made no definite statement.
Did not the report which I sent to the right hon. Gentleman state that Mr. Tillett would take a gun and shoot Lord Devonport?
No, Sir; I have repeated three times that the report did not contain any such statement.
Did not the right hon. Gentleman get the full report in which those words were used?
I do not remember seeing them in the report which the hon. Gentleman sent me. But I have read through the whole of the shorthand notes, and I did not find any definite statement of the kind mentioned by the hon. Gentleman.
Will it be perfectly safe in future for any person desiring to make this kind of threat to adopt the language of Mr. Tillett and use it in public?
Each case must be judged by its circumstances.
Does the right hon. Gentleman not read the letters sent to him in House of Commons envelopes?
I read all the letters sent to me in House of Commons envelopes, but I do not always read the enclosures.
asked whether it is intended to take any action against Mr. Ben Tillett in respect of his speeches to the transport workers inciting them to use violence and intimidation to secure their ends?
The right hon. and learned Gentleman has asked me to answer this question. The answer is in the negative.
May I ask if this Mr. Tillett is or is not the identical person with whom the Chancellor of the Exchequer recently discussed proposals that were submitted to and rejected by the employers?
I am entirely without knowledge of the meaning of that question.
I will put a question on the Paper.
Does the right hon. Gentleman think that all the intimidation is upon the side of the workers?
Protection of Workers
asked whether the Home Secretary has yet received the report of the statement of Mr. Robert Williams, the transport workers' secretary, that they had got to use all their force and tyranny to compel men to join their trade unions; and whether, in view of the intimidation at present preventing men from working who are anxious to do so, he can see his way to providing sufficient protection to men in the streets and to those entering and returning from the docks?
The police notes of the speech do not record this statement. Every effort is made by the police to protect men going to and from their work at the docks, and any application for such protection would be at once complied with.
Was not a report of the speech sent to the Home Secretary by an hon. Member in reply to a request by the right hon. Gentleman that information should be sent to him?
I have stated that the shorthand notes contained no such statement.
Does the right hon. Gentleman think shorthand notes are better than longhand notes?
Maintenance of Law and Order
asked the Prime Minister what Minister is responsible to the House of Commons for the maintenance of law and order outside the Metropolitan Police area?
For the functions in regard to the maintenance of order which belong to the Central Government, the Home Secretary is the Minister responsible to Parliament. The primary duty of maintaining order is cast by the Constitution on the local authorities.
Has the right hon. Gentleman's attention been called to the statement in "Anson's Law of England and Constitution":—
"The Home Secretary is responsible for peace and good order throughout the land."
No, Sir, my attention has not been drawn to that, but I am perfectly prepared to deal with it at the proper time and place.
Transport Workers
asked the President of the Board of Trade if he would state the number of men now at work in the Port of London; what was the number of transport workers in the United Kingdom outside London affected by the declaration of a general strike; and how many of these responded?
The Board of Trade have no official statistics giving the information desired by the hon. Member.
Does not the hon. Gentleman think it would be advisable to get the statistics and publish them?
Perhaps the hon. Member will suggest how they can be obtained, and we will consider the matter.
Labour Disputes (Enforcement of Agreements)
asked whether the Government proposed to take any action to enable agreements entered into under their direction, or with their approval, to be loyally enforced or to en able penalties to be imposed for any breach thereof by either one of the con tracting parties?
As the hon. Member is aware, the Government have just requested the Industrial Council to inquire into and report upon matters connected with Industrial Agreements and the best means of securing their observance. Pending the conclusion of this inquiry it would be premature to make any statement upon the subject.
Can the hon. Gentleman say when the Report is likely to be issued?
I am sorry that I cannot.
Casual Employment
asked what steps the Port of London Authority had taken under Section 28 of the Port of London Authority Act to diminish the evils of casual employment; whether any negotiations on the matter had taken place between the Board of Trade and the Authority; and, if so, what was the nature of the negotiations and their result?
I understand that the Port of London Authority have had under consideration the preparation of a scheme for the organisation of dock labour in the port, and various informal discussions took place last year between officers of my Department and representatives of the Port Authority with regard to possible co-operation between the Board of Trade and the Port Authority in this matter. The question was postponed pending the decision of Parliament as to whether or not dock labour should be included in the Schedule to Part II. of the National Insurance Act. I am sending a copy of my hon. Friend's question to the Port Authority for their observations, and will let him know the result.
Suffragist Prisoners
Case of Mrs. Gatty
asked the Secretary of State for the Home Department whether Mrs. Catherine Gatty, now in prison for an offence committed in connection with the suffrage agitation, is suffering in health; whether she has served three months of her sentence; and whether he will, in the circumstances of the case, remit the remainder of her sentence or otherwise mitigate her punishment?
This case is now under my consideration. I am expecting a further medical report shortly, and I regret I am unable to reply at the present moment.
How far is the process to be allowed to go before she is released? Has the right hon. Gentleman released Mrs. Pankhurst because she is dying?
No. It is a question for the medical officer. I understand that there is no case anywhere of a prisoner approaching death.
When will the right hon. Gentleman be able to make a statement whether she is now being forcibly fed?
I cannot state more than I have stated now. I may be able to say later in the afternoon, when I get the report.
Do you expect the report this afternoon?
I think so.
Does the right hon. Gentleman think it reasonable to keep in torture these women, many of whom are to be released next Saturday?
I am not keeping them in torture. They have only got to take their food in the ordinary way.
Hunger Strike
asked how many women and men are in prison for offences connected with the suffrage agitation; how many are on hunger strike; how many are being forcibly fed, and the number of times such prisoners have been so fed; and how many are in hospital as the result of hunger striking or forcible feeding, or any other cause?
There were, at midday to-day, 70 women and 1 man in prison for offences connected with the suffrage agitation; 51 women and 1 man are refusing food; 46 women and 1 man have been artificially fed (20 of the women once, 10 women twice, 7 women and 1 man three times, and 9 women four times), and 6 women are in hospital, 1 as the result of refusing food, and 5 from other causes.
Is one of the worst hospital cases a woman, who in consequence of the treatment given her, threw herself over the staircase?
I could not say without notice. I understand that in the particular case referred to, the woman threw herself on to the iron grating just below, which must have been perfectly apparent to her before she threw herself over.
How many of the prisoners have been discharged through ill-health caused by refusing food?
The hon. Gentleman did not give that item in his question. I could not answer without notice.
Is it a fact that Mrs. Pankhurst has been released, and what is the condition of her health?
Mrs. Pankhurst was released to-day, I think about mid-day, on account of the fact that the doctor reported that her heart was not strong enough to allow her to be forcibly fed.
Does the right hon. Gentleman think it good policy to keep the remainder of these prisoners in prison simply because they are strong enough to bear the strain?
That is not a question to be dealt with in an answer.
Forcible Feeding
asked how long William Ball was in prison before being forcibly fed; when did the doctors or warders detect the first signs of insanity; how many times was he forcibly fed before he gave up; and what period elapsed be tween the stoppage of forcible feeding and his removal to a lunatic asylum?
Ball was received in Pentonville Prison on the 22nd of December and he was fed artificially for the first time on the 25th of December. The first symptoms of mental disturbance were noticed during the night of 25th January, but it was thought his disorder was only temporary. He was artificially fed twice daily from the 25th of December till the 29th January, on which latter date he began to take food naturally. On no occasion was any force used. He was removed to the asylum on the 12th of February.
asked what evidence the expert appointed to inquire into the case of William Ball took other than the evidence of the prison officials; was any evidence taken either from medical men or the parents and friends of William Ball as to his mental and general condition of health previous to his imprisonment; what amount of time did the expert devote to an examination of the man himself; and did the prison doctor, at the time of the man entering prison or before he was forcibly fed, put on record any report as to the mental condition of this man as would suggest he was not sane?
The Report which has been laid before Parliament gives not only the conclusions arrived at by the eminent medical man who undertook an inquiry into the case, but also a full account of the means he adopted for arriving at the truth. I have nothing to add to it; but I may, perhaps, for the information of the House, quote the final words of the Report. "In my opinion," Sir George Savage says, "both in the prison and in the asylum, Ball was kindly and properly treated, and his insanity could not be attributed to any treatment to which he was subjected."
Will the right hon. Gentleman please answer the definite question, what expert evidence was taken of this man's previous mental condition and of his family history before his being imprisoned?
I think I have fully answered that question. I have referred my hon. Friend to the Parliamentary Paper which has been published.
Is it not a fact that the prison authorities took no evidence except that of the persons concerned in the forcible feeding of this man, and that no evidence was taken as to his previous history?
It is admitted that the man was sane when taken to prison.
Is not the fact that the man did not go mad before forcible feeding, and that the only time he went mad was after forcible feeding, proof against the answer of the Home Secretary?
It does not necessarily follow that it was a consequence of forcible feeding.
Was the inquiry the same as in the case of that instituted by the Government in the case of Archer-Shee at an early stage?
I do not understand what the Noble Lord means.
May I ask the Home Secretary whether it is a fact that Mrs. Pankhurst has been released, and whether, in view of this fresh treatment of the leader—
That question has been asked and answered.
I wish to ask leave to move the Adjournment of the House for the purpose of discussing a definite matter of urgent public importance, namely, the refusal of the Government to give equal treatment to all suffragist prisoners and the consequent forcible feeding of a number of those at present imprisoned.
The hon. Member proposes to ask leave to move the Adjournment of the House for the purpose of discussing a definite matter of urgent public importance, namely, the refusal of the Government to give equal treatment to all
Division No. 118.] AYES. [3.50 p.m. Alden, Percy Forster, Henry William Ponsonby, Arthur A. W. H. Amery, L. C. M. S. Ginnell, L. Radford, G. H. Atherley-Jones, Liewellyn A. Glanville, Harold James Roberts, s. (Sheffield, Ecciesall) Baring, Sir Godfrey (Barnstaple) Goldstone, Frank Roch, Walter F. (Pembroke) Barrie, H. T. Gordon, Hon. John Edward (Brighton) Rolleston, Sir John Barton, William Goulding, Edward Alfred Sanders, Robert Arthur Beale, Sir William Phipson Gwynne, R. S. (Sussex, Eastbourne) Smith, Albert (Lanes., Clitheroe) Boscawen, Sir Arthur S. T. Griffith- Harvey, T. E. (Leeds, W.) Smith, H. B. Lees (Northampton) Brace, William Healy, Timothy Michael (Cork, East) Snowden, Philip Bridgeman, W. Clive Herbert, Hon. A. (Somerset, S.) Spear, Sir John Ward Bull, Sir William James Hope, James Fitzalan (Sheffield) Stanley, Hon. G. F. (Preston) Burgoyne, A. H. Hudson, Walter Strauss, Arthur (Paddington, N.) Burn, Colonel C R. Jowett, Frederick William Sutherland, John E. Byles, Sir William Pollard King, J. (Somerset, N.) Sykes, Mark (Mull, Central) Campion, W. R. Lansbury, George Taylor, John W. (Durham) Carlile, Sir Edward Hildred Locker-Lampson, G. (Salisbury) Thomas, J. H. (Derby) Cassel, Felix Macdonald, J. R. (Leicester) Thomson, W. Mitchell- (Down, N.) Castlereagh, Viscount Macdonald, J. M. (Falkirk Burghs) Thorne, William (West Ham) Cecil, Lord Hugh (Oxford University) McCallum, Sir John M. Wardle, George J. Chancellor, H. G. M'Micking, Major Gilbert Wedgwood, Josiah C. Clay, Captain H. H. Spender Martin, J. White, Major G. D. (Lanes., Southport) Crawshay-Williams, Eliot Mason, David M. (Coventry) Whyte, A. F. (Perth) Crooks, William Mond, Sir Alfred M. Wilson, W. T. (Westhoughton) Dickinson, W. H. Money, L. G. Chiozza Worthington-Evans, L. Dickson, Rt. Hon. C. S. Morrell, Philip Wright, Henry Fitzherbert Duncan, C. (Barrow-in-Furness) Needham, Christopher T. Yoxall, Sir James Henry Eyres-Monsell, Bolton M. Newman, John R. P. Faber, George D. (Clapham) Newton, Harry Kottingham TELLERS FOR THE AYES.—Mr. Keir Hardie and Lord Robert Cecil. Fell, Arthur Parker, Sir Gilbert (Gravesend) Fetherstonhaugh, Godfrey Parker, James (Halifax)
NOES. Acland, Francis Dyke Brunner, J. F. L. Duncan, J. Hastings (Yorks, Otley) Agnew, Sir George William Bryce, J. Annan Esslemont, George Birnie Allen, A. A. (Dumbartonshire) Burns, Rt. Hon. John George, Rt. Hon. D. Lloyd Ashley, W. W. Carr-Gomm, H. W. Gladstone, W. G. C. Asquith, Rt. Hon. Herbert Henry Cawley, Harold T. (Heywood)) Greenwood, Granville G. (Peterborough) Bagot, Lieut.-Colonel J. Cawley, Sir Frederick (Prestwich) Greig, Colonel J. W. Baker, H. T. (Accrington) Cecil, Evelyn (Aston Manor) Griffith, Ellis Jones Balfour, Sir Robert (Lanark) Chapple, Dr. W. A. Guest, Hon. Frederick E. (Dorset, E.) Banbury, Sir Frederick George Churchill, Rt. Hon. Winston S. Gulland, John William Barran, Sir John N. (Hawick, B.) Clough, William Harcourt, Rt. Hon. L. (Rossendale) Beauchamp, Sir Edward Collins, Stephen (Lambeth) Harcourt, Robert V. (Montrose) Benn, W. W. (T. Hamlets, St. Geo.) Cornwall, Sir Edwin A. Harmsworth, Cecil (Luton, Beds) Birrell, Rt. Hon. Augustine Davies, Timothy (Lines., Louth) Harrison-Broadley, H. B. Black, Arthur W. Davies, Sir W. Howell (Bristol) Harvey, A. G. C. (Rochdale) Booth, Frederick Handel Dewar, Sir J. A. Hayward, Evan
suffragist prisoners, and the consequent forcible feeding of a number of them at present in prison. Has the hon. Member the leave of the House?
(having counted): Thirty-eight hon. Members support the hon. Member.
May we claim a Division on that?
The Question I have to put is "That leave be given to the hon. Member for Bow and Bromley to move the Adjournment of the House for the purpose of discussing a definite matter of urgent public importance, namely, the refusal of the Government to give equal treatment to all suffragist prisoners, and the consequent forcible feeding of a number of those at present imprisoned."
The House divided: Ayes, 86; Noes, 115.
Henderson, J. HI. (Aberdeen, W.) Masterman, C. F. G. Scott, A. MacCallum (Glas., Bridgeton) Henry, Sir Charles S. Menzies, Sir Walter Smith, Harold (Warrington) Higham, John Sharp Millar, James Duncan Soames, Arthur Wellesley Hobhouse, Rt. Hon. Charles E. H. Molteno, Percy Alport Stewart, Gershom Hogge, James Myles Montagu, Hon. E. S. Strauss, Edward A. (Southwark, West) Holmes, Daniel Turner Morgan, George Hay Summers, James Woolley Houston, Robert Paterson Morison, Hector Tennant, Harold John Howard, Hon. Geoffrey Munro-Ferguson, Rt. Hon. R. C. Thomas, Abel (Carmarthen, E.) Hughes, S. L. Murray, Capt. Hon. A. C. Thorne, G. R. (Wolverhampton) Jardine, Ernest (Somerset. E.) Norton, Captain Cecil W. Trevelyan, Charles Philips Jones, William (Carnarvonshire) Nuttall, Harry Wason, John Cathcart (Orkney) Jones, W. S. Glyn- (Stepney) Palmer, Godfrey Mark Webb, H. Kellaway, Frederick George Pearce, William (Limehouse) White, J. Dundas (Glasgow, Tradeston) Kerry, Earl of Peto, Basil Edward Whittaker, Rt. Hon. Sir T. P. Lambert, Richard (Wilts, Cricklade) Philipps, Col. Ivor (Southampton) Wiles, Sir Thomas Lawson, Sir W. (Cumb'rld, Cockerm'th) Price, Sir Robert J. (Norfolk, E.) Williams, Llewelyn (Carmarthen) Lewis, John Herbert Priestley, Sir W. E. B. (Bradford, E.) Williams, Penry (Middlesbrough) Lyell, Charles Henry Rea, Rt. Hon. Russell (South Shields) Williams, Col. R. (Dorset, W.) Macnamara, Rt. Hon. Dr. T. J. Roberts, Charles H. (Lincoln) Wilson, John (Durham, Mid) Macpherson, James Ian Roberts, Sir J. H. (Denbighs) Wood, Rt. Hon. T. McKinnon (Glas.) MacVeagh, Jeremiah Robertson, John M. (Tyneside) McKenna, Rt. Hon. Reginald Rose, Sir Charles Day M'Laren, Hon. H. D. (Leics.) Runciman, Rt. Hon. Walter TELLERS FOR THE NOES.—Master of Elibank End Mr. Illingworth. Malcolm, Ian Samuel, Rt. Hon. H. L. (Cleveland) Marshall, Arthur Harold Samuel, J. (Stockton-on-Tees)
4.0 P.M.
On a point of Order, I wish to ask whether as a result of the Division that has just taken place, it is now the fact that we are unable to raise this matter for discussion to-day, and, if so, whether there is any means of bringing this matter before the consideration of the House of Commons which is the High Court of Parliament?
I would not like to say, without reflection, what other means there may be of raising this question, but there is always the Home Office Vote.
May I ask whether the Government will put down the Home Office Vote even at this moment for to-morrow. It is quite easy, and it can be arranged. If the Home Secretary cannot be here there is the Under-Secretary. I submit that if the Prime Minister, who has the reputation of the House of Commons greatly at heart, does not accede to this request, it will be little short of a scandal.
I cannot put down the Home Office Vote to-morrow for the reason that the Home Secretary, in the course of his public duties, will be elsewhere. Under these circumstances, I think it would be most undesirable to put down that Vote to-morrow.
Can the right hon. Gentleman suggest any other way of discussing this matter?
Perhaps the Noble Lord will put down a question.
I will put down a question to-morrow.
May I ask the Prime Minister whether he adheres to the statement he made on the Motion for the Adjournment on Thursday last?
We cannot have any more questions upon this point.
New Member Sworn
Sydney Arnold, esquire, for the County the West of York (Southern Part of Riding, Holmfirth Division).
Business of the House
May I ask the right hon. Gentleman, the Prime Minister, what Supply is be taken to-morrow, and also what are the other arrangements for business?
To-morrow we shall take the Vote for the Office of Woods and Forests, and the Mint.
On Friday, we shall take the Second Reading (adjourned Debate) of the Inebriates Bill; Second Reading (adjourned Debate) of the Mental Deficiency Bill; and, if time permits, some smaller Orders on the Paper.
Ordered, "That the Proceedings upon the Reports of Ways and Means [ 29th April and 2nd April ], if under discussion at Eleven o'clock this night, be not interrupted under the Standing Order (Sittings of the House).—[ The Prime Minister. ]
Port of London (Strike)
Personal Explanation
I wish to call attention to a personal matter affecting the honour of a Member of this House. I do not know whether it is a point of Order or not. On Wednesday last I asked a supplementary question of the Home Secretary as follows:
"May I ask the right hon. Gentleman if he is aware that a large employer of labour, a friend of mine, the night before last had to stop up all night with a few men at work, and that they had to hide directly daylight appeared?"—[OFFICIAL REPORT, 19th June, 1912, col. 1667, vol. XXXIX.]
The hon. Member for Barrow-in-Furness (Mr. C. Duncan) interrupted with the remark:—
"A deliberate lie,"
and the hon. Member for Woolwich (Mr. Crooks) said:—
"I live there, and I say it is a deliberate falsehood."
After I had asked a question, the hon. Member for Barrow-in-Furness interjected "Give his name." The employer concerned, who is a friend of mine, particularly told me that I must not give his name, because the trade union and their pickets would be sure to make it extremely rough for his men, and therefore I did not do so. The hon. Member for Woolwich asked if I had any evidence of a single case of men at work having been molested. I went down to the East-end, and in one yard alone the foreman told me that twelve of his men had been assaulted outside in one way or another. There is also the evidence of the Law Courts and the reports in the Press, and the evidence I got down there. I actually saw a permit which these trade union leaders gave to a man to allow him apparently to go on the King's highway.
What was the date of it?
The date of what?
The date of the permit.
I did not take it.
Of course not.
Under these circumstances, as it is perfectly true what I put in the question, as it is absolutely true that my friend had to stop up all night with a few men at work, and that they had to hide directly daylight appeared, I ask you, Mr. Speaker, whether I am entitled to ask the hon. Member for Woolwich and the hon. Member for Barrow-in-Furness to withdraw their interjections.
I at once withdraw my remark so far as it applies to the hon. Member. I wish to point out, however, that the hon. Member for Ludlow's question to the Home Secretary was as follows:— moment, and any attack upon their honour and character I take as a personal insult. The starvation is on the side of the poor men who are out of work. I went to the police myself and asked for information. I have opportunities of knowing the docks in a way that I am not going to tell the House, unless I tell hon. Members privately. I say it is absolutely false to assert that thousands of men are hiding in the docks afraid to go home, because there is no provision for men to hide in the docks. The hon. Member's question suggested that gangs of men lie in wait for them in back streets, and the police informed me that there were no such cases. I took the opportunity of going to the hospital, because I had received a letter saying there were rows upon rows of poor men who had been violently assaulted lying in Poplar Hospital. Now Poplar Hospital receives 1,700 in-patients in the course of the year. There has been during this dispute, and there is, I understand at this moment, or at any rate there was at one o'clock yesterday, only six cases of assault in the Poplar Hospital, and these are the rows upon rows out of a total of 1,700 received in the course of a year. I say that there was not a single case of a man being assaulted at work.
I know there were common assaults in the streets. Often there are more common assaults on a Saturday night in the street than have happened since the strike began. Those assaults were not cases of strikers. I asked whether there was an abnormal number of cases admitted into this hospital in consequence of accidents and assaults during the strike, and if the number was more than at any other time. From what has appeared in the papers you would naturally expect the place being found in a state of siege, but the house surgeon told me that the number of accidents and the cases of assault is much less during the strike than they have ever been before. I say that no man was interfered with at work, and no gangs of men lie in wait in back streets to interfere with those at work. As regards these six persons who are lying ill in Poplar Hospital alleged to have been assaulted by strikers, we have no proof at all of this. Every week these things are going on, and every case of drunkenness is put down to the strike. It reminds me of the Colorado beetle, which was supposed to be responsible for eating motor cars and pianos years ago. Everything that happens nowadays is put down to the strike.
These poor men may sometimes be misguided, but they are human beings and ought to have our protection. I repeat what I said, that the statement which the hon. Member repeated in this House was absolutely a falsehood.
WAYS AND MEANS [29th April]
Budget Surplus
Resolution reported,
"That it is expedient that the obligation to issue the Old Sinking Fund to the National Debt Commissioners should not apply to the Old Sinking Fund for the year ending the thirty-first day of March, nineteen hundred and twelve."
I beg leave to move, as an Amendment, to add at the end of the Resolution the words, "in so far as the amount of that Fund exceeds five million pounds."
I think it will be to the convenience of the House that I should make a statement with regard to the intention of the Government in reference to the surplus of £6,500,000 which I announced in my Budget statement. I shall conclude by moving an Amendment to the Motion which has just been read out from the Chair. Perhaps the House will recollect that when I made my Budget statement I said that the £6,500,000 surplus would be added to the Exchequer Balances until we were in a better position to ascertain accurately what had happened in reference to twocontingencies which I then mentioned. Perhaps I had better read out exactly the statement I then made:— the strike, and the strike was then proceeding. No one knew how long it would last; it was perfectly obvious it was affecting the revenue very considerably, and, if it lasted for a very long time, there was no doubt at all that the revenue might be affected disastrously, especially in Excise and Customs, during the present year. I therefore proposed that the £6,500,000 should be held up partly until we ascertained what the loss to the revenue would be in consequence of the decrease in consumption which was attributable to the strike. That strike is now happily settled. I cannot even now form an accurate estimate as to the effect of the strike upon the revenue, but I am very pleased to be able to say, such is the buoyancy of trade, I feel assured that not only will it not be necessary to draw to the extent of a single penny upon this great reserve, but that I shall be well within the Estimates which I gave at the commencement of the year, and probably there will be a margin. Therefore, as far as that contingency is concerned, the House may wipe it out. It will not be necessary to draw at all upon the £6,500,000 to meet the ravages of the strike.
The second contingency which I mentioned was that of a possible increase in the demands of the Admiralty upon the Exchequer. The First Lord of the Admiralty, in presenting his Estimates this year, stated quite clearly that he based his Estimates upon the assumption that the German Naval Law remained unaltered. There was a Bill which, I think, was before the Reichstag at that moment for a very considerable addition to the provision made by the old Naval Law for the German Fleet. Since then that Bill has become an Act of Parliament, and it is no longer a contingency, but a fact with which we are confronted. This new law provides for an addition, spread over six years, to the German naval programme amounting in the aggregate to £10,000,000. I am going to give the House the actual figures. The figures this year show an increase of £734,000; 1913, £1,370,000; 1914, £1,859,000; 1915, £1,908,000; 1916, £2,104,000; 1917, £2,055,000; a total of £10,030,000. That represents an addition to the programme of the old German Navy Laws. The contingency which I then indicated as one of those which would render it necessary for us to draw upon that reserve has actually arisen, and my right hon. Friend will, in due course, submit to Parliament Supplementary Estimates. It is not for me to anticipate any statement which he has got to make, and I only refer to it in so far as it is necessary in order to explain the financial statement which I am making at the present moment. This year the additional sum for which my right hon. Friend will ask will not exceed £1,000,000, but further heavy claims will fall in subsequent years as a result of the programme which he finds it necessary to outline. That would leave a balance of £5,500,000 still undisposed of.
I need hardly say that, having £6,500,000 to spend, I have received innumerable suggestions as to the best method of disposing of that sum of money. I am not going to discuss them. They are most of them suggestions which would involve an annual increase, and are therefore totally inapplicable to the expenditure of a capital sum of £6,500,000. I hope that my hon. Friends and hon. Gentlemen on the other side of the House who have made those suggestions will just bear that in mind, and apply that observation to the particular project they have in their minds. Most, if not all of them, are totally inapplicable for that very reason. It would be very absurd finance indeed, merely because you have a surplus of £6,500,000 this year, to embark upon an increased expenditure which would involve an annual increase to your Estimates, and therefore I dismiss all those suggestions with that comment. There is, however, another item of expenditure which I propose to recommend the House to embark upon and to meet out of this sum of £6,500,000. It is true it is a subject which I did not mention at the time I made my Budget statement. It has reference to the expansion and development of our resources in East Africa and Uganda. The Colonial Office are pressing upon the Exchequer for an advance of a sum of money for the further development of that exceedingly rich country. A year or two ago I recommended that a portion of the surplus of the year should be expended upon the extension of railways in Uganda or the Protectorate.
In both.
In both. In Uganda and the Protectorate, and for the purpose of erecting a deep-water jetty or pier there. There is no doubt at all about the enormous possibilities of this great country. There is an increase from year to year in the produce which comes from this quarter, especially in cotton and in wheat. Its exports have more than doubled in the course of a year or two. It is undoubtedly to the interest of this country we should assist in the development of every new cotton-producing country. The lesson we had in the shortage from America in the course of the last year or two and the very injurious effect it had upon our cotton industry shows it is a dangerous thing for us to rely too exclusively upon one particular source of supply, for what is, after all, one of the most important industries in this country. In 1902–3 Uganda exported nothing; in 1907–8, Uganda exported 17,000 cwts. of cotton; in 1910–11, 83,000 cwts.; and this year it is expected there will be 105,000 cwts. of cotton exported from Uganda alone. Last year, for the first time, there was an export from the Protectorate as well, but the railroads, the piers, the steamboats, and the roads are quite inadequate to the development of this new source of supply in this rich country. In 1902, on the Uganda Railway there were three or four trains running in each direction; now you have fifty or sixty running in the course of the week, and the traffic is bursting all bounds. There are complaints of the incapacity of the railways to cope with the growing demands, and there are reports coming to the Colonial Office of produce rotting on the wharves and platforms for lack of carrying capacity and storage room. They want a large number of new engines, wagons, carriages for passengers, sidings, and officers' quarters, and improvements at the ports and lake, and in addition to that they want a development in the roads, especially in the district of Kioga. I am told it is one of the most promising districts in the whole Empire as far as cotton is concerned, but that owing to the lack of road accommodation the natives cannot bring their cotton down. The result is they are very much discouraged. They are producing this cotton under the stimulus of great promises from those organising the trade of the country, and they are very disappointed, because after all they cannot get their cotton away. It is proposed there should be an advance at a reasonable rate of interest to the Colonial Office of £500,000 for the purpose of further developing the resources of these two great countries.
Can the right hon. Gentleman say what the rate of interest is to be?
We have got to fight that out with the Colonial Office. We want a fair amount of interest and something that will represent the Sinking Fund, with some little margin for expenses as well. My right hon. Friend and I have not quite settled that pleasant controversy amongst ourselves. At any rate, I do not think there will be any difficulty. I think the rate of interest charged for the last loan was 3½ per cent., and 1 per cent. Sinking Fund. I come to the balance of £5,000,000 still left. I have set apart £1,000,000 for the Navy and £500,000 for Uganda.
What about England?
May I remind my hon. Friend that all this cotton and wheat is for England; and may I also remind him that the Navy is for the protection of England and English trade, and it is certainly to the interest of Great Britain that our great Colonial resources should be developed? That is why I am opposed to the methods suggested by hon. Gentlemen opposite. I should like to say one word with regard to the suggestion which has been made that we are not doing enough for the redemption of debt. I have read a good many, I will not say criticisms—because when we look for criticisms we do not expect facts which favour the view of the Government to be given particular prominence—I have ready many so-called financial arguments which pretend to give a fair view of the financial position, and I observe a deliberate at tempt to suppress facts with regard to what the Government has done in the last few years in redeeming debt, and it has been done so persistently in the last few days that I cannot help thinking it has been done to order. In all these articles there is an assumption that no debt has been paid. [HON. MEMBERS: "NO, no."] If there is such an assumption it is never mentioned. There is another assumption which is equally unfair that, even if debt is paid, we have redeemed less than any Government that ever existed. Anyone who acquired his information as to what was being done for the reduction of debt in this country from these so-called financial arguments would infer we pay less than any Government—
Would the right hon. Gentleman mind telling me to what he is referring?
I am not going to name newspapers. I ask the right hon. Gentleman to look at any financial article dealing with the position of Consols and with what the Government are doing with regard to the Sinking Fund. Can he point to any article in any paper in which the Government are given credit for having reduced debt more than any Government that ever existed in this country?
Can the right hon. Gentleman direct me to any article or articles which produce the statement he has professed to read in them that the Government are doing nothing for the reduction of Debt, or are doing less than any other Government?
I can give the right hon. Gentleman piles of them. Will he do me another favour. This is the beginning of the Debate. I have just made my statement. The right hon. Gentleman has to reply. I hope he will allow me to make my statement without interruption, and then he can give his reply. I will give him the articles of which I complain. I ask him will he point out to me any article in any leading Conservative paper dealing with finance that has admitted that this Government has done more for the reduction of Debt than any Government that ever existed in this country? I am quite willing to negotiate an exchange with him on that basis. What are the facts? I lay down the proposition, and I challenge any hon. or right hon. Gentleman to controvert it—that the present Government have paid more and have reduced the indebtedness of this country by a larger sum of money than any Government that ever existed in this country. I will quote figures. I have done so more than once. I have done so so often that I have been taunted with repeating them, but I am going to repeat them until I see them take root in the minds of those who criticise our policy. What was the largest reduction of debt prior to the advent of the present Government? Mr. Goschen reduced the indebtedness of the country—I am talking about net indebtedness—by £38,683,000 in the six years 1887–1893—an average of £6,447,000 per year. Sir Stafford North-cote only reduced it by £15,298,000 in six years—an average of two and a-half millions sterling. Mr. Gladstone, from 1860 to 1867, reduced it by £22,479,000, an average of just over three millions, and Sir William Harcourt, in three years, reduced it by £18,834,000, or an average of £6,278,000 a year. Sir Michael Hicks Beach, from 1896 to 1899 reduced it by £16,893,000, an average of £5,631,000. Then came the borrowing for the war. What was the reduction in Debt by the present Government up to the end of last year? It amounted to £63,000,000. I am not taking into account the provision for this year. I am simply taking the reduction up to the end of last year—£63,000,000. Again, I ask whether any criticism of the present Government, any criticism directed against its finances, has ever acknowledged that, either inside or outside the City? In addition to that we have provided for an increase during the last three years of £13,500,000 on the Navy Estimates. We have borne on the Estimates the cost of dock construction and shipbuilding, items which, abroad, are financed out of loans. So we have paid £63,000,000, in addition to the £13,500,000 added to the Navy Estimates, without negotiating any loan for the purpose.
Of course, I am unable to check the figures which the right hon. Gentleman is giving, but I want to understand is he dealing with the net reduction?
Yes, with the net reduction.
After accounting for money borrowed?
Yes, this is a purely net reduction of the amount of indebtedness of this country. If you pay off debt with one hand and borrow with the other hand that is not a reduction. I am dealing with the net reduction of the indebtedness of this country, and I say that no Government that has ever existed in this country has come near to this Government in the reduction of Debt. And yet it has never had the slightest recognition of the fact from our financial critics, and not very much from the City itself. I know it is suggested that the fall in Consols is due very largely to the fact that we are not making adequate provision for the reduction of Debt. If the provision made for the reduction of Debt were a dominant or very large element in the condition of our credit, then not only would Consols not have fallen, but they would have appreciated considerably beyond the position they have ever held under any Government. It is an element which does not account for the fall in Consols. If hon. and right hon. Gentlemen will look at the position in other countries they will find some element which is quite outside any provision for the reduction of Debt which is controlling the value of its securities. Take the case of Germany. The highest point reached by Consols in 1911 was 82⅛. To-day they stand at 76½, a drop of 5⅜. The highest point reached by German Three per Cents. in 1911 was 85. To-day they stand at 79—a drop of six points. That shows there is some element with which the provision for the reduction of debt has nothing whatever to do. It must be quite obvious to the Committee that one of the most important elements is the enormous expansion in industry. Anyone who looks at the figures for the last twenty, thirty, or forty years will see what an element that is. Take the year 1872, which was the great year of prosperity in British trade.
It was such a great year that it was even spoken of as the climax, for our prosperity reached an absolutely unprecedented height. What happened? Consols then stood at practically the same figure as that at which they stand to-day—almost the same figure, when you take the rate of interest into account. They stood at 72, and if you take the rate of interest, 2½ per cent., you will find that it works out at practically the same figure as to-day. That is a very remarkable figure. What happened? Shortly afterwards trade went down until we got to about the very worst year we have ever seen in British trade—1879. What happened? As trade went down Consols went up, so that by the time you reached 1879—which was the year of great unemployment, great distress, great suffering, factories closed, hundreds of thousands of men thrown out of work—Consols had gone up by something which was very considerable. That is the influence which is working throughout the whole world. It stands to reason that a period of great industrial prosperity always synchronises with a period of scarce money; scarce money means high interest; high interest must necessarily mean depressed gilt-edged securities. Therefore, wherever you get great prosperity in any country in the world, cash becomes dearer, and these gilt-edged securities naturally become depressed. The reason why during the last year, both in Germany and in this country, such securities were depressed-there may be other special reasons in Germany; there are one or two special reasons, because there was the withdrawal of the French money, which undoubtedly had some effect—was that great industrial prosperity throughout the world has had the effect of driving up the rate of interest, and that has put down the price of gilt-edged securities. I am only saying that in order to show that, notwithstanding the fact that these enormous sums of money have been set aside for the purpose of reducing Debt, it has not had the effect of putting up the price of Consols that you would expect, and that that is attributable to the facts I have already mentioned.
After that preliminary examination, I now come to the question of what we propose to do with the £5,000,000. I do not say that it is a reason for slackening in our efforts to reduce Debt that we have done so much in the past, and done so much without appreciably affecting the price of Consols, because there is this advantage—at any rate, in the low price of Consols—that you can buy them at a cheaper rate, and that is a good opportunity for reducing Debt. We therefore propose to take advantage of that opportunity. In fact, we propose to set aside the whole of the balance for the purpose of reducing Debt. I can observe the relief with which that statement is received by the other side, a relief which has nothing to do with the price of Consols, but which has far more to do with other reasons which are not strictly relevant to the consideration of a financial statement. I want to say exactly what the Government will have done, including the provision made this year, for the reduction of Debt. The total reduction of Debt effected by the present Government, inclusive of £5,000,000, will be £78,184,000. [An HON. MEMBER: "In how many years?"] That is for seven years. That is a net reduction of Debt, not the Debt we have reduced while we have been building up Debt on the other hand. I also make this qualification, that I do not know what the amount of the Telephone Debt will be. That we shall have to provide for. My right hon. Friend the Postmaster-General reminds me that of course it is a remunerative investment. When I have been calculating arriving at the net reduction, I have not entered into the question whether you get a return for your money or not. I am simply giving the net indebtedness of the country. If we had had to borrow that amount would have had to be deducted. Apart from that, we have reduced the Debt of the country by £78,184,000. I do ask, as a matter of fair play, that when comments are made on the price of Consols which are adverse to the Government, and when those comments have reference to the fact that we withheld money which we ought to have used towards reducing Debt, at any rate the figures of the reduction of all Debt ought to be given as well. I think that is only fair.
I am not asking of the right hon. Gentleman or his Friends—it is more than human nature could possibly stand—that they should go on platforms and say, "Look what a magnificent thing this Government has done; they have actually reduced the indebtedness of the country by £78,000,000, whereas we put it up £150,000,000." I am not asking that, but I do ask that when these criticisms are made what is on the other side of the balance sheet should also he referred to; that when the price of Consols and a reduction of the New Sinking Fund are referred to, the actual provision made for reducing the Debt in cash should also be quoted; and that when you get a high rate of interest, there should also be some reference to the abounding prosperity of the country. Why should what they call "Lloyd George finance" be held responsible for the depression in Consols and labour unrest, when nothing is said about the abounding prosperity of the country or the fact that trade has attained dimensions it has never before achieved in the whole history of this country. All I ask is that there shall be fair treatment of these matters. If that were done, I should be perfectly satisfied with that statement of the case. It should not be altogether a one-sided statement, because I agree that the question of the price of Consols is one that ought to be very carefully considered on its merits, and not as a partisan proposition. The hon. Baronet the Member for the City of London (Sir F. Banbury) has been a sinner once or twice, but I think he will be the first to admit that the matter has never been considered fairly and all the evidence taken into account. It ought to be taken into account. We ought also to consider what there is to be gained, on both sides, by the Exchequer from the present price of Consols, what there is to be gained by taking artificial steps to give them an artificial value, or whether anything more ought to be done in order to appreciate them. I will repeat what we are going to do with the £6,500,000. I propose it shall he dealt with in this way: £1,000,000 additional for the expenses of the British Navy in the course of the present year; £500,000 is to be advanced to the Protectorate and to Uganda, and the rest I propose should pass into the Old Sinking Fund.
It is unusual to have two Budget statements in one year, though it is not unknown. It is a practice which, I think, is in general terms and under general conditions to be deprecated, but I must say that I infinitely prefer the Chancellor of the Exchequer's second Budget statement this year to his first. I congratulate him on his chastened mood, and am glad to think that he is now returning to those sounder methods of finance which he absolutely declined to follow but a few weeks ago. I need not say anything about the provision which he was then holding in reserve for the consequences of the strike. That, he says, it is now clear will not be needed. That would naturally lead me to make some observations about the collection of taxation. But I think they will be better reserved for another Motion, and not interpolated in this discussion. The Chancellor of the Exchequer's proposal was to put the whole of this £6,500,000 into the Balances, without any definite pledge as to how any part of it should be appropriated being given beforehand. We objected to that; that it was an unconstitutional and a most inconvenient practice; that it struck at the root of all financial control by this House; and that if it became a settled habit of the House, it would really facilitate, and almost provoke, improper dealing—I almost said corrupt dealing—with the finances of the nation. The House will remember that, returning to this subject on the second day of Committee discussion, I think it was, when this Resolution was before us, we from this side of the House asked the Chancellor of the Exchequer for a simple pledge. We asked him to give us the assurance that what he did not require of this £6,500,000 for the strike or for the extraordinary needs of the Navy, he should pledge himself to return to the Sinking Fund. The Chancellor of the Exchequer absolutely and in terms refused to make any such pledge. In substance he has assented to our proposal to-day. The exception is the £500,000 which he lends to the British East Africa Protectorate and Uganda.
As regards the allocation of £1,000,000 of this money to the extraordinary expenditure on the Navy, I told him at the time that, although it was unusual, at any rate I should raise no objection, and I raise no objection to it now. But I ask the Government to be candid enough to review their past utterances in the light of what they are now doing. This money is by law appointed for the extinction of Debt. To apply this money in reduction of the demands upon the Exchequer in meeting the current expenses of the year is, in effect, to borrow money. There is no difference in, kind between withholding money which by law is devoted to the repayment of Debt in order that you may spend the money on the Navy, and borrowing the money.
was understood to say, that of the £6,500,000, £1,500,000 was attributable to under-spending last year.
5.0 P.M.
But that makes no difference. The whole of the Old Sinking Fund, with which we are dealing, in every year, be it big or small, is the result of one of two causes—under-expenditure by the Departments or under-Budgetting by he Chancellor of the Exchequer. Last year he made very nearly a record in both respects. He grossly under-estimated his revenue and the Admiralty greatly over-estimated their expenditure, but when the Chancellor pleads that that alters the case and defeats my argument may I ask him is this money being kept in order to pay for that expenditure which the House voted last year, but which the Admiralty found itself unable to carry out last year? Of course not. That you have still to raise out of revenue in future years. What you are doing is to take £1,000,000 of this money and spend it on the Navy because, owing to the expansion of the German programme, you find that your Navy Estimates must be higher than you expected. To take money which, by law, is allocated to the reduction of Debt and devote it to meeting your current expenditure is, in kind, exactly the same thing as if you were borrowing. If there is one thing that the Government have prided themselves upon it is that they would not borrow. Even to-day the Chancellor of the Exchequer has boasted again and again that this Government do not borrow for naval or military works, but he is doing the equivalent of borrowing for ships and he is doing the equivalent of borrowing for men, and if works have a short life so, in connection with naval matters, have ships or men an even shorter life. I do not find fault with what the Government are doing under all the circumstances of the case, but it becomes absurd for the Chancellor of the Exchequer to boast of the financial purity of his methods as compared with ours, or to sing again this song that the present Government never borrow for this purpose at the very moment when he is doing what is an exact equivalent. That much I am bound to say in criticism of the speech and of the attitude of the right hon. Gentleman and of his colleagues on this subject, but I do not want to dwell upon it because when the Government are doing a right thing on the whole I do not want to be hypercritical in what I have to say about it.
The other proposal, apart from debt, which the Chancellor now makes to us is that £500,000 should be lent to the British East African Protectorate and Uganda. I am not the person, if there are people in this House, to criticise that proposal. I am very glad that it should come from the party opposite. I am still more glad, and I am sure the Noble Lord (Lord Hugh Cecil), and the Noble Lord (Lord Robert Cecil) must have been as delighted as I was to hear the glowing eulogium passed by the Chancellor of the Exchequer upon the success of the Uganda Railway which was so much criticised by his party when the late Lord Salisbury proposed it and pressed it on, and the equally glowing account which he was able to give of the progress of these territories themselves—a progress which we foresaw and which we foretold, though at that time we did not enlist the sympathy of the right hon. Gentleman in the development of this country's Imperialist strength. Years of office bring wisdom in some matters at any rate, and we congratulate the Chancellor of the Exchequer on the change, and I, for my part, am quite ready to see this money temporarily diverted from the payment of debt, for that is all it is. It will come back again into the Exchequer through the Sinking Fund as the money is repaid, and, as has been done with similar debts on previous occasions, go back to the reduction of our own debt, having in the meantime served to develop some of our great Imperial States. I make no criticism of that though it is a novel proposal, but I do not quite understand why it could not have been included in the Budget statement. Still, I have no serious objection to its being introduced to us for the first time to-day.
With this exception, the Chancellor of the Exchequer is now prepared to let the rest of this money go to its proper legal purpose in the ordinary and legal course. That is a great improvement on his previous attitude. He might have made a perfectly unprovocative speech of a purely business character explaining proposals which would have commended themselves to everyone in the House, but he was conscious that he was eating his own words. He was saying that he was now doing what a week or two ago he declared he would not do, and what it has taken a great deal of pressure to make him do. I will not pry into the secrets of Cabinet life or ask what has passed among Cabinet Ministers of a persuasive character—what peaceful picketting there has been of the Treasury—to secure that these millions were not conveyed away from the purposes to which they are now allocated. But have not even these newspaper articles, which, I think, the Chancellor rather grossly caricatures and condemns in unmeasured terms, something to do with the change of front of the Government? Nothing but the pressure of public opinion, exercised on his own side and through his own side as well as from ours, and coming from critics on his own side as well as from ours, has, I am sure, sufficed to make the Chancellor of the Exchequer now tread the path of comparative financial wisdom and abandon the expectations and intentions which he obviously held when he discussed this matter in Committee. The Chancellor of the Exchequer has made a plea for fair treatment all round. I am not called upon to defend him against any newspaper criticism or to defend the newspapers from the criticisms which they make. Still less am I called upon to argue about articles which the Chancellor of the Exchequer describes in language which he is not prepared to repeat when challenged, and without giving name or authority for the statements which he made. But he has repeated to-day the defence which, as he frankly admitted, he has made on several occasions for the financial policy of the present Government. It consists in saying, "We, in our time, year for year, have reduced the debt by a larger figure than any other Government has done." Is that the whole of the facts which the Chancellor thinks material to a fair statement of the case? He is rebuking people who make one-sided statements. He is speaking with official responsibility and with the easiest access to all the facts. Does he really think that is a fair statement? What is the price at which he is buying Consols? How much cash does he need to provide in order to redeem £1,000,000 of Consols, and when, in all the years that he has surveyed, have any of his predecessors been able to reduce so much debt with so little actual cash?
Then look at another matter. The amount that you can afford to put to the reduction of Debt depends in part upon the amount of interest that you have to pay. Your fixed debt charge combines the amount which you intend to spend on the reduction of Debt and the amount which you are bound to pay to the creditors of the State as interest. The Chancellor of the Exchequer has the enjoyment of a low rate of interest, which had only just began to operate two or three years before we went out of office. All these are factors, and important factors.
Make allowance for them.
The Prime Minister does not expect me to make these calculations on my legs, or even to be able to make them whilst following the Chancellor's speech, but these are material factors which the Chancellor of the Exchequer left out of sight when appealing for fair consideration and professing to make a fair statement. But there is something more. When you are considering what the Government ought to be doing for the reduction of Debt, you ought to take account of the condition of the country, the sacrifices you can call upon the country to make having regard to its comparative prosperity or otherwise, and to the amount of taxation you are raising and the amount of new liabilities that you are creating. Has any Chancellor of the Exchequer ever thrown such heavy burdens upon future years as the two right hon. Gentlemen sitting opposite me have done? Has any Chancellor of the Exchequer ever raised Budgets to so high a figure? What is the proportion between the amount you are spending on debt reduction and the amount you are raising in taxation? Does that bear out your comparison with your predecessor? I think not, and certainly not if you are judged, as you ought to be judged, by what you deliberately provided for the reduction of Debt, and not by the windfalls which have come to the reduction of Debt owing to your mistake of estimating, either on the expenditure or on the revenue side. I quoted, on a previous occasion, a colleague of the right hon. Gentleman, who said, "The real criterion of the merits of the Government is the sacrifices which they voluntarily make to reduce debt." A great part of the reduction of Debt for which the Chancellor of Exchequer has taken credit has been a pure accident, which he never intended. It has been due to under-estimating his revenue and to over-estimating "his expenditure. The whole of this £6,500,000 is due to that cause to-day. When you come to the provision which he has deliberately made, and which is meant to be a continuous provision year by year of the present Government—the New Sinking Fund—the achievement of the right hon. Gentleman and his colleagues—I am not quite certain how much is to be attributed to the Prime Minister—
We raised it to a higher point than it had ever reached.
I think for the purpose of taking it down again. What the right hon. Gentleman did was to add £1,000,000 to it for one year—I think £500,000 one year and £1,000,000 the other—and he withdrew in each of those years £500,000 for other purposes. In any case he raised it £1,000,000 one year and £500,000 another year. I think that is so. It was raised to £28,500,000 one year and to £29,000,000 another year. I left it at £28,000,000. What is it at now? It is at £24,500,000. The right hon. Gentleman does not attempt to deny that he or his colleague took £3,500,000 off the £28,000,000 at which the Prime Minister found it. The actual provision for debt is, therefore, far less than his predecessors were making, and that is the real standard by which to judge of the right hon. Gentleman's zeal in this matter. When the right hon. Gentleman goes on to say that the fall in the price of Consols is not alone due to the inadequacy of the amount provided for the reduction of Debt I agree with him. I agree that it is extremely difficult to say what provision for the reduction of Debt would really bring Consols in a reasonable time to the figure at which we should like to see them. It is quite true, as he says, that great industrial activity generally means dear money and high rates of interest, and tempts people to invest elsewhere than in gilt-edged securities. It is quite true that we have great industrial activity at this moment, but it is true also that we have cheap money, and the peculiar feature of the present situation is that you have cheap money and cheap Consols.
The real difficulty about Consols at the present time is that owing to a variety of causes, and not a little owing to the finance of the right hon. Gentleman and his colleagues, nobody cares to invest in Consols, and there is no buyer in the market when the Government buyer is absent. When it was apparent that there was a surplus on the last financial year Consols began to make a movement, because it was thought the Chancellor of the Exchequer would have to devote £6,000,000 to their reduction. He nipped that in the bud, and since then they have reached a new low record. As long as people see that the Government is recklessly piling up future expenditure, and adding millions of liabilities on future years, and that the right hon. Gentleman is spending every penny he can get at a time of abounding revenue, and yet leaving these liabilities over to the future—as long as finance of that kind is accompanied with efforts, whether ultimately successful or not, to raid the normal provision For Debt, the Chancellor of the Exchequer cannot expect to see Consols reach the position as a security which they ought to hold. The right hon. Gentleman made an interesting comparison in the price of Consols now and forty years ago. I am not sure that it is an altogether satisfactory boast for the Chancellor of the Exchequer that our credit is to-day just what it was in 1872. It has been much better I think, and certainly if we compare ourselves with other countries—and that is the best thing to do in a matter of this kind—it is a very unsatisfactory position to be in. He took the case of Germany.
Why not?
Well, how about the United States? The United States Government, I think, was borrowing at 5 per cent. then, and it is borrowing at 2½ per cent. now. The credit of Italy has enormously increased, and in the case of France and Germany also their credit has enormously increased. Go a little further back if you do not like to take 1872. I admit that there were difficulties between France and Germany in 1872. Take Russia, I think it is the only great country in regard to which it can be said that our credit has improved in these forty years. It seems to me that that shows how lightly the Chancellor of the Exchequer deals with these matters, and how easily satisfied he is if he thinks he can make a party defence or a party score, and how little real interest he takes in the situation which confronts us and which causes concern to everybody who really studies the position of our national credit and thinks of the demands which may be made upon it. I feel bound to say so much on the spur of the moment in answer to what I might call the irrelevant matter which the Chancellor of the Exchequer introduced into his speech to cover his retreat. But I conclude by saying, as I did when I began, that with respect to the proposals as now put to the House, I am not going to quarrel. I do not think it is wholly satisfactory to pay what is after all extraordinary expenditure on the Navy only in the sense that it could not be definitely fixed at the moment when the Navy Estimates were introduced, but as to what is recurrent expenditure coming in ever larger figures in subsequent years, I do not think it is satisfactory to pay that out of money which ought to have gone to the Old Sinking Fund. The Chancellor of the Exchequer only takes £1,000,000 for that purpose, and although the proceeding is irregular, the object is good, and in these circumstances I am not prepared to criticise. The loan to Uganda and the British Protectorate will come back to the Sinking Fund after fructifying in the increased prosperity of those countries. The main portion of this surplus is to be devoted to what it always ought to have been devoted, namely, the Sinking Fund from which the Chancellor of the Exchequer tried, but failed, to take it away.
It is satisfactory to find that the right hon. Gentleman in the concluding observations of his speech is not an adverse critic on this occasion of the proposals of the Chancellor of the Exchequer. He seems to imagine that my right hon. Friend yielded to pressure which has forced him to alter his position in regard to this matter. I am not aware of any statement, either in the Budget speech of my right hon. Friend, or in any of his subsequent declarations, which indicated any other destination for any of these savings than the purposes to which he proposes they should be applied now. My right hon. Friend, I think wisely, said it was desirable to abstain from making a definite and final pronouncement on the subject until he had some experience of the working of the new financial year. We are now in the month of June, and our experience of the year is, I am glad, sufficient to enable us to say that the provision which at one time appeared to be necessary for a deficiency of revenue on account of labour troubles, will not be required. The statement made to-day by my right hon. Friend is, I think, in strict harmony with all the indications he previously gave as to the intentions of the Government. At any rate, it is a statement which, I am glad to say, meets with general approval in the House, and if I rise now it is for the purpose of offering one or two observations in reply to what has been said by the right hon. Gentleman (Mr. Austen Chamberlain) on other points rather than in confirmation and reiteration of what was said by my right hon. Friend. I may confess to the House that I am an old-fashioned financial purist. I have never changed my views in the least degree as to the manner in which the financial arrangements of this country ought to be conducted, and one of the doctrines of the financial purist is that, unless in very exceptional circumstances, the realised surplus of the year, as the right hon. Gentleman truly said, ought to be looked upon as money available for the reduction of debt. That is a sound general proposition, although it is one I am sure the right hon. Gentleman will be the first to acknowledge has been more honoured in the breach than the observance by his own political friends. I do not take the time that has elapsed since the South African War, but if you take the financial years immediately preceding—1895–6, 1896–7, 1897–8—you will find that in each of those years by far the larger part of the Old Sinking Fund was diverted and applied to purposes other than the reduction of debt.
There was a reason for that.
I am not saying whether there was a reason or not. The fact undoubtedly was that if you go to these particular years the larger part of the Old Sinking Fund was diverted. Although I hold that general doctrine, I think the circumstances are of a most exceptional kind. This realised surplus of £6,500,000 is due in an almost equal degree to two contributory causes. First of all, there was a very unexpected, and, as I believe, incalculable excess on certain items of revenue over the revenue which was foreseen at the beginning of the year. That accounts for about £3,000,000. In the next place, there were what are called savings, but what might be described as unavoidable underspending, on the public services, and particularly the Navy. That is to say, through no fault of the Admiralty, but largely owing to labour troubles, work which would have been accomplished during the financial year was at the end of the financial year still unperformed. I agree with the right hon. Gentleman that technically it is no doubt reborrowing, but I do think it creates a very exceptional position, and one may fairly say that if in the course of one financial year the country through circumstances which could not have been foreseen had to spend on the Navy less than that which it was prepared to spend, and which Parliament authorised it to spend, by something like £1,500,000, it is not an unfair thing to relieve the exceptional burden falling on the following year by diverting so much of the realised surplus to that expenditure. On that ground it appears to me that the exceptional circumstances justify the application of £1,000,000 to the Navy. I understand that the right hon. Gentleman does not quarrel with the way in which it is proposed to devote that money.
In regard to the part of the realised surplus which it is proposed to divert to Uganda, the case is, I think, a very simple one. The matter was not sufficiently ripe between the parties concerned for my right hon. Friend to bring it forward at the time he made his Budget statement. But when you look into the facts, I think you will all agree that it is a very profitable investment. A good rate of interest will be paid, the Sinking Fund will be provided for, and every penny diverted for the moment from the Old Sinking Fund will come back in the shape of repayment. I say nothing of the general grounds of the policy which it is desirable to encourage as far as we can, of developing the transport system of Uganda and East Africa, because I believe it is a matter on which there is absolutely no difference of opinion in any quarter of this House that this great staple industry of ours, the cotton industry, ought not to depend upon one single source of supply, and that as far as possible we should extend the area within which we can look for raw material. I pass from that to say one or two words on other topics which have been referred to. First, in regard to the reduction of debt, the right hon. Gentleman adverted, and quite properly and naturally, to the distinction between the Old Sinking Fund, which is more or less a creature of accident and fortune, and the New Sinking Fund, which represents the deliberate provision by Parliament for the reduction of debt. During the time I held the office of Chancellor of the Exchequer—I have been refreshing my memory just now on this matter—I raised the actual provision for the reduction of debt by one and a half million pounds.
One and a half millions per year?
Altogether. It was £28,000,000. It was raised to £28,500,000, and the next year it was raised to £29,500,000. That makes my statement accurate. In the course of those years I raised the annual provisions by one and a half million pounds. The result of that addition to the annual provision for the reduction of Debt was a saving which I think in any complete survey of the case ought not to be lost sight of, a saving to the taxpayer in interest on the National Debt of one million pounds a year, and the further reduction which has been made by my right hon. Friend since he has held the office of Chancellor of the Exchequer amounts to another million pounds a year; so that really the National Debt, in the shape of interest, is costing the Government to-day over £2,000,000 less than it did when we assumed office.
It was by increased reduction of Debt, and that was the whole object of the New Sinking Fund.
I agree, but I was pointing out that the burden of the National Debt, supposing you did not pay a penny off during the next ten years in redemption, the actual burden to the taxpayers was £2,000,000 a year less in the shape of interest than before we entered office. When you are considering what amount it is desirable and politic every year to devote to the reduction of the National Debt, of course it is most material to consider what is the burden in the shape of interest which you impose on the taxpayers of the country. I quite agree that when I raised the provision, as I did, to a figure which has never been known before, and has never been approached, £29,500,000—that was in the financial year 1907–8—I did so, and I told the House I did so, not because I thought that that was a figure at which the annual provision ought to remain, but in order that it might lay the foundation by the reduction of Debt in those years for expenditure which the Government contemplated at the time; in the first instance for old age pensions, and subsequently for other social reforms, and I think the hon. Baronet (Sir. F. Banbury) who has been a dose and acute critic of these things all the time that I was Chancellor of the Exchequer, will bear me out when I say that so far as I was concerned it was not because I thought that so high a figure as £29,500,000 should be permanently retained for the purpose of reduction of National Debt, that I raised the amount to that figure, but strictly and deliberately and avowedly with the object of providing a nest egg—it is an expression I do not care for, because there are all sorts of association with it, or they have since become associated with it; at any rate, I withdraw that expression, but I desired to lay the foundation for subsequent provisions for these and other social reforms. It was deliberately pursued with that object.
My right hon. Friend has been exposed to a great deal of criticism and obloquy, most undeserved obloquy I consider. His lot fell upon unhappy times, because he had to meet the bill, as it were, which I had drawn, and there came in at the same time, simultaneously with the new provision for old age pensions, large and unforeseeable demands in the direction of naval expenditure, on which I think both sides of the House were agreed, expenditure to meet demands made, indeed I might almost say with express insistency on both sides of the House, and which no responsible Government could neglect. That brings me to another point made by the right hon. Gentleman, and I was surprised to hear him make it. He spoke of our having recklessely piled up expenditure. As regards the main point, the taxation which my right hon. Friend has asked the House to impose has been taxation, not to meet the expenditure of future years, but to meet present expenditure. What was this expenditure? There were £13,000,000 for old age pensions, which I think it is commonly agreed on both sides was a wise expenditure and which is certainly an expenditure which nobody now proposes in any way to reduce; and roughly speaking, and using round figures, there were £13,000,000 for the Navy, which again was expenditure which was forced on the Government, which was also connected with the real interests of the Empire. In addition to that you have got £2,500,000 a year for expenses of the Insurance Act. That is the reckless piling up of expenditure so far as it has at present gone, and I do not believe there are any points of difference between both sides of the House with regard to that expenditure, as a whole, whether for old age pensions, for Navy, or for Insurance. It was expenditure which one will say that any Government which was alive to the great primary duties of all Governments in this country: first of all to maintain the defences of the Kingdom and the integrity of the Empire, and in the second place the prosecution of social reform, would not and ought not to have undertaken.
While the provision for that expenditure has gone on pari passu with this enormous reduction of Debt, though the process has necessarily slackened, and properly slackened, as I, when I was Chancellor of the Exchequer contemplated it would, during the succeeding years, yet during the last four years in which my right hon. Friend held office he has every year been paying off debt at a rate for which no country in the world affords any parallel at all; and while he has been imposing taxation, and, of course, in some respects heavy taxation, to meet this large and necessary addition to our expenditure for the purposes indicated a few moments ago, he has concurrently been paying off debt at a rate which though not quite so rapid as the rate of the immediately preceding years, will compare favourably with the procedure of any Chancellor of the Exchequer of any period of our financial records; and as my right hon. Friend says, and says truly, except during the three years under exceptional circumstances when I held the office, at a higher rate than any previous Chancellor of the Exchequer. How do we stand after that? The right hon. Gentleman, I am glad to say, did not indulge in the jeremiads which we have constantly heard in particular organs of the Press and on the platform, jeremiads which we heard as to the decay in trade and the decline in the credit of this country. As a matter of fact, trade was never more prosperous, if judged by all the criteria which we can apply. Looking at our trade oversea, or our Home market here, the trade of the country was never more prosperous and, I believe, never rested upon a sounder basis than it does at this moment. As to the credit of the country, my right hon. Friend has pointed out that, going back forty years, to 1872, when again we were at the crest of one of the highest waves in the whole history of our industrial prosperity, the credit of the country, measured by the price of Consols, is quite as good now as it was then. I quite agree that the credit of other countries has improved in the interval, and has improved proportionately more than our own. That is perfectly true. It is just as true, and, as we all remember in the Bristol controversy, it was frequently pointed out in that controversy, that while the rate of increase in the production at home and the export of commodities to foreign countries had increased in a greater ratio, say, in Germany and the United States of America, than here, we were so far in front at that time that it was really impossible to make any intelligible comparison between our position and that of other countries. I am not going into the controversial question as to how it was that we got such an enormous start. That we did get it is indisputable, and to suppose that we should always maintain the distance which then separated us from our leading industrial competitors, countries with the enormous un exploited and undeveloped resources, say, of Germany and the United States and other countries, with an intelligent, disciplined, and highly educated population such as theirs, every year improving their rates of industry and commerce—to suppose that we could maintain for all time the distance which separated us from them, was, of course, an illusion which time was certain to shatter. Surely it is a most satisfactory thing that while there has been this enormous progress, progress which we have no reason to envy, and which redounds, directly and indirectly, to our own benefit in the industrial position and financial credit of other countries, including our greatest industrial rivals, surely it is satisfactory to remember that our own credit has not declined, and that we can at this moment compare with the other countries of Europe and go into the market and borrow money as cheaply as or more cheaply than any of them! It appears to me that upon a review of all those facts there is nothing in our existing financial situation to cause the least disquiet, and my right hon. Friend's proposal to pay this large and unforeseen surplus, subject to the proper deductions which he has made, in reduction of Debt, is acting in strict accordance with the best traditions of our finance.
We have listened to the Chancellor of the Exchequer stating what he was about to do with the financial surplus, and we have heard the Prime Minister, with all the weight of his authority, blessing the Chancellor of the Exchequer's action and congratulating the House on having returned, though late in the day, to the financial purity in which the Prime Minister himself so firmly believes. I think it is only right that the Prime Minister should confer that blessing, because in the last year in which he held the great position which the Chancellor now holds he bequeathed many unpleasant legacies to the Chancellor of the Exchequer. In the first place, it is perfectly true that the Prime Minister kept the New Sinking Fund at a very high level during the two or three years he held the office of Chancellor of the Exchequer. He raised it from £28,000,000 to £28,500,000 in the first year and the next year to 29½ millions. During the last year he held that office he made a statement which put his successor in rather an unfortunate-position. He said in regard to the New Sinking Fund:—
"The time has come to justify a review of the situation. I do not think if I were in the Chancellor of the Exchequer's position that I should be justified in asking the taxpayers of this country to continue paying fourteen millions or fifteen millions per annum in further reduction of the Debt."
That was a distinct invitation to the present Chancellor of the Exchequer to cut down the rate at which the Prime Minister had kept the New Sinking Fund up to that date. I am not sure that was a fair position for the Prime Minister to put his successor in; but those are matters on which I cannot enter into a discussion this afternoon, but the Prime Minister said on the same occasion that in no year were old age pensions likely to exceed, but would probably fall short of, the sum of six millions. But now they stand at thirteen millions, and therefore the Prime Minister, who said that he had presented a Bill to his successor, and his successor had to meet it, presented a bill, not for six millions, but for thirteen millions.
Owing to the action of the House of Commons.
I should not be in order in discussing the why and the wherefore, but there remains the fact, SO I am justified in making that remark. The right hon. Gentleman said himself that he had presented a bill to the Chancellor of the Exchequer, and that the Chancellor of the Exchequer had to meet it. The Chancellor of the Exchequer has done the right thing, but he has done the right. thing in the wrong way. It is perfectly true that in years gone by many a Chancellor of the Exchequer has touched the Old Sinking Fund, but, when he has done so, he has stated his intention in his annual Budget statement; but the right hon. Gentleman the present Chancellor of the Exchequer held the Sinking Fund in mid-air, like Mahomet's coffin between earth and heaven, without announcing his intention. The great men of finance in the past always stated their object with regard to the Old Sinking Fund before they touched or tampered with it. The Chancellor of the Exchequer did nothing of the kind. Indeed, he put the surplus up to auction almost. No wonder he had a number of bids from all sides of the House. "There was money in it," as some one on the Front Bench opposite said in regard to the Welsh Disestablishment Bill. Applications were no doubt made by the Labour party, by the Navy party, and by people interested in other questions, and I do not think, from the point of view of the country, and from the point of view of the great position which the Chancellor of the Exchequer in this country always occupies, it was a fair position in which to put the country. It was the duty of the Chancellor of the Exchequer to know his own mind at the time of the Budget statement, and to state there and then the purpose to which he intended to dedicate the £6,500,000. When last the matter came up in Committee I had the honour of making a few remarks, and I said that so long as the money was dedicated to the Navy, irregular though it might be, I had no objection to it.
The great financiers of the past budgeted for the services of each year, which stood by itself; they tried to adjust the balance of estimated revenue and estimated expenditure as closely as they could, and no Chancellor of the Exchequer had any right to pat himself on the back if he had a large surplus at the end of the year. The New Sinking Fund, no doubt, directly depends upon the policy of the Government; but now they have cut it down by £3,500,000 as compared with the amount at which the Conservative Government left it when they went out of office in 1905. I agree that something between £50,000,000 and £60,000,000 have been paid off the National Debt during the last few years. But the more the National Debt is reduced, the worse Consols become. We have had a large amount of the Debt paid off, and one would have thought that Consols would have risen. They have not. They have gone steadily down year by year, until last week they were at almost the lowest point ever reached—76. What is the reason for that? There are many reasons no doubt; among them, partly, the enlargement of the area of trustee investments. Another reason is higher taxation. No doubt, in the old days, under lower taxation, men had more money to invest in the Consols market, where trustees invested money and so kept Consols up; but now, with more taxation, there are no longer those savings due to lower taxation. There are savings, of course, but they are no longer put into Consols. High Income Tax and high Death Duties, again, are further reasons for the fall in Consols. I do not know that the House realises that the Death Duties are bringing in something like between £25,000,000 and £26,000,000 every year. That means £500,000 per week to be paid in Death Duties, which entails a liquidation of stock. The money is not kept in the trouser pocket, or in a liquid state in the bank, to pay Death Duties on that colossal scale.
Therefore every week during the fifty-two weeks Stocks are turned into cash to the amount of something like half a million, which produces on the average the £25,000,000 that falls into the revenue. This disturbs the gilt-edged securities market, and disturbs Consols largely. Really, with the exception of Consols liquidated for Death Duties and the Consols the bankers have to hold for quick realisation, I do not believe that anybody goes into the Consols market except the Government broker. That is an extraordinary state of things. But for the Government broker, but for the banker, and but for the executor who has got to realise to pay the Death Duties, there is nobody today to support Consols. Why? I am driven to the conclusion that it is because of the policy of this Government, with its high taxation, and its general shaking of financial confidence, for there can be no doubt that financial confidence is shaken. Some hon. Gentlemen opposite have said, "What matter if Consols do fall?" I have heard hon. Gentlemen on the other side say, "Why do they bolster up Consols?" Do they realise what Consols mean? Consols mean the national credit. The more you knock down Consols the more you knock down the national credit. It has been said over and over again that Consols are the bellwether of the whole finance of this country. When Consols are falling all other bond investments follow. Look at Irish Land Stock, which has fallen to 74—it depends more or less on Consols. You will never get a high Irish Land Stock with low Consols any more than you will get any high gilt-edged stock with low Consols.
6.0 P.M.
Consols direct the markets. When there is this talk about bolstering up Consols, it should be remembered that we have to keep up the credit of the country. If you do not maintain the credit of the country everything falls, and the whole foundation of our financial system is shaken. The Prime Minister patted himself on the back and expressed his gratification at the splendid position of our country to-day. I wish I could think it. If we had a war—which God forbid—and we had to raise money on a large scale, Consols would fall to 50 and might fall lower than that. You can borrow money which is to go to the other end of the earth, but if you want to borrow money for some object in this country you cannot do it, or you cannot do it on any large scale. I do not think we are at all in a good position, and it is an alarming symptom that the more the Government broker goes into the market to buy up Consols the lower the National Stock seems to go. We must be thankful in these days for small mercies, and that the Chancellor of the Exchequer has at last discovered the wisdom of rehabilitating the Consols market in view of the enormous commitments of this country. I am glad that our expostulations on the Committee stage, and the expostulations of hon. Gentlemen on the other side of the House have borne fruit. I am not sanguine enough, or stupid enough, to think that much attention would be paid to our expostulations, but I have reason to know that considerable pressure has been put upon the Chancellor of the Exchequer by hon. Gentlemen on the other side who still have some regard for financial stability, and for the old rules of national finance. It is their protestations or exhortations that have induced the Chancellor of the Exchequer, late in the day though it be, to come down and express his determination to do the right thing in the matter of the Old Sinking Fund, and to carry £5,000,000 out of the £6,500,000 to the Old Sinking Fund, which is the proper receptacle for savings.
I thank the hon. Gentleman who has just sat down for the kind appreciation of any efforts which may have been made on this side of the House. I think it shows a great deal of good feeling that there are hon. Members on both sides prepared to give credit to men for honest and sincere intentions and pre-pared to show appreciation. I rise early in the Debate to say that I regret very much indeed to find myself so often apparently in opposition to the party to which I belong, but I again wish to say, it seems right surely, if my judgment, and that is all I have, tells, me that a certain course is wrong, then surely I should say so, and I now say so here. I cannot follow the right hon. Gentleman the Chancellor of the Exchequer in his Amendment, and I, for one, shall vote against it, and I hope there will be many others who will do likewise. The right hon. Gentleman the Member for East Worcestershire (Mr. Austen Chamberlain) in a very temperate and able speech, pointed out the way in which a great many on this side and on the other look on this question of the treatment of this surplus. I would ask the House to concentrate their attention on this point, that it is not a question whether we are in favour of an addition to the Navy we are asked just now to discuss, but, as the right hon. Gentleman said, it is a question as to the regularity of the treatment of the surplus. If further money is necessary for the Navy it can come in the form of a Supplementary Estimate, and we can then discuss it, but to take £1,000,000 away from this realised surplus of last year and use it for naval expenditure is vicious and essentially unsound and wrong. We have attacked hon. Members on the other side for borrowing loans for military and other works. The right hon. Gentleman the Member for East Worcestershire was perfectly justified and correct in stating that this taking of £1,000,000 of the surplus was to all intents and purposes a loan. So I think we are all agreed as to the unsound precedent of treating this million in that way. With regard to the last half million I am sure, though many on this side may think it was necessary and that it will prove a remunerative investment, that it is most irregular. If a loan is necessary for Uganda it should come before the House in the regular way and not out of the savings of the year.
The Budget ought to be for the immediate needs of the year. You try, as I understand it, to arrange your taxes to meet your future needs for the year before you. If at the end of the year you have a surplus over and above your immediate needs then the law provides, and common sense dictates, that that amount should automatically go to the reduction of the liabilities. If there is anything to be drawn from this enormous surplus, on which we congratulate the Chancellor of the Exchequer, surely it is that we may justly say that we are entitled now to have some relief of taxation! We might say we hear a great deal in these days of labour unrest, due I believe in large measure to the increased cost of living, and here is an opportunity to reduce the cost of living, perhaps by taking something off the tea or sugar taxes. Those are sensible demands to be met from a surplus unprecedented, I believe, in the history of the British Treasury. I listened with great interest to the speeches of the Chancellor of the Exchequer and the Prime Minister on this subject. The Chancellor of the Exchequer prides himself, and so does the Prime Minister, and legitimately, on the large amount of debt that has been redeemed during the present Government administration. I, for one, hope I shall always give credit to the Chancellor of the Exchequer and the Prime Minister for that reduction of debt, but, as was so well pointed out by the right hon. Gentleman the Member for East Worcestershire, the real test of your reduction of debt is not in the actual amount redeemed in the present Administration, but that you must have regard to the amount of your liabilities and to the increase of those liabilities. There is another point to which I would ask the attention of the House, and it is that a wise Chancellor of the Exchequer, in framing his Budget and adjusting his finances and drawing up his taxes, having regard to his liabilities, must have regard not only to the financial position of this country but to the financial position of the world. He must survey the financial world from a position of eminence, and he has access to a great amount of information not available to us. We have trade with and financial relations with the world.
If a banking house or financial house is about to launch a scheme that house has regard not only to the particular venture, which may be very sound and very attractive, but also must have regard to the condition of the money market. In other words, the venture may be right and sound, but it might not be expedient to launch on the market at the particular moment. I submit there are no different laws for national finance than for private finance, and, if anything, national finance is very much more dependent upon international finance, especially in the case of a nation which has the handling of something like £188,000,000 of money. Her obligations and her credit and trade with the world must in the nature of things affect every movement of the Chancellor of the Exchequer. I submit, therefore, that the Chancellor of the Exchequer, in addition to having regard to his taxation and liabilities and social reform schemes, must have regard to the state of finance throughout the world and to the amount of loanable capital throughout the world. It has been well said that we have paid off more debts than, comparatively speaking, other countries, but in comparing ourselves with other countries we must have regard to the conditions which prevail in those countries. One right hon. Gentleman on the other side mentioned the great improvement in the credit of America. We must, however, have regard to the fact that in America the conditions were not so favourable years ago. America has finally adopted the gold standard and is able to borrow at a much lower rate than it fomerly did, and, therefore, I think the statement that our credit suffered as compared with America for that reason falls to the ground. In the last six years there has been a great transference of what is called "fixed capital" into floating capital. It has been well said that there has been a great demand for capital and a great refunding and funding of debt.
We have had a great number of wars for the last ten or twelve years. We have had the Russo-Japanese war, the Spanish-American and South African wars, and other wars, all of which have used up the loanable capital of the world, thus reducing the supply. The mere fact that you pay off an amount of debt in your country, though admirable in itself, must be done having regard to your future, and to the financial position of the world as a whole. When you find that Germany is still increasing her liabilities, and has built and is building a large navy largely out of borrowed capital, and when we know that a great war is still going on between Italy and Turkey, using up an immense amount of loanable capital, and when we know there is great activity in trade and great liabilities for social schemes, which we believe in, but which cost money, then I submit that a wise Chancellor of the Exchequer does not pride himself on what he has done during the last five years; but having regard to all these circumstances, he ought to consider what we ought to do at the present moment. The very expansion of trade calls for a greater amount of loanable capital, and we are in that period of great activity with loanable capital scarce. New loans have in many instances of late been left in the hands of the underwriters. Although there is great wealth that is a comparative term, and we must have regard to what that wealth is, and whether it is going into railways abroad and for the development of the world generally, all of which is admirable, but which calls for an immense amount of loanable capital.
It is no satisfaction to us to know that an immense amount of our capital is invested abroad. We have as wise men to have a proper financial reserve as well as the other defences. In case of a great war as well as those defences we would require a great financial reserve. Therefore I submit that the supreme importance of using the surplus for the reduction of debt, is an argument which should appeal to every Member of the House particularly on this occasion. The right hon. Member for East Worcestershire (Mr. Austen Chamberlain) did not commit himself to the support of this Amendment. I think his words were that he had not much objection to it. The question we have to decide is not whether this expenditure is necessary or unnecessary. That question will arise when supplementary estimates are presented, and can then be discussed on its merits. We have to decide now whether we will be parties to the taking away from the Sinking Fund of a certain amount of money which ought to go to the redemption of debt, thereby establishing a vicious precedent, whether the money be used for naval or any other purpose. I think that is a perfectly logical position which ought to appeal to the House generally. We have heard a great deal about the fall in Consols. That question, together with the redemption of debt, ought particularly to appeal to the Labour party. It is not really a rich man's question or one concerning only bankers. The redemption of debt is a great social service. It was said of Mr. Gladstone that he was not much of a social reformer because he placed so much emphasis on economy, the reduction of debt, and peace, retrenchment, and reform. The redemption of debt is one of the greatest social services in which a Government can engage. Members of the Labour party may ask how it benefits them or the working classes. The setting free of £5,000,000 as the result of this wise action on the part of the Government, will increase the lending capacity of every bank in the country. It may not have a great effect, but it will certainly have some effect on the Money Market, and will probably increase the value of the assets of every bank. Thus their lending capacity will be increased, and this will help on the expansion of trade in which we all rejoice. As trade expands the area of employment is enlarged, and the working classes are benefited by a greater demand for their labour.
I had hoped that in this Budget we might have some reduction of taxation on either sugar or tea. We are rather apt to fix our eyes upon great schemes of social reform. I hope that I am a keen social reformer. The method of social reform that I am now urging may appear humdrum and unattractive, but I assure the House it is well worthy of attention. For the accumulation of wealth there is no other law for nations than for individuals. If you wish to accumulate wealth you must either spend less than you make or make more than you spend. The same rule applies to nations. With regard to the improvement which might be achieved through the reduction of taxation, there is a prevalent belief that it is a great advantage to tax the rich man for the benefit of the poor, and that the best way to improve the condition of the people is to take from the rich and give to the poor. I certainly believe that when you have to face a burden the load ought to be placed on the shoulders of those who are best able to bear it. But on general lines taxation in itself is not an advantage. Our supreme endeavour should be to reduce the burden of taxation. Mr. Gladstone said that if you wish to benefit the working classes you must operate not only on the articles which they consume, but also upon the trades in which they are employed. If you relieve burdens by reducing taxation you stimulate trade and thereby increase employment. Wealth is a relative term. Suppose a man in Yorkshire has large mills and is making a great income; he may be a very wealthy man on paper, but if through unwise national finance or unwise action on the part of the Government of the day his industry is burdened, the wealth-producing capacity of his mills is reduced and he is not able to employ so many men. Therefore to think that you can take the wealth from one man and give it to another is largely a delusion.
On a point of Order. The question before us is whether or not the realised surplus should go to the redemption of debt. The hon. Member is now arguing whether it is wise to take money out of the rich man's pocket in order to give it to the poor man. I submit that that has nothing to do with the question before us.
The hon. Member must confine his remarks to the question immediately before the House.
My object was to show the importance of using the surplus for the redemption of debt, and trying to reduce taxation in future. In conclusion, I would draw attention to the supreme importance of the issue before us. I am glad that the right hon. Member for East Worcestershire, who has described the action of the Chancellor of the Exchequer as a most irregular proceeding, has now returned. If the House will allow me, I would repeat what I said just now in his absence.
The hon. Member is not entitled to repeat his speech.
I meant only my concluding argument. I hope, however, that the right hon. Gentleman, who has admitted the irregularity of the proposed proceeding, will support the protest I have made, and that both sides will vote against this Amendment.
All who care for the financial stability of the country must be glad that the Chancellor of the Exchequer has found salvation, even though it be rather late in the day, and has placed the £5,000,000 to the credit of the Sinking Fund. It is, however, a very poor compliment to the right hon. Gentleman that almost universal surprise should have been excited by his action. I do not think the pride and self-congratulation of the Prime Minister and the Chancellor of the Exchequer are quite justified, seeing that, after all, they have merely carried out the elementary and primary duty of every Chancellor of the Exchequer. The remarks in reference to Consols made by the Chancellor of the Exchequer in introducing this second Budget require some comment.
The right hon. Gentleman seemed extremely annoyed with Members on this side of the House, and with the Press which supports us, for trying to make party capital out of the recent depreciation of Consols. In all the speeches of which I have listened on this question I have never found any effort to make party capital out of the position. Everybody has seemed to realise that the important thing is to find out the cause of the depreciation, and, more important still, to make the Chancellor of the Exchequer realise that the depreciation is a serious matter. Our position is that the price of Consols is the great barometer of the national credit. We know that that credit has suffered very severely during the last few years, and the fall in the price of Consols represents a weakening tendency in the national credit. We contend that it is the duty of every Government to do the best they can to stop that fall and to keep up the credit of the country. The Chancellor of the Exchequer seems to ignore the fact that the fall in Consols may be a danger to our national stability. He repeats continually that our credit is still superior to that of any other country in the world. So it is. I am proud to admit it. I should be the last person to decry the national credit of this country. I am glad to say that we can still go into the market and borrow money at a cheaper rate than any other country, with the possible exception of France. But the Chancellor of the Exchequer must not forget that our credit has tended during past years to depreciate more quickly than the credit of our foreign competitors. For instance, at this moment, French Rentes pay £3 4s. per cent., whereas Consols pay £3 5s. 9d. That is to say, at this moment, taking the premier securities of France and of this country, and comparing them on the basis of the yield per cent., which is the only fair basis for securities of this sort, the credit of France is slightly better than the credit of this country. The Chancellor of the Exchequer, on the Committee stage, in April, speaking of the price of Consols, said:—"Let them go to market for foreign Two-and-a-Half per Cent. Securities; do they really think they will get anything like the price that they will get for Consols?" Well, those figures which I have just read of the price of French Rentes show that the Chancellor of the Exchequer must have forgotten to take them into consideration, for at this moment French Rentes stand higher in comparison than Consols. The Chancellor of the Exchequer has given a great many reasons for this fall in Consols. He has taken great pains to rebut the arguments which we have brought forward. He said at a luncheon which he attended that the price of Consols had nothing to do with the redemption of debt. I should like to draw his attention to the movements of Consols during the last few weeks. Consols have been—as they generally do now—creating fresh low records. On Wednesday last Consols finished at 75 15–16ths. The following morning a notice appeared in the "Times" from their Parliamentary Correspondent which hinted that the Chancellor of the Exchequer might possibly give part of this surplus to the redemption of debt. What was the immediate effect upon Consols? By twelve o'clock Consols had risen over half a point. I do not think, in view of that, that it can possibly be denied that a very small alteration in the policy of the Government in the redemption of debt has a very great effect indeed upon the price of Consols.
The Chancellor of the Exchequer takes enormous credit to himself for the amount of debt which he has paid off—and, I think, quite rightly. At all events, the Prime Minister, his predecessor in office, did pay off a considerable amount of debt. But I think, in fairness, when the right hon. Gentleman is comparing, as he generally does, the efforts of the present Government with the efforts of their predecessors, he ought to take into consideration the difference in the price of Consols during the two Administrations. For instance, I find that during the years 1895–99—that is before the war—that £31,500,000 in cash was spent by the Unionist Government in the redemption of Debt; and that money redeemed only £29,000,000 of debt—that is to say, less debt than the Government paid cash; whereas during the years 1906–12, while hon. Gentlemen opposite were in office, £65,000,000 of cash—which I admit is a very large sum—redeemed £68,500,000 of debt. Therefore I think that should be taken into consideration when the Chancellor of the Exchequer is preening himself about his debt reduction. The argument which we had last from him was that the financial policy of the Government has little to do with the fall in Consols, and that really what was responsible was the widening of the scope of trustee investments. Everybody admits that that has had something to do with it. But I think it is impossible to give that widened scope such great importance as do the Chancellor of the Exchequer and other speakers on the opposite side of the House. They seem to suggest that before 1893 Consols were the only security which trustees could invest in. Let me point out there were other trust securities bearing a higher rate of interest in which trustees invested in preference to Consols. They invested in India Securities, bank securities, and stock, railway debentures and preference stock, and the securities of certain large municipalities. Therefore the extension of the scope of trustee investment cannot have been solely directed against Consols. I do not think they affected Consols—I think experts will agree—to anything like the extent that is claimed by the Chancellor of the Exchequer.
The right hon. Gentleman has given us a new line to-day; he now says that the fall in Consols is entirely due to the goodness of trade—that is to say, entirely due to dear money. Everyone agrees that when you have cheap money that these gilt-edged securities rise. But since 1896 there have been frequent periods of cheap money without the tendency asserted. Finally, I think when we praise the Chancellor of the Exchequer—as we rightly do—for having put aside this money for the redemption of debt, and when he prides himself for being the greatest financier known, I think he ought to take into consideration the different circumstances of the case when he is comparing his efforts with those of his Unionist predecessors. First it ought to be considered that this Government most certainly ought to effect a greater redemption of debt than did their predecessors in view of the fact that they had a great deal more debt to redeem. [HON. MEMBERS: "Hear, hear."] I quite agree that it is open to hon. Members opposite to say that that debt was imposed upon the country by hon. Members on this side; but I do not propose to argue the rights and the wrongs of the South African war. At all events, we can say that the Unionist Government of the day had, whether rightly or wrongly, to fight a great war. That war naturally entailed a large increase in debt. The obvious duty of any Government which followed after the war was to make very large reductions in the National Debt. I think it is instructive when we are considering that to see exactly what this Government have done and what the last Government did in regard to this debt reduction, taking into consideration also the very important factor of the rate of taxation. During 1905–11 the revenue of this country has gone up 21 per cent.; Death Duties and capital taxation has gone up 47 per cent.; Income Tax 42 per cent. That has been the result of the financial system of the Chancellor of the Exchequer.
Now we come to this much vaunted debt reduction. During the period I have given the sum set aside for the reduction of debt has decreased by 12 per cent., whereas the actual amount of the Sinking Fund applied to the reduction of debt has decreased by 20 per cent. I am excluding the sums which come under the Old Sinking Fund, like this £5,000,000; for as has been pointed out, this is not the result of the wise financial policy of the Chancellor of the Exchequer, but is simply to be regarded as a windfall. The actual sum set aside for the service of the reduction of debt is less to-day than it was in the last year of the Unionist Administration, and during that time the capital taxation of the country has increased to an enormous extent. We know, too, that the future commitments of the country have increased to at least an equal extent. Therefore I think these matters ought seriously to be taken into consideration while we are reviewing the financial position of the country. That is all I have to say on the question of Consols and the Sinking Fund. I would like to make one suggestion to the right hon. Gentleman opposite, one that I ventured to make before, and that is that now this Sinking Fund is going to be applied to debt reduction, that he ought to apply the major part of it to the reduction of the funded, as opposed to the unfunded, debt. I am quite aware that it is sound financial policy to redeem your unfunded debt first. I am quite aware of that, because, of course, there is always the serious possibility that you might be caught in a big war, in a big financial crisis, just at the time when a large amount of your terminable annuities fell due for redemption. But I think, when we realise that during the past six years the rate of the redemption of the unfunded debt has been out of all proportion greater, considering their amounts, than the rate of the Funded Debt, there is something to be said for my suggestion. Since 1906 £32,000,000 of Funded Debt have been repaid, whereas £26,000,000 of unfunded debt have been repaid. There are £602,000,000 of funded debt and only £39,500,000 of unfunded debt. When we consider this comparison I think it will be realised that the Government have paid off unfunded debt to a much higher figure and at a quicker rate than funded debt. If you are going to make an improvement in the price of Consols it is very essential that this £5,000,000 should be put, to as large an extent as possible, to the payment of the Funded Debt of the country. I do not for one moment desire to pose as an expert, but I think the House will agree that if you are going to take this £5,000,000 entirely to pay off Exchequer Bonds which fall due this year, you may ease the money market, and possibly create a rise in Consols, but that is a, very small thing in comparison with the effect upon Government securities, which must be brought about if the Government take the bold step of employing the major portion of this sum towards the redemption of the funded debt. In conclusion, I think we must feel that hon. Members on that side, as well as hon. Members on this side of the House are very much to be congratulated in having persuaded the Chancellor of the Exchequer at last to realise what his duty is, and to take some slight interest in financial stability.
I think it is only fair to do justice to the remarks of the hon. Gentleman who has preceded me, and to recognise the fairness with which he has put his case. His admission that the credit of this country stands higher than any other—[HON. MEMBERS: "He did not say so"]—is a perfectly just and a true one, and is founded upon fact. May I say to him that his instance of France is not borne out by the fact, because the Government of France borrowed money the other day for a railway loan, and they had to pay 4 per cent. for it. His view as to the credit of France does not coincide with that of the French Government, for they themselves felt they could not borrow except at 4 per cent. The hon. Gentleman rightly pointed out what many speakers on the opposite side of the House do not recognise—that is, that the National Debt is not alone Consols. The hon. Baronet opposite (Sir F. Banbury) must know perfectly well that if the Government during the last six years had redeemed £78,000,000 of Consols the price would have been much different from what it is at the present time. When we speak about the reduction of debt, it is the ordinary thing to associate it with Consols, but as a matter of fact very few Consols have been bought at all. [HON. MEMBERS: "Hear, hear."] Yes, but let me finish. The hon. Gentlemen who were responsible for the finances of the Transvaal war took very good care that it should not be so. Hon. Gentlemen raised money in the form that it was not necessary to redeem. Of the Transvaal loan I think, £30,000,000 fell due during the period that the present Government was in office, and had to be paid off. Therefore £30,000,000 of debt, which was necessary to be paid off, was paid off, because we owed it, and the Government was thereby prevented from buying Consols. The right hon. Gentleman the Member for East Worcestershire borrowed £10,000,000 sterling in the form of Exchequer Bonds, and in order that Consols should not be paid off, he borrowed it in the form of £10,000,000 for ten years, one million to be paid off each year. Consequently the Liberal Government, when they came into office, found themselves confronted—
The hon. Gentleman does not speak quite fairly of what I did. I do not know whether he is under the impression that I borrowed a further sum of £10,000,000. If so, he is mistaken. I was confronted by the necessity of making provision for £14,000,000 which fell in. I paid off £4,000,000. and I reborrowed the other £10,000,000. It is quite true I set aside a special Sinking Fund and provided that that sum should be repaid at the rate of £1,000,000 per annum out of that Sinking Fund. That was in order to secure that the repayment should be made regularly, and that it should not be in the power of anyone to divert that money from its proper purpose.
The right hon. Gentleman confirms what I said, namely, that he took very good care that the Government should not redeem Consols with the money in hand; and now he reproaches the Government on account of the low price of Consols, because they have not been buying Consols when he himself prevented them by causing that £10,000,000 to be redeemed at £1,000,000 a year.
I did not reproach the Chancellor of the Exchequer, in the first place, for not buying Consols; in the second place, I did not prevent him from buying Consols. The provision the hon. Gentleman is alluding to only referred to the additional sum of £1,000,000.
And to the extent of £1,000,000 a year the Government was obliged to provide money to redeem his Exchequer Bonds instead of buy-in Consols. As the hon. Gentleman who preceded me has pointed out, the price of Consols depends upon the presence of the Government broker, and he gave as an instance the paragraph in the "Times" when they went up ¾ per cent. I think I am, justified in pointing out that the Conservative Government took the very steps necessary to produce a fall in the price of Consols. I go further. They also raised for the South African war an enormous floating debt, larger, I think, than at any time in the history of the country. The present Chancellor of the Exchequer and the Prime Minister, who preceded him in that office, found themselves confronted with the fact that instead of being able to buy Consols with the surplus each year they were bound to redeem the floating debt of the country; so that not only was there the Transvaal loan to be redeemed, but the Exchequer Bonds and the floating debt of the country also had to be redeemed, legacies left from the previous Government; and these Gentlemen have the face now to come and reproach the Liberal Government for what they have done in the last five years during which they were obliged to redeem these very debts.
I am quite prepared to admit the theory advanced from the other side that it was the business of hon. Gentlemen opposite to increase debts and it is our business to pay them off; but I think they might at least give us the option as to which debts we are to pay off. When they talk about the price of Consols being the barometer of the credit of the country, I say the barometer is the debt we paid off at par. We had to pay £100 for £100 of debt. When you talk of previous Chancellors redeeming the debt at a loss, I would point out that we had to pay off previous loans—Exchequer Bonds and a floating debt at £100, paying a sovereign for a sovereign. Hon. Gentlemen opposite have now the face to come here to the House of Commons and say the price of Consols is low and that that is the barometer of the credit of the country. The barometer of the country is the debt we paid off amounting to £78,000,000, a very small proportion of which is Consols. I am quite prepared to take Consols as the barometer of the credit of the country now, when we have cleared off the urgent debts. The surplus accumulated in this country will doubtless be applied to the purchase of Consols in the future. A very large proportion of the surplus in hand will be applied to the purchase of Consols, as we have now no pressing debts of a floating character that need be bought off. I would like to point out to the hon. Gentleman opposite there was no accident credit in recent years. There has been no serious default upon the part of any great country, and the safety afforded by Consols in the past is now a very important part of the credit of this country.
The price of Consols has been affected by the higher interest people have been able to obtain over and above this security in other directions and in the large scope of their investments in which trustees are enabled to make investments to-day. Nevertheless, the fact remains that, as was stated by the hon. Gentleman opposite, that with equal terms and equal rates a great number of people, whether in this or in a foreign country, prefer British security to any other. We hear a lot about the large amount of English capital invested abroad, but we hear nothing about the very large amount of foreign capital invested in this country. Hon. Members would be surprised if they could only ascertain the very large amount of foreign capital that is invested in this country by foreigners on account of the security offered. Several countries are offering 4 per cent., and in many instances 5 per cent., almost on equal security with British security; but should any of these countries be found failing to meet their obligations the public would take fright and will be satisfied once more with the interest on Consols in consequence of its great security. The hon. Gentleman opposite did recognise that fact. And I think it is only fair that hon. Members opposite should recognise that with equal terms and the same rate of interest British securities command preference from investors to any other.
The hon. Gentleman who has just sat down has made some extraordinary statements, because the hon. Gentleman ought to know what he is talking about. The hon. Gentleman knows the position of the Government, and why he should have made these extraordinary statements that have not a vestige of foundation in fact is really past belief. The hon. Gentleman says the credit of the French Government is founded upon a basis of 4 per cent. He says the French Government could not borrow except at 4 per cent., and he says that is so because lately they borrowed at 4 per cent. They have done nothing of the sort. The French Government committed a financial error in regard to a small loan that was made to a private railway company. The company issued it at 4 per cent., and the French Government very foolishly guaranteed it, with the result there was a fall in French Rentes. I am quite certain they have risen again. It was recognised everywhere in financial circles in France—and the hon. Gentleman knows quite as well as I do, if not better—that the French Government could borrow now at something like 3¼ per cent. and not at 4 per cent. Then the hon. Gentleman goes on to tell this House that there are large sums of money sent from abroad and kept here for security. The hon. Gentleman knows as well as I do that twelve or fourteen years ago very large sums were sent, and the hon. Gentleman knows that in the last six or seven years these sums were reduced by very large amounts. He knows that quite well. He presumes, I will not say on the ignorance, but on the want of knowledge, of hon. Members. [A laugh.] What does the hon. Member who laughs know about banks. I do not say that in any offensive sense. It is a fact: that the majority of the Members on this side of the House—as well as upon the other side—are not conversant with the statements which the hon. Gentleman has made, and that one or two of us who have been in the city know. I do not want to say anything that may be deemed to be offensive. There are professions followed by hon. Gentlemen upon this side of the House and upon the other side of which I know nothing, and I should not be able to contradict statements made by them in reference to those professions. I do know something about the question under discussion. And I venture to repeat that the hon. Gentleman has made statements which are inaccurate and which cannot be substantiated.
I do not think I should have risen at all, only that the hon. Gentleman had spoken. I wish to say that, although I appreciate-very much the courage of the hon. Member for Coventry (Mr. D. M. Mason), and agree with nearly every word he has said upon financial questions, I am afraid I cannot agree with him at present. I do not think it would be good policy or wise for anybody to vote against the proposal of the Chancellor of the Exchequer in giving £5,000,000 for the purpose to which he is devoting it. We are extremely lucky to have got so much. Although I do not want to know whether the Chancellor of the Exchequer is a repentant sinner, or whether he is doing now what he always intended to do, the fact remains that he is doing more or less the right thing, and in these circumstances I will support him. With regard to the question whether this money should be employed for the redemption of funded or unfunded debt, I would say that not a single Member upon this side of the House has said that in the past it was not right to redeem unfunded debt. All my hon. Friend (Mr. Mills) said was that during the past six years to a very large extent it has been redeemed, and that now at the present moment, after you have redeemed such a quantity of unfunded debt, would it not be wise to take notice of the fact that you can now buy £100 of Stock for 76 per cent., and so redeem part of the unfunded debt? I agree the Chancellor of the Exchequer took the right course up to the present moment; but I think, in view of the very low price of Consols, and seeing that he has redeemed such a large amount of unfunded debt, he might now change his policy and redeem some of the funded debt.
7.0 P.M.
I should like for a moment to deal with what the Prime Minister said. The Prime Minister and the Chancellor of the Ex-chequer pointed out that in 1896, 1897, and 1898 the Sinking Fund was encroached upon. That is perfectly true, but it must be remembered that in those years Consols stood at between 112 and 114. A very large number of people with financial experience at that time said it was not policy to give £112, £113, and £114 for £100 worth of Stock, and that had a great influence on the action of Lord St. Aldwyn. I have not referred to the authorities; but I believe I am right in saying that at that time the expenditure of the country was not more than £120,000,000, the Income Tax was about 8d. in the £, and the whole situation was entirely different from what it is now. I believe the National Debt was then about £620,000,000. I do not quite agree with the Chancellor of the Exchequer when he complains that certain financial papers have not treated him fairly. I have not read any of the statements the right hon. Gentleman alludes to; but the complaint of the right hon. Gentleman is in regard to the amount of debt he has redeemed. I think that amount ought to be considered in view of what my hon. Friend has said, that owing to the low price of Consols he has been able to redeem a much larger amount than his predecessors, and it should also be considered in view of the fact that, though a large amount of the Sinking Fund has been redeemed our national indebtedness has been increased to a very large extent. I am not concerned to argue as to whose policy it was, whether it was the policy of hon. Gentlemen opposite or of hon. Members on this side of the House. At the present moment I am only concerned to deal with facts, and while it is true that in those years the Chancellor of the Exchequer has redeemed I think some £78,000,000, it must be remembered that very large commitments have been made and the indebtedness of the State has been very considerably increased. There is an addition to Irish Land, and something like £20,000,000 during the past five or six years has been added to Irish Land indebtedness.
Irish Land is not National Debt.
Here is another extraordinary statement from the hon. Gentleman opposite, and I really must give him a lesson in finance. The funded debt is secured upon the Consolidated Fund, and every individual in this country is liable for the funded debt, not only for the interest but also for the capital. If the hon. Gentleman opposite will refer to the Irish Land Act of 1903, he will find that Irish Land is secured in exactly the same way as Consols, no better and no worse, ranking pari passu with Consols and on the Consolidated Fund. But Irish Land has this advantage that Consols have not, that it has Irish Land behind it. I know that is not worth very much, because it stands lower than Consols. It yields about £3 13s. 6d., and Consols about £3 5s. 9d. I think I have shown that the interruption of the hon. Gentleman was not very apposite, I was dealing with the great increase in our national indebtedness, and I was pointing out that the increase on Irish Land was something like £20,000,000; but there has been another enormous increase, and that is in reference to old age pensions. I am not now dealing with the question whether these pensions are right or wrong, because that has nothing to do with this question. Incidentally, I may point out that I voted against Irish Land on the Second and Third Readings. Old age pensions now cost £12,000,000 a year. That means a capital sum at 3 per cent. of £400,000,000 sterling, and that has been added to the liabilities of the nation during the last five or six years. That may be right or wrong, and I do not want to argue the point; but you cannot get away from the fact that you are liable for that sum, and while you are liable for an enormous sum like that, amounting to a capital sum of £400,000,000, it is childish to talk about the redemption of financial debt to the extent of £65,000,000 in five or six years as being a very great feat.
I agree that the real method of reducing debt is the New Sinking Fund, and not the Old Sinking Fund, and it is the New Sinking Fund which has been depleted by the Chancellor of the Exchequer. The Old Sinking Fund is merely a windfall that may or may not come into the hands of the Chancellor of the Exchequer. It is not always the clever Chancellor of the Exchequer who gets a large sum for the Old Sinking Fund. The clever Chancellor of the Exchequer has neither a surplus nor a deficit, and if the right hon. Gentleman will consult the great authorities of the past he will find that the true sign of a good Chancellor of the Exchequer is correct Budgetting, and the Chancellor of the Exchequer has not distinguished himself in that particular direction. I was pleased at the right hon. Gentleman's repentance, but I hope the right hon. Gentleman will not content himself by being so very pleased that the finances of this country are not worse than those of other countries. The Prime Minister said that the credit of other countries has improved since 1872, and that in that year our credit was in such an exceptional position that we have not been able to maintain our enormous advantage over other countries on account of certain developments of territory. I should like to point out that even Spain is in better credit than she was forty years ago, and Italy certainly is, and I am not sure that Turkey may not be included. I do not think there is much to congratulate ourselves upon in this respect. I should have preferred that the Chancellor of the Exchequer would have been able to say that not only in the old days was our credit vastly superior to other people, but that we have maintained that position and even advanced, and that is what we ought to have been able to say. Never mind whose fault it is, but let us do something to remedy it. I admit that what the Chancellor of the Exchequer has proposed is a step in the right direction, and I hope he will do the same thing in years to come. I am afraid, however, that by the shake of his head he has been persuaded in another direction, and I am inclined to think he will revert to his evil ways. I am pleased to think that such a humble Member of this House as myself has been able to do something to persuade the right hon. Gentlemon to enter upon the new course he has taken.
I am not going to de-Vote my remarks to the special reasons which have fallen from hon. Gentlemen who have taken part in this Debate. Some of the speeches delivered this afternoon I have heard upon innumerable previous occasions, and a plain man who knows nothing about the methods of financial jugglery might be led into thinking there was something in those statements, were it not that a fall in Consols appears to be quite obvious, even to a man like myself, because in the last half-dozen years there has been an unfathomable expansion of trade throughout the world, and an extraordinary demand for additional capital in opening out new countries. Consequently it is only reasonable to expect that when various sound commercial investments can be obtained giving a return double the amount we have had for Consols people are going to prefer 5 per cent. interest for their money instead of 2½ per cent. I rose mainly for the purpose of assuring the Prime Minister that with regard to the purposes to which the Chancellor of the Exchequer proposes to devote this surplus there is at least one exception. I cannot approve of two out of three of those objects. As the Member for a Lancashire constituency which consumes more raw cotton than any country in the world I cannot but look with approval upon the proposal to grant a loan for the development of cotton growing in East Africa. With regard to the two other objects I take exception. I object wholly to the proposal to give £1,000,000 to the Navy and the remainder to the reduction of debt. I am afraid I cannot congratulate the Chancellor of the Exchequer upon having this sum to dispose of at all.
It seems to me there can only be three reasons for an enormous surplus: (1) That there has been deliberate underestimation of revenue; (2) deliberate or careless mistakes in the estimate of expenditure; or (3) that there has been a large addition to the revenue from some cause which could not have been foreseen. If the surplus had been derived from the third course, although we could not congratulate the Chancellor of the Exchequer upon his wisdom, at any rate we might have been able to congratulate him upon his good fortune. In this case I do not think the surplus has been due to causes which were not foreseen when the Budget of more than twelve months ago was framed. It is due, as the Chancellor of the Exchequer himself said when making the Budget statement, to the remarkable prosperity of the country. The remarkable prosperity of the country during the twelve months was a thing which everybody expected eighteen months ago, and the Chancellor of the Exchequer ought, therefore, to have known what the probable receipt from the taxes of the country was going to be. There is one fact I would like to point out. The surplus from revenue, which is about half the total surplus, is derived mainly from the excess of Excise Duties, and the Excise Duties are paid to the extent of four-fifths of their receipts by the working classes upon tea, sugar, spirits, and tobacco. Therefore, seeing the Chancellor of the Exchequer eighteen months ago would know, in view of the certain trade prospect for that year, that Excise would be likely to yield more than he stated, he, in my opinion, imposed upon the working classes of the country a taxation which was not warranted by the estimated expenditure.
The hon. Gentleman says it was generally foreseen. May I remind him that the Leader of the Opposition, on the Second Reading, challenged my estimate with regard to trade, and I am not certain the hon. Gentleman himself did not do so; at any rate, several hon. Members on this side of the House thought it was much too sanguine.
When the Chancellor of the Exchequer has to rely on the Leader of the Opposition in order to support his position—
I did not rely on the Leader of the Opposition; on the contrary, it was my own estimate. I merely reminded the hon. Member that it was challenged by the Leader of the Opposition, and that there were several other hon. Member's on this side of the House who thought I was too sanguine.
The Chancellor of the Exchequer is now using the statement of the Leader of the Opposition in order to refute me, but he will not deny that in the Budget statement of last year he anticipated a very prosperous trade year, and, I repeat, it was a thing which was generally known. We had then been in the boom only for about twelve months, and everybody knows a trade boom is not expended in twelve months' time. I will pass on very briefly to the reasons why I cannot support the proposal to devote part of the surplus to the Navy and the rest to the redemption of the Debt. I think it is painful there should have been but one solitary voice from these Liberal Benches against the proposal to increase the naval expenditure. Where have the old Radical traditions gone? What has become of the pledges by which this party was returned to power six or seven years ago? I can understand hon. Members opposite approving of this. The ex-Chancellor of the Exchequer the right hon. Gentleman opposite (Mr. Austen Chamberlain) had an exceedingly difficult task this afternoon in replying to the Chancellor of the Exchequer, because each of the three purposes to which this surplus is to be devoted, and particularly two of them, represent items of expenditure for which the Opposition have asked. The Chancellor of the Exchequer, in the speech he gave to the City Liberal Club some time ago, said the Opposition had asked for the expenditure upon the Navy. That was the very expression the right hon. Gentleman used— keep pace with German naval expenditure would be to suggest to the First Lord of the Admiralty that he makes fewer speeches at luncheons and dinners, fewer speeches of a menacing and provocative character. I come now to the proposal to devote this £5,000,000 to the reduction of debt. The Prime Minister said this afternoon that he approved of the reduction of the annual payment from the sum of £29,500,000 at which it stood during one year of his tenure of office as Chancellor of the Exchequer to the sum of about £24,500,000. I do not think it is quite just to put upon one year's race of taxpayers an undue burden, and, if £24,500,000 be sufficient, and I think it is, then I cannot understand how the Chancellor of the Exchequer can justify an additional £5,000,000 this year.
I think there are other purposes, and far better purposes, to which this £5,000,000 might be devoted; and may I call to the recollection of the Chancellor of the Exchequer a few paragraphs in that wonderful speech he delivered three or four years ago in introducing his notorious Budget. There he expounded the proposals in regard to the Development Act, an Act which I think in the ideal which was embodied in it is perhaps the most promising that has ever been placed upon the Statute Book of this country. I believe if it were used to the extent of its possibilities a complete social revolution might be carried out by that measure. The Chancellor of the Exchequer, I remember, in criticising the Unemployed Workmen's Act of the previous Government seven or eight years ago, used a very impressive phrase. He said that Unemployed Workmen's Act was "a motor-car without petrol." May I say to the right hon. Gentleman that his Development Act without money is "a motor-car without petrol." I have to complain that sufficient money is not being put into the Development Fund, and I have to complain also that the possibilities of the Act are not being used to the extent they ought to be used. I am not going to trouble the House with many quotations, but there are sentences in the speech of the right hon. Gentleman in introducing his famous Budget which bear upon this point, and which I really must quote. I regret time does not permit me to quote at great length some sentences which precede the one I am about to read, because they are a reply to the proposal the right hon. Gentleman is now submitting in far more forcible language than I could command. He pointed out the need for the development of the resources of the country, the need for the remaking of our harbours, for the protection of our shores against coast erosion, for the maintenance of the roads, and for the planting of the waste places of the earth until "the valleys shall smile with beauty and plenty." This is the sentence I propose to quote:— prepare for settling that question, but when the next trade depression comes, and when unemployment again reaches the figure of 10 per cent., the Government will not have that excuse. I admit they have done some little by their National Unemployment Insurance Act to meet it, but I might quote from this same speech of the Chancellor of the Exchequer to show that he himself admitted that was not sufficient. Seven shillings per week is very good as far as it goes, but 7s. a week will not keep the wolf from the door when the breadwinner of the family is out of work.
I agree, too, with the Chancellor of the Exchequer when he said it was far better that these unemployed men should be put to remunerative work than that they should be kept, or partially kept, by the community doing nothing. It would be far better if this surplus of £5,000,000, instead of going to the reduction of debt, were used for various schemes of national development; because by being applied in the manner proposed by the right hon. Gentleman it will not be put to purposes so nationally beneficial as those which I suggest. I appeal to the Chancellor of the Exchequer to devote this £5,000,000 to the development of the natural resources of the country. The right hon. Gentleman has been talking lately about the need for Housing Reform, and any proposals he may put forward for dealing with that question will be heartily supported by Members on these benches. Let him begin to carry out whatever ideas he may have in his mind for improving the housing of the people. Let him begin by devoting some part of this £5,000,000 to that purpose. We have in recent years had a large number of Royal Commissions sitting which have put before the Government schemes of national development. For five years I sat on a Royal Commission dealing with waterways and canals, and we presented a Report recommending an expenditure of £20,000,000 spread over five years. I doubt very much if one Member of the Government has read that Report. The last time I put a question in regard to it I received a reply to the effect that the proposals contained in the Report were so very comprehensive that the Government had not had time to give the matter attention.
What is the use of appointing Royal Commissions if that is to be the result? There was another Royal Commission dealing with the question of afforestation. That made a recommendation involving an expenditure of £2,000,000 a year which would ultimately have returned an enormous profit to the State. What is the use of men giving years of their lives to inquire into these questions if their Re-ports are to be regarded as so much waste paper? It is the duty of the Government to give effect to these proposals now they have an opportunity. The excuse in the past has been that the reforms could not be carried out because they involved the imposition of additional taxation. That cannot be said here, and £5,000,000 will be a fine nest-egg for carrying out these schemes of national development. They will have to be undertaken in a few years' time; and when that day comes the Government will not be in a position to say that they have not had time to prepare for the emergency. It is their duty to be prepared. I do not suggest that the schemes in all their fulness ought to be put in hand forthwith. I think schemes of this character should be of a telescopic nature, so that they may be expanded or contracted according to the state of employment in ordinary commercial life. I support one of the three proposals of the Government. The proposal to give a million to the Navy I shall oppose to the extent of going into the Division Lobby against it. I regret the Chancellor of the Exchequer is proposing to devote such a huge sum as £5,000,000 to the reduction of debt. I believe that the money could be put to far better and greater national advantage if used by the State, and not handed over to the Debt Commissioners.
We have listened, as we always do, with great respect to the speech made by the hon. Member for Blackburn. That speech is quite contrary to the general feeling of the House. Every Member who has spoken up to the present has spoken more or less with a feeling of relief that the Chancellor of the Exchequer has taken the line he has done with regard to the Sinking Fund. The right hon. Gentleman commenced his speech by telling us how good the Government had been in paying off debt. We all thought he was coming to the conclusion that they had paid enough, and therefore proposed to devote this money to some other purpose; but he resisted the temptation, and we are all glad. We congratulate him that he has come round to the state of mind which we all desired when this matter was before the House on a former occasion. The hon. Member for Blackburn told us that he does not agree with two of the ways in which the Chancellor of the Exchequer is proposing to deal with this money. He only agrees with the grant to Uganda. I think we shall all be agreed on that, as Uganda is one of those new and rising Colonies of the Empire which we all wish to encourage. We are, I understand, lending this money, and not giving it as a donation, and we hope it will come back to us again.
As regards the Navy, I suppose the hon. Member for Blackburn will not object to being called a Little Englander. I am sure this money will not be spent by the Government on the Navy unless it is absolutely necessary for the security of these islands. We are told that the extra expenditure by Germany which has necessitated this is to cost £734,000 in the present year, £1,375,000 next year, and £1,851,000 in the following year. The Chancellor of the Exchequer might very well have said, "Now I have got this extra money to provide in future years I must keep so much in hand for it." But he resisted that temptation also, and the extra money required must be raised by taxation unless by good fortune the right hon. Gentleman finds he has another Old Sinking Fund at the end of this year, which, I think, is extremely doubtful. I should like to say a word or two about the Old Sinking Fund. We have been told it is a windfall. It is more than a windfall; it is a broken reed to rely upon. It arises from two causes, or rather from one of two causes—from under-estimating revenue or over-estimating expenditure. With regard to the overestimating of expenditure I do not think the Chancellor of the Exchequer is to blame. I am engaged in one of the large contracting firms for the Admiralty, and I know that the Admiralty brought pressure to bear on the firm to complete certain work within the financial year. But the work could not be completed, in spite of that pressure, on account of various labour troubles, and it will have to be provided for out of the revenue of the present year. I, therefore, acquit the right hon. Gentleman of all blame in that regard.
What is the Old Sinking Fund? It is a chance balance representing the difference between the revenue and expenditure of the year. I find, going back for a period of thirty-six years, that only in twelve years has there been an Old Sinking Fund available at all. It has not produced very much money. A White Paper issued by the Secretary to the Treasury in April last gave the amounts received during the whole thirty-six years, and, roughly added up the totals, I find it comes up to about £20,000,000 altogether. That is nothing in comparison with the amount which has been received from the Fixed Charge. It does not do for the Government or the Chancellor of the Exchequer to rely upon it. I doubt very much whether anything will be available from the Old Sinking Fund for the present year. The real engine for reducing debt is the New Sinking Fund or the Fixed Charge. As the House is aware the amount of that was fixed by Sir Stafford Northcote, in the year 1875, at £28,000,000. It has varied a little, but when the party with which I have the honour to act went out of office in 1905 we left it at £28,000,000. It was raised to the highest point in 1907–8—to £29,500,000. Since that year it has been reduced and it now stands at £24,500,000. Out of that total as much as £17,500,000 goes in paying interest and management expenses, so that only a balance of a little over £7,000,000 went last year to the redemption of debt.
As to the question of Consols, it really is a very important matter. As soon as it was announced in the "Times" that the Chancellor of the Exchequer was thinking of devoting a part of this surplus to the redemption of debt, Consols immediately went up a half point. That shows how very sensitive the market is when money is devoted to paying off debt. I sincerely hope it will have a permanent effect, but I doubt it rather, and for this reason. The Old Sinking Fund is a broken reed which cannot be relied upon. What would permanently keep the price of Consols up would be an increase in the fixed charge. The Old Sinking Fund is only a chance thing, and it cannot exercise any permanent influence; therefore the devoting of these £5,000,000 to the reduction of debt is not likely to permanently influence the market, although it will have a temporary effect, no doubt. One further point. The House is aware, of course, that this is a permanent annuity, very different from a municipal loan or loans of that kind. This House insists on municipal loans being repaid within a given period of years. The money has to be repaid within a certain time, and if that condition is insisted upon in the case of municipal loans, why could it not be equally insisted that public money raised by the Exchequer should also be repayable over a period of years—a longer period if you like—say a hundred years, and make it repayable at certain prices? I will not suggest at par, because that would be too much, but suppose it should be repayable at some figure between 76 and 100. I believe if the Chancellor of the Exchequer were to insist on something of that kind it would have more influence than anything else on the market and on the confidence which the country has in this splendid investment. At present it is simply a permanent security, but if it could be made redeemable over a fixed period of years, at a certain price, it would have a great effect in strengthening the market. I wish to congratulate the right hon. Gentleman on the ability he has shown in resisting the demands to devote the money to all manner of ways other than that to which by law it must be devoted.
There is a question of procedure in relation to this matter in which I take a very great interest, and in which anyone belonging to a poorer portion of the United Kingdom must take a very deep interest. I do not rise for the purpose of complaining of the Chancellor of the Exchequer's statement; on the contrary, I think it was the ablest statement I have ever heard him make. He was able also in what he did not say, as well as in what he did say. He entered into no defence whatever of his procedure. In my opinion, his procedure was not only irregular, but absolutely lawless. It is no defence to say now, when criticism has been poured in upon it, that he is going to correct this procedure. I believe we ought to have a Standing Order in this House to prevent what the right hon. Gentleman did ever occurring again, because he has taken a course which was condemned by the Speaker in 1890, and which his own party and his own Leader condemned in 1893 as revolutionary.
In 1893?
Certainly. When the right hon. Gentleman the Member for Dover (Mr. Wyndham) brought in his Development Fund and did not earmark it. He will find that the Prime Minister engaged in a strong attack on the right hon. Gentleman in connection with that matter. What is the position? The Chancellor of the Exchequer finds that attention is concentrated upon his Budget statement, and accordingly he splits the Budget statement into two. I am not going for one moment to complain that he is voting £1,000,000 of this money to the Navy; on the contrary, I think that when the Germans are building in the way that they are building, a wholly different case has arisen from the point of view of the Chancellor of the Exchequer. Therefore I make no complaint whatever of that action on the part of the right hon. Gentleman. What I do complain of is this In the month of April, when he made his Budget statement, he must have been well aware what was the maximum demand which the German people would have made upon them by their naval authorities. Did anybody put it beyond £1,000,000? If they did not, and if nobody supposed that Germany was going to expend on building more than a million of money, what justification was there for the right hon. Gentleman, on the plea that he was doing this to resist Germany aggression, to hang up the sum of £6,500,000? He must have known then that they did not intend a £6,500,000 building programme, and that from the first £1,000,000 would be the utmost extent of their expenditure. When the right hon. Gentleman said he was hanging up this £6,500,000 for fear of the Germans doing something, I am sure there was something else concealed in his mind. What is the result? For the first time since 1890, when Mr. Goschen attempted it and was stopped by the Speaker by his pronouncement that it was unconstitutional, he has split his Budget statement into two. What is the effect on my country? Everybody supposed that the programme of the right hon. Gentleman would be fully developed when he made his Budget statement, and now, when you have only a Ways and Means Resolution, there is nobody from Ireland to take the smallest interest in the subject.
Let me take these points seriatim. I have dealt with the million for the Navy. He next says he is going to give £500,000 to the East African Protectorate and to Uganda. Upon that, we have a distinct grievance, because last year a similar statement was made by the right hon. Gentleman. I now want to get from the Government, who are dealing with Colonial matters far distant from us, while they are denying money for the wants of people at home, the correspondence which passed between the Treasury and the Colonial Office. Are we never to know the demand the Colonial Office makes? The Colonial Office, in my opinion, is only one removed in its mistaken Estimates from some other departments which certainly have not shown any great amount of economy. Take the Finance Act of last year. The right hon. Gentleman came down to this House and made a statement very like the kind of statement he has made to-day, so far as the harbour at Mombasa was concerned. The matter is dealt with in Section 16, under the head of "National Debt." There you have Mombasa. That is the way in which Parliament and the public are befooled. The matter was included in two Clauses. First, the Treasury were entitled to make an advance to the extent of £250,000 to the Government of the East African Protectorate. Secondly, it was provided that—
"the Treasury may advance by way of Joan to the Government of the East African Protectorate for the purpose of providing improved railway communication and harbours in the Protectorate, and improved water supply for Mombasa, any sums not exceeding in the whole two hundred and fifty thousand pounds."
I am not a sufficient expert to know whether that was an advance of £250,000. On my construction, it would give them power to grant £500,000.
It was one sum.
Why you should have set it out twice I do not know. I will take it to be one sum. Are we not entitled to get the information upon which the Treasury last year agreed, at the instance of the Colonial Office, to advance £250,000 to that country? Was there a statement made by the Colonial Office that if £250,000 was advanced for improving harbours at Mombasa that that would do the job? Was there a statement made to the Treasury by the Colonial Office last year that if they advanced this money it would be the entire amount which would be necessary? If so, what I should like to know is this why is the Government today bringing forward a further proposal for a loan of £500,000? Is this going to be the end of it, or are we to have another £500,000 next year? Is this to be a sort of repeating revolver, to come up again and again? Let us know the extent of our liabilities. The House should remember that we have spent on this interesting Colony more than £12,000,000 already, and that at a time when the Government told us, when they increased our taxation, that it was for the purpose of old age pensions, and for the purposes of the Insurance Act. I now leave that part of the story and come to the disposition of the £5,000,000. I want to know from the right hon. Gentleman why, when he has these enormous surpluses, it is to Mombasa and to the East African Protectorate that he turns, rather than to the taxpayers of the Kingdoms from whom he is raising the revenue? What excuse is there for putting huge taxes upon spirits, upon licences and upon publicans, and then spending our money, the money you get from the consumers in this country, upon these distant places, without letting us know our liability. That is by the way.
8.0 P.M.
The right hon. Gentleman has made an interesting defence of his position as regards Consols, and it was one that attracted my deep sympathy, for I have read the financial papers which attacked him, and I think some of them were extremely unjust and some of them rather mean. Although I have always been opposed to certain forms of "Lloyd George finance," something like candour is necessary in dealing with the question. The right hon. Gentleman has given a most excellent explanation of the fall in Consols, but will he tell me why Irish Land Stock, which pays a ¼ per cent more to the investor and which has a Government guarantee, is now lower in the market than Consols? This has a most important bearing upon the interests of Ireland. When the right hon. Gentleman throws £5,000,000 back into the Old Sinking Fund, £250,000 to Mombasa, and £1,000,000 to the Navy, he may defend those propositions from his point of view, but I respectfully maintain he should say something as regards their effect upon the financial position of the sister Kingdom. What is the position of Ireland? You have advanced to the landlords nominally £50,000,000 or £60,000,000. They are not getting their money. The bargains which you should have completed remain uncompleted. Do not suppose for a moment that this does not affect the interests of the tenant. It affects them closely, because the tenants' fifty-nine or sixty-nine years, whatever it is, will not begin to run until the transaction is completed, and until the landlord is paid off, and in the meantime they are paying a very high interest instead of paying the interest they would do, either under the Wyndham Act or the Birrell Act. When the Chancellor of the Exchequer gives us an explanation with regard to the fall in Consols, we are entitled to know to what reason the Government attribute the extraordinary fact that Stock bearing ¼ per cent. more interest is absolutely lower in the market than Consols. The proverb says:—
I am quite ready to criticise my right hon. Friend on any occasion, but I think, on this occasion. there has been a great deal said which ought not to have been said with regard to his responsibility as far as Consols and gilt-edged securities are concerned. When people blame one Government or another for a rise or fall of gilt-edged securities, to a large extent it is because they do not know the facts, and they will not follow or understand the market, and are not familiar with what raises or lowers prices. British first-class securities to-day—trust securities—could not be bought to pay 4 per cent., and Consols at present pay £3 5s. 9d. That is a very small return now-a-days, but even in the old days I can remember the time when they paid 3 per cent., and the ordinary market price ran from 94 to 96. That only paid practically the same figure. What really is at the bottom of this great depreciation is the fact that at a certain time— 1907 I think—Consols rose to a ridiculous figure, and the reason of that rise is not far to seek. For two solid years the Bank rate was 2 per cent., and people began to believe that it was never going to rise beyond that at all. They were told that the influx of gold from South Africa was so great that it would never be anything more than 2½ per cent. At that very time several corporations took advantage of the low rate and—the Chancellor cannot be held responsible for this—Birmingham put out a loan to tender at 2½ per cent., and it actually placed the loan at 102. To-day it is 72—a drop of £30. Liverpool put out a: loan of 2½ per cent. at this time, when people were alarmed at the continuous low rate, and it got 104. To-day the price of that stock is 73. You cannot suggest that the Government are responsible for that. What has happened is this: Not only is our credit not so great as it was, but some foreign countries to whom hardly anyone would lend any money because revolutions were constantly occurring—Argentina, Brazil, and so forth—have found that honesty is the best policy, and I suppose the diplomatist can make more out of a loan than he could make out of a rebellion. Be that as it may, all turned on it, and the consequence is that they get money now where they would never have got it before.
Further than that, you have an enormous expansion in Argentina and, more than anything else, an enormous expanse' in Canada. Canada is absorbing a great deal of money and offering first-class-security for it with good interest. The first reason for the fall in Consols was the drop to 2¾ per cent. and then to 2½ per cent. That interfered with the sweet simplicity of the 3 per cent., and when you once destroyed that 3 per cent. people said, "We will not lend money at 2½ per cent. when we can place it elsewhere," and you can redeem £5,000,000 and another £5,000,000 and I do not think it will have any real or substantial difference in the price. People nowadays will not be satisfied with 3 per cent. for their money. Business offers greater inducements," other nations offer greater inducements, and expanding countries offer greater inducements, and therefore people will have a greater return than £3 5s. or £3 10s., or whatever it may be. The hon. and learned" Gentleman (Mr. T. M. Healy) could not make out why Irish Land Stock should be cheaper than Consols. The fact is that there are certain institutions in this country which are bound to hold Consols and there is always a certain amount held up, and it will continue to be held up. There is no such obligation in regard to Irish Stock, and somehow or other it is not quite so popular. But the fact remains that it is useless for one side to charge the other with any drop in gilt-edged securities. The market wants a good return for its money and it will have that return, and if Consols will not offer it, it will get it somewhere else. Another cause for the drop in Consols, though not a great one, is that people in the City are always crabbing this Government. They are always putting out bear stories reflecting on the Government. In their own hearts they know perfectly well that it has not the slightest effect on people who are really buying and selling. I hope hon. Members opposite will show their common sense by not attributing to this Government any drop in first-class securities. It is all a question of what they will yield.
I am glad the hon. and learned Gentleman (Mr. T. M. Healy) raised the question about Irish Land Stock. There has been a very serious fall in the price of Irish Land Stock for the last few days which I can only attribute to the fear in the minds of many people as to what will happen to Irish land if Home Rule passes into law. I was also glad for another reason, because it is a matter I have endeavoured to raise by question and answer for some time with the Prime Minister and the Chancellor of the Exchequer as to the Returns which are presented to the House dealing with the National Debt. One of the reasons why Irish Stock is not in the same position as Consols is that it is not considered as a gross liability of the State, but only an indirect and contingent liability. Here comes the complaint which I wish to make out, and which I hope the Treasury will do something to remedy, because, after all, when dealing with these huge sums and these matters, which are of the highest importance to the financial interests of the nation, we ought to have a clear statement of how our national balance-sheet stands. There are two Returns presented to the House. One is known as the Command Paper and the other is the document which most of us have been using in the course of this Debate. The less bulky document is issued from Treasury Chambers and appeared on 1st April this year, and bears the signature of the Secretary to the Treasury. It has three columns. The first is the total amount of the dead-weight debt, and the second is a similar statement in respect of other capital liabilities, and the third is a similar statement in respect of the aggregate gross liabilities of the State. That is the misleading part of the Paper, because it does not take into consideration many other liabilities for which the State is really responsible, though not technically in the same way in which it is liable for the amounts which are mentioned in the Treasury Papers. There is no mention at all of any such important matters as the amount of the Irish debt for the land and the liabilities created under the Land Act, and yet it is supposed to be a statemeunt in respect of the aggregate and gross liabilities of the State. An unsuspecting foreigner, anxious to know what are the assets of the British Empire, will take up the paper and say, "Well, there is not as much owing as we expected," and he would think that is all we are liable for if he wanted to take it over as a going concern. Suppose the German Emperor comes over here, as someone told us he is going to very shortly. He will say, "After all, these people are not nearly as much in debt as they are supposed to be," but when he comes to the Command Paper he will find in Appendix 3, on page 26, a statement of the contingent or indirect liabilities. These all ought to be included in the gross liabilities of the State. My first complaint is that the amounts of contingent or indirect liabilities are not totalled up, and it takes anyone who has to look into these matters a considerable period of time to total up the columns. It is roughly £4,500,000.
I come now to the other point, and that is the guaranteed loans, of which the guaranteed Land Stock for Ireland is one of the most important liabilities. That, again, is not totalled up. This really is the real statement of the amount for which the Government is liable. The guaranteed loans are very big indeed, because they come out, I believe, to something like £230,000,000, and yet they are not totalled up. I asked the Prime Minister last month a question on this matter. He had been speaking at a very important meeting of the Central Association of Bankers, at which he said that during the last six years, from 31st March, 1906, to 31st March, 1912, the aggregate gross liabilities of the State had been reduced from £789,000,000 to £725,000,000, a reduction of £64,000,000. I asked whether he had omitted to take into account the contingent liabilities of the State, including the liability to make good the insolvency of the Post Office Savings Bank, and the guaranteed loans The aggregate of these items increased from £170,000,000 on 31st March, 1906, to £230,000,000 on 31st March, 1912—that is to say, an increase of £60,000,000. If you compare these six years and include these two items, you will find, on the one hand, that although the gross liabilities, as shown by the Paper issued by the Treasury, had been reduced by £64,000,000, yet in reality, owing to the contingent liabilities having gone up by£60,000,000, there is only a difference of £4,000,000 in the liabilities for debt. I will not ask the Secretary to the Treasury to include the liability for the insolvency of the Post Office Savings Bank, which, owing to the fall in the price of Consols, now amounts to £30,000,000, because that is a matter with respect to which even on this side of the House there might be difference of opinion. But, taking the other indirect liabilities of the State, they have gone up in six years no less than £30,000,000, and therefore, instead of the whole liabilities having been reduced £64,000,000, it will be seen, if you strike a correct balance, the total is only £34,000,000.
I do not know how this Paper which has been issued by the Treasury came into existence, and I hope the Financial Secretary to the Treasury will take steps to see that the Paper when issued in future conveys the whole truth as to the financial position of the country. I would like to point out to him that, whereas the accounts are made up to 31st March in each year, the Paper issued by the Treasury is up to 1st April this year. That is very confusing, and the consequence is that for the year 1912–13 the amount of the Debt reduction is, after all, only an estimate, and cannot be really a fact. I urge these points now because one gets very few opportunities of expressing an opinion on the very complicated subject of the accounts, which it is important everybody should be in a position to understand. We should have a proper statement as to how the financial position really does stand. I would like to draw the attention of the House to the charges which have been made against the party to which I have the honour to belong as to neglecting to reduce debt, or rather to call attention to the credit which is being taken by Members of the present Government for the amount of debt reduced during their tenure of office. I do not think sufficient reference has been made to this matter during the Debate. What the Government claim as the reduction made sounds a much larger amount than is really warranted when you take into consideration the fact that during the time the Unionist Government was in office Consols stood at over par. We naturally had to give cash at prices varying from £101 to £114 for each £100 of debt that was reduced, whereas now, the price of Consols being very low, the Government for each reduction of £100 of debt has only to pay £76. During last year the price dropped from £81 to £76. The Chancellor of the Exchequer is very fond of turning round upon Members of this House and saying, "It is all very well to charge us with very great expenditure, but you should look at the amount we have reduced debt." Then he refers to old age pensions.
I do not think that the general view of finance arises on the Amendment to this Resolution.
I have listened carefully to the whole of this Debate, and reference has been made to the liabilities of the State, old age pensions, and naval expenditure; but I will not labour the point very much. A great deal has been said this afternoon, and especially by the hon. Member for Blackburn (Mr. Snowden), about the cry of economy that was raised when the present Government came into power. He referred to the speeches they made in favour of economy. I cannot understand how the Chancellor of the Exchequer, the Home Secretary, and the First Lord of the Admiralty can possibly defend themselves in view of the expenditure that has taken place. There is not a single item of expenditure with respect to which they charged us with being extravagant which they have reduced. When they came into power they said everything was going to be reduced, and now, on the contrary, the expenditure of the country at this moment is something like £40,000,000 a year more than it was when the Unionist Government went out of power. There is not one item of expenditure in regard to which they have carried out their pledges. It is all very well to say that they have increased the Navy, and that the additional expenditure is partly owing to old age pensions, but is there any single Department of the State whatever in which they have made any economy? Therefore it is idle to say that we advocated a larger Navy, and that we assented to the payment of old age pensions. Can they show any way in which they have justified their pledges? The hon. Member for Blackburn said they made a great cry at the election of 1906 for economy and retrenchment. The Chancellor of the Exchequer, comparing British credit with that of other countries, said that during a certain period Consols had fallen only five points, while German Consols had fallen six points, the assumption being that therefore German credit was worse than ours. If there is one thing that this country has to depend upon more than anything else, beside its Navy, it is its financial credit. It is no use saying that after all British credit is looking up because German credit has fallen 1 per cent. more in the same period. On the contrary, I think it is nothing to boast of at all that there should be this difference. In the old days British credit was insuperably greater, not only than that of Germany, but than that of any other country in the world. The fall in Consols have been produced by a variety of causes. We cannot in justice say that it was all due to this or that particular cause. There have been all sorts of arguments this afternoon as to the extension of the scope of trustee investment, and no doubt that has something to do with it, but I am perfectly sure that one of the reasons why Consols have fallen so greatly is that nobody in this country knows what are the intentions of the Government as regards capital.
There is a widespread distrust of the policy of the Government in this respect. People do not like to put their money into Consols because they are afraid of losing a considerable amount of their capital. Year by year Consols are going down. The reason why they used to bear such a high name, and that foreigners invested in them, was that they were sure always that when they wished to sell they would get out the same amount as they put in. But that is not the case nowadays, and a distrust of the policy of the Government is one of the causes of the change. With regard to the amount of the surplus, it is perfectly true, as has been pointed out, that part of this vast surplus is due to the fact that for various reasons the Navy could not spend the money which was voted for it last year, but, as has been pointed out by the hon. Member for Blackburn (Mr. Snowden), this excess has been also produced by over-budgeting to some extent. It would be much better to budget more closely and have a small surplus and not extract these huge sums from the pockets of the taxpayer. I myself think it is ex-extremely bad finance, and I agree with every word that fell from the hon. Member for Blackburn upon this subject. I hope that the Chancellor of the Exchequer will take care to see that there is more equilibrium about these Budgets and that it is not necessary to take so much money from the pockets of the taxpayers as he has done last year. It is very easy to have these large surpluses when men go about the country claiming what wonderful things they have done in the reduction of debt, but, for my part, I consider it extremely bad finance, though I join with my Friends on this side in agreeing that the Chancellor has done extremely well in resisting the dictation which has been urged upon him by his Friends on that side of the House to give the money to other things than the reduction of the Debt. Though I cannot congratulate him on the fact that he has so much money at the end of the year for the Old Sinking Fund, yet I congratulate him on resisting the temptation put upon him to spend that money in a way absolutely contrary to law.
The hon. and gallant Gentleman who has just sat down made a most interesting speech, to which I listened with a great deal of interest, as I always do to speeches made on that side of the House. I will not, however, in reply to him and other hon. Gentlemen attempt to defend the Chancellor of the Exchequer, who is well able to defend himself. I rather wish to congratulate the right hon. Gentleman on the very fortunate position in which he has found himself. Seldom has a Chancellor been so fortunate at the end of the year. Never in my recollection has a Government done so well on finance as the present Government. I rise chiefly to commend the Government on the loan which they are making to British East Africa and Uganda. The more they can encourage the growth of cotton and corn in those and other Colonies, the better it will be for all. Cotton is the staple of one of our greatest industries, and we cannot afford to be dependent for our raw material chiefly upon one source of supply. I rejoice greatly that the Government are not only encouraging the growth of cotton in British East Africa, but also in India, and I trust that nothing will turn them aside from that policy of encouraging the growth of that which forms so great a part of our staple industry, particularly in Lancashire. The money spent on cotton will come back to us in a way of which we shall all approve. If I may refer to the Navy, I agree with what was said by my hon. Friend the Member for Blackburn. I exceedingly regret that it has been necessary to spend so much money on the Navy, but I know so much of this Government and I have such confidence in it that I am confident it would not propose to spend this money unless it felt it to be absolutely necessary for the protection of our trade and commerce. That does not prevent me regretting very deeply the necessity for that expenditure on provision for the Navy, particularly after the large expenditure made during the last few years. I rejoice, notwithstanding all that to find from the Prime Minister, to whom I listened with the deepest interest, that during the life of this Government the National Debt has been reduced by £78,000,000, thus saving £2,000,000 interest, making £80,000,000 of reduction, and that £13,000,000 is being spent on old age pensions, £13,000,000 extra on the Navy, and £2,600,000 on insurance, and all that has been done without putting one penny extra tax upon the food of the people. All that has been done under Free Trade finance, and all I can say is, when I hear those speeches and read the report of them, that I trust the Government will continue its good work for many a day to come.
I have listened to a good deal of this Debate, and there has been running through it an underlying current which cropped up chiefly in the speech of the hon. Member for Blackburn (Mr. Snowden), showing that many Members of the House do not seem to know what the Old Sinking Fund is. They do not realise that the Old Sinking Fund is the keystone of national finance. About the year 1828 it was decided to put aside all surpluses for the reduction of the debt, and the object of that is manifest, because, as long as there was a fixed sum to pay off the debt, and no account taken of the circumstances of the year, it was often to the advantage of the Chancellor of the Exchequer to provide himself with a small surplus which he wanted in the following year. At that time the practice which had prevailed was that the money not spent in any one Department was carried on to the following year, so that there was no finality in the nation's accounts. The Sinking Fund was established, and the regulation was made that everything which was surplus must go to the Old Sinking Fund and that the Sinking Fund should be applied to the reduction of the debt. That did two things—it gave accuracy in regard to accounts—though no doubt there is sometimes the temptation at the end of the year for a Department to carry out its expenditure in order to expend the full amount voted to it—but, on the other hand, it is sometimes the fault of the House itself that the Estimates are not passed in sufficient time to enable the Department to arrange the spending of their money.
That, however, is a circumstance which cannot be avoided, and which must be endured in view of the great advantage that we get from the fact that the money voted for one year must be spent in that year, or the surplus must go to the Sinking Fund for the payment of the debt, so that there is no particular temptation to the Chancellor of the Exchequer to sanction miscalculations which would give him a larger or smaller revenue. What I have to complain about is that the right hon. Gentleman no sooner became Chancellor of the Exchequer than he began to-lay hands on the Old Sinking Fund and on surpluses of one kind or another. Both sides are interested, as regards the real finance, the economics, and the credit of the country, in what seems a very dangerous departure. I wonder what Mr. Gladstone would have said to such finance as that? Mr. Gladstone laid it down that the Chancellor of the Exchequer ought to provide in his own mind for possible Supplementary Estimates before he mentions the word "surplus" to the House of Commons, and ought to try to find out from the various departments what were likely to be the Supplementary Estimates for the year before he made his Budget statement. The Chancellor of the Exchequer this year has repeated his offence, because in his Budget statement he hung up this surplus, as an hon. Member remarked, like Mahomed's coffin, between earth and Heaven, and suspended it for an indefinite length of time and for an indefinite purpose.
No coffin can ever go up into Heaven, and it required a great deal to draw that coffin down to its proper resting-place on earth. Pressure, I am glad to think, was brought to bear from both sides of the House, and also I believe a good deal from outside as well. The Chancellor of the Exchequer may have a good deal to say with regard to the newspapers; but after all the newspapers do represent opinion; they not only manufacture opinion, but they represent opinion. The opinion of the city is still a factor, and the Chancellor of the Exchequer has done wisely to recognise that, and to return—I cannot say return to the ways of financial sanity, because he has not done that. What he has done has been done under protest, and only after very great pressure. I do hope the House will remember what the origin of the Sinking Fund was, and will not be led away by any discussion of India, or even the Navy, but will make the Chancellor of the Exchequer—from whatever side of the House he may come—declare that the Old Sinking Fund and its application to the debt is a very important part of our financial structure, and ought not to be loosely dealt with. I quite acknowledge as I dare say Members on both sides of the House do, that a national crisis might arise which would necessitate the application of a part of the Old Sinking Fund to the defence of the country. We are told that the crisis has arisen at the present time. I am not going to quarrel therefore with the application of this million to the special needs of the Navy, but I do hope it will be remembered, as has been pointed out already by the hon. Member for Blackburn, that the under-spending on the Navy last year will have to be made up in the present year. But this million for the Navy is not to make up for under-spending, but is rather for the only reason for which any inroad ought to be made, namely, for the purpose of national defence.
I wish to make a protest against this further expenditure promised on the Navy. I feel that those who desire peace ought to make their voices heard on an occasion like this. We have during the last ten years increased our expenditure on the Navy more rapidly than any other country on the face of the earth. Ten years ago we were spending on the Navy a million a year more than Germany, which at that time was spending £13,500,000. Our expenditure has gone up to £44,000,000, and their expenditure has gone no further than £22,000,000. At present we have fifty-nine large capital ships as compared with Germany's thirty-five, and if you add the Austrian and Italian Navies, which are the only two possible combinations with Germany against us, they only amount together to fifty-five, whereas in the next category of large ships, that is cruisers, we have sixty-five as against Germany's thirteen. In other words, our preponderance is absolutely overwhelming and our position is over whelmingly unassailable, and there can be no combination of Powers likely to threaten us with any danger of any ac count whatever. The nation which is building most rapidly following our selves, namely, the United States of America, cannot possibly to my mind, ever become an enemy of ours on the seas. I think, therefore, that it is time we raised a pro test against further expenditure beyond that which is provided in the Budget statement of earlier in the year. For my part, I protest most strongly. I feel that any expenditure beyond the actual needs of the situation is really the means of pre venting money being spent on social re form and other much needed requirements, and that we are simply, by constantly adding to our forces, engaged in as policy which is provocative and which furnishes the armaments Press in foreign countries with the opportunity of pressing their Government to follow our lead, and which, on the other hand, is answered by the yellow Press of our own country and by those interested in armaments, explosives, and so forth, and which enables them to press our Government for still further expenditure. That competition keeps going on and prevents expenditure on much more needed requirements. I have no objection whatever to the expenditure of the half-million in Uganda. I think that is justified, but I do think that provision should be made whereby those who reap the advantage of that expenditure, and those whose estates are enormously increased by additional facilities for bringing goods from there to our markets, should by a system of taxation be made to contribute to the revenue of the Colony and to provide a sinking fund whereby this money should be gradually repaid. I do want to emphasise what I said on the question of this provocative expenditure on what I believe to be an unnecessary increase in armaments.
I wish I could follow the cheerful optimism of the hon. Member who has just spoken. From my point of view, and I think from the point of view of those who sit on this side, the stronger we are the more that fact makes for peace. Although I agree with the regret that the million pounds have not been put into the Old Sinking Fund, still I think if they are going to be diverted they could not be diverted to a better cause than that of strengthening our Navy and thus increasing the likelihood of peace in Europe. I do not want, however, to enlarge on that. I do not want, either, to join in the recriminations that have been made as to who is to blame for the present financial position of this country. The fall in Consols is there, and it seems to me that it is now the duty of the Government to see if that can be arrested, and to see that that fall goes no further. I think we might devote a few moments to the consideration as to whether there are any means by which that fall in our national security could be stopped. I know there are those sitting on the benches opposite who look on the continual fall in national securities as rather an advantage. They think that the lower it goes the less debt we have got to pay off. They seem to forget that it works in another way, because as our great financial institutions have to write off enormous sums of money, owing to continual depreciation it naturally must follow that in order to recoup themselves for that loss they must charge higher rates of interest for their money, and thus put a charge on the trade of the country which passes through their hands. It must not be forgotten that this continual depreciation of our national security has a most tremendously adverse effect upon institutions in which the money of many of our poorer countrymen are invested. Only last year we had the troubles of the Birkbeck Bank and the Yorkshire Penny Bank.
There is one particular institution in which the savings of the poor are to a very great degree consigned, and the position of which is, I think, most materially affected by the fall in our public securities, and that is the Post Office Savings Bank. In that bank you have over £200,000,000 of public money subscribed by those people who can afford to lose it less than anybody else, and who do lose in this way. When their amounts in the Post Office Savings Bank reach a certain sum many of them, on the advice of the authorities, invest money in public securities. A great many thrifty, frugal people in this country have invested funds in this way, and now they suffer a very considerable diminution in their capital. You cannot dismiss the question of the Post Office Savings Bank by saying depositors cannot lose anything as the nation is behind them. Suppose such a thing occurred as a run on the Savings Bank of the Post Office, what would happen? That is not an impossibility, and it is recognised even now by the National Insurance Commissioners. The Commissioners have issued a leaflet, in which they ask people not to use the term Post Office contributor. The fact being they are afraid, dealing with the poorer people, that those who have savings at the present time might get a confused idea into their minds that the Post Office is not such a nice and safe place as they thought it was, and that they might withdraw their funds. Supposing we had a withdrawal of £30,000,000 or £40,000,000, how is that to be met? It could only be met by the Government producing cash, and that could only be got by loan.
If the Government had, owing to some misfortune, to borrow a large amount of money to meet a possible run on the Savings Bank, then the continued fall of the national security would have a most material effect upon every taxpayer in the country. I often wonder if the Chancellor of the Exchequer would think that a modification to this effect would have some good result. If they were to arrange to offer one or two or three million of Government bonds to be paid off annually at face value it would stimulate the sporting instincts of the people, and they would buy in the hope of getting paid off at a hundred. I also think it would only be fair if a larger proportion of the Death Duties were devoted to the immediate reduction of our capital liability. There is no doubt that in spending the Death Duties we are spending as revenue what is capital. If we did devote a certain portion of those Death Duties to the redemption of debt it might possibly have some effect in recuperating the present drooping securities. The point has already been made that old age pensions have increased the capital liabilities of this country to an enormous extent, and I think we should be failing in our duty if we omitted to consider any possible means of bringing our security back to its old level. If we do nothing in that direction, when there is a surplus of £6,500,000 and the Government do not devote it to the reduction of the national liabilities, we have at least a right to ask for some reduction in the tremendous burden of taxation that is now imposed.
I entirely agree with the hon. Member for South St. Pancras (Captain Jessel) in desiring that we should have in the simplest possible form a return of the capital liabilities of the State. I hope the hon. Member will pursue his point, and see if we cannot get a return which better than any at present issued will show the total commitments of the nation in any financial year. Such a return would be very valuable. There is room for considerable improvement in the returns at present available. However you estimate the capital liabilities of the State, it cannot be doubted that under the present Administration those liabilities have been enormously reduced. The Government are entitled to more credit than the Opposition allows them in that in the face of new expenditure pressed upon them from all quarters they have followed the best traditions of English finance and have paid off during years of peace a considerable part of the National Debt. The result is that at the end of this year there will have been paid off during the present Administration £78,000,000 of the National Debt. That is a great achievement, and, whatever fault hon. Members may find with the financial methods of the present Government, they should at any rate recognise that they have to that extent strengthened the credit and financial position of the nation. When we on this side are reproached that the Government have not fulfilled the hopes which they held out when they took office of being more economical than their predecessors, it should be remembered that economy is not to be judged by the total expenditure in which a man indulges. One has to ask whether by his expenditure on one object he is hindering some other object, and whether the spender is getting his money's worth. I think that for the greater part of the increased expenditure of the Government, though not for the whole, the nation is getting its full money's worth. For instance, reference has been made to the capital liabilities of the nation in regard to old age pensions. In my opinion old age pensions are really an asset rather than a liability to the nation, and the fact that we have undertaken to pay old age pensions is, in the long run, to the financial advantage and not to the detriment of the country. With regard to Consols, in trying to find fault with the Government hon. Members opposite are a little too ingenious in tracing the fall in Consols to Lloyd-George finance or anything of the kind. The real reason why Consols and other gilt-edged securities have fallen is that, if people have money to invest and they can write to their broker and get a safe 4 per cent. investment, it is not likely that they will put their money in Consols and be content with 3 per cent. For instance, a few weeks ago, there was a New Zealand loan issued in this country. It was a two years' loan guaranteed by the Government, with interest at 3½ per cent., and a dividend payable almost immedi- ately, with the result that there was a perfectly safe 4 per cent. investment. Naturally people take advantage of these opportunities rather than purchase 3 per cent. Consols.
9.0 P.M.
I wish to join in congratulating the Chancellor of the Exchequer on the announcement he has made to-day in regard to the Old Sinking Fund. It certainly took the House by surprise. The surprise was a very pleasing one, though perhaps it was less pleasant to those hon. Members who had come down prepared with an elaborate defence of the Old Sinking Fund and a vigorous attack on the Chancellor of the Exchequer for tampering with it. We have heard from hon. Members opposite varying estimates as to the value of the Old Sinking Fund. For instance, the hon. Member for Sheffield (Mr. S. Roberts) said that it was a broken reed for the Chancellor of the Exchequer to lean upon. It is a broken reed upon which Chancellors of the Exchequer drawn from the other side have leaned frequently. If hon. Members will look up the records of Sir Michael Hicks-Beach and Mr. Goschen in this matter, they will find that the record of the present Chancellor of the Exchequer is far superior to theirs in equitable-dealing with the Old Sinking Fund. I am more inclined to agree with the hon. Baronet the Member for the City of London (Sir F. Banbury) and the hon. Member for Dorset (Colonel Williams), who regard the Old Sinking Fund as the buttress of our financial system. As I listened to the Chancellor of the Exchequer's statement to-day I was really somewhat at a loss to know why, in his Budget statement, he had departed from the sound principle of devoting the surplus of the year to the payment of debt. I could hardly understand why he should' have been at pains earlier in the year to say that he was going to hold up the Old Sinking Fund, and then to-day tell us he was going to devote nearly the whole of the surplus to paying off debt. I was irresistibly reminded of the old epitaph:— is in the nature of an investment, and that we may hope to get it back hereafter. Therefore I am not disposed to criticise that. I do not know whether I should have risen at all if it had not been for the challenge of the hon. Member for Blackburn to those Members of the Liberal party who hold by the old doctrines of small expenditure on armaments, instead of this constantly increasing expenditure which we have at the present time. No words of the hon. Gentleman would be too strong for me in this connection. I deeply regret that the Government to-day should think it necessary to devote forty-five millions to expenditure upon the Navy.
I believe that bolder counsels in this matter, that more courage on the part of the Government, would have enabled this country to dispense with a good deal of the enormous expenditure upon our armaments. I do not go into details in this matter now. I think we shall possibly have an opportunity for doing that upon the Naval Estimates, and that will be a better time to develop the matter. But when an appeal is made I would join the hon. Member for Blackburn in protesting against this extra million being devoted to increasing the already too much inflated Estimates presented to the House on behalf of the Navy for the present year. For the rest, the remaining five millions is devoted to clearing off debt, and on that I do congratulate the Government. By paying off debt they do, I say to the hon. Member for Blackburn, strengthen the position of the Government to deal with any difficulties about unemployment alluded to by the hon. Member. He said that the Government should provide now, in a time of prosperity and good trade, for a coming time when unemployment again increases, and you again have to make special provision for it. I entirely agree with him, but what better provision can you make than by diminishing liabilities? The repayment of five millions of debt is equivalent to having at liberty £150,000 a year revenue. If it is at hand it can be devoted to the Development Fund if so decided, but there you have the money as the result of the mere payment of this accumulated five million. I am confident that for the strengthening of our financial position and preparation for the meeting of difficulties in the future, for security against aggression by foreign Powers, there is no better way of defending the people of this country than by paying off debt, reducing the liability of the nation, and thereby setting free revenue to meet difficulties as they arise.
I trust that there shall be wanting in the few observations that I shall, by the indulgence of the House, address to it, that element that in the case of the hon. Gentleman the Member for Blackburn seems to have engendered a certain amount of heat and some asperity and bitterness. The hon. Member for Blackburn took exception first of all to the devotion of a million of money for the Navy. The only thing that prevented an absolute storm of disapproval throughout the country when the £6,000,000 were held up was the kind of veiled promise that it was held up to meet a contingency of naval expediency. On no other account would the country ever have suffered so great and disastrous a departure from precedent. The hon. Gentleman who has just addressed the House has dwelt upon the fact that money spent upon the Navy is wasted. It is an extremely cheap manner of courting popularity in certain quarters. I speak with all courtesy of the hon. Member, but it is nevertheless the fact that it is extremely popular to say that you will take money from the defence of the country in order to spend it on social reform. It means that you will leave your house open for the robber and yet hope it will be much more comfortable inside.
I wish I could say it was popular; but I am not sure it is not unpopular.
I am afraid I do not think so. The hon. Member for Haggerston, in his anxiety to decry any expenditure upon the Navy—the most necessary expenditure that this House votes—understated in his comparison the expenditure on the British Navy in 1901 by £17,000,000, but as he took his figures from the "Daily News" it is not surprising that they should bear but a shadowy and remote resemblance to facts. Had the hon. Gentleman given himself the trouble to look at any of those Blue Books and White Papers which, regardless of expense, are printed in such profusion, he would have seen that, whereas he put £2,000,000 on to the German expenditure, he took no less than seventeen millions of that for this country. So little do hon. Members think who are obsessed with this "Little England" and "Little Navy" heresy—the most sinister anybody can profess in a maritime country—that they will actually take any figure, the smallest which they can find, if it is the most likely to serve their purpose, and even from so discredited a source as this paper, which preaches these doctrines, and uses statistics which appear to support its case. The hon. Gentleman the Member for Blackburn took exception—no, I do not think he did take exception to the loan of half a million to Uganda and the African Protectorate. That he did not take exception to that was on account of the fact that he represened a Lancashire constituency, and he explained that it was some use in the development of cotton, and consequently he did not oppose it. I wish to say, as one concerned in trade in Africa, that I believe that never have I seen a more useful or a more praiseworthy use made of a portion of a surplus than this loan of £500,000 to the African Protectorate and Uganda. There is not a man who is connected with business in that country who does not know that the money spent in that direction is most usefully spent.
The right hon. Gentleman the Colonial Secretary has, since he has been in office—and I have the greatest pleasure on behalf of the people concerned in saying so—spared no pains and no trouble to endeavour to forward the interests of that country. That is of interest to the cotton trade. I only hope, and I do not say this by way of any complaint of the right hon. Gentleman, who has done a great deal in helping this African Cinderella of Nyasaland—for the right hon. Gentleman is always ready to watch—I hope he will watch for the next time when there is a surplus, and that he will endeavour to dispose of the money on an equally generous basis. The hon. Member for Blackburn, who is, I understand, regarded as an authority upon finance, agrees with another financier, whom I have often seen quoted, and whose doctrines I am somewhat familiar with, that the worst use that any man can make of his money is to fritter it away in paying his debts. I take very strong exception to that view. The hon. Member for Blackburn would rather take this five millions or anything else that can be screwed out of taxpayers, bled white by the exactions of a relentless Chancellor of the Exchequer, for the hon. Member thinks that taxation rests lightly on the people of this country. I know my hon. Friend the Member for Newcastle-under-Lyme rather prides himself that since the North-West Norfolk election he is not only the leader of a party, but he has a party of one to follow him. [An. HON. MEMBER: "TWO."] The hon. Member for Blackburn would fritter away on reforms he likes this £5,000,000, which was most improperly collected from the taxpayer. If any man managing a private business was to miscalculate a surplus of that sort at the end of the year the directors and business people of his concern would change him at once, for at the very least it indicates ignorance in estimating. The hon. Member for, Blackburn, having got this money, would spend it on housing. Surely a man should have something left in his pocket to spend, except your plan is first to empty his pocket and then to provide him with a house at the public expense? The hon. Member for Blackburn would also spend it on waterways and canals. If the present policy of the Chancellor of the Exchequer is pursued, there will be nothing left to convey by waterway or canal; the whole country will be drained by taxation. The hon. Member was very much hurt because the recommendations of the Commission of which he was a Member were not attended to. I understand the recommendations of another Royal Commission also never received attention, and that is the Commission which reported on Welsh land, and that Welsh land was good, and Welsh landlords were good, and nothing else was wrong with either but foreign competition. The hon. Member was not exercised in his mind about the recommendations of that Commission.
Would the hon. Member quote the recommendations of the Welsh Commission?
I think I have summarised the nature of them. It is a little remote from the subject. I only used it as an illustration, and I do not think it is any use dwelling further upon the point. I have read the Report and I have summarised the conclusions quite clearly. On the proper occasion, when the matter comes before the House, I shall be able to defend my synopsis of that Commission's Report. The Chancellor of the Exchequer, in his speech to-day, followed the practice described by the right hon. Gentleman the Member for East Worcester of spreading himself over the ice, and he devoted the whole of his speech almost to dealing with that particular part of his finance which can be accepted as finance—that is the repayment of debt. I submit that in the position of the Chancellor of the Exchequer, with all the able assistance he received from the permanent officials, there is no man in this country who could not pay off debt, when he resorts to a practice in a time of profound peace of taxing the country to death and bleeding the taxpayer white. If you consider the fact that taxation in the lifetime of the present Government has gone up by £30,000,000, it is absolutely irrelevant to talk about the amount of debt paid off without having regard to that fact. His predecessors would do exactly the same if they had increased the taxation of the country by £30,000,000 or more. It is beside the mark to dwell upon isolated figures as to the amount the Government have paid off apart from the circumstances, and the amount they exacted from the pockets of the taxpayers, and it absolutely conveys nothing whatever to the mind. These questions are purely irrelevant, as the hon. Member for Coventry (Mr. David Mason) pointed out. It is no good throwing a certain figure upon the floor of the House unless you take into account relevant circumstances, and the relation of the amount raised in taxation to the amount paid off from the Sinking Fund. There is absolutely nothing whatever in comparing isolated figures with those of your predecessors.
The Chancellor of the Exchequer complained about what he called the so-called financial articles in the Conservative papers dealing with finance. Here I sympathise to some extent with the Chancellor of the Exchequer, for so far as I know papers dealing with finance must be Conservative, and it would be quite impossible for those papers to adopt measures which the right hon. Gentleman adopts, so in regard to the Press, he is right up against unfriendly influence. When he describes those organs in the City as so-called financial papers, perhaps he might not consider it impolite or discourteous in me if I retort, although I have no concern in those papers, that individuals in the City would describe his proceedings as a kind of so-called finance, and if I tell him that throughout the City the most profound distrust exists of himself and his methods, and that not one of the explanations he made to-day would be accepted there as having any foundation; the things which he attempts to justify in the eyes of the world, are impossible to justify in the eyes of financiers. Where does he find any support for his policy? I confess I have never found it in any quarter. It is hardly found in the speeches made to-day on his own side. Certainly the most interesting and the best-informed speech that came from the Government side to-day was the speech of the hon. Member for Coventry, who gave the Chancellor of the Exchequer very little support. The fact is it is impossible for any man to spend the greater part of his time in the City of London, where they have some knowledge of finance, without knowing that the Chancellor of the Exchequer's proceedings are not regarded as finance. This office was the statesman's pride, but has now become the party politician's opportunity. His opponents are penalised; the Budget is put off, and treated in a different manner from what it has been in former periods; and finance, instead of being treated in a sober and serious manner, seems to be the absolute-football of party sport and circumstances in this House. The right hon. Gentleman, in endeavouring to justify his own proceedings, mentioned the expansion in industry, and stated that this country is now so prosperous. He has dealt with the figures of imports and exports and profits, which, he said, are very great; but, in spite of that, there is a great deal of unemployment and destitution in this country, as every Member who sits for any great industrial constituency cannot help feeling. I do not think, if the right hon. Gentleman's remarks on that subject were circulated through the industrial constituencies, they would meet with any response. On the contrary, I think if he had the opinion of such constituents they would press upon him that it is possible for very satisfactory figures to exist in Blue-books and White Papers while there is a great deal of unemployment and destitution in the country. How can it be otherwise when in Death Duties alone half a million a week is extracted from the capital of the country?
I think the hon. Gentleman has mistaken the occasion. This is not the Second Beading of the Finance Bill. I hope the hon. Gentleman will keep as strictly as he canto the subject before the House.
I apologise Mr. Deputy-Speaker, but I will not refer to that particular matter any further. It was mentioned without objection during another portion of the Debate, and I imagined I was in order. I will not say any more however on that phase of the subject. The right hon. Gentleman the Chancellor of the Exchequer himself referred in his speech to the relation of what he called the Lloyd Georgian finance with the unrest in the country. I think someone else described Lloyd Georgian finance by another expression, with which I agree because there is no co-relation between the two words as compounded. At any rate he used the expression and I trust I may be in order in referring to it since the right hon. Gentleman did so. I think I see very clearly that the connection between Lloyd Georgian finance and the unrest in the country is exceedingly close.
Did the right hon. Gentleman support my right hon. Friend's Budget of 1909?
I shall be very pleased to answer the question. I voted for a great many things when I sat upon the other side, and so I imagine did the First Lord of the Admiralty and the Secretary of State for War when on this side. I would remind the hon. Gentleman that until agricultural land was exempted I opposed the Budget, and I was by no means a strong supporter of the Budget at any time. I do not wish in any way to indulge in a line of argument which would lead to recrimination, but I do not think the time of the Committee is wasted if an hon. Member who has a close connection with business says what he believes to be the view of the City of London which, after all, is to some extent interested in the finances of this country. I hesitate, Mr. Deputy-Speaker, after you have called me to order, to proceed with remarks which otherwise I should have addressed to the House, but in case I should again find myself transgressing the rules of order which would be extremely disagreeable to me, I will bring my remarks to a conclusion.
The hon. Member who has just sat down referred to what he calls "Lloyd George finance."
The right hon. Gentleman called it "Lloyd George finance."
I would remind the hon. Member opposite that he voted for every item in that Budget. The hon. Member also spoke of unemployment as having been brought about by that same "Lloyd George finance." But may I point out that unemployment is less to-day than has ever been known before, and if "Lloyd George finance" has had anything to do with that diminution of unemployment, it speaks—
The hon. Baronet is now replying to remarks which I have just ruled out of order.
I am very glad the Chancellor of the Exchequer has at last put this £5,000,000 to the redemption of Debt. Some of us were considerably exercised about this matter, and consequently we are much relieved that the Chancellor of the Exchequer has at last come to the normal condition of affairs. I am not pedantic enough to complain about the amount given to the Navy, and the amount given for the development of cotton growing in Uganda. As a Lancashire Member, I know so well how desirable it is that we should have more sources of supply of cotton than we have at the present time, and I think that any encouragement that can be given to cotton growing in our Colonies will not only tend to help the Empire generally, but it will tend to save from a danger the Lancashire cotton trade. There has been a good deal of talk about the question of Consols this evening, and hon. Members opposite seem to think that our credit as a nation depends upon the price of Consols. I do not think so. I think the price of Consols has been mostly influenced by the fact that the right hon. Gentleman the Member for West Birmingham made all Colonial loans trust securities. My contention is abundantly proved every day. Recently New Zealand issued a £5,000,000 loan at 3½ per cent, at 99, repayable in two years, and gave the investor 4 per cent, per annum for two years. The very day that this New Zealand loan was issued Consols went down.
Was the New Zealand loan taken up?
No, it was not all taken up, but it was all underwritten. The fact is there was a trust security paying 4 per cent. per annum, repayable in two years, and naturally people who had money to invest for a short time would invest it there rather than in Consols as they used to do.
The public did not invest, and it was left on the hands of the underwriters.
A very considerable amount was taken up, but I admit it was not all taken up. This shows that when these trust securities come out in large amounts like £5,000,000, they are bound to depress Consols, but it is absurd to say that anything this Government has done has influenced Consols in that way. The fact is that people to-day want more interest for their money than they used to do, and they are able to get more. As other countries become more prosperous, English people are being influenced to invest in their loans, and consequently more money has been taken out of Consols and this has lowered Consols here. Everyone knows that Canada is booming at the present time, and people are only too ready to take up municipal loans in Canada and also Canadian State loans. The Danish Government has just issued a loan at 4 per cent. interest, and if people can get 4 per cent, from a stable Government like Denmark they are not likely to invest in Consols at 3¼ per cent. The more prosperous other countries have become and the higher the interest they offer, the lower our Consols are bound to come and will come. There is not a man in this House who to-day will invest his money at the same rate of interest as he would have invested it ten years ago. If the hon. Member goes to any stockbroker in the city he will find that the clients who come to him are not content with 3½ per cent., but they want 4 per cent. and 5 per cent., and all this has an effect on Consols. In my opinion even this £5,000,000 going to the redemption of Consols will only have a temporary effect. The rate of interest Consols pay is really the dominating factor in the price of Consols. I do not for a moment think this £5,000,000 will have any permanent effect. It is sure to have a temporary effect, because when you get more buyers than there are sellers the price for the moment goes up, but I do not think it will go up permanently; and, as that £5,000,000 loan which was issued the other day depressed Consols to the extent of either one-quarter or one-half, so this £5,000,000 that is going to the Sinking Fund to repay debt may have a temporary effect, but it will have no permanent effect. It is perfect nonsense in the opinion of anybody who really knows anything about it to say that the action of this Government has had any effect on the price of Consols.
I do not propose to detain the House for many minutes, but there are certain observations which I think ought to be made on the present occasion. I suppose it would be possible to bring almost any subject which has to do with the economic conditions of the country into relation with the Sinking Fund, and I should like to remind the Committee we are not discussing general economic questions nor the variety of ways in which a given sum of money can be spent, but we are discussing the conduct of the Chancellor of the Exchequer in regard to the Old Sinking Fund. The very mention of the Old Sinking Fund brings into our minds instantly the greatest names in English financial history. One thinks of Pitt, of Huskisson, Peel, Gladstone, and Sir Stafford North-cote, all of them men who devoted their vast abilities to building up British credit and who saw in the methods by which we dealt with the actual surpluses which arose from year to year the key of the whole financial position, and to a very large extent the key of British Constitutional liberty. I think in the course of this discussion we have perhaps allowed to go out of sight one very important consideration, and that is the very slow stages and the great difficulties we have to face in building up British credit. We take British credit very much as a thing for granted, but as a matter of fact we did not always enjoy great estimation in that particular, and when operations first began with regard to dealing with the Sinking Fund we had no great position in the world and we had no estimation among the financiers of the world. It was solely the efforts of British statesmen, backed up by the House of Commons, that made British credit what it was, and we have to consider now the question of what the Chancellor of the Exchequer is doing with that background of English history behind it.
Look at the situation. We had first of all the efforts of one of our greatest financial statesmen, Sir Robert Walpole, dealing with this question, and in consequence of the pressure of interests, the low-standard of commercial morality, and the corruption which prevailed at that time in the English public life, it was found impossible to maintain the Sinking Fund he established, and ultimately it was swept away. Then we have the efforts of one of our other great financial statesmen, the younger Pitt. He substituted his methods, and so great was his estimate of the importance of maintaining intact the obligations the State had entered into in this respect that, as all the world knows, he preferred to incur a great loss in regard to the Sinking Fund he established rather than break his word and go back on the arrangements the country had made. Then we had the other experiments, and the Old Sinking Fund we have at the present time was established in 1829, seventy-three years ago, and until recently I am not aware that among financial statesmen, or in fact amongst anybody in the House of Commons or any grade of the population, it was ever called into question that you should carry out your obligations with regard to the Sinking Fund. What are those obligations? Every Act of Parliament bearing upon the subject is perfectly explicit. We have first of all the original Act which describes in the greatest detail and in the most perfectly clear language what the object of the establishment of the Old Sinking Fund was. It was that you should substitute for all the fantastic schemes we had enjoyed in the course of our history the perfectly simple principle that whenever you got actual surpluses of revenue over expenditure it should be devoted to the extinction of debt. That Act was succeeded by the great Consolidated Fund Act of 1866. That was equally clear and explicit. We now live under the Act of 1875 regarding the National Debt, and it is also equally clear and explicit. That Act says the Old Sinking Fund shall be issued to the National Debt Commissioners, and it shall be applied to the extinction of debt.
The folly, the mistake, and the blunder—I may not call it by a worse name—of the Chancellor of the Exchequer is that he is importing into public practice in regard to this matter the controversy that "shall not" means "shall," that "shall" means "shall not," that "shall" may mean "may," and that we do not know really what a Statute of the British Parliament means. I say the effect of that confusion is felt throughout the British community, and the Chancellor of the Exchequer is dealing a great blow to that British credit which was built up with such great difficulty, but which may be destroyed with great ease. What can one say on the proposition before us this afternoon to devote £1,000,000 to the Navy, £500,000 to East Africa and Uganda, and £5,000,000 to the extinction of debt. We all believe, no, we do not all believe, in the maintenance of the British Navy. There are certain Gentlemen on the other side who do not believe in the maintenance of the Navy. All I have to say about that is that although I am bound to approve of the expenditure of £1,000,000 on the British Navy, I should not like my view on that subject and the desirability of spending that million to give the slightest encouragement to the idea that I or my Friends on this side of the House believe that is an adequate provision for the very serious naval situation with which we are faced. Personally, I have no hesitation in saying I think it is the duty of the Government to hasten that situation and deal with it, and not try, as it were, to lead the country to think we are embarking on an adequate naval programme. With regard to the half-million you lend to Uganda, I can only congratulate hon. Members on the other side of the House on agreeing to the proposition that it really is desirable to develop the resources of this Empire. It is a most remarkable admission on their part. I do not wish to wander in any degree from the strict terms of the Motion, or else I could comment at considerable length on this point. I will, however, content myself with expressing my congratulations to hon. Gentlemen opposite on being willing to spend half a million on such an excellent object. I presume there was some consideration in the mind of the Chancellor of the Exchequer regarding the rapid progress of Imperialistic ideas in Lancashire. But, however beneficial some of the methods proposed for spending this money may be, I think it is an unfortunate thing—an unfortunate example which, if followed, might prove disastrous—to convey to the public the idea that a definite obligation laid down by Act of Parliament may be varied at the will of the Chancellor of the Exchequer.
I think the House will agree the time has come for me say a few words in reply to the various criticisms which have been made on both sides of the House to the proposals of the Chancellor of the Exchequer. I would respectfully sympathise with the hon. Gentleman who has just sat down on the position in which he found himself. I can quite imagine how disappointing it must be to come down with a speech in one's pocket, and to find that there is no necessity for delivering it. I pass to the real criticisms made on the proposals of my right hon. Friend. I notice that the hon. Member for St. Pancras (Captain Jessel) did not seem to quite clearly understand the way in which the finance accounts of the country are presented to this House. He found some confusion to exist between the statements made in Cd. 6207 and the shorter statement to be found in Cd. 130. But if the hon. Gentleman will add up the totals which are to be found in the various columns of the longer return he will discover that they exactly coincide with the shorter summary in the simpler return, which sets before the House, in compact manner, the rather longer and fuller statement to be found in the fuller Paper. One is a summary of the other, and in no way a contradictory statement. As a matter of fact, the whole finance accounts are to be found in the return presented for a very long series of years and known as the Finance Accounts, which take note of the whole funded and unfunded Debt, the outstanding liabilities and assets, and present a complete balance sheet of the nation's liabilities and assets.
This shorter Paper does not take into account our indirect liabilities, and, therefore, is not a true account of our real financial position. We ought to have these columns of indirect liabilities added from year to year.
I understand the hon. Gentleman wants the contingent as well as the actual liabilities. But they do not become liabilities until such persons as are responsible for payment of the money which has been advanced have become defaulters. The hon. Gentleman has in mind, no doubt, principally the advances under the various Irish Land Purchase Acts. The percentage of defaults under these Acts is so infinitesimally small that it is not worth taking into account. My recollection is that last year, when I was responsible for these things, the total default upon advances amounting to something like £40,000,000 to £50,000,000, was under £50,000. Therefore it is not really a liability of the State; it does not become a State liability until default has taken place, and it therefore ought not to be reckoned as one of the debts of the State.
Let me pass from that to the statement made by the hon. Member for Haggerston (Mr. Chancellor), who protested against the naval expenditure, and, no doubt in that complaint found sympathy with some of my hon. Friends behind me. I do not suppose there is anybody, whether he sits on the Front Bench or the Back Bench, who views expenditure upon naval and military armaments with anything but dislike and apprehension. I certainly, for my own part, have been trained sufficiently long in the school of political finance to have the greatest possible dislike and reluctance to incur any expenditure that is not, in my belief, absolutely necessary for the safeguarding of the country. My hon. Friend, in the expression of his dislike, drew attention to the fact that there had been an increase in our naval expenditure from something like £30,000,000 to £45,000,000. He put the increase at 50 per cent.
What has Germany been doing during the same period? Her naval expenditure has jumped up from £12,000,000 to £22,000,000 an increase of nearly 100 per cent. I confess, for my part, if it is necessary, as I believe it is in this case, to take extra precautions for the safety of the country, the expenditure is most needed for the Navy. The hon. Gentleman the Member for Blackburn (Mr. Snowden) also, on somewhat similar lines, objected to the application of the Old Sinking Fund, not only for naval purposes, but also for the reduction of debt. He said that, in his opinion, the money ought to be used immediately for the promotion of social welfare, and, particularly, he complained, that no attention has been paid to the recommendations of certain Royal Commissions on which he sat for years—the Royal Commissions on Canals and Waterways and on Afforestation. I myself have been a Member of Royal Commissions for quite as long a period as the hon. Gentleman. I sat for four years on the Feebleminded Commission, and I am happy to say that, as a result of their labours, a Bill has this year been produced which meets with the almost universal acceptance of the House. [HON. MEMBERS: "NO, no."] At any rate, with very wide acceptance. With regard to the Reports of the Royal Commissions on Canals and Afforestation, let me remind the hon. Gentleman that there are now lying under the control of the State large sums of money which can be applied on the recommendation of the Commissioners, who have been appointed for the very purpose of considering these questions, to any scheme they can produce which can be acted upon as a business proposition. Take for instance, the case of the Development Fund. There is lying within immediate reach of the Development Commissioners a sum of about £2,000,000, which is not used only because some workable, business scheme has not yet been produced on which the money can be spent. The Road Commission have under their control at this moment a sum of two or two and a half millions, which can be used for the opening up of the country by means of communication if only they can produce, in conjunction with the local authorities, a scheme showing how the money can best be spent. Both in connection with the Development Commissioners and the Road Commissioners there can be provided employment for those who cannot otherwise obtain remunerative employment. I do not think the hon. Member can fairly say that the Government has not paid attention to, or been willing to meet, the demand, when their attention has been drawn to the need of further opening up the country and developing the present resources of the country. I would point out that under Part II. of the Insurance Act a sum of about £800,000 is devoted by Statute by this year's Estimates, at a time when trade is good, to the purpose of meeting unemployment in periods when trade will be bad. Can the hon. Gentleman really say that out of the superabundant wealth of this country no provision has been made for the future by the Government in the proposals they have submitted to the House?
I did not say that. I referred to the provision made in the unemployment section of the Insurance Act. As to the sums in the hands of the Road Commissioners, is it not a fact that the schemes they have sanctioned do not represent the applications that were made to them?
10.0 P.M.
No doubt a great number of schemes were put forward, but it does not follow that because a scheme is put forward it is a good object on which to spend money. Over the schemes as produced to the Commissioners, and through them to the Treasury, the Government have no control whatever. If a scheme is a business proposition it goes through; if it is not, it falls to the ground. The hon. Member for North-East Cork (Mr. T. M. Healy) asked some questions about Uganda and Irish Land Stock and the hon. Member for Haggerston said something on the question of Uganda. This is not a gift to the Protectorate of Uganda, it is a loan, upon profitable terms to the Treasury and therefore to the taxpayers of this country. It will be repaid in full by the owners of land and the traders in Uganda. More than that, Uganda is one of the few remaining Protectorates which at the present moment receive a Grant from the Imperial sources. We are informed upon sufficient evidence that the advance of this money to the Protectorate will result in a very short time in its being taken out of the class of Colonies and Protectorates which have to receive Grants-in-Aid from Imperial sources. Therefore, we shall not only get repayment of the sum in full, with a proper rate of interest, but we shall also be relieved by not having to make these Grants in future.
Will Ireland be the only country that will continue to receive Grants?
At the present moment Ireland is receiving large Grants out of Imperial taxation, and to that general proposition the right hon. Gentleman has not yet objected. Let me deal with the question of Irish Land Stock. The hon. Member for North-East Cork asked why its price is lower than that of Consols. The answer is so simple that I am almost ashamed to trouble the House with it. The repeated issues of any kind of stock at uncertain periods, so that the holders of stock never know in what position they are likely to be as regards the total amount of that stock in the market, is bound to render the position of the stock a precarious and fluctuating one. That is particularly the case with regard to Irish Land Stock. At the present moment we have issued something like £50,000,000 of cash in advances to the purchasers of Irish land, besides a large amount of stock. Those advances have been made partly from the Post Office and other sources of that kind, and partly by actual borrowings in the market. I think that in the course of last year cash advances were made to the amount of something like £8,000,000. These came at uncertain periods, and were bound to depreciate the prices of the stock. That is an explanation which is complete in itself, and it ought to be a full answer to the hon. Member for North-East Cork. Let me add that there has been no difficulty in finding the money for these advances. The difficulty has been entirely in the verification of titles. That has been the only cause for the delay. I am informed by the Irish Land Commissioners that the moment an agreement has been arrived at between the Commissioners and the would-be purchaser and seller, at that moment the money has been available for the completion of the transaction. I think I have answered every question put to me from either side of the House. Let me say, in conclusion, to my hon. Friend the Member for Rushcliffe (Mr. Leif Jones), who rather regretted that the proposal of the Chancellor of the Exchequer had not been made earlier in the year, that we have in the course of this year, up to the end of the first quarter of the calendar year, not the financial year, purchased no less than £6,000,000 of Two and a Half per Cent. Consols Stock, having bought back with something like four and a half millions of actual cash. We could not very well have added to the amount of money applied to our purchases of Consols. When you are a purchaser you desire that the price of the stock should be as low as possible, and that it should not be driven up by large purchases in the market, which after all, I am informed, can be disturbed by very small purchases indeed. The price can be put up, I am told, in the Consol market by any purchaser by the use of £100,000. Therefore it was not desirable from our point of view that we should have employed any more money in the purchase of Consols than has been used since the end of the first quarter of the calendar year.
Does the right hon. Gentlemen say it really made no difference as far as Consols are concerned whether we devoted this money to-day to the reduction of debt or whether it had been so devoted at the time the Budget was introduced?
No, I see no reason to think it would have made any difference whatever. We have saved a certain amount of interest—not I think enough to trouble the House with—by putting this money into Exchequer balances, but we have also financed ourselves during a portion of the year without borrowing. Without some help of this sort we should have had to borrow, as we have in past years, during the earlier parts of the financial year. It has not therefore been idle. It has been earning us a small amount of interest, and the finances of the State have in no way suffered from the disposition made by the Chancellor of the Exchequer of the surplus.
Although we approve of the way in which this £6,500,000 is to be appropriated, we cannot refrain from criticising the methods by which the Government has done this and the way in which they have postponed it. We entirely approve, of course, of the £1,000,000 going to the Navy, but the method by which it is done is that of using a windfall which we had this year to incur the beginning of an expenditure which will continue for several years. We are going to use this £1,000,000, I understand, for the construction of a certain number of ironclads which will not be completed for two or three years, so that next year there will probably be added to the normal expenditure of the Navy a considerable sum. They cannot expect next year to have a windfall of £2,000,000 which will be required to continue the expenditure occasioned by the present £1,000,000 expenditure, and they will therefore have to look to current revenue next year to carry out the method of finance which they are commencing this year by a windfall. In a business of any kind no one would consider that that was a sound method of finance or a proper way of using a windfall such as this. With regard to Uganda we may entirely approve of it, but when it is brought before us in such a way and at such a time as this, it is quite impossible for us to criticise it as we should do if it was done in the ordinary course. If we want to assist the production of cotton is this the best way in which the money could be expended? I am told that possibly even a smaller expenditure if made in the Soudan would produce two or three times as much cotton. That is a matter which we should like very much to discuss. I am by no means convinced that it would not have been better spent in the Soudan, where there is considerable difficulty in raising money for necessary works and encouraging the growth of cotton.
Then with regard to the balance of £5,000,000, which is to be used as it should have been used two months ago, the Chancellor of the Exchequer took great pride to himself from the fact that we have extinguished this large amount of debt. The greater part of the debt of this country is not a capital sum of debt, but an annuity which we have to pay every year, and you are entirely mistaken when you consider you are paying off a capital sum. You are not doing anything of the sort. You buy a certain amount of stock, which carries 2½ per cent. This Government, since they came into office has possibly extinguished a perpetual annuity of, say, £2,000,000 a year, but what have they done against it? They have increased the permanent perpetual liability by over £20,000,00 a year—I do not mean on the Navy and Army, but perpetual debt. Twenty millions is a very moderate estimate of the amount which the old age pensions and the National Insurance Bill will cost this country in the next two or three years. Next year it will amount to some £17,000,000, and it will very shortly amount to over £20,000,000. If you capitalise that it is about equal to the whole of the National Debt, and so, for the pleasure of having a Liberal Government in office, we have to all intents and purposes doubled the amount of the National Debt, and you and your descendants will have to pay £18,000,000 to £20,000,000 more every year than when they came into office. That is a matter which I should say requires the very gravest consideration when we are lightly told that they have extinguished £70,000,000 or £80,000,000. Do not take credit for having reduced debt by £2,000,000 when you have increased the annual debt by £20,000,000.
I want to say how delighted I am, being something of a financial prude myself, that the Government have seen fit to apply £5,000,000 out of £6,500,000 to the reduction of the National Debt. So far as the other £1,500,000—the £1,000,000 for the Navy and the £500,000 for East Africa—are concerned, it would be better if the money had also been raised by a Supplementary Estimate rather than that the precedent, for a Liberal Government, should be created of not putting the whole surplus for the year into the Sinking Fund. It is really meeting these expenses out of a loan instead of current expenditure, a principle against which the Liberal Government has hitherto set its face. I regret that in this case, whatever the merits of the expenditure may be upon the Navy or British East Africa, that the Government should have dropped that principle and raised the money by loan instead of paying out of annual taxation. I do not want to labour that point, because £5,000,000 have been saved, at any rate, and that is more than we had expected. I do not wish to say anything on the merits of the expenditure of £1,000,000 on the Navy. I suppose the Government are the best judges as to the amount of money required for the Navy. I do want to say a word upon the expenditure of £500,000 on British East Africa and Uganda. Hon. Members have assumed that it is for the purpose of developing the cotton supply and benefiting Lancashire. I do not believe that the money is going to be spent in any way which will result in the benefit of Lancashire. I think we ought to have some information from the Government as to the way in which that money is going to be spent before we decide on this Resolution. We know perfectly well that Uganda and British East Africa are different Colonies. In British East Africa, except perhaps on the coast, I do not think cotton is growable. It is grown in Uganda. But as to how much of the money is to be spent in Uganda and how much in British East Africa, we have not been told.
Then comes the question, How much is to be spent on railways and on experimental cultivation, and how much in developing the port on the river? If, as I believe the people want it to be spent on the growing of cotton, why spend it on railways to develop the highlands of British East Africa—a part already settled by British settlers? That is not the part where cotton is grown. I want the House to consider what the development of railways and the development of estates in British East Africa will really result in. If a railway is built in British East Africa to develop the country agriculturally, it will mean that immediately the value of estates near which or through which the railway runs must rise appreciably, and people who desire to acquire land will have to pay a higher price for the privilege of using the land. The money spent in developing a railway in British East Africa, in so far as it runs through private property, will go more or less directly into the pockets of the landlords in that part of the country. [Laughter.] I thought hon. Members who have interests in British East Africa knew that pretty well. We have had a strong expression of approval of the expenditure of £500,000 from the hon. Member for East Nottingham (Sir J. D. Bees). The hon. Member is interested in Nyasaland, and I daresay he is interested in British East Africa also. I am myself. He put in a plea that on another occasion there should be £250,000 devoted to Nyasaland. But would he pretend that that would not result in benefiting Nyasaland and in enabling producers to get their produce to market, and owners to get an increased price for the land?
I do not see any harm in benefiting a landlord. He is one of God's creatures.
I am extremely glad to hear that from the hon. Member. He sees no harm in spending £500,000 taken from the British taxpayers, bleeding them white, in order to benefit landlords in Nyasaland or British East Africa. He may not see any harm in it, but I do. It appears to me undesirable to take money from the British taxpayer for the benefit of these landlords in East Africa. We have already invested in British East Africa over £7,000,000 in the Uganda Railway, and now we are providing £500,000 for the same purpose. I submit that it is not a, proper use to make of the British taxpayers' money to invest it in this way where there is no return obtainable for it. If it were a good investment, if we could get 4 or 5 per cent. for it, well and good. It would then be an investment instead of an expense. That would be the case if we spent the money on developing such Colonies as North and South Nigeria where the whole land belongs to the State, and any increase in value would return to the taxpayer in the increase of revenue from those Colonies. That is not the case in British East Africa generally, and unless the line is so designed as to develop the value of the Crown lands as opposed to the value of the lands in private hands, I think it very questionable whether the money ought to be so spent. In Uganda the case is different. The greater part of the land there is in the hands of the native chiefs, and at any rate has not yet got into the hands of private speculators, concessionaires and syndicates, and the money spent on development, whether it be on experiments in growing cotton or providing machinery, or railway and road development, will be more wisely spent and more likely to give the return to the taxpayers in this country. I hope that the Government will explain to the House exactly how that £500,000 is to be spent on British East Africa and Uganda.
The magnitude of the surplus which we have been discussing this afternoon shows that the Chancellor of the Exchequer has taken £5,000,000 out of the pockets of the taxpayers more than was required, thereby causing considerable hardship and diminishing productive power, and showing unsound finance. But that being done, I cannot help thinking that he is proposing to distribute the surplus in the best possible way. I would rather that he had given somewhat more than £1,000,000 towards strengthening the Navy. I do not agree with the criticism from the other side of the House, because we must all feel that a certain Power in Europe has made an advance in shipbuilding recently that must have appealed to any Chancellor of the Exchequer to make a corresponding advance in securing the strength of our own Navy. I agree also that the £500,000 is well expended on British East Africa and Uganda. The hon. Gentleman who has just sat down I know would be very sorry indeed to see the landowners of that country benefited, but if a Wedgwood ware manufactory were established I have no doubt he would be glad to see that manufactory receiving some railway accommodation. I do not see why efforts which are made to bring land from prairie condition and into a state of production are not as much entitled to be encouraged as any manufactory whatever. My object in rising was to say that the surplus is unduly enlarged because of the action of the Chancellor of the Exchequer in withholding from the local authorities some of the amount from the carriage and motor car licences to which they are justly entitled.
That matter does not arise on this Resolution. The hon. Gentleman should reserve himself until we get to the Second Reading of the Finance Bill.
I bow to your ruling, Sir, but the reason that led me to follow that line of argument was that the surplus has been enlarged by withholding of this sum of money. I will, however, return to the subject on another occasion. I believe it is a wise step to devote £5,000,000 to the reduction of the National Debt. It has been the habit of whichever party has been in power to use the surplus for the reduction of the Debt. In my humble opinion the Chancellor of the Exchequer is quite justified in withholding a million for the Navy, and also the other £500,000. I am glad he has yielded to the representations from this side of the House by employing the bulk of the surplus to the reduction of the National Debt, thereby restoring and strengthening that confidence without which prosperity is impossible.
I should not have intervened in this Debate but for the fact that I have recently travelled through British East Africa and some portions of Uganda. It is perfectly true, as the hon. Member stated, that the British taxpayers own the Uganda railway, and that £7,000,000 of British money have been spent in its construction. I would remind the House that it has not been given to either the landowners or the authorities of British East Africa. The railway still remains the property of the British taxpayer, and it is already earning 2 per cent. upon the capital expenditure. With the extension of further branch lines and further extensions of the railway system of British East Africa, it will rapidly pay a larger return upon the capital invested, and become a valuable asset to that great country while still remaining the property of the British taxpayer.
Does the hon. Gentleman say that the railway is paying interest now at the rate of 2 per cent.?
I mean that the railway is earning a net return of 2 per cent. upon expenditure. At the present moment we are paying at the cost of the British taxpayer £139,000 a year in redemption of debt, and in 1925 that railway becomes the property of the British taxpayer without any charge upon it whatsoever. I venture to predict, having travelled through that country so ripe in undeveloped possibilities, agricultural and otherwise, that we shall find that we have in that railway one of the best assets and investments that the British taxpayer has ever made. Everyone knows that the way to open up and develop a country is to build railways through it. Where would Canada have been today but for the enterprise of building great railways through it? At that time there was not as much chance of a return on the money spent as there is with regard to Uganda. I travelled there over the only railway that has yet been opened. That opening took place on 1st January last, and already over that line, some fifty miles in length, the traffic has been enormous; and it is already paying a good return upon capital expenditure. What is needed now is a large extension through Uganda in order to have additional beneficial results by the construction of feeder lines to the Uganda Railway and an extension of the Uganda Railway system into Uganda proper. Each of those would feed the great Uganda main line, and make it each year more valuable. I feel convinced that such a scheme as that, which I was most gratified to hear proposed to-night, is the true policy we ought to pursue both in British East Africa and in Uganda, both in the interests of the people there, for whose government we are responsible, and in the interests, I am glad to know, of the white settlers in East Africa, and equally, I hope, of those in Uganda. That is the true policy, not only for the benefit of those regions of which we are—
On a point of Order. Are we discussing the merits or demerits of this scheme or whether we should wish anything more than five millions to the Sinking Fund?
We are discussing the proposed loan to Uganda or the British East Africa Protectorate, not in detail, but we cannot exclude the consideration of the possibilities of the country.
This is not a gift to the people of Uganda, it is a loan, and interest will be paid. I do not think in any of the lines we ever made that we had better security than we have in this instance. I believe it would be wise on the part of the Government not only to make a loan of half a million for the development of these great regions, but of very much more; I hope this loan is only the beginning, and that it will be followed up by further loans to give increased prosperity to those parts of our Empire and to benefit the development of the trade and commerce of the homeland also.
I would appeal to the House now to allow the conclusion of this first Resolution. We have discussed it at considerable length, I cannot say controversially, and I think on the whole the proposal has been accepted favourably on both sides of the House. I do trust that we shall be allowed to come to a decision now on the first Resolution. There are four Resolutions, and we hope to get them to-night. Those are the Tea, Income Tax, and Amendment of the Law Resolutions.
Resolution read a second time, and amended by adding at the end thereof the words "in so far as the amount of that fund exceeds five million pounds."
Resolved, "That the House doth agree with the Committee in the Resolution as amended—'that it is expedient that the obligation to issue the Old Sinking Fund to the National Debt Commissioner should not apply to the Old Sinking Fund for the year ending the 31st day of March, 1912, in so far as the amount of that fund exceeds five million pounds.'"
WAYS AND MEANS [2nd April]
Resolution reported,
Tea
1 "That the Custom Duty charged on tea until the first day of July, nineteen hundred and twelve, shall be charged as from that date until the first day of July, ninteen hundred and thirteen, that is to say:—
Tea, the pound … … fivepence."
I beg to move, after the word "pound," to insert the words "if grown within the British Empire, four-pence; if grown without the British Empire."
The effect of this Amendment would be to reduce the tax on British-grown tea from fivepence to fourpence. Last year the Chancellor of the Exchequer very properly described this Amendment as a hardy annual, and most Members on these benches will desire it to appear every year until some wise Goverment has been persuaded of the wisdom of accepting it. There are additional reasons for bringing the proposal before the House this year. Since it was last discussed there has been a considerable economic and Imperial development generally. The first reason for pressing the proposal is that if we omitted to do so we should be charged by hon. Members opposite with having weakened in our faith in the first constructive policy of the party on these benches. Just as on Saturday last we witnessed in a leading Government journal the heading, "Great Liberal Triumph," when their majority had suffered a reduction of 2,000, so, if we omitted to move this Amendment, we should see to-morrow the heading, "Death of Tariff Reform." The second reason is that during the past year our attention has been drawn much more emphatically to the ever-increasing cost of living in this country, and the consequent necessity of considering a reduction of even £1,000,000 in that cost to the people generally. The third reason is the charge made in the country that we are the food-taxers, and that only hon. Members opposite desire to free the food of the people from the burdens imposed upon it. Here we offer hon. Members opposite a very favourable opportunity of putting into practice the promises they have made ever since 1906. The fourth and greatest reason justifying the Amendment is the principle of Imperial Preference. It is impossible to overestimate the effect that the acceptance of such a proposal would have upon the Empire at large. Since last year the principle of Imperial Preference has received additional force. In the first place, the Government have very wisely agreed to the formation of an Imperial Trade Commission to inquire how the trade of the Empire can be extended. It must be a matter of very great regret to every honest person who wants to settle once and for all whether the present fiscal system of the country, or the modified one which we propose, is best in the interests of trade between this country and the Empire that the present Colonial Secretary, at the Colonial Conference last year, found it necessary to insist upon the exclusion of any consideration whatever of tariffs. The Prime Minister, on the 11th of this month, presided at the opening in London of the Colonial Chambers of Commerce. It was very significant and certainly true when he said that—
How many were neutral?
That I cannot say, because I do not know how many were present. But the fact remains that out of the considerable number present only nine agreed with the fiscal policy of the present Government. It is well within the knowledge of hon. Members that the Colonial Premiers year after year have, metaphorically speaking, gone down on their knees to ask this country to confer upon them the principle that I am now advocating. On every occasion they have been very flatly and, I think, ignominiously refused even consideration of the matter. Were my Amendment to be considered, the reduction of one penny on British grown tea would relieve the taxpayer of this country—and the hon. Gentleman the Member for Blackburn told us that the working classes pay four-fifths of the total—of £1,200,000. Were the proposal put before this House to reduce the whole of the Tea Tax, including foreign imported, by one penny, we should certainly receive from hon. Members opposite a very different reception. The only difference between my proposal—we understand the desire of hon. Members opposite is to reduce food taxes—and that is a small sum of £182,000. The Government three years ago reduced the tax all round by one penny. That would take off at the present time £1,283,000. There is, it seems to me, only a difference of £182,000 all told between my Amendment and the principle which hon. Gentlemen opposite would gladly subscribe to if once the Chancellor of the Exchequer told them that he could afford to lose that money from his revenue. It surely is one of the very cheapest experiments that hon. Members opposite who doubt the wisdom of our policy should be asked to support.
Beyond the actual reduction to the working classes of this country in particular and to the people of the country generally, of this amount of money upon food taxes I press the fact that the moral effect throughout the Colonies, and throughout this country would be something enormous. It is perfectly true as hon. and right hon. Gentlemen opposite may point out later that to ask for a reduction of one penny upon British grown tea is perhaps one of the least forcible things one should select in beginning to put into effect the principle of Imperial preference for the simple reason that the large bulk of the tea of our Empire comes from British Colonies, and that only 43,000,000 pounds weight come from foreign countries. That is perfectly true; but it is not the intrinsic value of the particular case that appeals to me; it is the principle which we on these benches want to push home. Seeing that so much of the tea which we import into this country does come from British Colonies, so much less is the risk of any danger to Imperial trade if we should be proved to be wrong and if Free Trade should prove to be right. We press this particular Amendment for the purpose of starting a policy of Imperial preference, and of putting it to the practical test.
The Chancellor of the Exchequer when referring to the great benefits which he claimed the present Government had conferred upon the country by the reduction of debt said it was perhaps asking more than one could expect from human nature that hon. Members on this side of the House going on public platforms should say to their audiences "look at the magnificent thing this Government has done for you." That is perfectly true, but were the Government to put to the practical test the policy of Imperial preference as they could by the acceptance of this Amendment and with such small risk to trade in general, I venture to suggest you would have a response not only from the people of this country, but from the whole Empire at large which it is difficult to foresee. I have endeavoured to-night to avoid going over more ground than I could help, and I have not touched on the old arguments brought forward on previous occasions, and I hope for that reason that the points I have specified may perhaps receive all the greater consideration from the Government. I beg to move the Amendment standing in my name.
I beg to second the Amendment. I have on several occasions moved or seconded Amendments on this subject. It would be giving an earnest to the Colonies on the part of this House if this Amendment were accepted, and it would be giving the Colonies some preference for the great benefits we receive from them. There is, as I often pointed out, some danger of the enormous imports of tea into this country being cut into by a change in popular taste people may get into the habit of drinking China tea instead of Indian and Ceylon teas. Whatever may be said to the contrary, the consumption of China tea is steady and progressive. I will not mention any figures now; they can be turned up at any time. If it becomes the fashion to drink China tea on a large scale a serious blow would be struck at India and Ceylon teas. I hope the House will for once resolve to give some return for the immense benefits we annually, monthly, and daily receive from the great Colonies of the Empire by accepting this Amendment. That is the Colonial way of looking at it. I do hope that we may show the Colonies that we mean to buy our tea from them in preference to buying it from other parts of the world.
I should like to thank the two hon. Members who have spoken on this Amendment for the brevity of their remarks. I realise the necessity in their case of bringing this question forward, but I am sure that they will not expect the Government to immediately accept this Amendment. I hope to give a few reasons why we are unable to do so without being unnecessarily controversial or repeating unnecessarily the Debates we have had on this subject year after year. The hon. Member opposite gave four reasons why he considered it necessary to move this Amendment at this time. The first was that if such an Amendment were not moved it would give persons in the country the idea that the party to which he belongs was weakening upon Colonial Preference. That is rather a domestic matter than one for us to comment upon, and if he considers such a demonstration should be made in order that there should be no doubt at all whether the Colonial Preference policy is as strong as it was, I have no comment to make in the matter. The second reason was that we are all against the increased cost of living, and we should all welcome any suggestion whereby it could be reduced. That is common to all parties in this House. All we ask in regard to any specific proposal for reducing the cost of living is that it should conform to two ideals. One is that if your proposal is going to drop a very considerable amount of revenue, which I agree is largely drawn from the working people of this country, some alternative suggestion should be made whereby revenue of an equal amount can be drawn not from the working people of the country, because it is not reducing the cost of living to shift the burden from one shoulder to the other of the working people; it is not reducing the cost of living reducing the Tea Duty if you are going to tax some other necessaries of life. Another reason given is that in any reduction suggested all the benefit ought to go to the taxpayer, and that especially in the case of the working people. As the hon. Member acknowledged, that might be the case if you took a substantial duty off all tea imported into this country, but as he agrees that would not be the case if you take the duty off a certain amount of the tea imported into this country, because however much relief was given to the taxpayer a certain portion would go to the tea growers in our Colonies.
I do not admit that.
The hon. Member will excuse my saying that is my opinion on the subject. Therefore, it would be impossible to replace that £1,000,000 by another £1,000,000 drawn direct from the pockets of the taxpayer. Nor is there, I would submit, any special necessity at this moment for giving what we regard as an indirect subsidy to the tea planting industry in the Empire. It is a very different position from the sugar growing industry in the West Indies, which was also the subject of controversy a few years ago. I am told on the authority of my officials that never was the tea growing industry in India, Ceylon, and the further East Indies in a more flourishing condition than at the present time. The only difficulty in connection with it, as I think the Chancellor of the Exchequer said in his Budget speech, was that some of the tea growers were in doubt whether they could more easily make a fortune by planting tea or rubber, or, if you like, by speculating in rubber plantations. As the suggestion of the hon. Member does not conform to either of those two conditions, for I understand he does not propose an increase in the Income Tax or in the Super-tax, or in the Land Duties, or in the Estate Duties in order to raise this £1,000,000, I would submit he has not really shown us any power of relieving the burden on the workpeople. The third reason he gave was that hon. Gentlemen opposite wanted to show they were not food taxers. I do not want, as I say, to revive any controversy, but I always understood the accepted policy of hon. Gentlemen opposite was to adjust the Tea and Sugar Taxes in connection with taxes on corn and meat, the idea being to endeavour to relieve the taxpayer of the Tea and Sugar Duty in order to give a Colonial preference on corn and meat. In that case, they cannot show they are not food taxers by reducing the duty on tea unless the hon. Member is prepared to repudiate the alternative of putting taxes on greater necessities of life, because whilst some of us may be able to live without tea, none of us can do without meat and bread. The further argument he put was that great joy would go out throughout the whole of the Empire among those who advocated Imperial preference, because the acceptance of this little piece of Imperial preference would give them hope that the whole British policy in connection with a trade preference on foodstuffs had changed, but immediately afterwards he appealed to us by saying we should only lose £182,000. If the losing of that £182,000 is to be accepted throughout the whole Empire as a symbol that the British policy of not giving a preference on food is to be abandoned, then it is not merely a question of whether you are losing £182,000 of revenue; it is a question whether in the opinion of hon. Gentlemen opposite the verdict of the House of Commons is to be interpreted as the abandonment of the idea of not giving a preference by a tax on food. We think the challenge of the hon. Gentleman may well be accepted, and we may say we will not give the indication to those advocating such taxes throughout the British Empire. I do not know that I need weary the House by giving one or two special reasons why this is a particularly bad sample of Colonial preference, because I think the hon. Gentleman himself acknowledged it is not the one he would have chosen.
11.0 P.M.
To begin with, it is a definite tax, and as a tax it will keep out the very cheapest form of tea. I am told the average price of tea imported from China is something like 8d. per lb., and that of teas imported from our own Colonial Possessions is something like 9d. Therefore you are taxing tea which is the food of the very poorest, and you raise the price of the tea to the very poorest classes of the population. Although it is said that in distinguished circles China tea is preferred for the sake of the palate, in places like my own Constituency where tea is sold in ¾d. packets it is the cheapest tea that is sold, and I see no reason why the commodity enjoyed by the very poorest of the people should be taxed to the advantage of a commodity which must of necessity be more expensive. Hon. Members have offered no alternative for providing the million a year. I think I may say the friendly challenge offered by the Chancellor of the Exchequer to the Whole House on Budget night should be accepted, that anyone who proposes a reduction of taxation should explain their alternatives, because it makes a considerable difference whether they are prepared in proposing a reduction of taxation to offer an alternative that will not fall on the working classes—or whether they merely wish to shift the burden from one shoulder to another.
I am told that the trade both with China and India is in an exceedingly healthy condition, and that it would be a great mistake to interfere with our large China trade interest. Of all countries whose trade we ought not to penalise, it surely is China, considering the long and dismal history of British interference with China trade. The advantage the hon. Gentleman will admit will be comparatively small. He took this opportunity to raise once more the tattered banner of Colonial preference, and to endeavour not to recede from what is called a hardy annual, but I think that under the circumstances I have a right to invite the House to reject the Amendment.
The hon. Gentleman said there was no way of reducing the taxation on tea without imposing a tax on the working classes. He also said we had proposed no alternative tax to make up for it. I beg to differ entirely from the right hon. Gentleman. Is he aware that in America they raise £45,000,000 by taxes on luxuries which the poor never buy? Is the right hon. Gentleman going to tell us that in this country we cannot raise one million on the luxuries of the rich, while they can raise £45,000,000 in that way in America? Is that no alternative? Did anybody ever hear such humbug in all their lives? I really think that before the right hon. Gentleman puts this sort of argument before the House he should realise what the rest of the world does. Do hon. Members opposite think they are so clever that they know better than the whole of the rest of the world? [Laughter.] They sit there laughing as if they thought they were the only clever people. The right hon. Gentleman said that by taking this penny off Imperially grown tea we were going to hurt the poorest of the poor. What do you do now? In proportion to value you tax the poor of the working class far more than the rich. Under the present system you tax the tea of the poor to the extent of 75 per cent. or 100 per cent. On the tea of the rich, in proportion to value, nothing like so much is charged. The right hon. Gentleman knows that his argument is not a true argument. On tea at 1s. per lb. the poor have to pay three times as much as the rich pay on tea at 3s. per lb. Are you not hurting the poor to the very best of your ability under the Free Trade system? That sort of humbug is too late in the day. Are hon. Gentlemen and right hon. Gentlemen, and especially the Chancellor of the Exchequer, who call themselves Free Traders, going to tell the country that they are the friends of the poor, when they are taxing one of the first necessities of life to the extent of something like 100 per cent., and refuse to put on any taxation which would more than make up any loss? Are they going to tell the country that they are the friends of the poor, either at Limehouse or anywhere else? That is the question I ask the right hon. Gentleman, and I hope he will answer it.
Division No. 119.] AYES. [11.10 p.m. Agg-Gardner, James Tynte Goldman, C. S. Nicholson, William G. (Petersfield) Aitken, Sir William Max Gordon, Hon. John Edward (Brighton) Nield, Herbert Amery, L. C. M. S. Goulding, Edward Alfred Norton-Griffiths, J. (Wednesbury) Anson, Rt. Hon. Sir William R. Grant, J. A. O'Neill, Hon. A. E. B. (Antrim, Mid.) Anstruther-Gray, Major William Greene, Walter Raymond Orde-Powlett, Hon. W. G. A. Archer-Shee, Major Martin Gretton, John Perkins, Walter F. Ashley, W. W. Guinness, Hon. Rupert (Essex, S.E.) Pole-Carew, Sir R. Bagot, Lieut-Colonel J. Guinness, Hon. W. E. (Bury S. Edmunds) Pollock, E. M. Baker, Sir Randoif L. (Dorset, N.) Gwynne, R. S. (Sussex, Eastbourne) Pretyman, Ernest George Balcarres, Lord Haddock, George Bahr Quilter, William Eley C. Banbury, Sir Frederick George Hall, D. B. (Isle of Wight) Ratcliff, Major R. F. Banner, John S. Harmood- Hambro, Angus Valdemar Rawlinson, John Frederick Peel Barnston, Harry Hamilton, Lord C. J. (Kensington, S.) Rawson, Col. R. H. Bathurst, Charles (Wilton) Hamilton, Marquess of (Londonderry) Rees, Sir J. D. Beach, Hon. Michael Hugh Hicks Harris, Henry Percy Roberts, S. (Sheffield, Ecclesall) Benn, Arthur Shirley (Plymouth) Harrison-Broadley, H. B. Rolleston, Sir John Beresford, Lord C. Henderson, Major H. (Berks, Abingdon) Ronaldshay, Earl of Bigland, Alfred Herbert, Hon. A. (Somerset, S.) Royds, Edmund Bridgeman, W. Clive Hewins, William Albert Samuel Rutherford, John (Lancs., Darwen) Bull, Sir William James Hills, J. W. Rutherford, W. (Liverpool, W. Derby) Burdett-Coutts, W. Hill-Wood, Samuel Samuel, Sir Harry (Norwood) Burgoyne, A. H. Hoare, S. J. G. Sanderson, Lancelot Burn, Col. C. R. Hohler, G. F. Sassoon, Sir Philip Campbell, Rt. Hon. J. (Dublin Univ.) Hope, Harry (Bute) Scott, Sir S. (Marylebone, W.) Carlile, Sir Edward Hildred Hope, James Fitzalan (Sheffield) Smith, Rt. Hon. F. E. (L'p'l, Walton) Cassel, Felix Horne, Edgar (Surrey, Guildford) Smith, Harold (Warrington) Castlereagh, Viscount Hunt, Rowland Spear, Sir John Ward Cator, John Hunter, Sir C. R. (Bath) Stanier, Beville Cautley, H. S. Ingleby, Holcombe Stanley. Hon. G. F. (Preston) Cave, George Jardine, E. (Somerset, E.) Starkey, John R. Cecil, Evelyn (Aston Manor) Jessel, Captain H. M. Staveley-Hill, Henry Cecil, Lord R. (Herts, Hitchin) Joynson-Hicks, William Steel-Maitland, A. D. Chaloner, Col. R. G. W. Kerr-Smiley, Peter Kerr Stewart, Gershom Chamberlain, Rt. Hon. J. A (Worc'r) Kerry, Earl of Strauss, Arthur (Paddington, North) Chaplin, Rt. Hon. Henry Keswick, Henry Swift, Rigby Clay, Captain H. H Spender Kinloch-Cooke, Sir Clement Sykes, Alan John (Ches., Knutsford) Clive, Captain Percy Arthur Knight, Capt. E. A. Sykes, Mark (Hull, Central) Coates, Major Sir Edward Feetham Lane-Fox, G. R. Talbot, Lord E. Cooper, Richard Ashmole Larmor, Sir J. Terrell, H. (Gloucester) Craig, Captain James (Down, E.) Lewisham, Viscount Thompson, Robert (Belfast, North) Craig, Norman (Kent) Lloyd, George Ambrose Thomson, W. Mitchell- (Down, North) Crichton-Stuart, Lord Ninian Locker-Lampson, G. (Salisbury) Touche, George Alexander Dalrymple, Viscount Lockwood, Rt. Hon. Lt.-Col. A. R. Tryon. Captain George Clement Dalziel, D. (Brixton) Lonsdale, Sir John Brownlee Walker, Col. William Hall Denniss, E. R. B. Lowe, Sir F. W. (Birm., Edgbaston) Ward, A. S. (Herts, Watford) Dixon, C. H. Lyttelton, Rt. Hon. A. (St. Geo., Han. S.) White, Major G. D. (Lancs., South) Duke, Henry Edward Mackinder, Halford J. Williams, Col. R. (Dorset, W.) Eyres-Monsell, B. M. Macmaster, Donald Willoughby, Major Hon. Claude Faber, George D. (Clapham) M'Calmont, Colonel James Wilson, A. Stanley (Yorks, Mid) Falle, Bertram Godfray Magnus, Sir Philip Wood, Hon. E. F. L. (Ripon) Fell, Arthur Malcolm, Ian Wood, John (Stalybridge) Fetherstonhaugh, Godfrey Mason, James F. (Windsor) Worthington-Evans, L. Finlay, Rt. Hon. Sir Robert Mildmay, Francis Bingham Wortley, Rt. Hon. C. B. Stuart- Fisher, Rt. Hon. W. Hayes Morrison-Bell, Capt. E. F. (Ashburton) Wyndham, Rt. Hon. George Fleming, Valentine Morrison-Bell, Major A. C. (Honiton) Yate, Col. C. E. Fletcher, John Samuel (Hampstead) Mount, William Arthur Younger, Sir George Foster, Philip Staveley Neville, Reginald J. N. Gastrell, Major W. H. Newdegate, F. A. TELLERS FOR THE AYES.—Mr. Pike Pease and Mr. Sanders. Gibbs, G. A. Newman, John R. P. Glazebrook, Capt. Philip K. Newton, Harry Kottingham
NOES. Acland, Francis Dyke Barton, W. Burns, Rt. Hon. John Agnew, Sir George William Beauchamp, Sir Edward Byles, Sir William Pollard Alden, Percy Benn, W. W. (T. Hamlets, St. George) Carr-Gomm, H. W. Allen, Arthur A. (Dumbarton) Black, Arthur W. Cawley, Harold T. (Heywood) Atherley-Jones, Llewellyn A. Boland, John Plus Chancellor, H. G. Baker, Harold T. (Accrington) Booth, Frederick Handel Chappie, Dr. William Allen Baker, Joseph A. (Finsbury, E.) Bowerman, C. W. Clough, William Balfour, Sir Robert (Lanark) Brady, P. J. Cornwall, Sir Edwin A. Baring, Sir Godfrey (Barnstaple) Brunner, J. F. L. Cotton, William Francis Barran, Sir John (Hawick) Bryce, J. Annan Craig, Herbert J. (Tynemouth)
Question put, "That the words 'if grown within the British Empire, four-pence; if grown without the British Empire 'be there added."
The House divided: Ayes, 177; Noes, 199.
Crawshay-Williams, Eliot Joyce, Michael Reddy, Michael Crooks, William Kellaway, Frederick George Richardson, Albion (Peckham) Crumley, Patrick King, Joseph Roberts, Charles H. (Lincoln) Cullinan, J. Lambert, Rt. Hon. G. (Devon, S. Molton) Roberts, George H. (Norwich) Davies, David (Montgomery Co.) Lambert, Richard (Wilts, Cricklade) Roberts, Sir J. H. (Denbighs.) Davies, Timothy (Lincs., Louth) Lansbury, George Robertson, Sir G. Scott (Bradford) Dawes, J. A. Levy, Sir Maurice Robertson, John M. (Tyneside) De Forest, Baron Lewis, John Herbert Roch, Walter F. (Pembroke) Delany, William Lundon, Thomas Roche, Augustine (Louth) Dickinson, W. H. (St. Pancras, N.) Lyell, Charles Henry Roe, Sir Thomas Doris, William Macdonald, J. R. (Leicester) Rose, Sir Charles Day Duffy, William J. Macdonald, J. M. (Falkirk Burghs) Rowntree, Arnold Duncan, C. (Barrow-in-Furness) Macnamara, Rt. Hon. Dr. T. J. Samuel, Rt. Hon. H. L. (Cleveland) Duncan, J. Hastings (Yorks, Otley) MacVeagh, Jeremiah Samuel, J. (Stockton-on-Tees) Edwards, Sir Francis (Radnor) McCallum, Sir John M. Samuel, Sir Stuart M. (Whitechapel) Edwards, John Hugh (Glamorgan, Mid) McKenna, Rt. Hon. Reginald Scott, A. MacCallum (Glas., Bridgeton) Elibank, Rt. Hon. Master of M'Laren, Hon. H. D. (Leics.) Shortt, Edward Esslemont, George Birnie M'Laren, Hon. F.W.S. (Lincs., Spalding) Simon, Sir John Allsebrook Fenwick, Rt. Hon. Charles M'Micking, Major Gilbert Smith, Albert (Lanes., Clitheroe) France, G. A. Marks, Sir George Croydon Spicer, Sir Albert Furness, Stephen Marshall, Arthur Harold Strauss, Edward A. (Southwark, West) Gelder, Sir W. A. Martin, Joseph Sutherland, J. E George, Rt. Hon. D. Lloyd Mason, David W. (Coventry) Taylor, John W. (Durham) Gill, A. H. Masterman, C. F. G. Taylor, Theodore C. (Radcliffe) Gladstone, W. G. C. Meagher, Michael Tennant, Harold John Goddard, Sir Daniel Ford Menzies, Sir Walter Thomas, J. H. (Derby) Goldstone, Frank Millar, James Duncan Thorne, G. R. (Wolverhampton) Greenwood, Glanville G. (Peterborough) Moiteno, Percy Alport Toulmin, Sir George Greig, Colonel J. W. Mond, Sir Alfred Trevelyan, Charles Philips Griffith, Ellis Jones (Anglesey) Money, L. G. Chiozza Verney, Sir Harry Hackett, J. Montagu, Hon. E. S. Wadsworth, J. Hall, F. (Yorks, Normanton) Morgan, George Hay Walton, Sir Joseph Hancock, John George Morrell, Philip Wardle, G. J. Harcourt, Rt. Hon. L. (Rossendale) Morison, Hector Warner, Sir Thomas Courtenay Harcourt, Robert V. (Montrose) Murray, Captain Hon. Arthur C. Wason, Rt. Hon. E. (Clackmannan) Hardie, J. Keir Needham, Christopher T. Wason, John Cathcart (Orkney) Harmsworth, Cecil (Luton, Beds) Neilson, Francis Wedgwood, Josiah C. Harvey, A. G. C. (Rochdale) Nicholson, Sir Charles (Doncaster) White, J. Dundas (Glasgow, Tradeston) Harvey, T. E. (Leeds, W.) Nolan, Joseph White, Patrick (Meath, North) Harvey, W. E. (Derbyshire, N.E.) Norman, Sir Henry Whittaker, Rt. Hon. Sir Thomas P. Haslam, James (Derbyshire) Nuttall, Harry Whyte, A. F. (Perth) Hayward, Evan O'Brien, Patrick (Kilkenny) Wiles, Thomas Hazleton, Richard (Galway, N.) O'Connor, John (Kildare) Wilkie, Alexander Henderson, Arthur (Durham) O'Connor, T. P. (Liverpool) Williams, Llewelyn (Carmarthen) Henry, Sir Charles S. O'Dowd, John Williams, Penry (Middlesbrough) Higham, John Sharp Palmer, Godfrey Mark Wilson, Hon. G. G. (Hull, W.) Hinds, John Parker, James (Halifax) Wilson, John (Durham, Mid) Hobhouse, Rt. Hon. Charles E. H. Pearce, Robert (Staffs, Leek) Wilson, Rt. Hon. J. W. (Worcs., N.) Hodge, John Pointer, Joseph Wilson, W. T. (Westhoughton) Hogge, James Myles Pollard, Sir George H. Winfrey, Richard Holmes, Daniel Turner Ponsonby, Arthur A. W. H. Wood, Rt. Hon. T. McKinnon (Glas.) Holt, Richard Durning Price, C. E. (Edinburgh, Central) Young, Samuel (Cavan, E.) Hudson, Walter Price, Sir Robert J. (Norfolk, E.) Young, William (Perth, East) Hughes, Spencer Leigh Pringle, William M. R. Jones, Edward R. (Merthyr Tydvil) Radford, G. H. Jones, Leif Stratten (Notts, Rushcliffe) Raffan, Peter Wilson TELLERS FOR THE NOES.—Mr. Illingworth and Mr. Gulland. Jones, William (Carnarvonshire) Rea, Rt. Hon. Russell (South Shields) Jones, W. S. Glyn- (Stepney) Rea, Walter Russell (Scarborough)
Question, "That this House doth agree with the Committee in the said Resolution," put, and agreed to.
Income Tax
Resolution reported, (2) "That Income Tax shall be charged for the year beginning the sixth day of April, nineteen hundred and twelve, at the rate of one shilling and two pence in the pound, and that the same Super-tax be charged for that year as was charged for the year beginning the sixth day of April, nineteen hundred and eleven."
Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
I beg to move, after the word "shilling," to insert the words "upon incomes not exceeding five hundred pounds, and upon all others at the rate of one shilling."
I have put down this Amendment because with a surplus of £6,500,000 the Government seems to have abandoned the old Liberal doctrine of leaving money in the pockets of the taxpayers, and now after eleven years they are keeping the Income Tax at an unduly high limit. My Amendment is designed to mitigate the hardship on people of very moderate means who feel the pressure of present taxation very heavily indeed. The rate of taxation asked for would bring it down in the case of these people to the rate that prosperous men with £3,000 a year are called upon to pay at present. If persons of moderate means were given some encouragement in the matter of Income Tax it might induce them to retire earlier than they otherwise would do, and assist the flow of promotion in the commercial world. The matter might be especially considered in view of the enormous windfalls which the Chancellor of the Exchequer has lately been receiving. Small tradesmen and those who are called upon to retire under an age limit from active duties feel greatly having to face out of their savings this heavy Income Tax. I have protested before and I protest again now against the use of the words "unearned money," because there is no such thing existing in the whole world. The money is earned by somebody, and however we may differ in our ideas of the justice of its division when it is earned a man who has earned a small competence ought to receive some consideration in times of prosperity such as we now enjoy. We all cheerfully assist the worker in his old age, and I think that the House might turn its attention in these days of big surpluses to middle-class people of small means. The concession which I ask for is a very small one and I trust that the Chancellor of the Exchequer will see his way to grant it.
In response to the very alluring portion of the hon. Gentleman's argument, I regret that I cannot see my way to accept the Amendment. Apart from the financial difficulty there is a very considerable administrative difficulty. The scale is now regulated by way of abatement, and not by the method which the hon. Member suggests. There have been proposals from time to time for graduated Income Tax. Up to the present this has been found administratively impossible except by way of returning sums of money which have already been collected. I agree that it is a very laborious method and one which causes considerable inconvenience, but it is the surest method of protecting the revenue, and Chancellors of the Exchequer have resisted Amendments drawn upon the principle of this one for good and practical reasons. I am sure that if we proceeded on the method suggested it would result in enormous loss to the revenue. Even if it were practicable I could not accept it at the present moment. There is a good deal to be said for it. But I could not now see my way to make an inroad upon the revenue of the year. I think the hon. Gentleman will agree that there is considerable force in the argument I am advancing, an argument which has been advanced from time to time by different Chancellors of the Exchequer, that you cannot by this means give the relief which the hon. Member seeks for those whose incomes are low. I very much regret that I cannot accept the Amendment of the hon. Gentleman.
Amendment put, and negatived.
I wish to refer to the Super-tax which, it will be agreed, is a very complicated matter. The Super-tax is levied for one year on the income of the previous year. I think I am correct in saying that the Income Tax paid for the year is based upon the income of the previous year. The point I wish to put is this: Where death has occurred within the year for which the tax is payable, that is to say, the present financial year, 1911–12, the claim of the Commissioners is that the full Super-tax is leviable for that year if the deceased person has made a return based on his total income for the previous year. Suppose the person died this week, let us say, and had already made a return, the claim of the Commissioners is that the entire Super-tax would then be payable for the whole of the year 1912–13. Supposing he had not made a return, then the Supertax would only be payable in proportion equal to the year which had expired up to the date of his death. That seems to me a most extraordinary method of levying the tax. I think it is a matter which requires looking into. I understand that this procedure is based on Section 24 of the Customs and Inland Revenue Act of 1890.
That Section provides— ceased estate on a matter of this kind the executors are placed in a very difficult position. They have to consider their duty to the estate, and it is obvious that the cost of contesting this matter would exceed the difference of the duty payable. Therefore, I urge that the matter is one in which the interpretation of the Commissioners is doubtful. I think myself that is straining the law, and it is also having the effect of inducing people to delay making their returns. The Chancellor of the Exchequer is aware that this year the return forms for the Super-tax are being sent out much earlier than in previous years—in the month of June. That is probably a good thing from the point of view of revenue. I do not criticise that, but if people are told by the Revenue Department that the fact that they are making returns renders them liable for the entire tax for the whole year, whereas if they had delayed only a comparatively small proportion of the tax would be demanded then it seems to me the point is one which the Chancellor of the Exchequer should look into, and if he cannot meet it I would ask him to allow a test case to be decided in the Courts at the expense of the Commissioners.
I rather think this is a question which has been decided in the Courts. I am speaking purely from recollection as I have not had time to look into it. I agree it ought not to be a final answer. I do not think it is enough to say that on a technical point there has been a decision in favour of the Crown. On the face of it I confess it strikes me as rather an anomaly, to say that the executors of a man are to be penalised because he has been prompt in responding to the invitation of the Inland Revenue to present a return. I think on the face of it it is not merely an injustice but, from the point of view of the revenue, highly undesirable. I shall certainly look into the matter, and if I find on looking into it that there is no explanation better than the one I can produce now, then I do not think it will be necessary to have a test case at all. I think much the best way would be by an agreed Amendment when we get on with the Budget. On the face of it that seems to me an injustice. Hon. Members will not take me as admitting that without having had the opportunity of looking into it. I say simply that on the face of it it appears to me to be an injustice.
This is one of the occasions in which the House has the opportunity of considering various taxes of the country, and particularly the Income Tax. In view of the lateness of the hour I will trouble the House with very few remarks. I would point out that this tax and Super-tax together bring in some £44,000,000. Everybody must realise that taxation involving such an enormous sum demands very careful consideration every year, and I hope we shall have ample opportunity of considering the real effects of this taxation. Many of us have not forgotten the speeches of the Prime Minister when as Chancellor of the Exchequer he pointed out that a uniform tax of 1s. in the £ was impossible to justify in time of peace, and how in the long run it was a burden not only upon profits but upon wages. If a uniform Income Tax of 1s. deserved the strictures passed upon it by the Prime Minister, the same remarks apply to a tax which in some cases has increased to 1s. 2d. and in others to 1s. 8d. It is only a truism to say that if you extract £44,000,000 from the pockets of the taxpayers, you are extracting a sum which would otherwise be spent amongst the various industries of the country. It is nothing less than a delusion to try and make people believe that by simply taxing the so-called rich man you are not in the long run very seriously affecting the opportunities for work and wages for the working classes. Why is the Chancellor of the Exchequer estimating for a reduction of £704,000 in the yield of Income Tax as compared with the actual receipts of last year? We are told that this year is one of the biggest trade years ever known in the history of the country, and the Chancellor of the Exchequer held out no idea that the boom in trade was likely to cease. We were indeed led to believe that the present year was likely to be a record year. That being so, one would naturally suppose that the yield of Income Tax would be greater this year than last. The only conclusion one can draw is that the Income Tax is at such a pitch in time of peace that it is having a prejudicial effect upon the yield.
It is quite possible that as a result of the Income Tax of 1s. 2d., and so on, that people have removed securities which were formerly paid in this country, and that therefore that amount has been withdrawn from the purview of the Chancellor of the Exchequer. It is quite possible that various causes working together produce a perfectly lawful evasion of the tax. I shall be glad if the right hon. Gentleman can give us some information on the point. Before I pass from Income Tax, may I ask the right hon. Gentleman to give us, if he can, some further information about a point which was promised in 1909. The Chancellor gave a concession to people who pay Income Tax under Schedule A. That was given to meet the case of the landlord who spent almost as much money on his property as he actually received. The Chancellor will remember that he devoted a sum of £500,000 for that purpose and promised, if he had a surplus, he would increase the maximum allowance of those who spent more than 25 per cent. on the upkeep and maintenance of their property. No doubt, he said, there were landlords who spent considerably more. The concession made by the Chancellor has not, owing to the complication of the form required, been taken advantage of by a great many landlords in the country; but I want to ask the Chancellor whether, seeing that there is a large sum of money not spent he will not fulfill the pledge he gave to the House and grant an extra concession to those owners of property who can prove they are entitled to it.
I desire, quite briefly, to raise another case of hardship that has arisen in connection with the Super-tax, in the hope that it may receive the same favourable consideration promised to the case raised by the hon. Gentleman the Member for Chelmsford. It is the case of a person residing in the Colonies or other part of the Empire who derives an income from English sources, either from investments in this country, or from a share in a partnership in this country. Of course they pay the ordinary Income Tax because it is deducted at the source. So far as the Super-tax is concerned they do not pay it while resident in the Colonies, or other part of the Empire, but the moment they come to reside in this country, even for a short period, the Commissioners claim not only for the year in which they are residing in this country, but for the three back years during which they have been resident in the Colonies, and in which they have not had the faintest idea that they were under any liability for Supertax. The particular case which I give to the right hon. Gentleman is this: A gentleman who was resident in India, and only I think during 1911 came to reside in this country, had a claim for Super-tax made upon him in respect of 1909–10. That certainly is a case where although Super-tax might fairly be charged during the year he was resident in this country, it becomes a matter of hardship to be taxed for three years back, when he was not resident in this country at all. I would ask the right hon. Gentleman before the finances of the year come on, to consider such cases and see if he can do anything to relieve them.
I want to draw attention to the classification of the rates of Income Tax in existence under the present scheme. The House knows very well that when the present Prime Minister became Chancellor of the Exchequer there was only one rate of Income Tax in this country. The right hon. Gentleman when Chancellor of the Exchequer introduced two rates—the ninepenny rate and the shilling rate. When the present Chancellor of the Exchequer assumed his office he introduced another rate—the one-and-two-penny rate but did not abolish the ninepenny and shilling rates with the result that we have the ninepenny rate in respect of incomes up to £2,000, the shilling rate in respect of incomes of £2,000 and the one-and-two-penny rate in respect of incomes over £2,000. I should like to ask if it is not a fact that the revenue derived from the shilling rate is very insignificant and disproportionately small to the cost of collection. In fact the cost of administrating this part of the Act is a very considerable one and throws a great deal of work upon assessors and Commissioners in diagnosing the incomes between £2,000 and over £2,000, while the revenue derived from the shilling tax is as small, if I may put it so, as the revenue derived from the Land Tax. I will give one fact to illustrate my point. There is one area in this country where £500,000 is being collected from the three rates of Income Tax, and so far as the one shilling Income Tax is concerned the revenue derived from that is only 5s. per cent. or £1,000 in respect of that tax. And where you find the Department needs so much work in arriving at the difference between the incomes liable for the ninepenny Income Tax and the shilling Income Tax involving this amount of labour, and when it proves so confusing to the taxpayer I suggest the Chancellor of the Exchequer should merge the ninepenny and the shilling tax and allow. the ninepenny tax to extend to incomes of £3,000 and have only one other tax for incomes above £3,000. If the right hon. Gentleman disagrees with the points I have raised can he tell the House the amount of revenue received in respect to the ninepenny Income Tax, the shilling Income Tax, and the one-an-two-penny Income Tax.
I hope the Chancellor of the Exchequer will give as friendly consideration to the point raised by my hon. Friend (Mr. Cassel) as to the other points of a similar character raised by my hon. and gallant Friend (Mr. Pretyman). I think the case of the recovery of three years arrears of Supertax on a person not being resident in the country when he comes here to reside really does seem on the face of it inexpedient from every point of view, as well as necessary to be regarded as a hardship by the particular taxpayer. My object in rising is to ask the Chancellor to be good enough to give information on another point. Some little time ago my attention was called by a correspondent to the unusual delay in collecting Supertax for last year. At first I replied I did not think there was anything of the kind and that it seemed to me the Inland Revenue were comparatively before, rather than behind, in their Super-tax work, for there is no doubt whatever that they have been issuing demands for the return of incomes in the current year in very large numbers. I have since received similar statements from other parts of the country as to the delay of the collection of the taxes due last year. The first business of the Income Tax Commissioners is to collect the taxes due last year. I do not know why by this time there should be any considerable arrears at all. It was not a question of discovering new tax subjects but where from previous returns they had knowledge of the persons last year and where Super-tax is still uncollected and no demand made.
I do not suppose that the Chancellor of the Exchequer can tell me at this moment what is the amount of the Supertax which is outstanding from last year, but I should be glad to have the information. If he cannot give it me now I should be glad if he will send it to me privately and I ask him to make inquiries as to why this tax was not collected at the proper time.
I have heard this complaint before from some quarter. I have made some inquiries and I cannot find that it is justified. Whether something of the kind may have happened in some particular case or not I do not know.
I have had cases sent me from different bodies.
I have made inquiries and I am sure there has been no delay so far as the collectors are concerned. I do not know whether the right hon. Gentleman can assist by giving me names of the districts.
I have had cases in Lancashire, in the Eastern Counties and in the Southern Midlands. It is not a single collector's error but something which is growing in many parts of the country. They are receiving demands to make their returns for this year while the tax due last year is still uncollected.
I do not understand why there should be any delay of that kind. There must be an explanation if the assessment had not been finally ascertained, because everything was put back by the original delay in the passing of the Super-tax; but I cannot understand where the tax has been ascertained and fixed why it should not be collected. I will inquire to find out what the explanation is, if there is any explanation. The right hon. Gentleman has pressed me to consider the case put by the hon. and learned Member for St. Pancras. I shall look into the matter and see what the explanation is and perhaps the hon. and learned Member by a question across the floor of the House will communicate with me.
I will send you the facts.
Another hon. Member gave cases where the Income Tax of all sorts amounted to half-a-million and he based his calculation upon 5s. per cent. I think that must be a very low estimate of the amount collected in respect of that particular part of the tax. I will go into the matter and see whether it has produced a revenue adequate for the trouble it has given. The hon. Gentleman the Member for Tewkesbury asked as to the amount estimated to be received this year in respect of Income Tax. He inquired why the Income Tax, which last year was £44,804,000, was this year estimated to produce £704,000 less, in spite of the fact that a bumper year was anticipated—or rather the substitution of a bumper year for a poorer year. The explanation is entirely due to the fact that included in the £44,000,000 collected last year was something like £3,000,000 of abnormal arrears from the previous year. The comparison should be not between £44,804,000 and £44,100,000 but between £41,000,000 and £44,000,000. The abnormal arrears of £3,000,000 must be eliminated, and the comparison is consequently a totally different one to that drawn by the hon. Gentleman. I will consider the point raised with regard to Schedule A later on.
Question, "That this House doth agree with the Committee in the said Resolution" put, and agreed to.
Amendment of Law
Resolution reported, 3. "That it is expedient to amend the Law relating to National Debt, Customs, and Inland Revenue (including Excise)."
Question, "That this House doth agree with the Committee in the said Resolution" put, and agreed to.
Bill ordered to be brought in by the Chairman of Ways and Means, the Chancellor of the Exchequer, and Mr. Masterman.
Finance Bill
"To grant certain Duties of Customs and Inland Revenue, to alter other Duties, and to amend the Law relating to Customs and Inland Revenue (including Excise) and the National Debt, and to make other provisions for the financial arrangements of the year," presented accordingly, and read the first time; to be read a second time upon Monday next, and to be printed. [Bill 252.]
Plumage Bill
Order for Second Reading read, and discharged. Bill withdrawn.
And, it being after half-past Eleven of the Clock on Monday evening, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at Two minutes after Twelve o'clock.